Early Case Management Speeds RTW, Report Says
Workers’ comp payers need to develop their own tipping points when seemingly routine claims escalate to high-cost levels. That’s among the strategies suggested in a new white paper.
Genex, a managed care firm, analyzed 46,000 claims over 12 months to identify characteristics that may signal a rapid escalation into excessive costs. While admitting there is no magic formula, the company says there are indications that a claim may be one of the estimated 5 percent that will turn into long-term, chronic cases that may cost millions of dollars. Among them are:
- Poor initial physician diagnosis
- Doctor hopping (e.g., three or more specialty physicians)
- Lack of modified work duty options
- Poor employee/employer relationships
- Psycho-social factors, including poor family support
- Preexisting conditions
- Alcohol or drug dependence
“One of the most important steps employers and carriers can take is to analyze claims and to engage telephonic case management for even routine injuries when two or more red flags are identified,” said Pat Chavanu, senior vice president at Genex. “As an industry we have to move away from setting arbitrary dollar figures for when to bring in case management; we need to utilize it earlier when it can make a difference in terms of costs, outcomes and the well-being of the worker.”
According to the analysis, delaying case management for a year can decrease the likelihood of the injured worker returning to work by nearly 20 percent. Claims that use case management in the first nine months are two times more likely to have a successful RTW as those referred three years after the incident.
“This does not mean, however, using case management for all claims,” the paper said. “Benchmarks, data, organizational culture and goals must be defined and incorporated into employer tipping point criteria.”
The company advises payers to hold case management programs accountable. “Look at their costs, how quickly they return employees to work, and whether they help to reduce litigation,” the paper said. “Does the organization also tell you when case management is not necessary? Ask claimants about their experience. Is it positive, negative?”
Payers should develop criteria based on the organization’s RTW goals, the paper advised. Also, they should make sure injured workers have access to a network of savvy workers’ comp providers, and give adjusters tools and resources to identify red flag claim characteristics.
Workers’ Participation Necessary for ADA Compliance
Want to avoid problems with the Americans with Disabilities Act? Get the injured worker involved from the get go in new injuries. That’s the advice of two experts.
Employers who turn a blind eye to the reasonable accommodation process early in the claims process may be acting illegally. Workers’ comp practitioners need to understand the nuances of the ADA in order to be in compliance.
“We in the workers’ comp industry have tended to do stay-at-work/return-to-work without the participation of the worker,” said Dr. Jennifer Christian, president of Webility Corporation and a veteran workers’ comp/disability expert. “The big difference I heard when talking to Aaron is that the worker needs to be involved in the discussion — at every step.”
“Aaron” is Aaron Konopasky, senior attorney advisor in the Equal Employment Opportunity Commission’s ADA/GINA Policy Division. As the chair of the work fitness and disability section of the American College of Occupational & Environmental Medicine, Christian is a member of a national return-to-work advisory group for the Department of Labor’s Office of Disability Employment Policy. Part of her role is developing a policy paper on promoting function and work as a health outcome for which stakeholders can be held accountable.
Christian said she was surprised to learn the ADA applies anytime a medical condition can potentially disrupt an employee’s participation in work. “There are people who come in with a disability, and those who acquire a disability while working for you,” she explained. “The ADA applies to any kind of health condition that will have a substantial impact on somebody’s ability to come to work and do their job.”
The need for active engagement by the injured worker is drawn from language in the ADA. Largely misunderstood by many employers, it is called the interactive process.
The ADA is a civil rights act that was signed into law on July 26, 1990, and amended effective Jan. 1, 2009. The law includes a requirement that employers reasonably accommodate their employees’ disabilities, ideally with input from the employee.
“The law says that an appropriate reasonable accommodation is best determined through a flexible, interactive process that involves both the employer and the individual with a disability,” Christian said.
Once the employer has received the leave accommodation request from the employee with a disability, “the employer must engage in the ADA interactive accommodation process with the employee to determine whether there is a reasonable workplace accommodation that will enable the employee to perform the essential functions of his or her position,” according to a white paper on the ADA published by The Reed Group. “The process includes discussion and exchange of information between the employee and the employer, and sometimes with medical professionals or others.”
