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North Carolina Supreme Court Decision – For Work Comp Claims In All States

June 15, 2017 By JL Risk Management Consultants Leave a Comment

North Carolina Supreme Court Ruling On Medical Treatment Denial After Initial Acceptance

The North Carolina Supreme Court has ruled on denying a medical condition after the claim was accepted. The link to the decision can be found at the end of this article. The file is in PDF format. The North Supreme Court decided in favor of the plaintiff . The case centers on the Parson presumption in a prior case revolving around the filing of the North Carolina Industrial Commission Form 60.

graphic north carolina supreme court scales

Wikimedia Commons – DTR

You should review this case even if you do not have interests in or have workers in North Carolina. I expect to see this ruling again in other states.

In North Carolina, The Form 60 basically represents the employer and carrier or self insured and Third party administrator admit compensability for the claim. The Form 63 enables the claims adjusting staff to pay up to 90 days of benefits without admitting liability.

If you look at the Form 60 and Form 63 closely you will immediately see the Form 63 gives the claims staff enough time to thoroughly investigate a claim before acceptance. Much debate occurs with the choice of what form to use. In my old claims adjusting days, I chose the Pay Without Prejudice Forms as much as possible. New Hampshire was the first time I had seen a Pay Without Prejudice Form.

Leading defense law firms discouraged the use of the Form 63 when I asked them. One statistic that stands out is that the claims were later denied by me less than 1% of the time.

The North Carolina Supreme Court ruled that once the employer/carrier or self insured/TPA accepts the claim and the employee proves an underlying medical condition was related – the injured employee’s claim for the specific medical treatment cannot be denied later in the claim.

**Please note that I am making a few assumptions as without the claim file to review, one must be very light on their opinions of how the case was handled. I am not asserting a claims handling opinion.

Some defense attorneys deem this case as one of the most significant decisions in Workers Comp for the last 30 years.

One that comes to mind for me was the 1994 North Carolina Supreme Court decision that erased the Statute of Limitation on all Workers Comp claims for medical treatment. The State Legislature later changed that one. One of the Supreme Court justices in 1994 said the case was social legislation. The big concern was the Workers Comp rating system was not built for this type of claim medical treatment alterations.

The North Supreme Court conclusion is below. The link to the decision is here. This is one to print or save to your desktop and read.

The case of

JOHNNIE WILKES, Employee
v.
CITY OF GREENVILLE,
Employer, SELF-INSURED

(PMA MANAGEMENT GROUP, Third-Party Administrator)

Conclusion

In sum, we hold that the Commission erred in failing to give plaintiff the benefit of a presumption that the additional medical treatment he sought was for conditions related to his compensable injuries. The Commission will reevaluate its decision, applying the correct presumption. As the Court of Appeals correctly addressed this error, we affirm on this issue. On the issue of plaintiff’s entitlement to additional disability benefits, we hold that the evidence raises factual issues regarding the effect of plaintiff’s compensable tinnitus on his ability to earn wages, and that, on remand, the Commission must find these facts. Accordingly, on this second issue we modify and affirm the decision of the Court of Appeals. We remand
this case to the Court of Appeals for further remand to the Commission for further proceedings not inconsistent with this opinion.
AFFIRMED IN PART; MODIFIED AND AFFIRMED IN PART, AND REMANDED.

Filed Under: North Carolina Industrial Commission, North Carolina Supreme Court Tagged With: Form 60, Form 63, insurance carrier, Parsons, Pay Without Prejudice, self insured, TPA

Insurance Policy = Contract Between Your Company and The Carrier

June 14, 2017 By JL Risk Management Consultants Leave a Comment

Read Your Insurance Policy On Receipt To Save Headaches

Your insurance policy equals a contract between you/your company and your insurance carrier. This applies to Workers Comp policies even though they are usually more state-regulated than liability policies.

Three questions asked over the last two weeks that applied to an insurance policy made me decide to step outside of Workers Comp a little.

Using a highlighter, whether electronic or the one in your desk drawer, go over any policy line by line, word by word. I did this with an auto policy last weekend. Watching grass grow seemed more exciting. However, I did find a mistake in one of the policies, so I felt vindicated in reviewing the policy.

picture barn raising insurance policy rural

Wikimedia Commons – Ron Shawley

Our Workers Comp consultant interns initial training requires the college student to read all of our policies along with the various endorsements. Yes, I do not read the one for the businesses, the interns read them over. They learn bucket-loads of knowledge. Many compile a list of questions to ask me. So, if our interns can read them, someone can read them in your offices or at home for personal policies.

