Workers’ Compensation Conference Agenda Released
Savvy employers have increasingly adopted injured-worker advocacy and engagement strategies to help employees overcome fears and challenges encountered when navigating workers’ compensation systems.
“The workers’ compensation claim process can be confusing and intimidating,” said William Wainscott, manager, workers’ comp and occupational health at International Paper.
“For the injured employee there are a lot of unknowns. An advocate helps alleviate the fears and guides them through all the issues.”
Wainscott will speak on an employer panel discussing injured-employee advocacy and engagement programs at the 25th Annual National Workers’ Compensation and Disability Management Conference® & Expo scheduled for Nov. 30 to Dec. 2 in New Orleans.
Minimizing a workplace injury’s impact on employees, their families and employers requires helping the injured worker access the right resources and understand their role in the recovery and return-to-work process, he said.
Wainscott is an NWCDC program co-chair and helped develop the conference’s 2016 agenda.
The agenda highlights other planned presentations featuring employers discussing leading-edge strategies for mitigating workers’ comp and disability challenges.
“We have put together a really strong agenda with topics that are meaningful for employers and other payer groups like insurance companies and third-party administrators,” said Denise Algire, who is also an NWCDC program co-chair and director of managed care and disability corporate risk at Albertsons Cos.
Addressing mental health factors impacting the recovery of workers’ comp and disability claimants is another focus of conference sessions developed to help meet growing employer and claims payer interest in the topic.
“Mental illness affects both workers’ comp and non-occupational disability,” Algire said.
Historically, there has been tremendous stigma around the topic, but more employers now understand that mental health issues impact absenteeism and productivity.
“There is more emphasis on this as organizations realize that the No. 1 reason for short-term disability claims is either depression or some other mental illness,” Algire added.
“So talking about it and understanding what solutions and options are available for employees, and how to implement those programs within your organization is an important conversation.”
Algire will also speak as part of the NWCDC panel discussing injured-employee advocacy programs.
In addition to Algire and Wainscott, the panel will include Kimberly George, senior VP and senior healthcare advisor at Sedgwick Claims Management Services, and Scott Daniels, director of disability at Comcast.
Daniels will also speak as part of another panel titled “Mental Matters: How Mental Health Impacts Productivity and Performance.”
That is not the only conference presentation on mental health issues.
Donna Morrison, corporate healthcare director at UPS, will join Michael Lacroix, associate medical director of behavioral health at Aetna Life Insurance and Coventry Workers’ Comp Services, to deliver a presentation titled “Advances in Behavioral Health Disability Claims Management Strategies.”
In total, the conference features 31 breakout sessions, two general sessions, and a keynote address delivered by Tim East, director of corporate risk management at The Walt Disney Co.
During his presentation titled “Fueling Injury Recovery with Engaged Workers,” East will discuss how technology trends impact workers’ expectations for how employers engage them.
Worker engagement and solutions for mental health’s impact on claim duration are not the only topics awaiting NWCDC attendees.
Other sessions will offer strategies to address opioid prescribing, Medicare set-aside requirements, Americans with Disabilities Act mandates, and insurance arrangements.
The conference will also present several case studies including:
- A look at the multidisciplinary approach applied by manufacturer Mohawk Industries to launch a health and safety program.
- The strategies Columbus Consolidated Government employed to develop an award-winning return-to-work program.
- How American Airlines fostered a claims-closure culture to resolve complex legacy claims.
Those are only a few of the topics employers and service providers will present at this year’s conference, recognized as the workers’ comp industry’s must-attend event of the year.
Managing Service Providers
Uncovering inconsistencies in an insurer’s or third party administrator’s service performance can ultimately strengthen an employer’s partnerships with the organizations managing injured-worker claims.
Advocates of independent reviews maintain that vendor management quality assurance audits conducted by independent reviewers can reveal weaknesses that impact an employer’s workers’ compensation program.
Yet other observers argue that independent quality assurance audits are becoming a thing of the past and their value diminishing.
Still, about 25 percent of self-insured employers and those with large deductibles seek the audits, said Dan Marshall, chief claims officer U.S. at Aon.
“It is only the most sophisticated buyers that want to look under the hood, so to speak, and get a gauge of the performance of claims service providers,” he said.
Insurers and third party administrators, meanwhile, employ their own teams to conduct highly structured quality assurance, or QA, reviews of their internal claims operations.
They test whether their employees adhere to internally mandated standards and whether their claims managers comply with negotiated service levels. They also evaluate the performance of external claims service providers.
“TPAs [and insurers] do a significant amount of internal quality assurance before a work product goes out,” said Jenny Killgore, VP of insurance services at Athenium Inc., which provides insurers with quality assurance systems for evaluating claims, underwriting processes and vendor-management practices.
Whether insurers and TPAs use internal resources or contract with outside companies for nurse case management, legal defense, MSA compliance, surveillance and other claims management services, QA reviews can reveal whether services are optimally deployed.
