Tag Archives: cms

What An Employer Can Do To Reduce Soft Tissue Injuries In The Transportation Industry

The trucking industry accounted for nearly 20 percent of all days-away-from-work cases in 2011. Correspondingly, trucking was among the seven occupations which had an incidence rate greater than 300 cases per 10,000 full-time workers and who had greater than 20,000 days-away-from-work cases.

OSHA defines a Musculoskeletal Disorder (MSD) as an injury of the muscles, nerves, tendons, ligaments, joints, cartilage and spinal discs. They identify examples of Musculoskeletal Disorders to include: carpal tunnel syndrome, rotator cuff syndrome, De Quervain’s disease, trigger finger, tarsal tunnel syndrome, sciatica, epicondylitis, tendinitis, Raynaud’s phenomenon, carpet layers knee, herniated spinal disc, and low back pain.

The average cost of a work-related soft tissue injury in the trucking industry exceeds any other industry. According to the U.S. Bureau of Labor Statistics (BLS), Musculoskeletal Disorders nationwide typically account for 33% of work-related injuries, while the incidence of Musculoskeletal Disorders in the transportation industry is 60-67%. The Bureau of Labor Statistics also noted that there were 1.4 million total transportation workers, and each year 1 in 18 is injured or made ill by the job.

These higher rates of injury can be attributed in part to several factors. Due to the nature of their work, many drivers maintain a poor diet, rarely get enough sleep, and are sedentary. As a result, they find themselves more susceptible to heart attacks and diabetes, as well as a myriad of strains, sprains and various other Musculoskeletal Disorders.

Additionally, the percentage of older workers is higher in transportation than in most industries, with the Transportation Research Board estimating that up to 25 percent of truck drivers will be older than 65 by 2025, translating into more severe Musculoskeletal Disorder claims.

These factors are contributing to more workers’ compensation claims for drivers which increase employers’ costs. As part of the job, many truck drivers are required to unload the goods they transport, leading to serious sprains and strains. Heavy lifting after long periods of sitting can increase the likelihood of severe sprains and strains. In addition, drivers often rush at the delivery site in an effort to meet the demands of tight schedules. This combination contributes to 52% of the non-fatal injuries in this industry, with trunk and back claims accounting for 70% of these cases.

Due to its unique workplace circumstances, the commercial transportation industry is at higher risk for increased frequency of injuries and costs to the industry. The following describes the framework of this dilemma:

  1. Commercial transportation jobs expose workers to high physical demands and extended hours of exposure.
  2. The transportation industry experiences one of the highest work-related injury rates among all workplace sectors.
  3. The transportation industry experiences a high level of turnover on an annual basis, which results in a high number of newly hired employees exposed to unfamiliar and physically demanding tasks.

While this is an industry-wide issue, we will focus on California in order to illustrate how problematic it truly is. In March of 2010, the California Workers’ Compensation Institute (CWCI) issued its latest scorecard for the California Trucking Industry. Over eight years, $480 million dollars was paid in medical and indemnity costs alone. The study found that, even though this industry accounted for only 1% of all California industrial claims, they accounted for 1.8% of the state’s workers’ compensation paid benefits. It was also found that medical and indemnity payments were higher than any other industry. The average lost-time direct claim cost at $18,587 is 41% higher than the industry average in California. The indirect costs in this industry range from a 2x to a 10x multiple, and in an industry known for low profit margins, controlling costs is critical.

It should also be noted that California can retain jurisdiction of a workers’ compensation claim even if the injury did not occur in that state; the employee only has to live in California, drive through California or have been hired out of California. This is such a significant problem that in 2010 the U.S. Department of Transportation initiated the Compliance Safety Accountability measure of driver’s fitness. This is specific to transportation, is publicly available, and the ratings are tied to insurance rates and letters of credit.

With the numerous reforms taking place in 2013 and the Centers for Medicare and Medicaid Services (CMS) Mandatory Reporting Act, it is now essential that employers become proactive and only accept claims that arise out of the course and scope of employment. Medicare has mandated all work-related and general liability injuries be reported to CMS in an electronic format. This means that CMS has the mechanism to look back and identify work comp-related medical care payments made by Medicare. This is a retroactive statute that will ultimately hold the employer and/or insurance carrier responsible for these payments.

Should CMS have to pursue the employer in court, the amount owed is doubled. The insured or employer could pay the future medical cost twice — once to the claimant at settlement and later when Medicare seeks reimbursement of the medical care they paid on behalf of the claimant. There is no statute of limitations on compliance with the MSA requirements. CMS can review claims closed last year, five years ago, or even longer to check for compliance. Penalties and fees for noncompliance are $1,000 per day if medical care is not paid within 30 days.

Historically, soft tissue injuries have been difficult to diagnose and even harder to treat due to the broad spectrum of disorders related to soft tissue. Most diagnostic tests are not designed to address Musculoskeletal Disorders and are unable to document the presence of pain or loss of function … two key complaints.

