Archives for March 2016

Workers Comp Accident Rates Affected By Spring Forward

March 29, 2016 By JL Risk Management Consultants

Workers Comp Accident Rates Do Spring Forward

Do Workers Comp Accident Rates twice per year? According to a recent article I came across- not necessarily.

Picture of Files fallen in Locker Room Workers Comp Accident Rates Twice Per Year

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The one hour time change in the fall has no effect on accident rates. The springtime “ides of March” time change does lead to a higher rate of accidents.

Two doctoral candidates found that a spike in injuries does occur every March.

In two separate studies, they found that the March switch to Daylight Savings Time resulted in

40 minutes less sleep for American workers
5.7 percent increase in workplace injuries
nearly 68 percent more work days lost to injuries.

In Canada, the accidents rate increases do agree with these two studies. There was an 8% increase in accidents the Monday following the time change.

Car Accident Workers Comp Accident Rates Sheriff Reporting Car Crash

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Traffic accidents do rise sharply on the Monday after the March Daylight Savings time change. In fact, a long term study showed a 17% increase in traffic accidents on that Monday.

Finding any rating bureau information that is specific to a certain date each year was difficult at best.

A 2009 Journal of Applied Psychology study concluded that miners had a 40 minute sleep deprivation which resulted in a 5.7 increase in accident rates for the Monday after the March time change. The Workers Comp accident rate for this one industry may not be reflective of all industries.

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CompScope WCRI Blogging Live – State of States

March 11, 2016 By JL Risk Management Consultants

CompScope – State of the States – WCRI – Blogging Live

States of the States WCRI CompScope annual conference 2016 Blogging Live.

Preliminary Research – Subject to change –

Over view of Hug conference room CompScope in palace of nations

Wikimedia Commons – Tryfon Kar

Two New States – Kentucky and Georgia are being added to the CompScope(R)

Wage Loss States that have wage loss and PPD – North Carolina and Georgia

Wage Loss states are not PPD states –

Georgia

TTD = Temporary Total Disability

Georgia is a combined PPD and Wage Loss state

TTD benefits paid – No maximum medical (MMI) in Georgia

TTD maximum weeks = 400 weeks

Maximum 300 PPD Weeks

Georgia – one of higher states for TTD – median state $18,313

Georgia – Approximately $26,000 per claim average on TTD

Weekly TTD benefits rate lower than median state

Average duration of TD benefits were lower than median state

40% lower statutory maximum

31% of claims were limited by maximum TTD rate – highest of all studied states

Georgia and North Carolina had the highest rate of lump sum settlements

Wikimedia Common -Own work

Georgia had:

higher medical benefit involved in PPD settlements than median states
higher litigation related expense than median state
higher payments for defense attorney than the median state
is based on an administrative system

Kentucky

No TPD – Temporary Partial Disability

Longer Temporary Total Disability period

Kentucky is close to median state for TTD length

Kentucky was:

PPD benefit payments were higher than the median
Close to median state were for benefit delivery expenses
Medical-legal services expense were much higher than the median state

Medical trends across the States

Half of studied states – had a moderate growth rate in medical costs

The other half had very low growth rates in medical costs

What factors caused the very low growth rate?

Illinois –
- 30% reduction in fee schedule rates
- 29 different fee schedules in the state (regions) were reduced to 4
- 76% higher than Medicare fee schedule rates
North Carolina –
- Outpatient hospital -utilization per claim lowered
- Fee schedule reduced outpatient charges from 95% of charges to 76% of charges
- 2013 – froze rates – cut by 15%
- Outpatient hospital rates were tied to Medicare rates in 2015
- Goal – balance out hospital charges with non-hospital charges
California –
- SB 863 effects
- Reduced ASC rates from 120% to 80% of Medicare outpatient hospital rates
- Trend of billing frequent complex office visits stopped in 2014
- Neurological testing fees reduced by 43.6%
Louisiana –
- Colorado – based guidelines introduced
- Decrease in medical visits per claim possibly due to changes in 2011

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Opt Out 2nd Panel – WCRI Blogging Live – Boston MA

March 10, 2016 By JL Risk Management Consultants

Opt Out 2nd Panel – WCRI Conference

These are the Opt Out 2nd Panel of WCRI conference blogging live.