Reviews conducted by a TPA’s or insurer’s internal QA team also help those organizations strengthen their employee training programs and learn whether service inconsistencies exist among widely dispersed regional offices.
They also help retain customers as competitive market pressures and QA practices have pushed insurers and TPAs to improve their services over the years, several experts agreed.
But an independent review can help reveal whether employers are indeed well served by the internal QA processes of the claims management organizations they contract with, said Jim Kremer, senior manager, insurance and actuarial advisory services at Ernst & Young LLP.
Independent reviews can help confirm that an employer’s claims-management instructions and service agreements are consistently met and whether the company’s dollars are wisely spent.
“Leading practice would be a focus on claims management quality overall, especially outcomes.” — Jim Kremer, senior manager, insurance and actuarial advisory services, Ernst & Young LLP
“You have standards that are in place at every carrier and third party administrator,” Kremer said. But, he asked, “Are those front-line adjusters, and frankly their supervisors, adhering to those standards?”
QA reviews can assess timely claim intervention, reserving, pharmacy management and medical data management, among others. Audits should evaluate adherence to leading claims-management practices and impact on claims outcomes, Kremer said.
“Large employers have performance guarantees in place, hence requiring audits,” Kremer said. “Leading practice would be a focus on claims management quality overall, especially outcomes.”
An independent review might find, for example, that workloads unintentionally encourage a TPA’s adjusters to relinquish control of claim files to specialists more often than optimal. That can cause employers to pay for nurses or attorneys to complete tasks adjusters are capable of handling.
“There is a cost to that and you certainly don’t want to assign routine tasks that an adjuster should be doing to a nurse case manager or to an attorney,” Kremer said. “That is very expensive and produces what we call ‘expense leakage.’ We see it quite often when we are out auditing in the marketplace.”
Other common findings include inadequate supervision of adjusters and failures to optimally reserve for specific claims, brokers said.
One opportunity for improvement commonly found during Sedgwick Claims Management Services Inc.’s internal audits involves the inability of adjusters to connect with injured employees during attempted follow-up telephone calls, said Darrell Brown, Sedgwick’s chief claims officer.
Observers say that has become an industry-wide problem, especially with the increased use of cell phones.
That inability to connect slows claim management decisions and can result in the increased use of investigations when adjusters don’t receive responses to their queries or when claimants believe they are not being properly cared for, Brown said.
“You can’t have a good outcome if the injured employee is having a bad experience,” Brown said.
During the request for proposal process, when employers shop for new TPA partners, it’s common to ask to see results of the TPAs’ internal QA reviews, said Thomas Ryan, research leader for Marsh’s workers’ compensation center of excellence.
“Sometimes they will sanitize the results [of internal QA audits] and share those with us,” Ryan said. “Others are a little reluctant to do so. But they will at least give us some high-level findings.”
Once a TPA is selected, contract language provides employers with the ability to conduct audits.
Thing of the Past?
Not everyone agrees, however, on the value of QA audits.
Automated claims-handling systems with embedded quality assurance components make independent reviews less necessary today, said Jerry Poole, president and CEO of Acrometis, which provides automated adjuster desktops.
“The quality assurance audit will be a thing of the past,” Poole said.
He said that when making claims decisions, Acrometis’ adjuster systems conduct QA in real time, while audits provide a retrospective review.
Real-time QA provides beneficial data about certain adjuster tasks, such as whether specific claims actions are completed within certain timeframes, Kremer said.
But the systems still cannot sufficiently evaluate certain factors, like the intensity of a claim investigation, he said.
Internal risk management staff at Albertsons Safeway constantly monitor the performance of the TPAs servicing the grocery chain’s workers’ comp claims, and medical outcomes are continually measured, said Bill Zachry, group VP of risk management.
Yet Albertsons Safeway also obtains an independent audit every four or five years, Zachry added.
The Hartford, meanwhile, relies on an internal team, comprised mostly of nurses, to conduct evaluations of the business partners that provide workers’ comp services.
Those services include utilization review, field nurse case management, vocational rehab, pharmacy benefit management, transportation, interpretation, physical therapy and medical provider networks.
QA evaluations are conducted before contracting with such partners, said Dr. Marcos Iglesias, VP and medical director for the insurer. Then each is trained on The Hartford’s QA expectations with follow-up audits. &
Handling Heavy Equipment Risk with Expertise
What happens to a construction project when a crane gets damaged?
Everything comes to a halt. Cranes are critical tools on the job site, and such heavy equipment is not quickly or easily replaceable. If one goes out of commission, it imperils the project’s timeline and potentially its budget.
Crane values can range from less than $1 million to more than $10 million. Insuring them is challenging not just because of their value, but because of the risks associated with transporting them to the job site.
“Cranes travel on a flatbed truck, and anything can happen on the road, so the exposure is very broad. This complicates coverage for cranes and other pieces of heavy equipment,” said Rich Clarke, Assistant Vice President, Marine Heavy Equipment, Lexington Insurance, a member of AIG.
