Bill Zachry Senior Fellow Sedgwick Institute 2018

“Jumper” ClaimsThe Identification and Prevention of Catastrophic Workers Compensation ClaimsFocused on Litigation and Lost time Reduction Bill Zachry Senior Fellow Sedgwick Institute 2018

Old Causes of Catastrophic Claims • Quadriplegic • Paraplegic • Amputations • Head Injuries • Severe Burns • Total Loss of Vision • Heart Conditions • Cancers • Death

Workers CompensationPyramid of Experience Top 3% of incidents are catastrophic claims Incidents, Close Calls, Near-misses (Hundreds of These For Every Accident) 60% of total cost $ Middle 15% are indemnity claims Bottom 82% are claims with no indemnity payments Indemnity 30% of total cost $ 10% of total cost $ Medical Only

Top Causes of Catastrophic “Jumper” Claims • Litigation • Lost time • Lack of Coping Skills (the At-Risk Employee) • Employer / Employee relationship • Opioid use • )

Identification of Jumper Claims • “Big data” and AI used to identify Jumper Claims • Goal is 90+ % accurately identified in six or fewer weeks • Re-design and implement claims intake programs to gather data needed to identify “Jumper Claims” • Initial report of claim • Initial Medical Triage • Three Point Contact • At Risk Employee contact

Litigation and Lost Time The top two drivers for “Jumper” claims overlap. Both impact each other Both have common causes and solutions

Litigation Causes • Claim not reported immediately • Lack of communication between any of the parties • Delays in decision for compensability • Delays in benefit provision • Lack of trust in the doctor • Lack of employer employee relationship

Litigation Causes • Prior litigation by the employee • Confusing system • Anger by the worker for being put in a situation where the injury can take place • Union involvement

Litigation Mitigation • Employer remain engaged with worker • Prompt accurate adequate benefit provision • Prompt authorization for medical treatment • Identification and intervention of the “At Risk” employee • Communication using modern technology (phone texting of benefits and access to payment information on line)

Lost Time • Drivers of lost time and mitigation methods • Employer • Claims administrator • Doctor • Employee

Failure to return to work can result in.. • Catastrophic and permanent loss of income for injured worker • Increased mortality for injured workers • Increased divorces and other social maladies • Permanent social and economic impact on family of worker

Lost Time Disability drives Workers Compensation costs • Lost time causes litigation • Work related disability is a problem • Multiple reasons – Demographic, Health, Economic, Social • Financial incentives do not encourage doctors to facilitate return to work • Medical treatment and solutions have not been effective • Increasing costs (Medical, Temporary Disability, Permanent Disability, Vocational Rehabilitation, Litigation, Indirect, etc.) • Solution is to identify and eliminate obstacles which block the return to work process

Ageing work force and co morbidities have Increased exposure to disability • On January 1, 2011, the oldest Baby Boomers started turning 65. • For the next 19 years (until 2030) 10,000 per day will turn 65. • By 2030 18% of the nation's population will be at least 65 • Ageing workforce has increased exposure to Co-morbidity • Co-morbidity refers to when a person has one or more medical or psychiatric conditions or diseases that are present at the same time as the injury • WC Examples: Chronic low back pain, diabetes, Hypertension, Drug abuse, COPD, Obesity

Lack of retirement resources Keep workers in labor force longer • Will keep workers working longer to maintain or obtain group health medical coverage • Will keep workers in the work force longer resulting in increasing exposure to co-morbidities • Will put pressure on WC system for increased cost shifting

Current Medical treatment process does not result in optimum return to work • More treatment often results in worse (or no impact) on disability • Extended Physical Therapy as a “preventive” or chiro for low back pain = WORSE disability outcome (delay RTW, MORE recurrence) • Chronic pain treatment - opioids – more is much worse • Back surgery – much less helpful in WC (Sweden study shows back surgery and no back surgery gets same outcome in two years)

Opioids cause significant increase in length of disability • Oxycodone and Hydrocodone • Impact on work force (many already addicted) • First Wave done • Second wave now inundating workforce • The impact of opioids can be profound • Medical costs double • Indemnity costs increase exponentially • Opioid utilization costs • Detox costs • Migratory claims • Exorbitant MSA allocations • Inability to resolve claim

Risk factors for pain and delayed RTW are different Risk factors for back PAIN outcome: Risk factors for back injury RTW outcomes are: Workplace conflict Work place inflexibility Fear of re-injury Lack of autonomy Pain severity Catastrophic view • Pain severity • Duration • Somatic focus • Coping • History

The disability process benefits many in the health care system and discourages RTW • Provider cartels resist evidence-based practice (chiro, pain, surgery,…) • Fee-for-service is very profitable for Health Care industry • overtreatment, overbilling, more income for disability evaluations and IMEs • The system provides insulation from malpractice • When measuring patient satisfaction Return to work = negative patient ratings • RTW coordination procedures take time and cost money for medical providers • Doctors are usually not trained to solve RTW problems (no training, practice, or mentorship)

