Tag Archives: injured workers

A Silicon Valley View on Work Comp

Occupational injuries cost the U.S. more than $250 billion annually. That is nearly three times the financial impact of cancer. Yet to date, the technology and analytics community has largely underserved the challenges of effectively helping injured workers get back to being productive rapidly. Injured workers are being pulled into complex processes unnecessarily. Claims adjusters juggle many balls and are not able to focus their time on what they do best: being a trusted adviser to the injured worker.

The technology and analytics community can make an impact by helping drop combined ratios by more than 20% through better pricing and improved operations. To date, these efforts have been delivered largely through a one-off services model, an approach that works for specific scenarios in which objectives can vary by carrier.

See also: Data and Analytics in P&C Insurance  

For universal challenges across carrier, the one-off services model is suboptimal, and a product-centric model is recommended to maximize impact. Two such carrier challenges that affect the lives of claims adjusters daily and need special attention are:

  1. Connecting the injured worker to the right providers. The choice of the provider for a claim makes a big difference to its outcome. From a total cost perspective, a bottom-tiered provider can cost five times as much as a top-tiered provider. Improving the quality of a medical network and directing claims toward better providers can reduce average claim costs by more than 10%. To suggest the right providers, claims adjusters need a solution that ranks providers in a fair, accurate, comprehensive and defensible way. The system also needs to be very easy to use so that the adjuster can come up with the right answer instantaneously when the injured worker calls.
  2. Reducing claims escalation and focusing the team’s attention. The majority (~75%) of claims are simple and can be fast-tracked. However, the few that are complex (e.g., heading toward litigation or high costs) drive the bulk of the effort. Determining which claims are heading toward a simple outcome and which ones are heading toward complexity is challenging. The ever-changing nature of the claims complicates the situation. The claims team needs a solution that goes through the open claims and helps focus efforts. It needs to be highly accurate, dynamic (i.e., account for the changing nature of the claims) and integrate well into the team’s workflows. In short, the technology solution needs to mirror the dream analyst that every claims team likes to have — the one who is constantly on top of the claims and helps adjusters focus on being a trusted guide to the injured worker.

Why Now?

Analytics, in particular, and technology, in general, have passed through the hype cycle and are now accepted as required parts of the workers’ compensation solution for these reasons:

  • Underlying technology platforms are more mature. Claims management systems are being upgraded or replaced industrywide. They are more flexible, comprehensive and integrated than ever before. With this maturity comes the ability to easily connect one system to another and change workflows, an essential ingredient in accelerating change. Uber wouldn’t have happened if payment systems did not connect easily.
  • Analytics have started proving value. The advances made on analytical models over the past five to 10 years have started showing clear, tangible results. Underwriting and pricing models have brought down combined ratios dramatically. Additionally, provider scoring models have reduced costs by more than 10% year-over-year, and litigation models have brought down attorney involvement rates by several percentage points. The value of analytics is no longer under scrutiny. The question now is: How can we realize impact?
  • Both analytics and technology are essential to attracting new talent. Millennials will not accept archaic, paper-based processes. Most don’t know life without technology, and they treat it as a given. To attract new talent to the workers’ compensation industry, providers need to serve up tools that our future leaders can use and relate to rapidly. There is no alternative.

Why Current Delivery Models Are Obsolete

Most advanced analytics efforts have been one-off projects by internal teams or boutique consulting firms. They are primarily geared toward proving the point but not designed for scale and longevity. They served a purpose while the market was sizing up the value of analytics. However, these services have led to unnecessary redundancy across the industry, and, lacking a long-term strategy, these suboptimal solutions have stalled over time.

Are there exceptions? Sure. There are several models in which the objectives differ from carrier to carrier. For example, pricing models are intricately tied to the strategy of the carrier and will therefore have different goals for each carrier. In carrier-specific models, internal or outsourced analytics projects make sense.

See also: How Technology Breaks Down Silos  

However, for most claims operations, the objective is identical across carriers: reduce the cycle time of processing claims. To solve this challenge comprehensively, carriers need to have a dedicated focus over a long period. It takes hundreds of iterations to get all the pieces in place before one can call the solution complete. What is needed is a product-centric model.

