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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 It? (Part 3)

This is the conclusion to the series of articles on whether baseline testing is worth the effort. The first two articles dealt with baseline testing from an employer’s point of view and from an injured worker’s point of view. We believe that those case studies were compelling. This final article will examine the statistics and, we believe, prove that baseline testing is truly worth the effort.

The concept of baseline testing for soft-tissue injuries began for us when requirements for set asides were established to protect Medicare from future medical expenses for workers’ compensation and general liability claims. ln 2011, the Centers for Medicare and Medicaid Services (CMS) mandated that all workers’ compensation  and general liability claims be reported in electronic format. This change enables CMS to look back and identify if it has ever made any work comp-related payments on a patient. Section 111 of the Medicare, Medicaid and SCHIP Extension Act of 2007 establishes Medicare’s status as a secondary payer under 42 U.S.C. 5 1395y (b), and this creates a right to reimbursement for any future claims related to a past workers’ compensation settlement. Therefore, this act has the potential to impose a possible risk of future liability against all parties indefinitely.

Soft-tissue injuries are the leading cause of claims and costs in this challenging system. They account for at least one third of all claims and are the primary reason for lost time at work. So, we  began baseline testing for soft-tissue injuries for the transportation industry in October 2011. Since that time, we have expanded our baseline testing  program to other industries: manufacturing, retail, warehouse and construction. Our initial testing  was in Georgia and quickly expanded to Texas. Now, our program is being conducted in California, Arizona, Utah, Florida, Oklahoma, Colorado and Indiana. Since the inception of the program, we have conducted more than 15,000 baseline tests.

Of those we tested, 27 have attempted to file a workers’ compensation soft-tissue claim. Only five of those 27 were found to have a change in condition. ln other words, only five had a pathology that arose out of the course and scope of employment (AOECOE). No claim was accepted for the remaining 22 cases. Of the five claims that were accepted, all resolved with the appropriate treatment. Of the cases where there was no change in condition and the claim was not accepted, three went on to litigation. These cases are summarized in the following vignettes.

Litigated case 1: A 54-year-old truck driver underwent the post-loss electrodiagnostic functional assessment (EFA) to compare with the baseline. She alleged incapacitating pathology to her neck, shoulder and back. But the comparison between the post-loss test and the baseline actually demonstrated improvement. It was found she had 25 prior workers’ compensation claims related to the same body part. Her case ultimately went to arbitration. This complicated case settled for less than $6,000. There was a full release with language to prevent future medical care from CMS, thereby protecting the employer from the unpredictable expenses of future claims to the same body part.

Litigated Case 2: A truck driver who was employed for less than a month experienced an unwitnessed fall from a truck and alleged injuries to his back, plus cumulative trauma. When the comparison tests were done, it was revealed that he had substantial pathology on the baseline that was unchanged in the EFA post-loss test.The claim remained denied based on the EFA-STM program, but he continued to receive treatment. No payments were made for the patient’s care, and he continued to pursue the issue through the legal process. The employer agreed to an independent medical exam (IME) appointment to review the status of the EFA comparisons and help establish AOECOE. The IME doctor, based on the EFA reports, found no work-related injury, leading to an uncomplicated resolution of this case.

Litigated Case 3 was detailed in Part 1 of this series. In summary, the results of the EFA-STM program demonstrated no change in condition, and the findings were affirmed in court.

In these three case examples, no unnecessary medical care was permitted; paid time off work was shortened; and litigation was resolved earlier in the process, reducing costs. Even though people will sometimes still litigate, the baseline testing gave objective medical evidence for AOECOE conditions and supported the defense of the case.

A review of the history of claims in businesses also shows that utilization of EFA –STM program significantly reduces the frequency of workers’ compensation injury claims.

In summary, the EFA program leads to more accurate diagnoses and ultimately better site-specific care to the injured worker. There are far fewer litigated cases, and even these cases are less costly because the objective evidence leads to more rapid, accurate and favorable results.

ls baseline testing worth the effort? Indubitably, yes!

Is Baseline Testing Worth It? (Part 2)

In our first article on this subject, we gave an overview of baseline testing, compared it with a post-offer physical exam, updated recent legal decisions under the Americans With Disabilities Act (ADA) that allow baseline testing and concluded with a legal case highlighting the benefits of a baseline program. While all stakeholders won in the case we cited, we all need to remember that the focus in workers’ comp needs to be the injured worker.

That isn’t always the case, as recent court rulings have shown. Last week, a Pottawatomie County judge in Oklahoma issued a ruling that may erode the exclusive remedy provision for workers’ compensation (Duck vs Morgan Tire). This ruling comes after Miami-Dade District Judge Jorge Cueto ruled in August that the exclusive-remedy provision of the state’s comp statute was unconstitutional. Both cases make a strong case that the rights of injured workers have been deteriorating and that workers no longer have enough protection. (The cases are under appeal.)

The workers’ compensation system is overburdened with red tape: In some states, there are onerous mandates for doctors, delays in legal proceedings, disputes over acceptance of cases…and on and on. An injured person is caught in the middle. Frequently, necessary care is delayed — which often results in even greater damage and costs. Carriers and employers are frustrated, too. With increasing federal mandates complicating this already tangled system, they feel they are being asked to accept claims that “aren’t ours.” They worry about liability and uncontrolled costs, even while knowing that delaying appropriate care can lead to prolonged disability, inefficient medical care and higher costs.

