Archives for May 2020

Workers Compensation Rating System – See You in 18 Months

May 28, 2020 By JL Risk Management Consultants

The Workers Compensation Rating System And Insurance Press – Different Timetables

The Workers Compensation Rating System was built as a delayed system. Why was that statement the first sentence in the article?

Picture of 18 months workers compensation rating system

Wikimedia Common License – Claude Covo-Farchi

The Workers Compensation rating system cannot provide immediate data analysis. NCCI, WCIRB, and the other state rating bureaus allow for a term called claims development.

Claims departments do not review their claims weekly to see if the reserves are correct. See this article on how adjusters work their claims.

Any data from a rating bureau may look stale or out of date. The Workers Compensation rating system allows the claims in a certain policy to develop for an extra 18 months before the data is reported.

The UNISTAT date pegs the claim reserve data with the Total Incurred amounts 6 months after a policy ends.

A few articles are floating around in the press where the author seems astounded that the rating bureaus cannot provide immediate data reporting. I have even caught myself asking the WCIRB for immediate results.

Two weeks ago the NCCI produced a great teleconference that substituted for their Annual Issues Symposium. The lineup produced a great teleconference. The total attendance (including me) topped out at 2600. The platform NCCI used published the number of participants at the bottom of the screen.

NCCI could not answer this question and rightfully so – What are you seeing as far as COVID-related data? That answer was a stretch for the presenters.

Of course, the press wants to break new stories – that is why they call it the news. Press outlets want fresh data now. Unfortunately, if one takes a look at any statistical study that is based on rating data, most of them right now show solid data for 2018 and projected data for 2019. Why? Because once again, the Workers Compensation rating system originates from older data.

Stopwatch workers compensation rating system on a palm

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Let us use the date of the teleconference for the date a certain workers’ compensation policy ends. The date of the conference was May 12th.

Any COVID-19 related claims for a policy that ended (not started) on May 12th would not be reported to NCCI by the carriers until November 12 2021 or later.

Many reports that I write for clients always contain when the claims from a certain policy will take effect. I always receive questions on the timing of the data from new clients.

Feel free to search this blog for the UNISTAT date for more info.

©J&L Risk Management Inc Copyright Notice

Work Comp Class Code 8871 Clerical Telecommuter Very Popular Now

May 27, 2020 By JL Risk Management Consultants

Work Comp Class Code 8871 Popular During the Coronavirus Pandemic

The Workers Comp Class Code 8871 represents telecommuters. Exactly who are telecommuters? Let us first cover the general non-workers’ comp generic definition.

CDC Public Use License

Definitions of Class Code 8871

General

Telecommuters are defined as:

Someone who works at home and communicates with his or her office by phone, email, or internet.
On another level, the teleworker or telecommuter is someone with computer knowledge who can utilize and work on data transmitted down a telephone line or bounced off a satellite

The first definition covers many people who are working out of their homes now for their employers. The second definition seems a little archaic.

Workers’ Compensation Rating Bureau (NCCI) definition(paraphrased):

For purposes of Class Code 8871:

A residence office is a clerical work area located within the home of the clerical employee.
The residence office must be separate and distinct from the location of the employer. In the event
If an employer operates a business from a residence and the employer has clerical staff at the employer’s business location residence, these clerical employees are classified to Code 8810.

Clerical duties of an employee classified to Class Code 8871 include but are not limited to

The creation or maintenance of financial or other employer records, handling correspondence, computer composition, technical drafting, and telephone duties, including sales by phone.
Depositing funds at banks*
Purchase of office supplies*
Pickup or delivery of mail*

*Outside the office duties are incidental and directly related to that employee’s duties in the residential office.

State Exceptions To Class Code 8871

The following states do not allow this class code:

California
Massachusetts
Montana
New Jersey
Oregon
Texas

I will not research each of the states besides California

Calfornia has its own rating bureau – the WCIRB. Many of our article and blog readers are from the Golden State. California may introduce Class Code 8871 after their June 2, 2020 meeting. The WCIRB lists the topic for discussion at this meeting.

Will the WCIRB use the same code? We will find out sometime in June.

Two Very Similar Caveats

Some Classification Codes include telecommuting clerical employees as part of the basic code. Do not assume that all telecommuters are listed under 8871. An example is Doctor’s offices.
Do not assume everyone working from home goes under Class Code 8871 – such as delivery drivers.

Coronavirus Pandemic And Wage-Splitting (Very Important)

Close-up of female surgeon Class Code 8871 wearing face mask

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One of the questions that we have received often since the pandemic shutdowns started- If an employer is mid-policy and requires employees to work from home, how do they handle their wage reporting when the job changes to a telecommuter.