What Is the High-Impact Promise of a Product-Centric Model?

A product-centric model is focused on creating the most robust solution possible across the entire industry. It is about identifying a problem that is common across many customers and then dedicating an R&D effort to it. Differences between customers are handled through configurations, such as switches that can be turned on or off, rather than customization, such as building brand-new models and using different inputs from customers. Product teams focus on select issues and continuously innovate.

A product-centric model delivers:

  • A continuously optimized model. Having a team of smart data scientists, engineers and product managers working toward the same goal for an extended period has an almost magical effect. All situations are thought through, and the solution is deep and complete. Experience builds on experience to create an exponentially rich set of features.
  • A cost-efficient model. R&D costs can now be distributed across the industry, making the cost for each customer much lower than a one-off solution. This is especially true when considering the total cost of the solution, including design, implementation, maintenance and upgrades.
  • A quickly implemented model. The constant refinement of the product makes it as close to plug-and-play as possible. Timelines can be reduced from months to days and minutes.

From our market size estimates, each of these challenges faced today by claims operations represents a $5 billion-and-upward opportunity across the industry. The potential of solving these challenges with advances in technology and analytics is significant from an economics standpoint. More importantly, a product-centric model will empower claims adjusters to do what we set out to do in the first place: “Get injured workers back on track rapidly.”

How Should Workers’ Compensation Evolve?

Workers’ compensation has been around for more than 100 years. It was developed as a grand bargain between labor and employers to ensure that injured workers received appropriate medical care and wage-loss benefits while employers received protections against tort lawsuits arising from workplace injuries.

The workplace is vastly different than it was when workers’ compensation was conceived. Workers’ compensation has also evolved in some ways, but in other ways it has not kept pace with changing workplace demographics and injury exposures. There are discussions in our industry around whether workers’ compensation is still meeting the needs of both employers and injured workers. Even the U.S. Department of Labor and OSHA have recently questioned the adequacy of workers’ compensation benefits. Some employers are actively pushing for an alternative option to workers’ compensation because they feel workers’ compensation no longer provides suitable protection for employers and injured workers.

As a person who has been very actively engaged in the workers’ compensation industry, I see a variety of issues within the current system and I hear complaints from a variety of stakeholders about it. Industry groups are starting to engage in discussion about the future of workers’ compensation. With that as a backdrop, here are my thoughts around how workers’ compensation needs to evolve.

Change Medical Delivery Model

The single biggest flaw in workers’ compensation is the current medical delivery model. Medical costs keep rising, and outcomes are often poor. This is because, historically, the medical delivery model in workers’ compensation has been focused on two things: discounts and conflict.

See Also: Workers’ Comp Market Trends

Too often, medical treatment in workers’ compensation claims is used as a weapon for secondary gain. Certain attorneys consistently refer injured workers to certain physicians who extend disability, perform unnecessary treatment and ultimately produce poor medical outcomes for the injured workers. These physicians producing the poor outcomes are well-known by the payers, yet they are allowed to continue to ruin the lives of injured workers so that the settlement will be larger and the attorney fee higher. This is just wrong.

The reimbursement model has prominently focused on who will deliver the cheapest care, not necessarily the best care. In fact, sometimes the best physicians refuse to treat workers’ compensation patients because of the low reimbursement rates. In addition, unnecessary utilization review delays workers from receiving care. Bills are not submitted at fee schedule rates, which necessitates spending money on bill review services to ensure that the appropriate amount is paid. There is a lot of money wasted on the bill churn that would be better spent on medical care.

We need to start over completely on the medical delivery model and look at what is happening in group health and Medicare for guidance. Under those models, insureds are not free to treat with any provider they choose; they must treat with someone “in network.” Certain treatments must be pre-authorized, and prescription drugs must be on an approved formulary to be covered. Both group health and Medicare are now scoring medical providers to see which of them produce the best outcomes. Those that consistently produce poor outcomes are excluded from coverage. Everyone with medical insurance, including Medicare, has operated under these rules for years. Yet, when the same rules are proposed under workers’ compensation, there is outrage that the injured worker would be denied the right to treat as he wishes.