Factors hindering return to work (employers) • Abrogate all responsibility for RTW to the claims process • Believe that all worker compensation claims are fraud • Uses punitive return to work programs (sorting paper clips) • Attempts to use wc as a way to terminate problematic employees • Believe that there are significant legal barriers to communication (particularly if employee is represented) • Does not understand full or hidden costs of lost time

Factors hindering return to work (employers) • Misconception of need due to the insurance policy • Angry with employee for accident, impact on stats., loss of bonus • Have no economic incentives to encourage transitional RTW or light duty • Has no one specifically responsible for return to work or that person does not have sufficient time, authority or correct people skills

Factors hindering return to work (employers) • No clearly stated goal or culture for eliminating lost time • Failure to explain nature of modified duties or timelines to manager • No jobs available which can accommodate light duties • Union contracts can limit light duties • Small employer with limited number of employees • No clear job description for Doctor to use which defines current physical job duties and requirements

Factors hindering return to work (employers) • Lacks clear instructions on return to work process for all participants • Employee is a temporary or seasonal employee • Modified duty programs are limited in length (90) days to avoid problems associated with creating “Permanent Accommodations” per ADA • Do not provide occ and non-occ modified duty with same criteria

Factors hindering return to work (examiner) • Examiner is not aware of co-morbidities (such as obesity, diabetes or pre-existing conditions) • Examiner does not take enough time to get to know the psycho social issues which are driving the injured worker • Examiner does not have the correct person or resources at the employer to facilitate return to work • Examiner is not aware of light or modified duties which are available at employers • Complex legal issues such as third party claim, or subrogation are driving claims process

Factors hindering Return to work(Medical Provider) • Not given accurate information about nature of accident, capacity of the injured worker or nature of physical job requirements • Is asked by worker or employer to keep employee off of work unless capable of doing full duties • Prescribes medication which would prevent employee from returning to full duty • Misplaced incentives for customer satisfaction

FACTORS INCREASING DISABILITY (Injured worker) • The claim process is not always transparent or easy to understand • It can be daunting, confusing, frustrating and scary • Workers compensation benefit packets mailed to associates after a WC claim: • Not in format which many worker want (text or email) • Legalese and not in plain language the worker would understand • Overwhelming • Intimidating

Factors hindering modified duties or transitional return work (injured worker) • Economic (reduced income for worker) • Psycho social issues (child care, parents, commute) • Lack of employee employer relationship • Concern about re-injury (employee, employer) • Lack of accurate or clear instructions from doctor • Compliance with work restrictions • Employee wanting to exceed work restrictions • Perceived pressure from co-workers to exceed restrictions

Focus early on RTW • RTW problems become irreversible over time • Employee linkage to employer gets lost • Worker becomes a “sick patient” • Reversing long term disability requires increased resources and higher costs • Prolonged disability drives unnecessary workers compensation costs particularly unnecessary medical care

Methods to reduce lost time (employers) • Do analytics to determine impact of reduced lost time on wc costs • TD • PD • Hidden costs of replacements and lost productivity • Set company goals (total days per year as well as individual claims) • Give goals to examiners for reduced lost time days • Get buy in from all parties in organization (HR, Risk Management, Safety, Senior Management, Legal) • Align both occ and non-occ processes

Factors which make modified duties successful (employers) • Corporate culture encourages employee for prompt reporting of all claims without negative repercussions • Financial incentives aligned to encourage front line supervisors to immediately report all claims • Financial incentives for front line supervisors to accommodate light modified duties • Financial incentives for employee to work modified duties • Full pay and full work hours • Be aware of unintended consequences

Methods to reduce lost time (claimS EXAMINERS) • Engage the injured employee • Explain the claim process • Be compassionate, calm their fears • Help them through the process after a work related injury • Always be available to the worker • Answer workers questions • Demonstrate empathy and urgency • Investigate and make compensability timely • Explain WC benefits, employee’s obligations, your role • Pay all benefits timely • Keep in touch with injured employee; how are they progressing, questions?

Methods to reduce lost time (claimS EXAMINERS) • Review medical treatment • Work with doctor for timely diagnosis and effective treatment plan • Including co-morbidities • Work with injured associate to ensure understanding of their injury, treatment plan, healing process, etc. • Prompt utilization review • Watch prescriptions and work with doctor to avoid dependency

Methods to reduce lost time (claimS EXAMINERS) • Build relationship with your medical providers • Tour the facility • Explain your light duty program • Discuss expectations • What does employer want • What does injured associate want • What does doctor want • The right care, at the right time, with the right provider for the right outcomes

Methods to reduce lost time (workers) • Work safely • Report injuries immediately • Obtain prompt medical attention, if needed • Comply with medical treatment • Keep manager aware of status, progress and questions • Diagnosis, next appt., recovery plan, expected return to work date • Participate in light duty • Cooperate with claims adjuster • Ask questions and reach out for help

Methods to reduce lost timeMedical providers • Get to know the patient • Find out what kind of modified duties are provided by the employer • Communicate if there are any barriers to return to work • Set expectations with worker on return to work • Follow disability guidelines

Bill Zachry Senior Fellow Sedgwick Institute 2018