Tag Archives: independent medical exam

How Medicare Can Heal Workers’ Comp

Workers’ comp in every state should carve out its medical line and relinquish it to Medicare. The respective statutory systems for indemnity benefits would remain. This scenario, albeit challenging in execution, would correct the cause of many systemic workers’ comp ills.

First, we must admit that the root of most WC problems lies in the delivery of medical care. Workers’ compensation medicine inhabits its own “bizzaro-world,” often lacking both clinical science and common sense. This is not the fault of most medical practitioners themselves, but more because of the pervasive manipulations, exaggerations and legal stretching of sensibilities that defy the clinical standards used in other venues.

The ubiquitous, counter-intuitive flaw is that WC medicine often is used to expand a claim rather than provide a cure. Anyone in the WC business can agree to the following truths as just a sample of medically related frustrations:

– Most any study performed shows higher costs and worse outcomes in WC medicine than in other settings. Common injuries take longer to heal when they are WC claims.

– Hearing judges regularly disregard clinical opinions in favor of subjective evidence. A common judicial outcome is to award illogical progressions, allowing diagnoses to expand as problems progress through various body parts.

– Causal relationship has an extremely low and speculative threshold when injuries are combined with chronic overlays and co-morbidities.

– Chronic conditions are accepted as arising out of incredibly specious initial traumas.

– Multiple surgeries and lifetime narcotic regimes are embraced in the face of perpetual and repeated failures to cure, all to the general detriment of claimants’ health.

– Various entities have profit streams directly related to churning medical care.

– Most of the pendulum-swinging effort in statutory legal reform amounts to limited attempts to control medical systems already tainted by legal gamesmanship. Therefore, the results don’t always support optimal clinical perspectives or patient well-being.

WC professionals may have a jaded viewpoint and accept this nonsense as part of the game. I ask you to consider a world where WC medical care was a non-issue. How much conflict and cost could be taken out of the system?

Let’s take it another step and consider ridding the current system of Medicare Set Asides (MSAs). We all know MSAs and their surrounding requirements increase cost, require added resources and waste temporary total disability (TTD) money in process delays. MSAs are a hijacking of any given state’s ability to allow compromise settlements over unproven causal relationships. In effect, when no one has determined direct causal relationship, MSAs simply decree all future care be paid, in advance, as an addendum to a settlement. Another terrible dynamic of this hijacking is how Medicare profits from the wild abandon in WC medicine, as a litany of future responsibilities can be attached to a claim absent a clinical “reasonable and customary” test by which Medicare itself might never accept such treatment requirements.

Through the MSA process, Medicare enjoys an exceptionally advantageous position with respect to WC. However, the playing field can be leveled by giving Medicare every claim from day one.

There should certainly be a direct reimbursement requirement from WC claim payers to Medicare for related care provided. I argue that this scenario would be much less costly and more efficient and fair than the current big-picture scheme that is WC medicine.

Here are a few practical thoughts in application that require no big changes:

-Medicare uses its current rules for “reasonable and necessary” to approve all care and to formally conclude treatment. Disputes can be handled via existing channels available through Medicare.

– Medicare uses its current fee schedules.

– Medicare uses its current rules for determining “chronic” conditions as opposed to curative treatment. This is the arbiter for otherwise obstinate, litigated maximum medical improvement (MMI) arguments and sets the bar for drawing down the WC reimbursement requirement and transferring a case to group health if continuing care is necessary.

Here are additional suggested changes to support the concept:

– Questionable causation or responsibility for migrating diagnosis could be given a percentage likelihood that would be applied to Medicare reimbursements. Independent physicians from opposing sides could put forth opinions, and a review process could establish the percentage applied to the life of the medical case. For example, a clinical consensus decrees that aggravated shoulder pain is 25% likely as due to job-related issues, and therefore future Medicare reimbursements from WC are 25% of cost.

– Extent of disability and permanency could still be determined by state-sanctioned independent medical exams (IMEs) and litigation process. The difference would be limits on the opportunity to exploit medical opinion, as Medicare would refer for these opinions, and aspects of Medicare’s rules and controls and requisite threat of sanctions would govern the providers.

– Medicare would need to categorize WC-preferred providers with appropriate qualification in occupationally related medicine.

– The ability to actually settle medical costs would no longer exist in any state.

– New employer insurance products or funding mechanisms could be invented to cover “Continuing Medicare Reimbursements” on certain classes of long-term claims where indemnity is fully closed, as well as the sporadic one-off future claims that might arise as allegedly part of an initial WC claim, with a “claims made” type of trigger. No more MSAs.