The industry and regulator needs to focus on identifying which medical providers produce the best outcomes for injured workers and also which providers follow established treatment guidelines. These physicians, and only these physicians, need to be treating workers’ compensation patients. Let’s eliminate the “plaintiff and defense” doctor mentality and just have good doctors treating our injured workers. Once we have identified those physicians, we need to get out of their way and let them treat the patient. There is no need for utilization review when an approved physician is following treatment guidelines and dispensing off the pharmacy formulary.

Let’s change the focus from conflict and discounts to better outcomes and expedited treatment. These won’t be easy changes to make, but the result will be better outcomes for injured workers and lower costs for employers. Win-Win!

Reduce Bureaucracy

The administrative bureaucracy around workers’ compensation is complex, time-consuming and extremely costly. It also does little to enhance the underlying purpose of the workers’ compensation system, which is to deliver benefits to injured workers and return them to the workplace in a timely manner. States create a never-ending mountain of forms that must be filed and data that must be reported. These requirements vary by state, forcing carriers and TPAs to comply with more than 50 different sets of rules and regulations.

Also, why are penalties for compliance errors not based on a pattern of conduct instead of being issued with every violation? If a payer is 99%-compliant across thousands of claims, it is making every effort to comply. But mistakes happen when humans are involved, so perfection is not obtainable. The focus of compliance efforts should be ensuring that every effort is being made to comply, not simply generating revenue from every error.

State regulators need to take a critical look at their administrative requirements with a focus on increasing efficiency, reducing redundancy and lowering the costs to both payers and the states themselves.

Tighten Thresholds of Compensability and Eliminate Presumptions

The threshold for something to be a compensable workers’ compensation claim varies from 1% (aggravating condition) to more than 50% (major cause). Workers’ compensation benefits should be reserved for injuries and diseases caused by the workplace environment, not a simple aggravation. In addition, the normal human aging process should not produce a compensable workers’ compensation claim under the theory of “repetitive trauma.” There should not be workers’ compensation benefits for simply standing, walking, bending and other basic activities related to daily living.

States should adopt a consistent threshold that the work injury is the major cause of the disabling condition. If work is not more than 50% responsible for the condition, then it belongs under group health.

While we are at it, presumptions for certain conditions and occupations should be eliminated. These laws are based more on politics than science, and they add significant unnecessary costs to public entity employers, which, in turn, increases the tax burden on every person in this country. They also fly in the face of equal protection under the law by creating a preferred class of injured workers. If the facts of the case and the science support a compensable claim, then it should be compensable. However, a firefighter who has smoked two packs of cigarettes a day for 20 years should not automatically receive workers’ compensation benefits for lung cancer because of a presumption law.

Eliminate Permanent Partial Disability and Focus on Return to Work

The human body is a remarkable machine because it has the ability to heal itself. In addition, medical treatment is specifically meant to restore function. Most injuries do not result in some type of permanent impairment, yet most states have a permanent partial disability benefit. Why? This is how workers’ compensation attorneys get paid. Permanent partial disability benefits represent a tort element injected into this no-fault benefit delivery system, and this is the leading cause of litigation in workers’ compensation.

The goal of workers’ compensation is to return injured workers to employment. If they can go back to their regular earnings, then the goal is accomplished. If they cannot, then there should be a wage-loss benefit. This gives incentive to employers to return injured workers’ to employment, and it would significantly reduce litigation and conflict in the system.

Eliminate Waiting Periods

The suggestions I have provided thus far would all reduce workers’ compensation costs. The savings should allow us to increase certain benefits without increasing employer costs. Let’s start eliminating the waiting period. Why should someone have to go without pay for three to seven days because they suffered a workplace injury? This creates an unnecessary financial hardship on injured workers. You don’t have a waiting period when taking sick days from work, so why is there a waiting period for workers’ compensation benefits? Yes, a change would result in more indemnity claims, but we are talking small dollars in additional benefits when compared with the benefit this would provide to injured workers by reducing the financial strain caused by a workplace injury.

Eliminate Caps on Indemnity Benefits

All states cap the weekly indemnity benefits that injured workers can receive. These caps range from a high of $1,628 (Iowa) to a low of $469 (Mississippi). In 34 states, the benefit cap is less than $1,000/week.