From this NCCI webpage:

In accordance with Basic Manual Rules 1-D-3 and 2-G, the employer would be responsible for maintaining separate payroll records for the change in operations or the wages earned for an employee whose occupation has changed. If these records are not maintained, then all payroll would be assigned to the highest-rated applicable class code. See footnote. ¹

¹An example could be a retail store that remains open for delivery of goods but closes the showroom to consumers. Several of the retail showroom employees will work from home to assist with phone orders, customer service calls, and related clerical paperwork. These employees may be reassigned to Code 8871—Clerical Telecommuter Employees.

_____________

You must split the payroll between when the employees were working in an office and then when they had to work out of their home due to the coronavirus lockdowns.

Bottom Line –

Hand pointing Class Code 8871 at a financial concept

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Sloppy or ignoring your wage and time recordkeeping is going to cost you dearly with your worker’s comp audit and will likely affect your company greatly during tax reporting time.

Organize your records now. If you have them organized – a good job. Switching to the proper Class Code be it 8871 or another code may save your company a large amount of premiums.

©J&L Risk Management Inc Copyright Notice

Free Workers Comp Study – Best Report on Medical Costs WCRI

May 21, 2020 By JL Risk Management Consultants

Free Workers Comp Study – WCRI Medical Price Index – A Great Reference Tool

WCRI (Workers Compensation Research Institute) released its annual free workers comp study and report on medical prices for the treatment of Workers Compensation injuries.

picture of free workers comp study and beer

Wikimedia Commons – JP

Please see the bottom of this article for the link to the free report.

The breadth and depth of the report astound me as a free publication. The report covers over 88% of the medical benefits paid in the US. If you are looking for trending information, the study spans 12 years (2008 – 2019).

WCRI only asks that you give them your contact info. The group does not spam you after sign-up. Claims staff could use it as a basis for setting reserves with very little extrapolation of the provided numbers and statistics. (Hint)

From WCRI:

This annual study creates an index for the actual prices paid for professional services over a 12-year span from 2008 to 2019 based on a market basket of commonly used services for treating workers with injuries. This study also provides a baseline for policymakers and other system stakeholders to observe any effects the current COVID-19 pandemic might have on medical prices in workers’ compensation across states and over time.

The study focuses on professional services (evaluation and management, physical medicine, surgery, major and minor radiology, neurological and neuromuscular testing, pain management injections, and emergency care) billed by physicians, physical and occupational therapists, and chiropractors. It shows how prices paid for these services compare across states, how the prices have changed, and whether price growth is part of a broader phenomenon or unique to a state. The study also discusses the price comparison results and price trends in relation to the principal policy mechanism for regulating prices—fee schedules.

These states covered are Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, and Wisconsin.

I am downloading the free workers comp study and report as soon as I publish this article at this link.

©J&L Risk Management Inc Copyright Notice

Workers Comp Consultant Company – J&L – Top 10 Lessons Learned

May 21, 2020 By JL Risk Management Consultants

J&L – 25 Years and Counting As A Leading Workers Comp Consultant Company

J&L Insurance started in 1996 as a Workers Comp consultant company handling the proper filing of claims forms for large self-insureds.

Dice with 25 showing workers comp consultant company

Wikimedia Commons -Saharasav

We added services as the market requested it such as premium audit services, general consulting, blog reporting, expert witness services, and Mod audits, actuarial services, and forecasting to name a few.

I had forgotten the anniversary this past March due to being in the middle of the coronavirus pandemic. Talking with so many business associates I became amazed at how many now want to strike out on their own and start a business across their kitchen table as I did in 1996.

Top 10 Lessons Learned In A Workers Comp Consultant Company

Couple with workers comp consultant company in office

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The Top 10 below lessons that I have learned with a Workers Comp consultant company. The first five are general. The second five are workers comp centric.