On the jobsite, operator error is the most common cause of a loss. While employee training is the best way to minimize the risk, all the training in the world can’t prevent every accident.
“Simple mistakes like forgetting to put the outrigger down or setting the load capacity incorrectly can lead to a lot of damage,” Clarke said.
Crane losses can easily top $1 million in physical damage alone, not including the costs of lost business income.
“Many insurers are not comfortable covering a single piece of equipment valued over $1 million,” Clarke said.
A large and complex risk requires a sophisticated claims approach. Lexington Insurance, backed by the resources and capabilities of AIG, has the underwriting and claims expertise to handle such large claims.
“Cranes travel on a flatbed truck, and anything can happen on the road, so the exposure is very broad. This complicates coverage for cranes and other pieces of heavy equipment. Simple mistakes like forgetting to put the outrigger down or setting the load capacity incorrectly can lead to a lot of damage.”
— Rich Clarke, Assistant Vice President, Marine Heavy Equipment, Lexington Insurance
Flexibility in Underwriting and Claims
Treating insureds as partners in the policy-building and claims process helps to fine-tune coverage to fit the risk and gets all parties on the same page.
Internally, a close relationship between underwriting and claims teams facilitates that partnership and results in a smoother claims process for both insurer and insured.
“Our underwriters and claims examiners work together with the broker and insured to gain a better understanding of their risk and their coverage expectations before we even issue a policy,” said Michelle Sipple, Senior Vice President, Property, Lexington Insurance. “This helps us tailor our policies or claims handling to suit their needs.”
“The shared goals and commonality between underwriting and claims help us provide the most for our clients,” Clarke said.
Establishing familiarity and trust between client, claims, and underwriting helps to ensure that policy wording is clear and reflects the expectations of all parties — and that insureds know who to contact in the event of a loss.
Lexington’s claims and underwriting experts who specialize in heavy equipment will meet with a client before they buy coverage, during a claim, or any time in between. It is important for both claims and underwriting to have face time with insured so that everyone is working toward the same goals.
When there is a loss, designated adjusters stay in contact throughout the life of a claim.
Maintaining consistent communication not only meets a high standard of customer service, but also ensures speed and efficiency when a claim arises.
“We try to educate our clients from the get-go about what we will need from them after a loss, so we can initiate the claim and get the ball rolling right away,” Clarke said. “They are much more comfortable knowing who is helping them when they are trying to recover from a loss, and when it comes to heavy equipment, there’s no time to spare.”
“Our underwriters and claims examiners work together with the broker and insured to gain a better understanding of their risk and their coverage expectations before we even issue a policy. This helps us tailor our policies or claims handling to suit their needs.”
— Michelle Sipple, Senior Vice President, Property, Lexington Insurance
Leveraging Industry Expertise
When a claim occurs, independent adjusters and engineers arrive on the scene as quickly as possible to conduct physical inspections of damaged cranes, bringing years of experience and many industry relationships with them.
Lexington has three claims examiners specializing in cranes and heavy equipment. To accommodate time differences among clients’ sites, Lexington’s inland marine operations work out of two central locations on the East and West Coasts – Atlanta, Georgia and Portland, Oregon.
No matter the time zone, examiners can arrive on site quickly.
“Our clients know they need us out there immediately. They know our expertise,” Clarke said. “Our examiners are known as leaders in the industry.”
When a barge crane sustained damage while dismantling an old bridge in the San Francisco Bay that had been cracked by an earthquake, for example, “I got the call at 6 a.m. and we had experts on site by 12 p.m.,” Clarke said.
In addition to educating insureds about the claims process and maintaining open lines of communication, Lexington further facilitates the process through AIG’s IntelliRisk® services – a suite of online tools to help policyholders understand their losses and track their claim’s progress.
“Brokers and clients can log in and see status of their claim and find information on their losses and reserves,” Sipple said.
In some situations, Lexington can also come to the rescue for clients in the form of advance payments. If a crane gets damaged, an examiner can conduct a quick inspection and provide a rough estimate of what the total value of the claim might be.
Lexington can then issue 50 percent of that estimate to the insured immediately to help them get moving on repairs or find a replacement. This helps to mitigate business interruption losses, as it normally takes a few weeks to determine the full and final value of the claim and disburse payment.
Again, the skill of the examiners in projecting accurate loss costs makes this possible.
“This is done on a case-by-case basis,” Clarke said. “There’s no guarantee, but if the circumstances are right, we will always try to get that advance payment out to our insureds to ease their financial burden.”
For project managers stymied by an out-of-service crane, these services help to bring halted work back up to speed.
For more information about Lexington’s inland marine services, interested brokers should visit http://www.lexingtoninsurance.com/home.
This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Lexington Insurance. The editorial staff of Risk & Insurance had no role in its preparation.