For instance, the Proof of Loss policy requirements generate so many misunderstandings

. Yes, a claim must be filed immediately. However, almost all carriers in all states require a Proof of Loss in 60 days. FEMA provides a great explanation for Proof of Loss here. A summary is:

A Proof of Loss is a policyholder’s statement of the amount of money being requested, signed to and sworn to by the policyholder with documentation to support the amount requested. It is important to understand the Proof of Loss is not the claim.

On a side note, I decided to become FEMA flood certified this year to handle FEMA NFIP claims.

Your Workers Comp insurance policy requires no Proof of Loss. However, you should read the policy front to back or as recommended in this blog back to front. The Declarations Page counts as a few pages. The Dec Pages do not count as the whole policy. Also, read the Endorsements on your Work Comp insurance policy as you receive them throughout the policy year.

Always call or email (my recommendation) with questions on your insurance policy.

Filed Under: Insurance Policy Tagged With: Declarations Page, endorsement, highlighter, Proof of Loss

Workers Comp Medical Networks Save Money? – WCRI Webinar 6/14/17

June 8, 2017 By JL Risk Management Consultants Leave a Comment

Workers Comp Medical Networks Save Money vs. Not Having Them – Three Sources Agree On One Point

Most workers comp medical networks cause many headaches when established upfront. The costs in time, effort, and funds almost always generates even more of a benefit. Many years ago, I wrote the Six Keys To Saving on Workers Comp. Those have not changed over the years – 10 to be exact.

One of those keys points to medical – especially physician networks – as a large cost saver. NCCI confirmed that key at their Annual Issue Symposium. The savings may not look that significant in their study, however, 3% of medical costs totals a large amount when examining medical outlays.

The recent WCRI study on medical networks concerned me. I made the mistake of reading the reports from various sources without reading the study itself. I remained quiet for weeks until the study confirmed what NCCI and I had inferred on workers comp medical networks.

Unless I am mistaken, the one “wobbling” variable is the employer that has a network in place, but allows the employee to make the initial treatment choice. Then the costs would be similar.

My two studies in North Carolina and our current list of clients with medical networks show a huge reduction in costs after installing a medical network and then using it.

As I have assisted employers with installing medical choice networks in states that allow the employer to make the medical choice, their Workers Comp costs have reduced by 75% on the average.

I did not keep the data that I covered in my own studies. I was performing informal studies as files were audited for public employers.

WCRI webinar on June 15th on Physician Choice

This webinar may be one to attend. See below for the details.

Should the choice of provider in workers’ compensation cases be left to workers or employers? The Workers Compensation Research Institute (WCRI) will share its latest research informing this question during a 45-minute webinar on Wednesday, June 14, 2017, at 2 p.m. ET (1 p.m. CT, 12 noon MT, and 11 a.m. PT). The webinar will be hosted by Dr. Bogdan Savych, a public policy analyst at WCRI.

Dr. Savych led the groundbreaking study on how injured employees fared post-injury by actually interviewing the employees. The study is among my favorites overall and my preferred study from WCRI.

Attendance is limited to 100 people and all attendees receive a free copy of the slides. Click here to register.

Filed Under: NCCI Claims Cost, Six Keys, WCRI Tagged With: physician choice, webinar

Employers Can Extend Longevity Among Older Workers, Experts Say

June 8, 2017 By JL Risk Management Consultants

Guest Author – Great Article On How Employers Can Extend Longevity Among Older Workers

Older workers have some of the best qualities an employer could want in a worker: expertise, loyalty, commitment to quality, and the ability to be outstanding mentors to others. But the physical challenges that accompany the aging process can be daunting for both the employee and the organization.

By understanding the aging process and being open to making some changes, employers can keep these valuable employees — and avoid potential litigation. Two workers’ compensation experts outlined the obstacles and opportunities available in their ‘Pearls of Wisdom, an Aging Workforce’ session at RIMS.