So the question remains: How do we do the best for the injured worker while protecting ourselves?

This article focuses on the heart of the matter: Better diagnosis leads to better patient care. Peel away the layers of comp laws and reforms, and this is what the industry should be about.

Baseline testing helps identify a change in condition, so the person can get the best care possible for work-related injuries. Does this actually happen? Does baseline testing work with soft-tissue injuries, specifically those that appear to be based on subjective complaints, with typically little or no objective findings? (Soft-tissue injuries, although often unsupported by clear and convincing evidence, are the leading drivers of cost in the system.)

Here is a case that shows that it’s possible to use baseline testing to avoid over-treating or under-treating and to do the right thing:

Mr. Jones works for the same employer as was mentioned in Part 1 of this article. He is 34 years old and is employed as truck driver. He underwent a baseline test in June 2014 and was injured at work in September 2014. He was driving his truck when he hit a bump. He was wearing a seat belt but hit his head. He continued to work. He later felt diffuse neck pain and reported the incident.

The following day, he saw a doctor, who couldn’t issue a diagnosis. Mr. Jones had a history of chronic neck pain, so the doctor couldn’t tell if anything was “new.” He thought the pain would go away, but it persisted.

Because Mr. Jones had undergone a baseline evaluation, he was sent for the post-incident, electrodiagnostic functional assessment (EFA). The comparison of the two evaluations revealed a change in condition. The testing indicated he could have an industrially related left cervical radiculopathy. Treatment was redirected to this area, and he received the appropriate care on an expedited basis.

This is a person who had diffuse pathology and a substantial pre-existing condition. As a result, his workman’s comp carrier delayed care, and he pursued treatment by his chiropractor on a non-industrial basis. He was off work, not receiving benefits, while waiting for the causation of his injury to be determined. He potentially could have gotten lost in the system with unresolved treatment and escalating bills while without benefits and out of work.

The employer truly wants the best care for its injured workers and, as soon as the comparison demonstrated a change, ensured that he received all the appropriate care and benefits for his work-related injury.

We truly believe that everyone in this workers’ compensation system wants to do the “right thing” but that is hard to do without objective evidence. Accurate diagnoses lead to better patient care, which is the very basis of workers’ compensation. So is baseline testing really worth the effort? You bet it is!

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.

Better Management of Soft-Tissue Injuries: A Case Study

The Gatesway Foundation, a nonprofit organization in Tulsa, OK, had seen an increase in its work-related musculoskeletal (MSD) cases, which the U.S. Department of Labor and Occupational Safety and Health Administration (OSHA) define as injuries of the muscles, nerves, tendons, ligaments, joints, cartilage and spinal discs. These types of disorders, commonly referred to as soft tissue injuries as well as sprains and strains, most often present as injury or pain of the back, neck, shoulder or knee and are a major source of disability. According to the 2010 report by the Bureau of Labor Statistics, the disorders account for 29% of total cases.

The Gatesway Foundation was experiencing both an increased frequency of claims and a rise in the cost of treatments, so, in 2012, the foundation began employing the EFA’s soft-tissue management program to compare pre- and post-loss data to accurately distinguish if there is acute pathology after a work-related injury. The program determines if pathology arises out of the course and scope of employment. A baseline test is conducted at the time of hire and compared with post-incident tests. State workers’ compensation laws may have many differences but have one thing in common: The employer is only responsible for returning the individual to pre-injury status. 

In the past, determination of pre-injury status, especially for soft tissue injuries, was often guess work.  Having objective findings can prevent costly misdiagnosis, unnecessary or inappropriate surgery, prolonged treatment periods and fraudulent claims. Employees also receive better treatment for compensable conditions.

The Gatesway Foundation began its program in April 2013 and had no MSD claims or OSHA recordables until Sept. 17, when a 52-year-old health care provider reported that a patient had fallen on her.  Initially, her complaints included her arm and shoulder. By the time she saw a doctor, her pain included her back.  The physician ordered a post-loss test for comparison with the baseline test.  The comparison showed a minimal increase in lumbar muscle spasms that decreased with stretching.  Two sessions of physical therapy were prescribed, and the employee has returned to work.

In the adjuster’s words, “This could have involved a great deal more expense and possible lost time without this information” from the baseline test. The program enabled the physician to have objective information and allowed the injured worker to receive appropriate care.

The program has drastically reduced the Gatesway Foundation’s soft-tissue-related workers' compensation claims.  The year prior to initiating the program, the foundation’s developed losses were $1 million. In the first six months of the policy year, before starting the program, the developed losses were $500,000. With the implementation of the program, the developed losses in the last six months of the policy year were $30,000.

A detailed analysis of the data revealed a dramatic decrease in the cost per claim when a baseline test was conducted.

Average Cost of Sprain Strain Claim Since Sept 2011
Without Baseline $18,794
With Baseline $2,241
% Reduction With Baseline 88%

This resulted in a dramatic return on investment (ROI)

Reduction in Claims Cost $316,544
Total Program Cost $9,200
ROI (Impact to Claims) 3,441%

The utilization of this book-end strategy allows for unprecedented access to information and allows for better treatment.