In conclusion, this concept would profoundly improve WC in four ways:

1) It provides a nationally accepted level of care to injured workers.

2) It brings clinical common sense to an otherwise specious and manipulated system.

3) It ends the oppressive impact of MSAs.

4) It saves an incredible amount of direct costs, frictional costs and resources while reducing litigation.

This idea is radical, but, among the calls to revise the grand bargain, it does not totally explode the current state system. I say, let the debate begin!

Yes, OSHA Is Now a Friend to Insurers

The HR/safety director at a large national construction company, who was the first to use OSHA-sanctioned medical exams conducted outside the workers’ comp system, said the program is “extremely successful” and may have saved the company as much as $1 million in workers’ comp expenses over the past few years.

The company, which has asked not to be named, has had employees sign contracts agreeing to diagnostic tests based on OSHA medical exam regulations. But when the company wanted to us a test result in front of the New York State Workers’ Comp Commission, the company’s insurance lawyer strongly advised against doing so — the insurance lawyer told the company lawyer she might go to jail!

The company contacted Ted Ronca, a leading workers’ comp and disability attorney and author based in New York. Ronca said a section in OSHA record keeping regulations (attached below) allowed an employer to schedule a contemporaneous exam with a medical provider of its choice, at the same time a worker was being examined as part of the workers’ comp process. The employer could then request a release of HIPAA-protected medical records from the worker. Ronca made a written request to OSHA and received an official letter of clarification and refinement, which was noted in my ITL article in October, Has OSHA Become a Friend to Insurers?

Both Ronca (reachable at medsearch7@optonline.net) and I were very surprised to learn of these regulations, which can help an employer push back against any overstatement of the injury done to the worker. But as anyone who has worked in the HR/disability world knows, there is a whole alphabet soup of federal regulations involving both occupational and non-occupational disability programs, including ERISA, SSDI, ADA, FMLA, EEOC, OSHA, DOT and both federal and state workers’ comp laws, not to mention scores of management/union-negotiated disability benefit programs. None of these programs are actually aligned with one another. Most are run independently from each other by different federal agencies. And most large employers have different internal staffs and outside vendors or insurance companies that administer these various disability/paid-time-off programs.

A retired New York workers’ compensation judge said that uncovering the OSHA regulations was “brilliant” and that state courts wouldn’t override them. He said the first thing judges are trained to do is “not touch” any other laws in workers’ comp cases. A workers’ comp judge would have no authority whatsoever on federal OSHA regulations.

An employer has an unequivocal right to schedule a contemporaneous exam under OSHA record keeping regulations, outside of state workers’ comp systems. How and when to use these exams is a whole other matter. Their use is not based on any case law. Case law does not exist here. Usage is based on what Ronca has done with the major construction company and other clients. In fact, OSHA exams are now formerly a part of the construction company’s employee contract protocol as a union contractor.

The new employment contract includes all the typical rules and regulations but also contains a provision on how to report all work-related injuries and the requirement that the injured worker must go to a company-provided medical/diagnostic exam, paid for 100% by the employer. In addition, new employees or contractors must undergo a confidential post-hire baseline range-of-motion medical exam, which is not read but kept in a private file and used only if there is a subsequent, work-related injury reported.

Ronca and the company have headed off potentially difficult or fraudulent claims, often without ever going to court, since implementing their program in late 2011. It would typically take as long as 18 months to schedule a hearing or independent medical exam (IME) through the state work comp system. Now, the company can take a very active role from the time of injury.

Among the first test cases was a classic type involving an employee who filed a work comp claim, after being fired, for aggravation of a pre-existing back condition. The OSHA-sanctioned medical exam confirmed there was no aggravation of a pre-existing condition. Furthermore, it was discovered that the employee was working a second job “under the table.”  No claim was filed.

Ronca says that, depending on results of the OSHA-sanctioned exams, he may be able to tell the employee’s work comp attorney, “Your client is a liar.” The client and attorney will not show up for a hearing.

In another case, the HR/safety director at the construction company said an attorney at her work comp carrier read the OSHA medical exam report and said, “I have never been so prepared for a hearing.”  This was another complicated claim involving aggravation of a pre-existing shoulder and neck condition. The carrier was going to settle for $80,000. Instead, the case was settled for $12,000 when it was determined there was no aggravation of the shoulder injury, only of the neck.

Another case in California involved aggravation of a pre-existing condition, where the claimant claimed total disability as a result. The medical exam found a slight aggravation, but the employee refused to return to work. The company went as far to arrange a modified-duty job with the nonprofit Habitat for Humanity, at full pay and benefits, but the employee refused. The company pointed out the situation to the company union. After a 5 1/2-month stand- off, the employee returned to full duty and dropped his work comp claim.