Wikimedia Commons – Fabrice Florin (WMF)

Presenters –

Bruce C Wood- American Insurance Association
Elizabeth Bailey- Waffle House
Alan Pierce – Workers Injury Law and Advocacy Group
James Mills- Oklahoma Insurance Department

Great Panel

Bruce Wood- Basically not a proponent of Oklahoma Opt Out – Is flawed and should be enacted

Elizabeth Bailey – Waffle House- Texas Opt out only – no Oklahoma

Texas WC system was broken
Medical providers were cost drivers not attorneys
Lifetime medical benefits

Key Benefits-

Cost reduction
No litigation – virtually
Medical provider selection
Plan flexibility
Improved workplace safety program
Improved communication
Decrease in claim cost
Claims cost reduced 57%
Indemnity costs down 99%
Overall savings $9.7 million
Indemnity claims were reduced from $6,502 per restaurant to $65
5 litigated claims since 2003
Last attorney involvement was 2011

Hand Illustrating Opt Out 2nd Panel Insurance Icon

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Waffle House = Impressive Employer with good communication

Alan Pierce – we may be forgetting the employee in the process

Opt out is inconsistent with access to administrative courts and due process
Workers compensation is not another Employer benefit plan
WC is a right owned by and owned to workers

James Mills – Oklahoma Department of Insurance

Consumer oriented
Most expensive Workers Comp state
Not data driven issue
Title 85 of Statutes
Work Comp ~~Act~~ Code
Used to be one of two court-based systems
Senate Bill 62 = Comprehensive reform > 200 pages
- Opt Out
- Residual Market reform

No more room at the table for any more parties in the Workers Comp process

Early medical treatment is a cost reduction driver

Oklahoma option will change and grow over time.

Question to James Mills concerning employee choice of medical treatment – is it a benefit?

Very good comment – lowering claim reporting does not equate to better safety

©J&L Risk Management Inc Copyright Notice

WCRI – Blogging Live – Controversial Opt Out Panels

March 10, 2016 By JL Risk Management Consultants

Controversial Opt Out Panels

The blogging live controversial Opt Out panels in WCRI

Two Presenters –

Trey Gillespie – Property and Casualty Insurers Association of America

Bill Minick – PartnerSource

Graphic of Controversial Opt Out Panels Concept

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Opt outs as a form of Workers Compensation coverage has been in Texas for quite some time. Texas’s program has been successful. Oklahoma is still the fulcrum of a recent controversial decision.

Opt out is ERISA based.

No admission of liability .

Many common exclusions.

Many of the cause of injury aspects in the regular insurance market look very similar to the Oklahoma Workers Compensation Opt out rules.

However, there are Conditions and Limitations:

Benefits stop if employee leaves the company
FMLA protections to 12 weeks
Reporting requirements (24 hour delay max)
NCCI say only 20% of Lost Time injuries are reported within 24 hours.
93% of costs are allocated to Lost Time vs. Medical Only claims
Medical plans are made by plan administrator
Medical benefits may be terminated before care ends- this varies greatly from regular WC coverage
Medically necessary – the cheapest way to treat, if no treatment in 60 day = termination of benefits
Continuing medical maintenance differs greatly from regular WC coverage. Palliative care – whether required or not is not covered
Voluntary settlements are based on Plan Administrator evaluation
Often refers to “Dillard Decision”
Limited appeal rights
No payment of PPD (Permanent Disability) benefits are not covered.
Quote From Dillard’s decision – Injured workers not treated equally under opt out

