Tag Archives: efa-stm

An Unprecedented Work Comp Ruling

The March 2016 opinion  in Negron v. Progressive Casualty Insurance by a federal district court was an unprecedented ruling against Progressive for filing a false or fraudulent claim under the Medicare Secondary Payor Act (MSP) and causing a governmental agency (Medicare) to wrongfully pay for benefits. The decision raises a broad issue for workers’ compensation.

Before MSP, Medicare and other federal programs paid for medical services even if the beneficiary was covered by another program. With increased longevity and escalating medical costs, though, the federal government could not continue to pay for medical costs that were already covered by other plans. Therefore, in 1980, Congress enacted MSP to bar Medicare payments where payment has been made or is reasonably expected to be made promptly by a primary plan. MSP also requires that certain claims-specific information be reported by liability insurance (including self-insurance), no-fault insurance and workers’ compensation insurance.

The connection to workers’ compensation comes because it allows an injured worker to potentially be  entitled to receive future medical benefits. Settlement of workers’ compensation claims is either by stipulation (future medical treatment is typically left open) or by compromise and release (where future medical issues are paid out). But if Medicare pays for a work-related condition covered by future medical payments that have been settled through workers’ comp, this could constitute fraudulently inducing a Medicare payment and be subject to the False Claims Act, a federal law that imposes liability on persons and companies that defraud governmental programs.

See also: Whistleblower Suits: Emerging Risk on MSP

Under the False Claims Act, private individuals may bring a lawsuit on behalf of the government in exchange for the right to retain a portion of any resulting damages award. Therefore an injured employee who is a Medicare recipient may bring an action against the responsible party if there was payment by Medicare for a work-related injury, and the worker would receive part of the recovery. This may seem far-fetched, but it could happen, so employers need to be prepared.

See also: The Search For True Healthcare Transparency

It would reduce potential overlap and complications if an employer needs pays only for conditions and treatment  that arise out of the course and scope of employment. The best approach to this is to have objective information as to what the employee’s physical condition was before an injury so he can be returned to pre-injury status.

An EFA-STM program can provide that baseline for musculoskeletal disorder (MSD) claims, a leading cost driver in worker’s compensation. MSD claims are often difficult to diagnose and treat, and oftentimes the individual does not receive appropriate care. The EFA-STM program evaluates either new or existing employees with a customized evaluation that is consistent with  the job. The baseline evaluation is not read until there is reason to think a work-related MSD might have happened. At that time, a second test is conducted to not only determine if there is a change in condition but to ensure that the employee receives the appropriate care for any work-related injury.

Ending Cost-Shifting to Workers’ Comp

An April 2016 study by the Worker’s Compensation Research Institute (WCRI) titled, “Do Higher Fee Schedules Increase the Number of Workers’ Compensation Cases?” found that, in many states, workers’ compensation reimbursement rates were higher than group health reimbursement rates. The study stated that cost shifting is more common with soft tissue injuries, especially in states with higher workers’ compensation reimbursement rates. The study found that an estimated 20% increase in workers’ compensation payments for physician services provided during an office visit is associated with increases in the number of soft-tissue injuries being called “work-related” by 6%.

This study goes hand-in-hand with another study by the WCRI called, “Will The Affordable Care Act Shift Claims to Worker’s Compensation Payors” (September 2015), which said that if only 3% of group health soft tissue conditions were shifted to workers’ compensation in Pennsylvania, costs could increase nearly $100 million annually — in California, this cost shifting to workers’ compensation could increase costs more than $225 million.

See Also: What Will Workers’ Comp Be in 20 Years?

Soft-tissue injuries typically defined as musculoskeletal disorders (MSD) are typically muscle or nerve conditions that primarily affect the neck, back and shoulders and can include conditions such as cumulative trauma, neck, back sprain/strains or any damage to the muscles, ligaments and tendons. They are often difficult to diagnose and treat because there are very few reliable objective tests that demonstrate soft tissue injuries. The diagnosis is often based on the patient’s history and the doctor’s physical examination of the patient. Therefore, the diagnosis frequently depends on the individual’s subjective complaints of pain, as well as the individual’s compliance and genuine effort during the musculoskeletal and neurological phases of the exam. Historically, in workers’ compensation, both the patient’s subjective complaints and his or her effort during the physical exam are often unreliable. Inaccurate histories and poor effort on physical exams can, more often than not, lead to misdiagnoses and ineffective or inappropriate treatments, which increase the cost, shifting burden to the employer even more.