“Almost 20 percent of the workforce is over 65,” said Dawn Watkins, director of Integrated Disability Management for the Los Angeles Unified School District. While that number is 9 million now, it is expected to increase to about 98 million by 2060. Joining Watkins for the presentation was Darrell Brown, chief Claims Officer for Sedgwick. The two identified some of the unique risks of aging workers and ways employers can mitigate them and capitalize on their capabilities.

Stats

Older workers have the fewest number of work-related injuries, according to researchers. However, the severity costs associated with injuries of workers aged 35 and older are 50 percent higher compared to their younger colleagues. While that is partly due to higher wages, aging workers typically have more comorbid conditions and take longer to recover from their injuries.

The types of injuries also vary among different age groups. Older workers tend to have more rotator cuff and knee injuries while younger workers have more back and ankle sprains.

Among the physical changes that may accompany aging are the following:

Strength — a decrease of 25 to 30 percent.
Flexibility — decreases 18 to 20 percent.
Balance — 1/3 of those aged 65 and older fall each year.
Sight — all aspects can deteriorate.
Reaction time and speed — decreases.
Hearing — 1/3 of adults 65 to 74 years of age have problems.
Manual dexterity — decreases.
Body fat — increases.

“Older workers tend to have more slips, trips and falls, often due to decreased balance,” the two explained. “They also have a higher number of illness days.”

There are several specific signs that may indicate the aging process is impacting an employee. Increased fatigue, for example, or loss of patience along with irritability may be signs. An increase in minor injuries and near misses are others.

Addressing Physical Challenges

Employers can help prevent injuries among older workers through various worksite programs, according to an industry physical therapy expert. “Injury prevention programs such as stretching, body mechanics training, and general education on the types of injuries you can get on your job can really help,” said Daniel Sanchez, VP of Operations for OnSite-Physio. “They should also be shown how to do their job tasks properly to avoid injury.”

When older workers sustain injuries their recoveries may take longer due to preexisting conditions. “An underlying condition is often not mentioned by the treating physician, but it makes the recovery slower,” Sanchez said. “If you are providing physical therapy for an older person with a sprained knee and there are arthritic changes that cause the recovery to be slower you have to change your treatment approach to be less aggressive with the therapy. You don’t want to aggravate the underlying condition.”

In addition to physical activities, there are additional changes employers should consider to help their older workers. Training materials, for example, can be produced in large print to make it easier to read for those with poorer eyesight. Collaboration and knowledge can be integrated as a fundamental requirement of every job at every level. And jobs can be modified to respond to age-related changes.

Reasonable accommodation

Chronic or other medical conditions of aging workers might prompt a request for reasonable accommodation. Under the Americans with Disabilities Act, private employers with 15 or more employees are required to provide a covered job applicant or employee with a reasonable accommodation, unless doing so would pose undue hardship or direct threat.

Workers who believe they are covered may request an accommodation verbally or in writing. While there is no specific time frame, employers are advised to respond to requests as soon as possible to avoid violating the ADA. “If you can’t deal with this accommodation issue now, how will you deal with it in a deposition,” Watkins said.

Making accommodations does not need to be costly. “Modifying jobs is a great way to address reasonable accommodation,” Watkins said. “You can adjust [the job] based on the person’s needs.”

Claims administration

Using best practices in managing all claims is the best way to avoid litigation. There are several ways that can translate to claims involving older workers.

“Be sure the treating physician is experienced with comorbidities and psychosocial issues among older people,” Brown explained. “Also, use empathy and caring. And don’t draw conclusions based on demographics, including the age of the claimant.”

Communicating with an older injured worker may involve sending a letter or initiating a phone call, rather than sending a text message. Respect, dignity, open mindedness and fairness are essential.

“We have a customer service approach to claims,” Watkins said. We return calls. We do the things we expect as consumers.”

For more information visit www.sedgwick.com or www.onsite-physio.com.

Authored by and thanks to

Nancy Grover President, NMG Consulting

Filed Under: Older workers Tagged With: Los Angeles, Nancy Grover, NMG Consulting, reasonable accomodation, Sedgwick

Workers Comp Attorney Involvement – WCRI Says 400% Variation Between States

May 25, 2017 By JL Risk Management Consultants

Workers Comp Attorney Involvement Varies Widely Between 18 States – WCRI

The Workers Comp Attorney involvement rates vary wildly between the states that WCRI studied in a recently released report. This topic wowed the press and audience at the recent WCRI Annual Conference just this last March. The press at the conference began feverishly typing when this data was presented by WCRI.