Bill Minick presentation-

Same mutual goals
Determining Good Public Policy
- Experiments -rigorous assessments
- No anecdotal experiences
1.5 million workers covered
50,000 claims resolved annually
$0 spent by regulatory industries
$125 million annual claims cost
$1 Billion in direct written premiums over the past decade.
1,000 private sector jobs

Woman Controversial Opt Out Panels At Office

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Benefits are mandated

Liability Exposures

Financial Security Requirements

Employee protections – safety such as OSHA

Disclosure rules

Written plan document
Definitely determinable benefits
Understandable

Fiduciary rules

Acting in employee’s interest

Claims Procedures

Enforcement- there are civil and criminal penalties

There is no perfect grand bargain

93 Texas settlements in Excess of $1 million

ERISA requires that Opt Out benefits are communicated to the employees in a language that they can understand – Workers Comp has an issue with being mysterious

Immediate reporting requirement leads to better outcomes

Medical providers should be held accountable

Evidence based medicine

©J&L Risk Management Inc Copyright Notice

WCRI Blogging Live- Crossing State Lines For Medical Care

March 10, 2016 By JL Risk Management Consultants

WCRI Blogging Live – Medical Care

This is the WCRI blogging live crossing States lines for Medical care

Ambulatory Surgical Centers (ASC’s) – in New York City vs. New Jersey

Preliminary Findings

Picture of WCRI Blogging Live People of science During Medical Conference

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Dr. Brogdan Savych – medical researcher and author for WCRI

Shoulder Arthroscopies average ASC cost increased significantly from 2011 through 2014 – 25%+ per year.

Half of all surgeries in New Jersey ASC’s are from New York claimants

New York City injured workers treating in New Jersey – 326% more than New York.

Pennsylvania workers on the New Jersey border do not treat that much in New Jersey.

The questions I had on this session, but had to step away to take a phone call were:

Why did Pennsylvania workers not treat that much in New Jersey
Were the physicians from New Jersey recruiting the injured workers ?
What are the medical control statuses in Pennsylvania, New York, and New Jersey?
Is there any upcoming legislation in any of these states that would change the treatment dynamics presented?

I will definitely have to update this article after I read the conference manual on this presentation.

____

Comment – Medical control in New York? This article was from WCRI Blogging Live

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California Medical Review and Dispute – Blogging WCRI Conference

March 10, 2016 By JL Risk Management Consultants

California Medical Review and Dispute Blogging Live WCRI Conference

California Medical review and dispute is a white hot topic amongst risk managers presently. One of the hot sub-topics now is the amount of money charged for UR (Utilization Review) in California.

In our claims loss run analyses, we find that California ALAE Allocated Expenses to handle a claim can actually cost more than the benefits provided to the injured employee. No other state comes close to this amount.

Picture of California Medical Review National Healthcare System

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One recent estimate showed that the cost for UR was more than the medical charges themselves. The UR charges have grown steadily over the past ten years. The employers have to pay the final bill for the UR charges either by paying an increased premium due to the rates and a higher XMod or budgeted funds for the self insureds.

As this one is in the conference book, and there were so many great charts which covered so much great info, I will cover this one soon. I cannot give this section justice without reviewing the charts more closely. I am trying to juggle doing interviews with the presenters and doing live blogging.

Some of the more interesting statistics-

1% of doctors accounted for 46% of IMR (Independent Medical Reviews)
50% of pharmacy benefits go to IMR – no other medical service even close

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Blogging Live WCRI Comparing Workers Comp Outcomes Across States

March 10, 2016 By JL Risk Management Consultants

WCRI – Blogging Live

Comparing Workers Comp outcomes across states WCRI blogging live.

Subject to Further Research

One of my favorite WCRI studies – hard work on this one

Dr. Savych and Dr. Thumula (WCRI) – presenters

These two presenters presented the initial study data last year- 2015. It was groundbreaking as no one or company actually telephone-interviewed 6,000 injured workers – amazing study

Four Key Outcome Measures

The four areas examined were:

15 State Median = 14% for no substantial return to work – workers did not return to work or did not stay at work for 30 days.