Think about that for a moment. In most states, if you are earning more than $78,000 per year, you will be subject to the benefit cap. This is not something that only affects the top 1% of the workforce. This cap affects skilled trade workers, factory workers, teachers, healthcare workers, municipal employees, police, firefighters and a variety of others. It is truly a penalty on the middle class. For workers subject to the cap, their workers’ compensation benefits will be significantly less than their normal wages. How many of us could avoid financial ruin if our income was suddenly reduced by a significant percentage?

See Also: Why Mental Health Matters in Work Comp

Workers’ compensation benefits are designed to be a backstop for those unfortunate enough to suffer a workplace injury. Having a workers’ compensation claim should not mean someone suffers a significant financial hardship simply because they earn a decent living. Eliminating the benefit cap would solve this problem.

Define and Cover Known Occupational Diseases

One area where workers’ compensation really needs to evolve is the coverage of occupational diseases. This concept was not contemplated when workers’ compensation statutes were drafted because the focus was on sudden traumatic injuries, but we know that occupational diseases are a reality. Science tells us that there are certain conditions that may be caused by workplace exposures. These conditions can take years to manifest.

The industry and regulators need to work together to identify those diseases that are caused by the work environment and ensure that benefits are available to address them. This means eliminating statutes of limitations that are shorter than the latency period for the condition to develop.

I refer back to my comments on thresholds of compensability. If the workplace exposure is more than 50% responsible for the condition, then it should be covered. If not, then it should be paid under group health.

Reduce Inconsistency Between States

Workers’ compensation is a state-based system, so there will always be variations between the states. However, there are some areas where the inconsistency increases costs and does not treat all workers equally.

If states could agree on a common data template for carrier reporting, it would significantly reduce the administrative costs associated with gathering and reporting data. All the states don’t need to use the same data elements, but they could accept the feed and simply ignore what they did not need. There have been efforts in this area for years with no resolution. In addition, a common workplace poster for coverage and common forms would also significantly reduce the costs associated with compliance in these areas. As mentioned previously, the bureaucracy of workers’ compensation adds unnecessary cost to the system. We should be able to make some small changes to common templates to reduce costs and increase efficiency.

Another area of inconsistency is the simple definition of who is an employee subject to workers’ compensation coverage. If two people work for the same company performing the same job in different states, one should not be subject to workers’ compensation while the other is not, yet this occurs. States vary on their definitions of employees vs. independent contractors. Some states exclude farm workers and domestic servants from workers’ compensation, while others mandate coverage for those workers. Whether or not you are eligible for workers’ compensation should not vary based on your state of employment.

Ensure That Permanent Total and Death Benefits Are Adequate

Having a family’s breadwinner die or become permanently totally disabled (PTD) is both emotionally and financially devastating. Workers’ compensation benefits are supposed to help reduce the financial impact. Yet there are four states that have hard caps on all indemnity benefits (DC, MS, IN, SC). If you are permanently totally disabled in those states, benefits only pay for 450-500 weeks. That means, by design, those states shift PTD claims to the social welfare system.

Things are even worse with death benefits. There are 19 states that cap death benefits, including the four listed above. In Georgia and Florida, death benefits are capped at only $150,000. Some would argue that there may be life insurance to provide additional funds, but there is certainly no guarantee of that.

The most devastating injuries should not result in even more devastating financial consequences for the injured worker and the family.

Adopt an Advocacy-Based Claims Model

In many ways, workers’ compensation is a system based on conflict. We have “adjusters” who “investigate” your claim. A very small percentage of claims are ultimately denied as not being compensable, yet the claims review process is based on those claims rather than the vast majority, which resolve without any issues. Businesses stress the importance of customer service, and most employers agree that the workforce is the most valuable asset of any business. However, many businesses often fail to treat their own injured employees with the same consideration they give to their customers. That customer service focus needs to be extended not just to customers but to employees.

In discussions around creating an “Advocacy-Based Claims Model,” employers adopting this approach are seeing less litigation, lower costs and greater employee satisfaction. Rather than just denying a claim and inviting litigation, workers are told about benefit options that are available when workers’ compensation is not appropriate. Changing this model is about changing attitudes, the language we use to communicate and even the workflow. It can be done.