In many states, the burden to determine causation of a soft tissue injury and to determine if the medical necessity of treatment falls under workers’ compensation or group health resides solely with the treating physician. In fact, states like Florida place an extra burden on doctors because of an apportionment law that states that the individual is responsible for the non-work-related treatment. If there is a major discrepancy in reimbursement between workers’ compensation and commercial insurance, the treating physician is tempted to accept the patient’s history of the event and does not have an incentive to investigate history that may place the causation of the patient’s symptoms in doubt. If clear-cut evidence documenting a pre-existing condition is lacking or not reviewed, the physician’s decision can be affected by secondary gain, and the physician is more likely to state that the soft tissue injury is work-related.

In these economic times, the cost-shifting issue is hard to resist for physicians. That is coupled with the fact that soft tissue injuries are often hard to demonstrate radiographically or with objective testing. In addition, radiographic tests are unreliable at timing injuries. X-rays and MRIs can show chronic changes like osteophytes and severely collapsed discs that usually take years to develop, but if a patient states that all of the pain began after a work-related injury, the treating physician may be tempted to attribute causation to the work-related event despite conflicting (yet unclear) radiographic findings. If this trend continues and remains uncontrolled, employers’ workers’ compensation costs can skyrocket.

The key to this issue is only accepting claims that arise out of the course and the scope of treatment. The law in each jurisdiction has one simple common theme: The employee needs to be returned to baseline.

An electrodiagnostic functional assessment soft tissue management (EFA-STM) program can resolve the issues. It is a bookend solution that measures current and new employees before and after a work-related event is reported. It assists in determining if an injury arose over the course and scope of employment (AOECOE) and helps in providing better care for the work-related condition.

EFA-STM is non-discriminatory. It objectively determines pre-injury status and whether there is a change in condition after a reported occurrence. A baseline assessment is performed and the unread data is immediately stored in a secure database. When a work-related event is reported, a post-injury assessment is conducted and compared with the baseline test to determine whether there is a change in condition. Without a pre-injury exam for comparison, no radiographic test (including an MRI) can accurately time a soft-tissue injury and, thus, the ultimate opinion on causation of injury can be subject to bias.

In addition, it is commonly accepted that an MRI, for example, shows structural abnormalities that are common in asymptomatic patients. The EFA-STM program allows physicians to more accurately determine if structural changes on an MRI are causing nerve/muscle irritation and disturbance. Therefore, more accurate diagnoses are made and more appropriate treatments are recommended. Unnecessary, costly and invasive tests (e.g. discography) and treatments can be avoided.

See Also: 25 Axioms of medical Care in Workers’ Comp System

The EFA-STM program is specifically designed to allow better treatment for the work-related condition and has proven invaluable to prevent cost shifting to workers’ compensation. The program provides objective information that enables doctors to more accurately establish causation and to avoid the potential temptation to shift the burden to a work comp carrier if a soft tissue injury is not work-related. Finally, the EFA-STM program minimizes false positive structural abnormalities that are commonly seen on an MRI and allows for more accurate diagnoses so that safer, more cost-effective treatments can be rendered.

Is Baseline Testing Worth the Effort?

We have written several articles on the topic of baseline testing and demonstrated some substantial results. Today, with more than three years of baseline data, we are still asked the question: Is baseline testing really worth the effort? That’s the question we address in this article.

First, some background on baseline testing:

Often called a bookend solution, it is a non-discriminatory way for an employer to ascertain if a work-related injury arises out of the course and scope of employment (AOECEO). For a baseline test to be valid for musculoskeletal disorders (soft-tissue injuries), it has to assess the specific function of the nerves and muscles of  the spine or other body part in question. In the case of soft-tissue injuries, the test should include electromyography (EMG), range of motion and functional assessment for some of the essential functions of the job. The test should be noninvasive.

The baseline test data is stored unread until there is a work-related injury and then compared with a post-incident test to determine a change in condition or AOECOE status.

A baseline test is not designed to see if somebody can perform the essential functions of their job and therefore differs from the post-offer, preplacement evaluation (POET). Another major difference between a POET and a baseline test is that baseline testing can be done on the existing workforce. According to the ADA, post-employment medical inquiries and exams can only be done when they are job-related and consistent with business necessity. 42 U.S.C. § 12112(d)(4)(A).  Two recent cases from the Sixth Circuit (Bates v. DuraAuto Systems and Kroll v. White Lake Ambulance Authority) can assist employers with questions. It is our opinion, consistent with Bates, that a medical exam is not prohibited as long as it does not identify or single out a disability. Therefore, baseline testing is permissible, because the data is never evaluated unless a post-loss event occurs and at that time becomes subject to workers’ compensation requirements. At no point does the baseline testing determine or identify disability or an individual’s inability to perform their job functions.