Indiana had lowest rate of no return to work- 9%

Georgia had highest – 19%

To be able to perform cross – state comparisons data was normalized due to differences in state laws, industries, 400 interviews in 15 states = 6,000 kept n (number of interviewees same).

The comparison were all for injured employees with more than 7 days out of work.

Used SF-12(r) measurement instrument

Average injury severity was similar across the 15 states studied

Reported Big Problems with Medical care = 17% – 15 state median

Two common reasons of medical care dissatisfaction were:

Employer did not want to provide the care
Diagnosis dissatisfaction

14% – 15 State Median – for big problems with getting desired provider

36% of those were discouraged by employer to use this medical provider

Wisconsin has lowest rate of dissatisfaction with medical care = 9%

Florida has highest rate of dissatisfaction with medical care = 20%

Aging was considered as a control factor.

One future consideration is the states that allow employer or employee medical control.

WCRI – Blogging Live – Do Fee Schedules = WC Case Shifting?

March 10, 2016 By JL Risk Management Consultants

WCRI – Blogging Live – Case Shifting and Fee Schedules

WCRI WC Case Shifting and do fee schedules.

Preliminary Findings

Dr. Osleya Formenko – Author – Impressive- Received Her Doctorate From Our HQ City Raleigh – UNC

Dr John Gruber- Dartmouth Institute

Dr. John Ruser – Presenter

Picture Of Doctor Case Shifting Writing In Patient Chart

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There are many numerous articles on this blog concerning fee schedules

Workers Compensation usually pays more than Health.

Expect that claims shifting is more likely in the states that have higher WC rates than health.

Workers Comp is fee for service – more lucrative

The treating Dr. makes the work-relatedness call

Fractures lacerations contusions are obvious work relatedness

Back strain, knee strain, soft tissue

Dr. Gruber and Dr. Formenyko found that 20% increase in treatment prices = 6% increase in WC claims vs health

The research indicated that there is a much larger cost factor than may be realized by the 6% when specific states are analyzed such as Texas and Illinois.

The claims shifting for soft tissue injuries have more of an impact of case shifting to costs that are borne by employers in that state.

There will be further studies performed in the future to see if the number of WC cases / case shifting occurs in states that have a higher variability between health insurance and WC rates ICD 10 codes, etc.

A great question- Some physicians have said that WC pays less than health insurance, research and data said WC pays more.

Blogging Live WCRI 2016 Yearly Conference – Ground Rules

March 10, 2016 By JL Risk Management Consultants

Blogging Live WCRI Conference 2016 Ground Rules

OK, so there are a few ground rules with blogging live WCRI Conference.

Please excuse any typos or any weird looking info. I am trying to follow the presenters, not necessarily the slides they present as to include info that will not be seen or heard elsewhere.
Some of this is preliminary information- may have further study results. I will note that in the blogging when applicable.
Please forward these onto any interested parties.
I may not be able to cover all the sessions – if you see one you like, let me know and I will try to include it. My wrists tire out after a few sessions.
If you like the sessions, most, if not all, of the studies are available for purchase at wcrinet.org The price is usually very reasonable.
I was the first one to blog Workers Comp Conference live starting with this one a few years ago.
There are many other live blogs from the prior years WCRI conferences. You can find the by searching wcri blogging in the search box at the top right of this webpage.
Blogging live is quite a bit of work

What are Policy Endorsements – Are they important?

March 8, 2016 By JL Risk Management Consultants

Policy Endorsements vs. Dec Page

Repetitive Workers Comp policy Endorsements are one of the 10 Red Flags To Possible Overcharges.

The Policy Dec Page (also called the Declarations Page) is an important part of any policy. Workers Comp policies are no exception. However, some policies may have a more important – section- The Endorsements. Why?

The answer is simple. A Workers Comp policy can be altered hundreds of times in a policy period. Actually, the most I have seen is just over 100 times in a policy period.