Workers’ compensation is still a valuable protection for both injured workers and employers. However, the time has come for it to evolve to better reflect the realities of the current workforce, risks present in the workplace, and advances in science and medicine. If workers’ compensation is to remain relevant for another 100 years, it needs to keep up with changes in society.

Court Dumps Lien Filing Fee Challenge

The 2nd District Court of Appeal has handed down a decision affirming the legislature’s creation of the lien filing fee as part of SB 863. In Chorn v. W.C.A.B., a physician (Robin Chorn M.D.) filed a complaint that was joined by two injured workers in an effort to challenge, on constitutional grounds, the imposition of a lien filing fee. The court, with frequent references to Angelotti Chiropractic Inc v. Baker, rejected similar arguments that were raised, which, unsuccessfully, (thus far) challenged the lien activation fee provisions of SB 863.

First, the court dealt with the issue of judicial standing for the injured workers—whether they could raise an issue of constitutionality regarding the lien filing fee provisions and in short order dismissed their claims in the case.

From the ruling:

Petitioners Kalestian, Vounov and Buie contend they have a “real and direct interest in challenging constitutionally infirm provisions of law that are transparently intended to impair access to expeditious treatment of their workplace injuries.” They claim that “the imposition of a lien filing fee that bears no connection to the value of the services rendered will make it less likely that medical providers will offer or render care to workers’ compensation patients on a lien basis,” and will “deprive injured workers of any choice as where [sic] they receive their care (if they receive care at all),” thereby “impairing the promise of unencumbered access to medical treatment of their injuries.” But petitioners have not submitted any evidence in support of these claims or any details of their alleged injuries beyond the bare assertion that they have “been denied medical care access as a consequence of SB863.” Moreover, they have not demonstrated that they are more affected than the “public at large” by the operation of sections 4903.05 and 4903.8, or that their constitutional challenges, if successful, would directly affect their rights.”

See Also: Hidden Motives on Workers’ Comp

After dismissing the causes of action by the purported injured workers (no doubt added into the mix in an unsuccessful effort to piggyback onto a more sympathetic plaintiff than the medical provider), the court turned to the multiple arguments raised by the medical provider plaintiff.

On the issue of the imposition of a lien filing fee as an impermissible “encumbrance” on the system, the court was unimpressed, noting the plaintiff failed to cite any legal authority as the basis of its assertions. The court pointed out that the courts have rarely been willing to substitute their judgment for the legislature’s in its efforts to create or maintain a system of workers’ compensation. Noting the legislature’s findings regarding workers’ compensation abuse on a broad scale, the court found the imposition of a $150 filing fee to be a rational exercise of legislative authority.

The court then sequentially addressed the additional arguments: right to petition, due process, equal protection and right to contract.  In each argument, the court found the medical lien provider failed to demonstrate a constitutional violation based on the obligation to pay a filing fee. The court was particularly swayed by the fact that the lien claimants could, upon meeting the statutory criterion and prevailing in litigation, recover their fees:

“…The compromise effected by section 4903.05—lien claimants must pay to file their liens, but may recoup their filing fees if they ultimately prevail—sufficiently protects the due process rights of lien claimants while serving the legitimate goal of deterring frivolous filings.”

The court was particularly dismissive of the claim of contractual impairment, as the court noted the contracts that the plaintiff claimed were being impaired had not yet been created. The statutory prohibition on impairing contractual rights essentially prevents the government from changing existing contracts, but it does not extend to future contracts.

The petition requesting an injunction enforcing the lien activation provisions of SB 863 was denied for the medical lien provider and for the injured worker plaintiffs, with respondents to recover their costs.

Comments and Conclusions:

This case had more or less dropped off the radar, particularly since the initial filing by the medical lien provider, Dr. Chorn, The refiled petition was filed directly with the Court of Appeal, the first level of appellate review that can consider constitutional issues. As a result, there really is no factual record to review. The court’s decision rests almost entirely upon statutory interpretation and the court’s conclusions (based on much the same logic as in the Angelotti case) that the legislature has broad discretion. The imposition of a recoverable filing fee turns out to be no more of an impermissible exercise of the legislature’s power than the activation fee.

This case is likely to be appealed to the California Supreme Court, where it is almost just as likely to fail.