My live blogging of this session from the March WCRI Annual Conference can be found here.

WCRI is the Workers Compensation Research Institute out of Boston, Mass. Andy and the Institute represent a great think tank for Workers Compensation. When I need good fresh WC data, I turn to them. The rating bureaus such as NCCI and WCIRB provide good data also.

If you underwrite, adjust, or have anything to do with the Workers Comp rating process, this is one study you should download. The data astounded me.

The chart in this article shows the striking differences between the 18 states in reference to attorney involvement.

According to WCRI

“According to the study, the percentage of claims with worker attorneys ranged from 13–14 percent in Wisconsin and Texas to 49–52 percent in New Jersey and Illinois, for 2013 claims with more than seven days of lost time and experience through March 2016. The median of the 18 states was at nearly 30 percent.

The question that I ponder covers three points – why

Such a huge variation
Do over 50% of files in either Illinois or New Jersey require an attorney? – astounding
Is the median of all states at 30%?

WCRI postulates an answer for all three:

The study, Worker Attorney Involvement: A New Measure, indicates system features may be responsible for at least some of the interstate variation. The report focuses on the two states among the lowest on this measure (Wisconsin and Texas) and the two states among the highest (Illinois and New Jersey), and discusses the system features that may be contributing to these states’ results based on findings from WCRI’s CompScope™ Benchmarks studies.

The 18 states included in this study are Arkansas, California, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Massachusetts, Michigan, Minnesota, New Jersey, North Carolina, Pennsylvania, Texas, Virginia, and Wisconsin. These states were selected because they are geographically diverse, represent a range of system features, and represent the range of states that are higher, near the middle, and lower on costs per claim.

The data structure analyzed for Workers Comp Attorney involvement by WCRI was enormous –

The analysis in this report uses data from 24 data sources, including national and regional insurers, claims administration organizations, state funds, and self-insured employers. The data are collected in the WCRI Detailed Benchmark/Evaluation (DBE) database, which includes about 7.5 million claims that are reasonably representative of the entire system in each of the 18 states, including all market segments: self-insurance, residual market, voluntary insurance, and state funds.

To download this study on Workers Comp attorney involvement, visit https://www.wcrinet.org/reports/wcri-flashreport-worker-attorney-involvement-a-new-measure . The authors of this study are Rebecca (Rui) Yang, Karen Rothkin, and Roman Dolinschi.

BTW, WCRI does not pay J&L Risk Management Consultants or myself any advertising revenue. My opinions on their studies are written of my own volition. They do provide me a copy of certain studies gratis if I request them.

Filed Under: WCRI Tagged With: Arkansas, California, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Massachusetts, Michigan, Minnesota, New Jersey, North Carolina, pennsylvania, Texas, Virginia, Wisconsin

Workers Comp Medical Networks Keeping Costs in Check NCCI – Physicians

May 24, 2017 By JL Risk Management Consultants

Workers Comp Medical Networks = Cost Saving According to NCCI’s Barry Lipton

Workers Comp medical networks reduce costs in most instances. At NCCI’s 2017 Annual Issues Symposium, Barry Lipton, Senior Actuary covered a very interesting topic – Medical Costs Then and Now <<slides available at this link.

brain activity workers comp medical networks scan

Provided by US Government

I do recommend looking at the slides for a few minutes as they are beyond informative.

One of the more important aspects of his presentation was that medical costs were decreasing due to the increase (almost 2/3) of physicians charges were network-based. See slide 14 of the presentation.

Slide 13 of Mr. Lipton’s presentation shows that states without medical fee schedules dwindled down to just a very few (6 states).

Two of his conclusions stated

Most physician fee schedules have been in place since 2000
Higher provider network penetration reaps benefits of system efficiencies

The second bullet point used to be quite a concern with the employer clients that I consulted with to reduce WC costs. The network penetration rates were never that high in many of the employer’s workers comp medical networks.

Slide 8 of his presentation points out the main reason for the reduction in costs. Surprisingly, it is physician utilization per claim. While the reduction only totaled 3%, one would have to say this is significant in a time of upward spiraling medical costs.