Ronca feels the strongest tool offered by the OSHA regulation is the ability to obtain prior medical records. He also stressed that the whole goal is to get the employer involved in workers’ comp claims from the moment of injury.  Early intervention is a well-known standard and best practice in workers’ comp. An OSHA exam is tool employers may use in selected cases.

The construction company is trying to do the right thing — that is, get the injured worker an early exam to help determine the correct diagnosis and treatment, which is in the best interest of both the employee and the employer. The OSHA exam should also be used if the employer suspects fraud or abuse, pre-existing conditions, employees working second jobs, etc.

Bob “Red” Hollingsworth, CEO of CompMinder in Salt Lake City, is now using this approach and has updated the CompMinder injury reporting tool he offers to employers. There is now a section that asks the employer if it wants to schedule an OSHA exam? If yes, Hollingsworth (reachable at Bob@buckner.com) has arrangements with a highly qualified occupational medical director to set-up a pre-planned program. It is critical that the employer do this directly with medical providers. The work comp carrier or TPA cannot pay for or schedule such an exam.

The work comp folks can’t be involved, so non-believers need not apply. But the employer can!

ADDENDUM — OSHA REGULATIONS UNDER SECTION 1904

“OSHA record keeping regulations permit an employer to request a prompt medical exam and release of HIPPA protected prior medical records outside the workers’ compensation system in order to help understand the link between workplace factors and injuries and illnesses in particular cases.”

Key Points

The medical exam must be paid 100% by the employer with the provider of its choice outside the workers’ compensation system.

An insurance company or third party administrator cannot schedule or pay for such exams because they cannot act outside the state workers’ comp system.

The costs of such medical exams are not included in a company’s workers’ comp costs nor experience modification calculation.

The employer can choose what medical provider’s opinion they consider to be the most authoritative for record keeping purposes.

Employee must submit to a prompt medical exam when requested by the employer and release of HIPAA-protected medical records.

Medical information and records obtained through this process can be discoverable with proper procedure and subpoena in workers’ comp cases.

OSHA 300 LOG Recordable Rules-1904

Key Language

In certain circumstances, OSHA record keeping requirements permit an employer to choose between two conflicting medical opinions. When an employer receives contemporaneous recommendations from two or more physicians or licensed health care professionals about the need for medical treatment, the employer may decide which recommendation is the most authoritative and record case based on that recommendation.

1904 Frequently Asked Questions

If a physician or licensed health care professional recommends medical treatment, days away from work or restricted activity as a result of a work-related injury or illness, can the employer decline to record the case based on a contemporaneous second provider’s opinion that the recommended medical treatment, days away from work or work restrictions are unnecessary, if the employer believes the second opinion is more authoritative?

OSHA ANSWER IS YES

HOWEVER,  

Once medical treatment is provided for a work-related injury or illness, or days away from work or restricted work activity has taken place, the case is recordable.

“If there are conflicting contemporaneous recommendations regarding medical treatment or the need for days away from work or restricted work activity but the medical treatment is not actually provided and no days away from work or work restrictions have occurred, then the employer may determine which recommendation is the most authoritative and record on that basis.”

OSHA considers that medical treatment is provided once a prescription is issued.

Key Definitions

Lost-Time: Work day (other than day of injury) when the worker is unable to return to their job.

Contemporaneous: Medical recommendations provided with no change in condition.

Most Authoritative: Best documented, best reasoned and most persuasive

Section 1904.5

Wide variety of issues do not need to be reported on OSHA log 300 but require a medical exam with prior medical records.

Employer can schedule a prompt exam and request HIPAA release for prior medical records.

A carrier or TPA would NOT be permitted to schedule such an exam, because they cannot act outside the workers’ comp system.

Note the Department of Transportation (DOT) also has additional exams for drivers such as ability to load, drive etc.

These are known as intermediary exams.

In both cases, exam records and results are not part of the comp record.

Medical exam costs must be paid by employer and are not added in comp claims or the experience modifier. However, with proper procedure and use of subpoena, records may be released and used in the comp claim.

Who Makes the Determination?

OSHA agrees that medical opinions are a burden and impractical and not required in the majority of cases. “This does not mean that employers may not, if they choose, seek advice of a physician or other licensed health care professional to help understand the link between workplace factors and injuries and illness in particular cases. It simply means OSHA does not believe that most employers will need to avail themselves of such professional services in most cases.”

Accordingly, OSHA concluded in the final rule that the determination of work-relatedness is “best made by the employer.”