According to Kroll, an employer that requires medical examination of an employee has to have a reasonable belief, based on objective evidence, that the test will satisfy  a vital function of the business. The keys are objective evidence and vital business function. Accepting AOECOE claims, and getting the employee the best care for the work-related injury, will fulfill this obligation.

With recent case law, and a basic understanding of the differences between POET and baseline testing, let’s evaluate a case study:

A national concrete manufacturer and supplier conducted POETs on all new hires. The employees use heavy equipment, and POET had proven to be a valuable tool to ensure that people could handle the equipment and to increase safety in the workplace. However, in the event of an injury, the POET test could not determine if there was an AOECOE condition and could not assist in identifying better treatment for the condition. To better help employees in the event of a work-related injury, the company decided to do baseline testing for existing employees and new hires.

Mr. Smith, a 48-year-old driver who was an existing employee, felt a sharp pain in his back after lifting at work. When he reported the incident, he stated that he  was injured before his EFA baseline evaluation and that even no change from the baseline still meant he had a work-related injury. As part of the  EFA-STM program, he was referred for evaluation and sent for post-injury assessment. Based on the EFA comparisons, chronic unrelated pathology and no acute pathology were noted on both evaluations. Furthermore, no change of condition was noted, and the comparison testing revealed that he was improved on the post-loss test. He subsequently pursued a surgical opinion on his own, without authorization  from the workers’ compensation carrier. The surgeon who evaluated him recommended a lumbar surgery, and this was performed, again without authorization. After the surgery, the court commissioner found the injury to Mr. Smith’s back not to be work-related, based on the EFA-STM results. Therefore, surgery was not compensable. Furthermore, the post-incident EFA testing found surgery wouldn’t have been indicated even if there were a change in condition. Mr. Smith has still not been able to return to work following his back surgery.

This case demonstrates that the EFA-STM program enables determination of AOECOE conditions. In Mr. Smith’s case, the baseline testing program was not only instrumental in determining there was no AOECOE, nothing OSHA-recordable and no mandatory reporting but, most importantly, was able to determine that Mr. Smith was not a surgical candidate. Thousands of dollars for unnecessary medical care was avoided by the company for an injury that was not work-related, according to an objective determination by the EFA testing.

Is baseline testing worth the effort? You be the judge.

Workers' Compensation No Longer the Exclusive Remedy: RICO on the Radar, Part 2

Understandably, Part 1 of this article series has been met with some controversy and skepticism. The article is not designed to scare employers, as might have been suggested. Its intention is to educate employers about the many issues facing them when an employee becomes injured, that transcend the State Workers’ Compensation System and a workable solution to overcoming the challenges. Employers can no longer afford to bury their heads and rely on the exclusive remedy position. Yes, it may be here to stay, but it is becoming a bit frayed around the edges.

Coincidently, when Part 1 of this article was published, The National Football League (NFL) announced that it had reached a 765 million dollar settlement with players and their families for the settlement and consolidation of approximately 4,500 concussion claims. The players alleged that the NFL hid or ignored the facts that concussions caused brain injuries. Under the settlement, the NFL will pay 675 million dollars to retired players who demonstrate medical evidence of brain injury. Payouts of up to 5 million dollars each could go to players found to have Alzheimer's or Parkinson's diseases or other concussion-related conditions, or to their families. The settlement came just prior to the start of football season and will put an end to the mounting litigation that threatened the multi-billion dollar league.

United States District Presiding Judge Anita B. Brody appointed Judge Phillips to oversee the negotiations. Judge Philips said, “This is a historic agreement, one that will make sure that former NFL players who need and deserve compensation will receive it, and that will promote safety for players at all levels of football.”

 “This agreement lets us help those who need it most and continue our work to make the game safer for current and future players. Commissioner Goodell and every owner gave the legal team the same direction: do the right thing for the game and for the men who played it,” said NFL Executive Vice President Jeffrey Pash. “We thought it was critical to get more help to players and families who deserve it, rather than spend many years and millions of dollars on litigation. This is an important step that builds on the significant changes we’ve made in recent years to make the game safer, and we will continue our work to better the long-term health and well-being of NFL players.”

Once final documentation is completed, the settlement will be filed with Judge Brody, who will then schedule a hearing to consider whether or not to grant preliminary approval to the agreement. The retired players will then have the ability to file objections to the settlement.