As stated in my last article, workers comp medical networks or medical control is the most significant way to reduce costs out of the Six Keys To Reducing Workers Comp Costs.

Slide 2 shows that Workers Comp medical increases on Lost Time claims grew much more slowly over the last five years. In fact, the costs decreased in 2015. However costs increased quite a bit in 2016 compared to the last few years.

The NCCI analysis agreed with most of my findings on the importance of using workers comp medical networks.

Filed Under: medical networks, NCCI Conferences Tagged With: lost time claim, medical fee schedule, network penetration

Workers Comp Medical Networks Reduce Costs – Or Do They Actually?

May 24, 2017 By JL Risk Management Consultants

Workers Comp Medical Networks – Three Conflicting Studies

Most Workers Comp medical networks generate large claim payment reductions according to two studies. Another study indicates no savings from these same Workers Comp medical networks.

One of my Six Keys To Saving On Workers Comp Costs involves medical control. Since the late 1980’s I have tracked three variables which save on WC payouts. One of the Six Keys is medical control or the use of medical networks created by the employer. The others are ASAP First Reports and Return to Work programs.

diagram workers comp medical networks decision

jean paul alonso – Wikimedia Commons

In the 1990’s, I decided to see if my three financial keys affected the files as I had anticipated from the beginning. I performed two studies on two very different groups of governmental WC claim files. My theory on the financial keys sustained my theory all throughout the two sets of files.

Medical control by the employer reduced costs by 75%. Each employer we have assisted in cutting workers comp costs saved premium or budget dollars when using medical control to direct their employees to certain physicians. We stress to each client to have a medical network in place and not just have the company Doctor in place.

Study after study has shown that employees use the physicians that the employer recommends for initial and subsequent treatment for their work related injuries regardless of whether the employee or the employer has the medical treatment control.

Therefore my studies and experience say that medical control and medical networks save big workers comp money. Additionally, the network or medical control provides good conservative care for injured employees. The win-win-win situation creates a great bond between employer and employee.

NCCI Recent Press Release

NCCI, the largest rating bureau for Workers Comp released a study at their Annual State of The Line conference last week. Their study on Workers Comp medical networks indicated a great deal of premiums are saved by using medical networks.

WCRI Recent Study Release

WCRI (Workers Comp Research Institute) recently released a study that seems to contradict my findings along with NCCI. WCRI and my findings have always agreed right down the line. In fact most of the time, NCCI, WCRI, and I agreed on almost any aspect of Workers Comp.

For further reading, the links below will take you to each study’s summary. Unfortunately, my study was informal. I do not keep all the data nor did I publish the study as it was a very ad-hoc analysis.

WCRI graciously supplied me a copy of their study. The summary/abstract is here.

The recent NCCI study has not been released yet. It should be out shortly. I will link to it when it appears on the NCCI website.

I try to write short articles so I will not comment on the NCCI or WCRI Studies yet. I will comment on workers comp medical networks this week.

Filed Under: medical networks Tagged With: ASAP First Reports, medical control, NCCI, WCRI

Workers Comp Policy Info Retention Recommendation

May 16, 2017 By JL Risk Management Consultants

Workers Comp Policy Info Should Be Kept Very Handy

The Workers Comp policy info referenced includes:

Policies
All policy amendments or endorsements
Loss Runs – not just not most recent one
Premium Audits
Rating Bureau Worksheets

The aforementioned list of information should be retained for at least five years if not longer. These records should be accessible very quickly by the appropriate staff.

picture of signpost workers comp policy info idrections

Deepashree S – Wikimedia

Why?

If you decide to call in a consultant – the more records you have kept, the process will be easier and probably less expensive.

Policies

Your company will need your workers comp policy info for:

Comparison of one year’s quote to the next
Comparison at time of premium audit
Shopping your policy including alternative coverages

The policy endorsements should be kept along with each respective policy year. Endorsements can heavily modify your original policy.

Loss Runs

A current loss run that cover the last four to five years seems great but not always. The loss runs that were produced each year enables workers comp consultants to better understand the flow of the reserves. Not all of our competitors examine the loss runs levels as they change during the year.