How to Manage Legal Fees for Work Comp

Loss expenses are on the rise, at an alarming rate, according to California’s Workers’ Compensation Insurance Rating Bureau (WCIRB). The California Workers Compensation — Aon Advisory Bulletin (July 2014) indicates that “allocated costs (mostly attorney payments) increased 7.3% in 2013. Unallocated costs increased 10.3%.”

Given that legal costs are on the rise, here are nine ways that risk managers can more closely manage legal services:

Have in-house counsel monitor outside counsel (and adjuster performance). Litigation costs must be properly managed because overzealous defense counsel and untrained (or cooperating adjusters) can prolong litigation, increase costs for the employer and wreak havoc on the lives of injured workers.

Review outside counsel financial arrangements — consider capped fees, flat fees or invoice paid upon file completion. Paying at the end allows outside counsel to defend the claim but discourages unnecessary hearings and runaway fees and lets risk management easily review the ultimate fee rather than numerous monthly bills. Excessive fees are more noticeable and easier to compare against other files and law firms. Attorneys who are milking the claim become more visible.

An “invoice paid upon file completion” is a good approach if you use the same attorney frequently. However, this approach should not be used when the defense counsel only has one file. You could end up with an excessive bill, with little recourse other than to fight with your own chosen counsel over the amount.

Conduct an independent audit to assess whether defense counsel was needed in the first place, or whether she was just assigned the case to do work the adjuster, assigned too many cases, was too busy to do.

A favorite ploy of overworked adjusters (and lazy adjusters) is to allow the defense counsel to handle the claim. Legal counsel should not be paid to do the adjuster’s job, including gathering medical reports, state board records and ISO reports, arranging independent medical exams (IMEs), etc. An independent claims audit of your files will tell you whether you are paying legal fees for the work the adjuster should be doing.

Review hearing rulings. Review whether the same attorneys are requesting hearings on the same issue repeatedly or requesting hearings on issues they are likely to lose. For example, if benefits are terminated but reinstated at the hearing, and this happens repeatedly, it is an indication that benefits are being terminated without sufficient cause, thereby creating unnecessary legal expense. In insurance speak, this is called “churning” files.

Churning is any unnecessary activity undertaken by defense counsel for the sole purpose of increasing the legal services bill. It can be unnecessary research on a subject the attorney should know, unnecessary motions, unnecessary discovery, having another attorney in the firm review the case, having a paralegal or junior partner undertake an unnecessary action, etc.

Before any preparation by defense counsel for the hearing, the adjuster should phone the defense attorney and discuss the need for the hearing and what the probable outcome will be. If you know going into the hearing that you are going to lose, have counsel resolve the issue with the opposing counsel. It will save both legal fees and unnecessary claim costs (indemnity and medical costs continue while you wait for the hearing). By removing the unnecessary hearings, you move the file faster, with less overall claim cost, to the final resolution.

Review whether opportunities for agreement between counsel are ignored. Defense counsel may avoid agreement because it is more profitable to have a junior attorney attend hearings and collect a large fee.

For example, in Connecticut, a claimant’s doctor can be changed, with agreement of counsel, but defense counsel rarely agree even though knowledgeable counsel will know which doctors have reputations for overtreating and overrating disability, which doctors are known for unbiased treatment and ratings and which doctors have a reputation for being conservative in their treatment and ratings.

Review whether defense counsel makes unfounded accusations against claimant of misbehavior or wrongdoing (e.g. claimant is not credible or is trying to game the system) on every claim to obfuscate the issues and prolong the litigation.

If defense counsel is not totally objective in his assessment of both the claim and the claimant, it is time to immediately identify new defense counsel.

Look at whether the attorney charges for lots of research, on many files. Very little research is necessary except in unusual claims with issues of law, so files with legal research should be reviewed very carefully.

Adjusters — with sufficient authority — should attend all hearings with defense counsel. Sometimes, there are opportunities to settle litigation during hearings. These opportunities should be considered while someone with the requisite authority is present. In many cases, seasoned adjusters are capable of attending hearings without defense counsel. (This is not allowed in some jurisdictions.)

Risk managers (or the company human resources manager or the workers’ compensation coordinator) should attend all hearings to be available to testify about the job requirements and efforts to provide transitional duty and to show interest in the injured worker’s well-being. Specify this procedure in the account handling instructions.

To verify you are controlling your legal fees, a two-pronged approach is needed. A litigation management review by an independent claims auditor will determine the effectiveness of your adjusters in controlling legal expenses. This should be combined with an audit of the legal invoices by an experienced legal bill auditor.