One may ask what this has to do with Part 1 of this article.  An important component of this settlement is baseline testing. According to the settlement, baseline medical exams will be provided, the cost of which will be capped at $75 million. This will be a key element in ascertaining the conditions of current and retired players, gauging  the progression of any injuries they may have and having documentation of the medical status. This key component is the subject of Part 1 of this article. Baseline testing is not simply a self-promotion for the EFA-STM, but is a major part of helping injured workers, no matter what their occupations may be.

These cases are just the beginning, and it appears that the exclusive remedy provision for workers' compensation will no longer serve to prevent costly civil litigation as evidenced by the NFL settlement. An employer, insurance carrier/TPA and physician can take several steps to protect themselves. First, evidence-based medicine should always prevail. Objective medical evidence can help protect against claims for fraudulent denials of work-related injuries. Also, employers should accept only claims that arise out of the course and scope of employment (AOECOE). If an employer can objectively document AOECOE issues, fraudulent claims and fraudulent denials can be avoided and most importantly, correct treatment can be prevail.

A good approach to determining AOECOE claims is baseline testing, as it can identify injuries that arise out of the course and scope of employment. When a work-related claim is not AOECOE, as proved by objective medical evidence, such as pre and post assessments, then not only is there no workers’ compensation claim, there is no OSHA recordable claim, and no mandatory reporting issue. Conversely, if there is an injury, the injured worker can get the best site specific treatment and prevent inappropriate treatment and unnecessary progression of the underlying conditions.

The NFL recognized the importance of baseline testing with its recent settlement, and it is only the beginning. MSD for NFL players is also a significant problem. Why not baseline all football players, or, for that matter, all professional athletes, to address any injuries that may occur while playing and return them to the field sooner? This would promote better health and performance and might extend their careers. Professional athletes tend to play through their injuries, potentially causing more harm. An objective baseline test can assist all parties by providing objective medical evidence of an injury and outlining appropriate care. This truly is a win-win situation.

A proven example of a baseline test for musculoskeletal disorders (MSD) cases is the EFA-STM program. EFA-STM program begins by providing baseline injury testing for existing employees and new hires. The data is interpreted only when and if there is a soft tissue claim.  After a claim, the injured worker is required to undergo the post-loss testing. The subsequent comparison objectively demonstrates whether or not an acute injury exists. If there is a change from the baseline, site specific treatment recommendations are made for the AOECOE condition, giving the doctors more information and helping to ensure the injured worker receives the best care possible.

The case of the NFL settlement may not be a RICO claim, but, certainly, it tries the boundaries of the exclusive remedy provision of workers compensation. Baseline tests like the EFA-STM are a proven way to providing better work-related care. It is time for change and to think outside of the box to provide the answers so that we can become proactive, not reactive.

Workers' Compensation No Longer The Exclusive Remedy: RICO On The Radar

Workers' Compensation origins can be traced to the late Middle Ages and Renaissance times in the Unholy Trinity of Defenses, the doctrine that first outlined that work-related injuries were compensable.  This doctrine began in Europe and made its way to America with the Industrial Revolution.  There were so many restrictions with it that changes occurred and led to the doctrine of Contributory Negligence which outlines that employers are not at fault for work-related injuries. This principle was established in the United States with the case Martin vs. The U.S. Railroad. In this case, faulty equipment caused the injuries, but the employee did not receive compensation, as it was deemed that inspection of equipment was part of his job duties. Additionally, the case Farnwell vs. The Boston Worchester Railroad Company led to the “Fellow Servant Rule” where employees did not receive compensation if their injuries were in any way related to negligence from a co-worker.

For awhile, in the United States, we had the Assumption of Risk Doctrine that held employers were not liable for injuries because employees knew of job hazards when they signed their work contracts. By agreeing to work, they assumed all risks. These contracts were often nicknamed Death Contracts. The only recourse an employee had was civil litigation or tort claims. As the nineteenth century continued, employers were faced with increasing civil litigation and employee verdicts.

The basis of our exclusive remedy workers' compensation system had its roots in Prussia with Chancellor Otto Von Bismarck, who, in 1884, pushed through Workers' Accident Insurance which contained the exclusive remedy provisions for employers.  The first Federal Workers' Compensation law was signed in 1908 by President Taft, protecting workers involved in interstate commerce.

Work Reform was slower to progress to America. Early workers' compensation acts were attempted in New York (1898), Maryland (1902), Massachusetts (1908), and Montana (1909) without success.  Finally, in 1911, Wisconsin passed the first comprehensive workers' compensation law, followed by nine other states that same year. Before the end of the decade, thirty other states passed workers' compensation laws. The last state to pass workers' compensation laws was Mississippi in 1948.  The main issue in all the states workers' compensation acts is the no fault system, i.e. employers who participate in the states workers' compensation system are exempt from civil tort litigation, hence the exclusive remedy. In the United States this exclusive remedy for work related injuries has stood, for the most part, until recently.