How Work Comp Can Outdo Group Health

We all know the current healthcare system in the U.S. delivers erratic quality at unsustainable, yet ever-increasing, costs. Workers’ compensation medical care is affected by those costs. 

A major shift in the health industry, value-based healthcare, will benefit workers’ compensation. Embracing selected new medical management methodologies put forth in value-based healthcare has the potential to be powerful.

Value-based healthcare means restructuring how medical care is organized, measured and reimbursed. It moves away from a supply-driven system organized around what physicians do to a patient-centered system organized around what patients need. The focus is shifted from volume and profitability to patient outcomes (quality care). When fully implemented, the overall impact will be nothing less than staggering.

Porter and Lee, healthcare industry strategists at Harvard, have described six value strategies necessary to achieve healthcare industry transformation. Many of the changes are now underway in ACOs (accountable care organizations) such as the Cleveland Clinic, proving the concept. These defined initiatives produce desired results—quality care at less cost. 

Six components of value-based healthcare

The following briefly describes the methodologies necessary to transform healthcare, according to Porter and Lee.

  1. Integrated practice units (IPUs)—meaning multiple specialists practice together, resulting in comprehensive and integrated medical care rather than fragmented, duplicated services
  1. Measure true outcomes and costs for every patientWhen outcomes are measured and reported publicly, providers are under pressure to improve. Fraud and self-dealing are reduced.
  1. Bundled paymentsPayment bundles are capitated single payments for all the patient’s needs during defined episodes of care, such as specific surgical procedures. Providers are rewarded for delivering quality while spending less.
  1. Integrate care delivery systemsServices are concentrated and integrated to eliminate fragmentation and to optimize the quality of care delivered at any given location.
  1.  Expand geographic reachCenters of excellence are developed where expertise is gained through higher volume of similar procedures.
  1.   Information technologyData mining powerfully enables the first five initiatives and informs services and decisions.

As Porter and Lee say, “Whether providers like it or not, healthcare is evolving from a proficiency-based art to a data-driven science, from freelance physicians to hospital-employed physicians, from one-size-fits-all community hospitals to vast hospital networks organized around centers of excellence.”

Value-based medical management in workers’ comp

The goal of value-based medical care is to enhance quality outcomes for patients (injured workers) while reducing costs. Focusing on quality (what the patient needs) actually reduces costs.

For group health, the measures are physical and philosophical, requiring widespread disruption in how services are organized, delivered and reimbursed. However, workers’ compensation payers can benefit by incorporating three of the six value measures into their medical management process now.

  1. Measure true outcomes and costs for every patient (the injured worker)

Physician performance is scored based on injured workers’ experience and outcomes along with cost. Providers who score poorly can be avoided.

  1. Bundle payments

Bundling is capitating payments for all the services required for procedures such as specific surgical procedures, including all associated pre-op and post-op care. The costs are kept in line because providers need to stay under the cap to be profitable. They also focus on quality, because re-dos, redundancy and complications add cost to the service bundle, thereby diminishing profits. Prepare to see bundled payment options available to workers’ compensation sooner rather than later.

  1. Information technology

The data in workers’ compensation, while in silos, is all organized around individual claims and injured workers. When the data is integrated at the claim level, patient experience, provider performance, outcome and cost analysis opportunities are unlimited. The more comprehensive and accurate the data, the greater the opportunity for gain.

Those who cling to traditional seat-of-the-pants medical management will be left behind. Those in group health may be hampered by slow regulatory change, organizational upheaval and resistant providers, while workers’ compensation payers are free to adopt transformative value measures now. Organizations that progress rapidly to implement the value agenda will reap huge benefits.

The ‘CURES’ for Work Comp Claims

When an injured worker submits a claim, it initiates processes aimed at returning the injured worker to gainful and sustainable work at the earliest possible time. In this journey, checkpoints and milestones are the best means to monitor progress. Checkpoints generally relate to visits with a medical practitioner where medical conditions are checked against expectations and, if necessary, treatments are adjusted. Milestones are associated with reaching a goal.

