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New Tool for Settling Open Medical Claims

The almighty dollar is often just one component of a successful workers’ compensation settlement. Savvy negotiators recognize that they have several tools at their disposal when it comes to bridging the gap between the payer’s offer and the plaintiff’s demand, many of which dictate how and when the settlement dollars can be used.

On both sides of the negotiating table, many are adept at minimizing or maximizing the medical cost projection or the amount that goes into a Medicare Set Aside (MSA). Many in the industry also understand how a structured settlement (annuity) can unlock value and allow for the pacing of stable income for the claimant.

Now, a small but growing number in the industry are beginning to understand how offering professional administration (PA) of the claimant’s future medical funds can help facilitate a settlement. PA provides the claimant with a dedicated support team after he settles the case, along with technology to ensure he saves money when he actually spend the settlement dollars on healthcare.

What settlement issues can you use PA to help address?

The most often cited concerns of injured workers when they face the prospect of settling are regarding: 1) access to their medical treatment and 2) how long it takes to get a response from their adjuster, attorneys or the board as they go through settlement process. Examples of these concerns are easily found by reading the comments directly from injured workers in a survey by the New York Workers’ Compensation Board. Issues like “denied treatment” and “delayed processes” are at the core of nearly every complaint.

PA is effective in addressing these concerns because PA services do not restrict the claimant’s access to medical treatment via utilization review or a medical provider network (MPN); PA services provide expanded choices for treatment. In addition, many PA services have call centers that offer support to their clients, the injured workers. CareGuard, for instance, offers 24/7 coverage to its members and prospective members to answer any questions they may have as they navigate the complex healthcare maze after settlement.

Through the life of their claim, many injured workers simply lose trust in the attorneys, judges or system in general. This is often because the settlement process sets the parties up at a table for purposes of a one-time transaction, but then each group walks their own separate way.

There is sparing research done on injured workers’ attitudes toward settling their case, but a survey in Minnesota in 2013 scratched the surface of what a daunting undertaking settling is for the injured individual. The study found that about one-third of injured workers did not fully understand their settlement. Further, it revealed that around three-quarters of injured workers did NOT believe they achieved a “fair” settlement. The sample used were folks who actually overcame their concerns and settled regardless of the negative sentiment the process evoked. Many claimants do not have the courage to push forward with settlement and instead decide to leave their future medical claim, if not their entire claim, open.

PA can be a valuable tool, whether for adjusters, defense attorneys or plaintiff attorneys, to inject trust and solutions into a contentious situation. A team becomes available to address claimants’ concerns about their future medical treatment. PA also introduces a party to the settlement negotiation whose interests are aligned with the claimant’s, because the PA provider will be the only party continuing to provide service to the claimant after settlement. This can give the claimant much-needed peace of mind that a partner is looking out for his best interests, and it is this peace of mind that helps reluctant claimants see that settling could in fact be their best decision. PA services give claimants comfort and confidence that life after settlement can be a rewarding and hassle free experience.

How can you leverage PA in a settlement?

To leverage PA effectively, negotiators on either side of the table should introduce the service early on in the process and clearly explain its benefits to the claimant. Often times, it’s useful to connect the PA provider directly with the claimant or her attorney so that a relationship is established and the service is well-understood. After all, the agreement between the PA provider and the claimant will exist for years beyond the settlement; it’s better to begin that relationship early on rather than try to throw it in last minute.

The PA provider can serve as a neutral party that helps explain to the claimant what she can expect after settlement. Some PA providers, like CareGuard, can go further to provide cost analyses of what treatments will cost on their platform and demos of how their service works. PA providers understand that they do not get paid until the case settles, so they are a source of information and guidance toward settlement for all parties involved.

3 Signals It’s Time to Close the Claim

Some workers’ compensation claims seem to have a life of their own. Before you know it, years have passed since the date of injury. Here are three signals telling you to take a hard look at settling now.

The Injured Workers Is 61 Years Old

Once an injured worker reaches age 62½, any buyout of future medical care must include a Medicare Set-Aside. (Buyout of medical benefits for an injured worker already on Medicare also requires a Medicare Set-Aside.) This adds work and delay. Sometimes, the MSA evaluation changes the parties’ view of the case. Stories abound about how the MSA process has torpedoed a settlement. Check your case inventory. If the injured worker is 61 years old, take steps now to close the claim before Medicare becomes a party to the proceedings.

Litigation Has Become a Way of Life

You’re in court every month. The number of claimed body parts keeps increasing; every treatment request is denied. Everyone mistrusts everyone else, including their own lawyers. Take a deep breath. Step back. This claim has a settlement value. The parties just need help figuring out what it is.

Trial Is Imminent

Nothing makes people think about settlement more than an upcoming trial date. You’ve lived with these facts for a long time; how can you be sure the judge will see things your way in the limited time available to put on the case?  Often, a judge’s order is just the gateway to even more litigation.

Going to trial is a risk. Most people are uncomfortable with the lack of control. They are happier with a negotiated settlement reached through compromise. You won’t get everything your way, but you won’t lose on every issue either. Most importantly, litigation can end.

Take the First Step

Approach the other side about scheduling a mediation. If communication has broken down, contact the mediator first, and let her work on bringing the parties together.

What Will Workers’ Comp Be in 20 Years?