Premium Audits

Premium audits provide the closing figures for each policy year. No matter what the policy indicates, the workers comp premium audit shows what final premium figures the insurance carrier charged for that respective year. If your company decides to dispute an audit, the more info retained on the past and current premium audit, the better you can follow what the premium auditor did each year.

Rating Bureau Worksheets

The rating bureau sheets indicate not only the Experience Mod, but what total incurred numbers were charged to the policy. The sheets can be invaluable for comparing total incurred numbers to the loss runs. A word of caution – experienced Workers Comp consultants may be your best bet for these comparisons. The comparison can be a complicated task where the numbers may not match as expected.

The overall records retention information can be found in the link to this article. Overall records retention should be longer with the cheap and easy storage costs provided by just a USB thumbdrive with a password.

Filed Under: records retention Tagged With: loss runs, premium audit, rating bureau worksheets

Workers Comp Safety Innovator Now A Thing Of The Past – Correction

May 16, 2017 By JL Risk Management Consultants

A Great Workers Comp Safety Source Closed Down After 60 Years

Workers Comp safety peer reviewed research provider has been shut down. Liberty Mutual Insurance Companies have stopped performing peer reviewed workers comp safety research this week.

Wikimedia Commons – James Alan 1986

The Liberty Mutual workers comp safety facility partnered with outstanding organizations such as:

MIT
Harvard School of Public Health,
University of Massachusetts at Amherst
University of Massachusetts at Lowell

The research institute created the Workplace Safety Index. I had read over quite a bit of their cutting-edge research over the years. A few articles in this blog referred to their research results. Liberty Mutual produced the 2017 Workplace Safety Index in PDF form.

Overexertion involving outside sources topped the list as the most expensive type of injury.

According to the report –

This event category, which includes injuries related to lifting, pushing, pulling, holding, carrying or throwing objects, cost businesses $13.79 billion in direct costs and accounted for 23 percent of the overall national burden.

23% appears to be a significant number. Lower back injuries generate huge WC losses from just lifting injuries alone.

I had always thought the 2nd place injury type was the most expensive –

Falls on same level ranked second with direct costs of $10.62 billion and accounted for 17.7 percent of the total injury burden.

Correction – After talking with two Liberty Mutual employees, I was informed that the Hopkinton, Massachusetts, facility remains open – the peer reviewed research efforts ended this month.

Liberty Mutual owns the largest database on Workers Comp. Hopefully, they will share it with the outside workers comp community. But then again, why would they lose that competitive advantage?

I guess that, as I have said before, Workers Comp never really changes. I stand corrected on this issue. We all hate to see the facility go, but then again who can blame them for ending the peer-reviewed workers comp safety studies?

Filed Under: Liberty Mutual Tagged With: Harvard, MIT, University of Massachusetts

Workers Comp Claims Savings In 7 Words – Written 8 Years Ago

May 11, 2017 By JL Risk Management Consultants

Workers Comp Claims Savings In 7 Words Reprisal – Still True Today

The Workers Comp Claims Savings In 7 Words articles were very popular when I wrote them. As with most things in the WC arena, the seven articles still ring true today. The basics do not change.

picture of workers comp claims savings seven

Wikimedia Commons – Savingsgard

Please excuse the older articles if the spacing or any other attributes look a little off the mark. The articles still need more “gussying.”

The 7 Mostly Encompassing Words with a link to each article are:

Report – Check out this article on ASAP reporting from earlier this week – easiest one to accomplish
Refer – Physician referral control results in cost savings on the medical costs and indirectly saves some of the indemnity claim costs
Return – A solid return to work program with #1 and #2 implementation will reduce indemnity costs greatly and indirectly the medical costs.
Treat – If the injured employee thinks they have been treated well, the claims cost reduces quickly.
Document – Take great notes – always keep any documents handy with a proper records retention policy – back up everything
Question – The old “if you see something, say something” quote applies very heavily. Asking the proper questions saves cash
Adopt – If your company does not adopt a program that you have created, #1 – #6 wastes your time.

The above list was produced in 2010. I could have easily added in another four or five. Would I change any of the 7 words – No as I wrote up the basis for these in the late 1980’s. Workers Compensation cannot be described as a fluid (ever-changing) environment. A concept from the past stays true most of the time.

Filed Under: Workers Comp Claims Guide, workers comp costs budget overhead Tagged With: ASAP reporting, Claims Savings, records retention