At the first medical appointment, the physician is required to prepare a report for the claims administrator based on a comprehensive medical examination of the injured person, including a review of the medical history. At the same time, the physician can access CURES (Controlled Substance Utilization Review and Evaluation System) to check whether the patient has received any scheduled controlled substances in the prior 12 months. Through this access, the physician can identify an at-risk patient and accordingly establish a treatment plan that considers both medications and adjunctive treatments. Also, if a patient is identified as an addict, he can be referred for rehabilitation and social re-integration. With subsequent medical appointments, the physician can again use CURES to check for any changes to the patient’s scheduled controlled substances usage since his last visit.

The importance of a physician using CURES to check a patient’s use of scheduled controlled substances cannot be overemphasized, especially in workers’ compensation, where a patient may not be forthcoming in sharing comorbidity information because of a lack of trust. Not knowing if a patient is currently taking scheduled controlled substances, the physician could jeopardize the patient by prescribing inappropriate medications.

In addition to the medical profession, CURES is available to Department of Justice investigators and law enforcement agencies to identify persons who visit a number of physicians to obtain supplies of scheduled controlled substances for abuse and diversion (i.e. physician shopping). Pharmacists and numerous regulatory boards from the medical board to the veterinary board also have access to CURES, providing them with the opportunity to monitor the medical profession for aberrant prescribing of scheduled controlled substances.

While states like Florida implemented a PDMP (prescription drug monitoring program) as late as 2011, California has monitored Schedule II controlled substances since 1940 and with the introduction of CURES in 1996 extended its monitoring to include Schedule III and IV controlled substances. Online access to CURES has also been available to the medical profession since 2009. Consequently, California has not experienced the abuse and diversion that Florida has with its “pill mills.”

Access to CURES by claims administrators or their representatives (i.e. third party payers) will not deliver improved quality of care or reduce prescription drug fraud and abuse and will add unnecessary costs through duplication of efforts already being performed by others using CURES. Close monitoring of checkpoints, however, by the claims administrator will provide benefits. Monitoring is accomplished through what is commonly referred to as “encounter data” and includes diagnoses, services performed and medications dispensed along with amounts charged and paid. Diagnoses, medical procedures and pharmaceuticals translated into coding systems such as ICD-10 (International Classification of Disease, 10th revision), HCPCS (HeathCare Common Procedure Coding System) and NDC (National Drug Code) provide excellent opportunities to automate the monitoring of encounter data.

Have claims administrators been able to implement technology solutions to automate the monitoring of encounter data and achieve outstanding results? Over the past two decades, many claims administrators have opted to outsource the management and control of critically important functions such as utilization review, medical bill review and pharmacy monitoring. Many of the outsource organizations only focus on that part of the encounter data that directly applies to their function — for example, pharmacy benefit managers only monitor the pharmacy. But using all the encounter data can promote a vibrant synergy very capable of achieving outstanding outcomes and results for the injured worker.

Losing control of encounter data eliminates the claims administrator’s ability to establish and monitor adherence to best evidence-based practices. When physicians have not adhered to their proposed treatment plans, opportunities to trigger yellow and red flags for investigation are lost.

Claims administrators who have automated the monitoring of their encounter data can assist states in reducing abuse and diversion by monitoring the quantities of medications being dispensed in a progressive or step therapy pain management plan, for example, and encouraging unused supplies to be returned to the physician at the next appointment. This can be achieved at no additional cost to the claims administrator and reduces the quantities of unused or unneeded prescription medications in circulation, which has been the focus of the DEA’s (U.S. Drug Enforcement Agency) “take back” initiatives. To date, the DEA has collected in excess of 1,400 tons of unused medications, which could otherwise have found their way into the illicit drug market.

For as long as the U.S. remains the biggest licit and illicit drug market in the world, claims administrators will remain challenged to deliver on their workers’ compensation claims handling obligations.

With a changing workforce, claims administrators will need to move more and more toward a biopsychosocial approach to managing medical conditions. They must provide quality care at the lowest possible cost, which can only be achieved through the fine analytics of consolidated encounter data.

Capturing encounter data through the claims administrator’s processes and fine analytics will consistently yield the best claims outcomes, from earlier return-to-work to lower costs associated with medical treatment through to automated overseeing of a claim, including provider performance monitoring and evaluation. All of these are the essence of superior workers’ compensation claims management.