Endorsements are usually emailed or mailed to an employer from the insurance carrier or through their agent. Any endorsement should be read in full upon receipt.

Many times, the information enclosed may be a minor change. The policies can be changed dramatically in certain cases.

As discussed in an earlier post, the major parts of a policy are Declarations, Insuring Agreements, Conditions, Exclusions, and Endorsements.

One can think of the Endorsement pages as Appendices where each additional Appendix modifies the policies and even earlier Appendices/Endorsements.

Two Businessman Policy Endorsements Signing Document

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Other types of policies are no different. I have just received an auto and home combined policy endorsement. I read both of them very closely as should you with your Workers Compensation policies.

There are very strict rules on when a Work Comp policy can be endorsed by the carrier. Each state has its own set of Endorsement rules.

In the age of scans and emails, the Endorsement documents may be emailed to your company lumped in with all of your business emails. Make sure that you have your spam whacker let the emails in from your agent and carrier at all times.

Someone in your office should be responsible for receiving; reading; and bringing the emailed Endorsements to the attention of management.

Endorsements do have a function of simplification. This keeps a policy owner from having multiple changes that are internal to a policy. In other words, without Policy Endorsements, the complete policy would have to be read and re-read every time there was a modification.

California Xmods = Heavy Penalty For Repetitive Accidents

March 1, 2016 By JL Risk Management Consultants

California Insurance Commissioner Approves 2017 Changes

California Xmods also known as Experience Modification Factors calculations are changing drastically in 2017. A very important term for California employers in the next few years is the term variable split point.

graphic of two hand protect California Xmods insurance

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Split points are the amount at which the Total Incurred for a claim has much more of an effect on an employer’s X-Mod.

Variable split points are not the same as the split point changes enacted by NCCI over the previous years. NCCI now has its split point set at $15,000 from $5,000 just a few years ago. Search the term split points in the search box for more articles on the changes by NCCI.

How variable split points work is the total expected losses for the Experience Period have much more of an effect than just the prior California split point of $7,000. In other words, the size of the employer will determine the split point.

According to the WCRIB:

Approximately 90 Primary Threshold split points
Values range from $4,500 to $75,000
Ranges based on employer’s total expected losses in the experience period
Final values will be updated and proposed to Insurance Commissioner in 2016 WCIRB Regulatory Filing

The interesting fact is the effect on California Xmods may not be known until the Insurance Commissioner approves the final levels.

The most important fact is the 2017 and forward X-Mod system is going to punish employers that have repetitive accidents. The concept of a variable X-Mod will also lessen the effect of one huge claim on a small
employer.

The claim amounts up to split point are used fully in x-mod calculation. This is the same as NCCI’s split points with one major exception.

StockUnlimited

Claim amounts above split point are not used in x-mod calculation. One of the main differences between the NCCI and WCIRB split points is that NCCI still uses the Excess loss in its calculations. NCCI excess losses are in a roundabout way – discounted. California will be basically creating the split point as more of a ceiling.

You can find the PowerPoint(r) slides here on the changes to the X-Mods.

Unsafe smaller employers have already seen a major change to the way their X-Mods are calculated by the WCIRB. I attended a 2013 WCIRB conference which introduced a new X-Mod formula that removed a credit for small employers.

The goal here is plain and simple- safety.

Archives for March 2016

Workers Comp Accident Rates Do Spring Forward

WCRI Conference Blogging Live

CompScope – State of the States – WCRI – Blogging Live

Opt Out 2nd Panel – WCRI Conference

Controversial Opt Out Panels

WCRI Blogging Live – Medical Care

California Medical Review and Dispute Blogging Live WCRI Conference

WCRI – Blogging Live

Subject to Further Research

WCRI – Blogging Live – Case Shifting and Fee Schedules

Blogging Live WCRI Conference 2016 Ground Rules

Policy Endorsements vs. Dec Page

California Insurance Commissioner Approves 2017 Changes