Employers need a way to manage their Musculoskeletal Disorder exposure and provide better care to their injured workers. The key to managing this problem is for employers to obtain the ability to only accept claims that arise out of the course and scope of employment. The only viable solution for employers is to conduct a baseline soft tissue assessment in order to establish pre-injury status. The baseline must be job and body part specific and objective to comply with the Americans with Disabilities Act Amendments Act of 2008.

The baseline assessments are not read or interpreted unless and until there is an injury. By not identifying a potential disability, employers are able to conduct baseline assessments on new hires as well as existing employees while maintaining compliance with the Americans with Disabilities Act Amendments Act. If there is a soft tissue injury, the employee is sent for a post-loss assessment to determine what and if there is any change from the baseline assessment. If no change is noted (no acute pathology), then there is no valid claim. This proven baseline program is known as the EFA Soft Tissue Management Program (EFA-STM Program), which utilizes the Electrodiagnostic Functional Assessment to objectively provide this data.

The Real Fiscal Cliff – Not the Puny One in the News Today

Medicare and Social Security are in deep trouble — deep trouble. The nominal national debt is puny compared to the unfunded liabilities in Medicare and Social Security. How does $16T — yes “T” as in trillion — compare to $86T? There is a good article in the Wall Street Journal written by Chris Cox and Bill Archer. Click here to read the full article.

Historically, the government has had success in transferring these types of liabilities to the private sector. One way was to deliberately underpay doctors and hospitals under Medicare with the full expectation that those shortfalls would be absorbed by private payers. In my career I had discussions with the Centers for Medicare and Medicaid Services about that very thing. One Centers for Medicare and Medicaid Services official admitted that was part of their strategy. He also said that would continue as long as private payers were willing to absorb the Medicare underpayments to providers. That has worked so far.

Another example was when the government declared that private group plans would be primary over Medicare for workers over age 65. For those of you too young to remember, that was not always the case.

One possible big transfer of Medicare costs to the private sector would be to declare that companies have to offer COBRA for five years or so for every employee age 65 and up who terminates employment. I guarantee you that type of transfer to private companies will be “on the table.”

For those of you benefit managers who are in the first half of your career, you will be facing measures not unlike ones I’ve described here. Brace yourselves.

Will the Outlook Get Worse?

Just as most of us thought things were improving and as the Dow was seemingly stabilizing with all of us hoping for a strong recovery, it happened. The elongated and painful negotiations regarding the debt limit, the downgrading of the US credit, and then a tumultuous stock market drop. What’s next? The recent Health Affairs article from the CMS Office of the Actuary suggests that we are now faced with higher than average health care cost increases.

One of the “hoped for” outcomes of health care reform, known as PPACA or Obamacare, was reduced health care trends and more controlled healthcare costs. Although filled with controversy, the general understanding of the overarching and primary objective for reform was the goal of achieving health care cost savings.

The forecasts are not encouraging. The impact of rising health care costs on the federal budget and deficit is concerning at best, when at the same time the value of Treasury securities is declining in the financial markets. Perhaps one of the most disappointing predictions is the table below.

The authors suggest that PPACA has significantly increased the costs of all of the key sectors related to health care. Other than the projected increase in government administration, the two most significantly increasing categories were prescription drugs and net cost of health insurance. These increases are concerning and something that we cannot afford. The biggest increase occurs in 2014 when a major part of the program is implemented.

So what should we do? What steps should be taken to be sure we achieve some control on the rapidly escalating health care costs? I propose a three step plan, one that will reduce costs no matter what happens with health care reform. We need to take action and action that is effective! The three steps are:

  • Stronger focus on eliminating potentially avoidable health care services. We need to be sure we need to do what is being done. Ongoing studies show that as much as 50% of what is done in the hospital today is potentially avoidable. There are considerable opportunities to reduce length of stay without negatively impacting the quality of health care. Complementary information shows that as much as 35% of what physicians do in the ambulatory setting is potentially avoidable. Until we eliminate true medical “waste” we have no hope of reducing the cost of care.
  • Continue to negotiate additional discounts in reimbursement for health care services to be sure that we avoid paying for more than needed. Ideally it would be better to move to an all-payer system where health care providers are paid a common fee for their services no matter who is the payer (i.e., public or private). Studies show that the private sector has more than a 16% cost shift from public payers that are unwilling to pay their fair portion.
  • Introduce incentives that work to motivate everyone to reduce health care costs. This includes incentives to providers to limit services to those necessary, to patients to live healthier lifestyles, and employers/plan sponsors to consider appropriate plan designs that minimize over consumption of services.

Although the CMS actuaries are only projecting health care costs, the concerns they raise are important and need to be carefully considered. Our economy is fragile and it cannot survive continued surprises. Hopefully we will take the steps to avoid further problems. It is a time for action.