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.
A Modern Claims Philosophy: Proactive and Integrated
According to some experts, “The best claim is the one that never happens.”
But is that even remotely realistic?
Experienced risk professionals know that in the real world, claims and losses are inevitable. After all, it’s called Risk Management, not Risk Avoidance.
And while no one likes losses, there are rich lessons to be gleaned from the claims management process. Through careful tracking and analysis of losses, risk professionals spot gaps in their risk control programs and identify new or emerging risks.
Aspen Insurance embraces this philosophy by viewing the data and expertise of their claims operation as a valuable asset. Unlike more traditional carriers, Aspen Insurance integrates their claims professionals into all of their client work – from the initial risk assessment and underwriting process through ongoing risk management consulting and loss control.
This proactive and integrated approach results in meaningful reductions to the frequency and severity of client losses. But when the inevitable does happen, Aspen Insurance claims professionals utilize their established understanding of client risks and operations to produce some truly amazing solutions.
“I worked at several of the most well known and respected insurance companies in my many years as a claims executive. But few of them utilize an approach that is as innovative as Aspen Insurance,” said Stephen Perrella, senior vice president, casualty claims, at Aspen Insurance.
“We do a lot of trending and data analysis to provide as much information as possible to our clients. Our analytics can help clients improve upon their own risk management procedures.”
— Stephen Perrella, Senior Vice President, Casualty Claims, Aspen Insurance
Utilizing claims expertise to improve underwriting
Acting as adviser and advocate, Aspen integrates the entire process under a coverage coordinator who ensures that the underwriters, claims and insureds agree on consistent, clear definitions and protocols. With claims professionals involved in the initial account review and the development of form language, Aspen’s underwriters have a full sense of risks so they can provide more specific and meaningful coverage, and identify risks and exclusions that the underwriter might not consider during a routine underwriting process.
“Most insurers don’t ever want to talk about claims and underwriting in the same sentence,” said Perrella. “That archaic view can potentially hurt the insurance company as well as their business partners.”
Aspen Insurance considered a company working on a large bridge refurbishment project on the West Coast as a potential insured, posing the array of generally anticipated construction-related risks. During underwriting, its claims managers discovered there was a large oil storage facility underneath the bridge. If a worker didn’t properly tether his or her tools, or a piece of steel fell onto a tank and fractured it, the consequences would be severe. Shutting down a widely used waterway channel for an oil cleanup would be devastating. The business interruption claims alone would be astronomical.
“We narrowed the opportunity for possible claims that the underwriter was unaware existed at the outset,” said Perrella.
Risk management improved
Claims professionals help Aspen Insurance’s clients with their risk management programs. When data analysis reveals high numbers of claims in a particular area, Aspen readily shares that information with the client. The Aspen team then works with the client to determine if there are better ways to handle certain processes.
“We do a lot of trending and data analysis to provide as much information as possible to our clients,” said Perrella. “Our analytics can help clients improve upon their own risk management procedures.”
For a large restaurant-and-entertainment group with locations in New York and Las Vegas, Aspen’s consultative approach has been critical. After meeting with risk managers and using analytics to study trends in the client’s portfolio, Aspen learned that the sheer size and volume of customers at each location led to disparate profiles of patron injuries.
Specifically, the organization had a high number of glass-related incidents across its multiple venues. So Aspen’s claims and underwriting professionals helped the organization implement new reporting protocols and risk-prevention strategies that led to a significant drop in glass-related claims over the following two years. Where one location would experience a disproportionate level of security assault or slip & fall claims, the possible genesis for those claims was discussed with the insured and corrective steps explored in response. Aspen’s proactive management of the account and working relationship with its principals led the organization to make changes that not only lowered the company’s exposures, but also kept patrons safer.
World-class claims management
Despite expert planning and careful prevention, losses and claims are inevitable. With Aspen’s claims department involved from the earliest stages of risk assessment, the department has developed world-class claims-processing capability.
“When a claim does arrive, everyone knows exactly how to operate,” said Perrella. “By understanding the perspectives of both the underwriters and the actuaries, our claims folks have grown to be better business people.
“We have dramatically reduced the potential for any problematic communication breakdown between our claims team, broker and the client,” said Perrella.
A fire ripped through an office building rendering it unusable by its seven tenants. An investigation revealed that an employee of the client intentionally set the fire. The client had not purchased business interruption insurance, and instead only had coverage for the physical damage to the building.
The Aspen claims team researched a way to assist the client in filing a third-party claim through secondary insurance that covered the business interruption portion of the loss. The attention, knowledge and creativity of the claims team saved the client from possible insurmountable losses.
Modernize your carrier relationship
Aspen Insurance’s claims philosophy is a great example of how this carrier’s innovative perspective is redefining the underwriter-client relationship. Learn more about how Aspen Insurance can benefit your risk management program at http://www.aspen.co/insurance/.
Stephen Perrella, Senior Vice President, Casualty, can be reached at Stephen.firstname.lastname@example.org.
This article is provided for news and information purposes only and does not necessarily represent Aspen’s views and does constitute legal advice. This article reflects the opinion of the author at the time it was written taking into account market, regulatory and other conditions at the time of writing which may change over time. Aspen does not undertake a duty to update the article.
This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Aspen Insurance. The editorial staff of Risk & Insurance had no role in its preparation.