At the 67th annual SAWCA Convention, Frank Neuhauser, executive director of the Center for the Study of Social Insurance (CSSI) at University of California at Berkeley, opened his keynote by discussing the future of workers’ compensation.

He noted that the current system does not efficiently address the issues that employers and employees face today. In 1915, the system was created primarily to support a heavily industrialized workforce, but that is no longer the case.

The organizational costs associated with administering $1.00 of medical treatment under workers comp is estimated to be $1.25. To administer at this same level of service under a group health plan costs just 14 cents.

In addition, the use of workers’ compensation Medicare set asides (MSAs) creates Medicare to lose between 25% and 40% of the amount, and the MSA process is inefficient and has the potential to become costly. Neuhauser recommends that a more streamlined approach be designed by the states to limit the duration of employers’ liability to two years and then assess insurers and self-insurers “fair” payment to a Medicare trust fund.

Non-traumatic injuries make up 67% of claims and 75% of claim dollars. So where do these injuries frequently occur? An employee is four times more likely to suffer a fatal injury away from the workplace, and 75% of workers are in occupations that are low hazard.

In the next 20 years, this may lead to the conclusion that the workers’ compensation requirement for employers and occupations with negligible additional risk should be eliminated.

Based on this conclusion and the ability to administer medical benefits more efficiently, Neuhauser recommends that 75% of employers should administer their workers’ compensation through a group health plan.

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!

Did the Work Comp Nurse Make It Worse?

Case management nurses can unwittingly hinder the control of workers’ comp claims. Consider the perfect storm of “assumptions” leading to disaster: An adjuster receives a claim requiring extended treatment, makes the standard screen-clicks to assign a nurse and logs the claim in the diary. The employer assumes the case is being scrutinized and treatment is being managed. The adjuster assumes it is okay to ignore the case for a while. The nurse takes the initial claim information at something approaching face value.

In these situations, many nurses act but don’t interact. They assist with referrals and expedite the collection of medical information. Unfortunately, they may not use their clinical acumen on critical issues like compensability, diagnosis, causal relationship, return to work (RTW) and treatment plans. We should note that nurses must balance caseloads and respect their company’s requirements for speed. As such, they might feel justified in expediting what appears to be a common assignment.

When it comes to referrals, a well-intentioned nurse can cause disaster. I have experienced all of the following: a claimant alleging breathing issues referred to a “sick building expert”; a claimant with negligible head trauma to a “closed head injury specialist”; a claimant alleging jaw pain to a “TMJ dentist”; and the ever popular referral of a claimant with mysterious pains to a “chronic pain specialist.”

These real examples all involved highly questionable claimants. Needless to say, medical expert “hammers” saw perfect “nails” in each claimant and fully validated the conditions and the causal relationship each alleged. By the time of the next adjuster diary, it was all over but for the increase in reserves.

The claimant can steal control of a case and contrive subjective medical issues if a nurse simply collects doctor reports and fails to interact. Countless WC case files exist where medical notes are simply pasted in by the nurse. (As far as I am concerned, this indicates adjuster/employer failure and not necessarily a poor nurse.)

I have witnessed nurse case managers decline to intervene in RTW efforts, and the corporate nurse care management entity can, conveniently, relieve itself of RTW responsibilities without affecting its fixed fee. I would argue that some level of RTW support from a nurse can and should exist on any given case in any jurisdiction.

Quick Tip: You and Your Adjuster Must Engage and Direct Nurse Assignments

A nurse should be vital in selecting providers for specialist evaluation or independent medical exams (IMEs). However, the nurse needs the insight and outlook that can only be gained by communication and planning. Engage the nurse and explain all the case issues and concerns. Compare providers and agree on who might be most appropriate. Agree on the specific background, insight and questions to be given to this provider. An early conference call should be mandatory.

The nurse should be an active member of the claim team, including adjuster, employer, defense counsel, Medicare medical savings account (MSA) vendor and, in certain cases, the special investigative unit (SIU). Nurse contributions should be vital to team decisions and strategy.

Make certain the nurse case management fee-structure allows extended work, as a claim might require. Reconfigure if necessary to ensure nurses can spend adequate time where needed.

A nurse should be asked to evaluate, comment and make suggestions based on all medical info collected. This insight can be used by the team to make tactical and strategic decisions.

A nurse is most useful for assessing the claimant on a personal level. The nurse should be sought for oral comment on impressions and gut feelings based on interaction with the claimant. Written assessments, which are subject to discovery in legal proceedings, need to be subtle and are not as meaningful. Therefore, conference calls on an interim basis are critical for gaining powerful nurse insight.

Nurses should absolutely support RTW efforts, either at most by collecting potential jobs from the employer and sharing these directly with the employee and doctor or at minimum by reminding the doctor that the employer has a RTW program and expects participation. Somewhere along this range of support should fit any jurisdiction.

Nurses are great tactical tools against unwieldy claimants. They can relay important details and extraneous issues to a physician that can affect causation determinations and reliability assessment of subjective symptoms. Nurses give doctors an “option B” of facts and background when doctors otherwise would only consider “option A,” as relayed by a claimant. Without an “option B,” doctors are more likely to give a claimant benefit of the doubt.

Most important: The power of case management nurses is wasted if you do not provide specific insight, direction and expectation for each claim assigned.