You are not the same as your last job. People, governmental organizations, and companies that you have worked with in your last job may not be the customers that you had counted on for business when you started your company. This lesson becomes a shocker for many people that tends to make them not stay a consultant for very long.
The first five years are rough. Making an appointment with a prospect and then having them not make the appointment and not return your calls or emails. Balancing family time and work time can be a very tedious task. If you can make it five years, most businesses will survive in one form or another.
The first year comes off as horrible. Often, your first year has little business generated while you must afford to live and market on a shoestring. Keeping your head up the first year is very critical. You will be told no so many times that most people go back to a regular salary-based job.
One of the most important – do not think you have failed if you go back to a salary-based job as an employee. You made the choice to not own and run your own business. I tried to start my own business while working at night and then would go into my regular job during the day three or four times in the 1980s and 1990s. My heart said go for it with the Workers Comp Consultant company. My brain said – the bills do not stop, you have more personal bills and now business bills.<<super-critical point.
The #1 expense that new businesses experience which can easily cause failure – hiring employees too early. I heard this warning in a public relations seminar that I attended with the local Chamber of Commerce. The presenter said that she had made the same mistake and then cut her staff down to four people from over 20. Could having many employees count as a status symbol? – Possibly.
Watch the minimum number of employees that causes Workers Comp insurance requirement. In some states it is one employee! Can a new employer afford a $500 a day fine? Of course not
Workers’ Compensation has not changed that much in over 20 years. Many buzzwords and trends have been recycled over the years. Working across states lines can pose some difficulties, but workers’ compensation has the same variables and procedures.
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Blogging remains a requirement in this industry. Websites are even more of a requirement. Google, Bing, and other search engines do not rank you in the search results because you have a spiffy website. Content is king and queen in almost any industry. Blogging must be in your blood to write a 900-word article such as this one you are reading now.
Right now – Workers Comp sits on the back burner of the stove. The pandemic caused a large amount of governmental action. Most businesses try to survive daily by having remote employees and all the other benefits. The Affordable Care Act caused businesses to do the same thing to Workers Comp in 2010 – 2016.
Keep educating yourself in insurance subjects even when you do not have enough time to add on a designation or degree. Reading workers’ comp publications each morning or night and heavily on the weekends keeps you abreast of the current developments. I read approximately 20 publications to see the trends in this industry. Many are free if you will sign up for their newsletter. Some bloggers think they are gurus – be aware of what you read in insurance blogs.
Bonus – Watch out for the SFNs. Yes, the Something For Nothings. Like any type of consultant, your product equals your available time. Many SFNs think that you can give them free advice. We receive calls almost every day from someone “just wanting some advice.” You will develop a sense of the difference between a prospect, potential buyer of your services, and someone just wants you to work as a free consultant. You must develop those screening skills very quickly to survive.

This list could go on for 50 more suggestions. Do not take these as “stamped in cement.”

One huge advantage that you have if you are a sole proprietor or very small business consultant comes from being able to change your business to fit the market very quickly. Do not try to make the market fit your business.

With the pandemic, if you have decided to start your own Workers Comp consultant company or as any insurance consultant, or any type of consultant – do not give up the ship too quickly. Good luck.

©J&L Risk Management Inc Copyright Notice

Workers Comp Outpatient Medical Costs – Fee Schedules Win Again

May 14, 2020 By JL Risk Management Consultants

States With Fee Schedules Have Lower Workers Comp Outpatient Medical Costs – WCRI

Fee schedules have appeared in this blog many times due to the economic effects they have on medical bills. WCRI (Workers Comp Research Institute) published a study this week showing that fee schedules lower Workers Comp outpatient medical costs. The study specifically covered hospital outpatient costs.

picture of 100 dollar bill workers comp outpatient medical

The outpatient medical cost study is produced by WCRI yearly. We here at J&L watch for this study every year as a bellwether for fee schedules versus the other billing methods.

We liked the depth of the study – 13 years for you triskaidekaphobia sufferers.

The study, the latest in an annual series, compares hospital payments for a group of common outpatient surgeries in workers’ compensation across 36 states from 2005 to 2018.

Let us look at these numbers. The increased charges remain outstandingly high each year this study is published. The name of the study is the Hospital Outpatient Payment Index: Interstate Variations and Policy Analysis, 9th Edition.

WCRI came to two astounding conclusions (are you ready for these numbers?). The two researchers Dr. Formenko and Dr. Yang. They split the numbers between % of charge-based states and states without any fee schedule.

Percent-of-charge-based fee regulations were 74 to 168 percent higher than the median of the study states with fixed-amount fee schedules in 2018.
No fee schedules, they were 51 to 131 percent higher.
WCRI also found that hospital outpatient payments per episode in most states with percent-of-charge-based fee regulations or no fee schedules grew faster than in states with fixed-amount fee schedules.

Variation in the difference between average workers’ compensation payments and Medicare rates for a common group of procedures across states was even greater — reaching as low as 42 percent (or $2,574) below Medicare in Nevada and as high as 365 percent (or $17,713) above Medicare in Alabama.

This means that when using the most stable statistic among the states (Medicare rates), the statistic the hospitals have a workers comp outpatient medical cost variance of $20,287.

Overall, the figures show a 50% difference between fee schedules states and states without them.

Often Unmentioned Fee Schedule Benefit

Setting medical reserves can easily confound the most experienced claims adjuster or supervisor. States with fee schedules lessen the inaccuracy of setting medical reserves. Some adjusters use old fee scheduled bills to compare procedure costs. (secret shortcut).