While the ADA does not specifically define the interactive process, the EEOC says it shows employers are making a good-faith effort to comply with the ADA, according to the Job Accommodation Network. “And from a practical standpoint, it is a way to streamline the accommodation process and help insure that effective accommodations are provided.”
According to Christian, the provision means “that injured workers will need to be active participants in their employers’ stay-at-work and return-to-work decision-making process.”
Language about the interactive process is included in the appendix to the administrative rules to the ADA with several problem-solving steps employers should use. The law says reasonable accommodations should be determined by an interactive process, which can include:
- Analyzing the particular job involved, its purpose, and essential functions.
- Consulting with the individual to ascertain the precise job-related limitations imposed by the disability and how they could be overcome with a reasonable accommodation.
- Working with the injured person, identifying potential accommodations, and assessing the effectiveness of each.
- Considering the employee’s preference and selecting and implementing the accommodation that is most appropriate for both the employee and the employer.
Advice for Employers
ADA-related issues can occur at many different points during an employee’s recovery from an injury. Employers need to evaluate and manage workers’ comp and ADA legal issues simultaneously. Christian and Konopasky collaborated to write some concise guidance for employers on why, when, and how to do that.
“You have to think of the ADA and workers’ comp — or short-term-disability — running concurrently, not sequentially,” Christian said. “That’s the administrative compliance angle.”
As she and Konopasky explained, obligations for reasonable accommodation start when the employer realizes a worker’s medical problem is impacting the employee’s ability to work. “If the condition has the potential to significantly disrupt the employee’s work participation, the employer should immediately engage the worker in an interactive process to look for a reasonable accommodation under the ADA,” they wrote.
The three identified specific times when the ADA may apply:
- At the time a person is injured. “No matter whether the condition is already stable or is still evolving, the ADA may require the employer to provide a reasonable accommodation that would enable the individual to perform his or her essential job functions, unless doing so would involve significant difficulty or expense.”
- While recovering out of work due to injury. If the worker has been unable to work at all for a period, the interactive process should begin as soon as the worker’s condition is stable enough that a reasonable accommodation might allow the worker to perform the essential functions of the job.
- When the individual has exhausted his leave and workers’ compensation benefits and is still unable to return to the original position even with an on-the-job reasonable accommodation. At this point, whether or not the medical condition has reached MMI, the employer should consider other forms of reasonable accommodation.
Healthcare: The Hardest Job in Risk Management
Radically changing cost and reimbursement models.
Rapidly evolving service delivery approaches.
It is difficult to imagine an industry more complex and uncertain than healthcare. Providers are being forced to lower costs and improve efficiencies on a scale that is almost beyond imagination. At the same time, quality of care must remain high.
After all, this is more than just a business.
The pressure on risk managers, brokers and CFOs is intense. If navigating these challenges wasn’t stress inducing enough, these professionals also need to ensure continued profitability.
“Healthcare companies don’t hide the fact that they’re looking to reduce costs and improve efficiencies in practically every facet of their business. Insurance purchasing and financing are high on that list,” said Leo Carroll, who heads the healthcare professional liability underwriting unit for Berkshire Hathaway Specialty Insurance.
But it’s about a lot more than just price. The complexity of the healthcare system and unique footprint of each provider requires customized solutions that can reduce risk, minimize losses and improve efficiencies.
“Each provider is faced with a different set of challenges. Therefore, our approach is to carefully listen to the needs of each client and respond with a creative proposal that often requires great flexibility on the part of our team,” explained Carroll.
Creativity? Flexibility? Those are not terms often used to describe an insurance carrier. But BHSI Healthcare is a new type of insurer.
The Foundation: Financial Strength
Berkshire Hathaway is synonymous with financial strength. Leveraging the company’s well-capitalized balance sheet provides BHSI with unmatched capabilities to take on substantial risks in a sustainable way.
For one, BHSI is the highest rated paper available to healthcare providers. Given the severity of risks faced by the industry, this is a very important attribute.
But BHSI operationalizes its balance sheet in many ways beyond just strong financial ratings.
For example, BHSI has never relied on reinsurance. Without the need to manage those relationships, BHSI is able to eliminate a significant amount of overhead. The result is an industry leading expense ratio and the ability to pass on savings to clients.