Racketeer Influenced and Corrupt Organizations, more commonly known as RICO, is a federal law that provides for criminal penalties and a civil cause of action for acts performed as part of an ongoing criminal organization. This act focuses specifically on racketeering, and it allows the leaders of a syndicate to be tried for the crimes which they ordered others to do or with which they assisted. It was enacted October 15, 1970 and was in widespread use to prosecute the Mafia. It has become more widespread and now plays a significant role in work-related injuries.

RICO on the Radar

One of the most recent significant cases is Brown, et al v. Cassens Transport, et al No. 08a0385. In summary, The United States Court of Appeals, Sixth District (Michigan), acting on a remand from the United States Supreme Court, has held that employees may have an action based on the civil provisions of the RICO Act against not only employers but their agents (carriers and doctors).  This is an important decision which could affect employers in the 6th district, Michigan and Illinois, because it involves a Federal statute where the United States Supreme Court has held that the plaintiffs need not prove reliance that the defendants’ actions resulted in detrimental consequences to the plaintiff.

In the instant case, Brown v. Cassens, decided October 23, 2008, the Supreme Court had merely restated its opinion in Bridge v. Phoenix, decided June 9, 2008, where it originally held that the plaintiff need not prove that it relied on the alleged RICO violation. This case allows the Plaintiffs to sue the Employer (Cassens Transport Company), the TPA (Crawford and Company) and the doctor (Dr. Margules).

The Plaintiffs allege that the defendants engaged in a civil conspiracy and racketeering to deny them workers' compensation benefits. Specifically, the Plaintiffs allege that the employer and TPA hired unqualified doctors to issue fraudulent medical findings to deny them workers' compensation benefits.  The case alleges at least 13 predicate acts of fraud by mail and wire all relating to the fraudulent denial of the workers' compensation benefits under the Michigan Workers' Disability Compensation Act. For more specifics, please refer to the case citations. Suffice it to say here that the Court has allowed this case to proceed forward, taking away the employers exclusive remedy. Furthermore, RICO cases are not covered by insurance, making this very costly for the employer, carrier and physician.

Many say that the this case has a long way to go before employers have to be concerned about  the exclusive remedy position being taken away, but that may no longer be true. In November 2012, a landmark settlement was reached in Josephine et al v.Walmart Stores, Inc., Claims Management, Inc., American Home Assurance Co., Concentra Health Services, Inc.; Defendants. Civil Action No. 1:09-cv-00656-REB-BNB (USDCT Colorado). This RICO case was allowed to proceed against defendants under a state RICO statute in Colorado in March, 2011. In November, 2012, a settlement was reached between the parties for $8 million.

And most recently, June, 2013, the Sixth Circuit heard arguments in Jackson v. Sedgwick Claims Management Serv. This RICO case will determine if Michigan’s workers’ compensation laws provide the exclusive remedy for injured workers, or whether injured workers can sue under RICO for an alleged conspiracy to file false medical reports to cut off workers’ compensation benefits. 

These cases are just the beginning and it appears that the exclusive remedy provision for workers' compensation will no longer serve to prevent costly civil litigation. An employer, insurance carrier/TPA and physician can take several steps to protect themselves. First, evidence-based medicine should always prevail. Objective medical evidence can help protect against claims for fraudulent denials of work-related injuries. Also, employers should accept only claims that arise out of the course and scope of employment (AOECOE). If an employer can objectively document AOECOE issues, then no claim exists, hence no fraudulent denials.

A good approach to determining AOECOE claims is baseline testing, as it can identify injuries that arise out of the course and scope of employment. If a work-related claim is not AOECOE, as proven by objective medical evidence such as a pre- and post-assessment where there is no change from the baseline, then, not only is there no workers’ compensation claim, there is no OSHA-recordable claim, and no mandatory reporting issue. If the baseline testing is evidenced-based medicine and objective, this can further protect employers against RICO claims.

A proven example of a baseline test for musculoskeletal disorders (MSD) cases is the EFA-STM program. EFA-STM Program begins by providing baseline injury testing for existing employees and new hires. The data is interpreted only when and if there is a soft tissue claim.  After a claim, the injured worker is required to undergo the post-loss testing. The subsequent comparison objectively demonstrates whether or not an acute injury exists. If there is a change from the baseline, site-specific treatment recommendations are made for the AOECOE condition, ensuring that the injured worker receives the best care possible.