After 10 years of experience, most adjusters and supervisors more easily develop a sixth sense of how much a medical procedure costs in states with fee schedules.

Workers Comp Outpatient Medical Excluded Data and States Covered

Male Doctor of workers comp outpatient medical analyzing x-ray report

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This study captures payments for services provided and billed by hospitals; it excludes professional services billed by nonhospital medical providers (such as physicians, physical therapists, and chiropractors) and transactions for durable medical equipment and pharmaceuticals billed by providers other than hospitals. The analysis also excludes payments made to ambulatory surgery centers.

Go here for more info and to download the study.

The 36 states included in this study are Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, West Virginia, and Wisconsin.

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Workers Comp Claim Denial Means No Medical Control?

May 14, 2020 By JL Risk Management Consultants

Court of Appeals Confirms Workers Comp Claim Denial Medical Control Loss

Does a Workers Comp claim denial result in the claims staff losing medical control? A long-standing debate among workers comp claims adjusters still occurs today.

picture of arm in sling workers comp claim denial

Public Use License – Wikimedia – Self

One outlook says the adjuster retains medical control on the file. The denial may be removed later on in the claim. The claimant should only expect covered medical treatment if they still see the “company doctor” and any referrals.

If the claim denial sticks, then the employee’s health insurance (if they have a policy) will cover the medical expenses.

The other side of the coin says the claims staff has no right to control the medical treatment when an adjuster issues a workers comp claim denial. How can the injured worker treat with the employer’s (and adjuster’s) choice of treating physicians?

The other side of the coin seems to make more common sense. One cannot control what one does not cover.

The most important one of my Six Keys to Workers Comp Savings points to the use of medical treatment networks to keep costs in check.

North Carolina Court of Appeals

Stethoscope Workers Comp Claim Denial with green apple

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Recently, the North Carolina Court of Appeals made this decision as part of a large case with more contentions than just medical control. The case was

PAMELA LAUZIERE, Employee, Plaintiff,
v.
STANLEY MARTIN COMMUNITIES, LLC, Employer, and AMERICAN ZURICH
INSURANCE COMPANY, Carrier, Defendants.

You may find the case here if you wish to read the whole decision. One of the three Justices wrote a very interesting dissenting (disagreeing) opinion.

The Appeals Court in North Carolina handles appeals after an Industrial Commission Deputy Commissioner and Full Commission (on appeal) have rendered their decisions.

A passage from the Court decision said:

As to the argument, Defendants were prejudiced by being unable to direct medical care, we have “long held that the right to direct medical treatment is triggered only when the employer has accepted the claim as compensable.”

This confirms, at least in the Tarheel State, that when a claim is denied, medical control goes to the injured employee’s choice of treatment.

One of the most upset physician’s offices I encountered in my adjusting career was when four years of medical bills were switched from health coverage to Workers’ Compensation as agreed to at a mediation.

Wow – the doctor’s billing staff was not happy! The paperwork became a nightmare to reimburse the health carrier and then rebill to the comp carrier. BTW, the denial was wrongly issued by an adjuster that preceded me on the file.

Workers Comp Claim Denial – Medical Control Decision

Senior woman Workers Comp Claim Denial sits with plaster cast on broken arm

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One aspect of a claim denial that many claim departments may miss centers around the loss of medical control. Most denial decisions likely do not consider the amount of future medical payments if the claims are ruled compensable or if the adjuster decides to pay for the claim at a later date.

I am not referring to the file reserves. The claims staff will likely reserve a file as if there is a risk that benefits will be paid out sometime in the future. Full value reserves mean the employers will pay full value in their premiums.

If the file has no medical control a possible “rethink” needs to occur before the workers comp claim denial and its aftermath.

My hat is tipped to WorkCompCentral.com. I found the worker’s comp case there. It was behind a paywall, so I could not provide a direct reference.

The bottom line – losing medical control may offset a weaker workers comp claim denial.

Free Workers Comp Webinar Choices – Which Ones To Watch?

May 7, 2020 By JL Risk Management Consultants

Free Workers Comp Webinar Choices – Many To Choose From – Worth Your Time?

Many organizations currently offer free workers comp webinar choices. Which ones should you check out over the next two months? Let us check to see which ones charge nothing for the great information.

picture of Big Ben Time for Free Workers Comp Webinars

Wikimedia – Solipsist

If Your Organization Is Providing One Add Your Free Workers Comp Webinar to the comments section

I recently completed a six-hour webinar for my FEMA Flood Certification. Yes, I can adjust FEMA flood claims. The six-hour webinar provided good information. As it was the Feds, you had to answer 20 timed polling questions throughout the webinar to guarantee credit to be FEMA flood certified.