“The impact of operationalizing our balance sheet is remarkable. We don’t impose our business needs on our clients. Our financial strength provides us the freedom to genuinely listen to our clients and propose unique, creative solutions,” Carroll said.
Keeping Things Simple
Healthcare professional liability policy language is often bloated and difficult to decipher. Insurers are attempting to tackle complex, evolving issues and account for a broad range of scenarios and contingencies. The result often confuses and contradicts.
Carroll said BHSI strives to be as simple and straightforward as possible with policy language across all lines of business. It comes down to making it easy and transparent to do business with BHSI.
“Our goal is to be as straightforward as we can and at the same time provide coverage that’s meaningful and addresses the exposures our customers need addressed,” Carroll said.
Claims: More Than an After Thought
Complex litigation is an unfortunate fact of life for large healthcare customers. Carroll, who began his insurance career in medical claims management, understands how important complex claims management is to the BHSI value proposition.
In fact, “claims management is so critical to customers, that BHSI Claims contributes to all aspects of its operations – from product development through risk analysis, servicing and claims resolution,” said Robert Romeo, head of Healthcare and Casualty Claims.
And as part of the focus on building long-term relationships, BHSI has made it a priority to introduce customers to the claims team as early as possible and before a claim is made on a policy.
“Being so closely aligned automatically delivers efficiency and simplicity in the way we work,” explained Carroll. “We have a common understanding of our forms, endorsements and coverage, so there is less opportunity for disagreement or misunderstanding between what our underwriters wrote and how our claims professionals interpret it.”
Responding To Ebola: Creativity + Flexibility
The recent Ebola outbreak provided a prime example of BHSI Healthcare’s customer-centric approach in action.
Almost immediately, many healthcare systems recognized the need to improve their infectious disease management protocols. The urgency intensified after several nurses who treated Ebola patients were themselves infected.
BHSI Healthcare was uniquely positioned to rapidly respond. Carroll and his team approached several of their clients who were widely recognized as the leading infectious disease management institutions. With the help of these institutions, BHSI was able to compile tools, checklists, libraries and other materials.
These best practices were immediately made available to all BHSI Healthcare clients who leveraged the information to improve their operations.
At the same time, healthcare providers were at risk of multiple exposures associated with the evolving Ebola situation. Carroll and his Healthcare team worked with clients from a professional liability and general liability perspective. Concurrently, other BHSI groups worked with the same clients on offerings for business interruption, disinfection and cleaning costs.
Ever vigilant, the BHSI chief underwriting officer, David Fields, created a point of central command to monitor the situation, field client requests and execute the company’s response. The results were highly customized packages designed specifically for several clients. On some programs, net limits exceeded $100 million and covered many exposures underwritten by multiple BHSI groups.
“At the height of the outbreak, there was a lot of fear and panic in the healthcare industry. Our team responded not by pulling back but by leaning in. We demonstrated that we are risk seekers and as an organization we can deploy our substantial resources in times of crisis. The results were creative solutions and very substantial coverage options for our clients,” said Carroll.
It turns out that creativity and flexibly requires both significant financial resources and passionate professionals. That is why no other insurer can match Berkshire Hathaway Specialty Insurance.
To learn more about BHSI Healthcare, please visit www.bhspecialty.com.
Berkshire Hathaway Specialty Insurance (www.bhspecialty.com) provides commercial property, casualty, healthcare professional liability, executive and professional lines, surety, travel, programs, and homeowners insurance. It underwrites on the paper of Berkshire Hathaway’s National Indemnity group of insurance companies, which hold financial strength ratings of A++ from AM Best and AA+ from Standard & Poor’s. Based in Boston, Berkshire Hathaway Specialty Insurance has regional underwriting offices in Atlanta, Boston, Chicago, Los Angeles, New York, San Francisco, Toronto, Hong Kong, Singapore and New Zealand. For more information, contact email@example.com.
The information contained herein is for general informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any product or service. Any description set forth herein does not include all policy terms, conditions and exclusions. Please refer to the actual policy for complete details of coverage and exclusions.
This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Berkshire Hathaway Specialty Insurance. The editorial staff of Risk & Insurance had no role in its preparation.