The webinar also provided six hours on my North Carolina all lines adjuster license along with satisfying my required flood hour.

While it was not a free WC webinar, receiving three types of different license credits made me sign up the moment it was offered as a webinar.

I registered for the following webinars

NCCI Annual Issues Symposium (May 12th) – this article contains the signup info. Dr. Robert Hartwig’s presentations remain cutting edge. Why? He gets Workers’ Compensation. I always try to find a few great nuggets of information. He provides a treasure chest of info each time I attend one of his lectures. He appears in my article more than a few times.
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FEMA Flood Certification (Four remaining dates) – adjusters should pay attention to get six hours including a flood certification. Ignore the location data as FEMA accepts worldwide registration. You do not have to be acquiring the FEMA flood certification if you want the hours on your state’s adjuster or agent licenses. (Totally worth the time). Make sure your state allows credit for the FEMA flood conference – not all do.
OutFront Ideas with Mark and Kimberly – I missed the recent May 5th free workers comp webinar. No worries. The webinar archive can be found here. Kimberly and mark always provide more of a conversation than a traditional webinar.
WCRI (Workers Comp Research Institute) – no webinars scheduled. Their archive would keep you busy for days.

I will update this free workers comp webinar list over the next few weeks until most of the lockdowns finish.

Workers Comp Telemedicine – Is Telehealth Really Worth It?

May 7, 2020 By JL Risk Management Consultants

Is Workers Comp Telemedicine In The Age of COVID-19 Worth The Time and Money?

After experiencing my first telemedicine (telehealth) appointment today, I decided to see if Workers Comp Telemedicine would be worth the conversion.

Picture of Russian Workers Comp Telemedicne

Wikimedia License – Дмитрий Кошелев

I had written about in-home doctor visits for Workers Comp a few years ago.

By the way, my checkup appointment was great – other than the physician running late. A physician running late is understandable in the current shelter-in-place environment. The only requirements were that I check my blood pressure, heart rate, weight, and temperature before the appointment.

A great article was written by GoodRx covered Telemedicine very well. According to the article (find it here) telemedicine:

is not appropriate for emergency situations like a heart attack or stroke, cuts or lacerations, or broken bones that require x-rays, splints, or casts. Anything that requires immediate, hands-on care should be handled in person. However, telemedicine is very useful for simple issues and follow-up consultations.

Three Huge Advantages of Workers Comp Telemedicine

Prescription drugs Workers Comp Telemedicine close up

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Three big advantages of telehealth appointments quickly came to mind after my remote appointment.

1. Worksite After Return to Work

If an injured employee has returned to work, why remove them from their job site for a follow-up medical appointment? Having an injured employee “return to their injury” plus having to take off work may not be the best risk management/loss control method.

The injured employee (even remote workers) can very easily log into a web portal from anywhere with the smartphone as I did today.

2. Initial Instant Care For Minor Injuries

One of my fellow consultants mentioned to me two weeks ago that Workers Comp Telemedicine firms in Missouri have sprung up at large manufacturers. One of his clients (manufacturing plant) has used telehealth for months.

The injured employee logs into instant access with a Doctor or nurse for injury treatment and recommendations such as coming to a physician’s in-person for further treatment.

Of course, more serious injuries would skip the telehealth login and be seen at a physician’s office. The very serious injuries should always be treated in an Emergency Room.

3. Prescription and Physical Therapy Management

Some of the medical appointments when I was carrying a 250 file load that seemed unnecessary were prescription and physical therapy management appointments. The injured employee must leave the worksite or their home to go to an appointment that could have been handled with a phone call.

Could workers comp telemedicine work for these types of appointments? Yes, they should work most of the time.

Main Drawbacks With Workers Comp Telemedicine

Set of medical icon Workers Comp Telemedicine vector image

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The main hurdle with Workers Comp Telemedicine comes from its physical aspects. Workers’ Compensation injuries create the need for hands-on treatment for neurological, emergency, orthopedic, or other types of treatment.

American ingenuity will figure out how to jump over the physical component of work comp appointments. It is just a matter of time.

The other main drawback would for the malingerers. Let us leave that one alone as that drawback obviously should be a concern.

The final drawback comes from the IT area. You need a good connection for the video. Check out my one favorite trick that will give you 50% more router speed for your Workers Comp telemedicine appointments.

Is Workers Comp Telemedicine Worth It?

Workers Comp telemedicine justifies further discussion and uses if the one main drawback can be overcome in the next few years.