The March 2016 opinion in Negron v. Progressive Casualty Insurance by a federal district court was an unprecedented ruling against Progressive for filing a false or fraudulent claim under the Medicare Secondary Payor Act (MSP) and causing a governmental agency (Medicare) to wrongfully pay for benefits. The decision raises a broad issue for workers’ compensation.
Before MSP, Medicare and other federal programs paid for medical services even if the beneficiary was covered by another program. With increased longevity and escalating medical costs, though, the federal government could not continue to pay for medical costs that were already covered by other plans. Therefore, in 1980, Congress enacted MSP to bar Medicare payments where payment has been made or is reasonably expected to be made promptly by a primary plan. MSP also requires that certain claims-specific information be reported by liability insurance (including self-insurance), no-fault insurance and workers’ compensation insurance.
The connection to workers’ compensation comes because it allows an injured worker to potentially be entitled to receive future medical benefits. Settlement of workers’ compensation claims is either by stipulation (future medical treatment is typically left open) or by compromise and release (where future medical issues are paid out). But if Medicare pays for a work-related condition covered by future medical payments that have been settled through workers’ comp, this could constitute fraudulently inducing a Medicare payment and be subject to the False Claims Act, a federal law that imposes liability on persons and companies that defraud governmental programs.
Under the False Claims Act, private individuals may bring a lawsuit on behalf of the government in exchange for the right to retain a portion of any resulting damages award. Therefore an injured employee who is a Medicare recipient may bring an action against the responsible party if there was payment by Medicare for a work-related injury, and the worker would receive part of the recovery. This may seem far-fetched, but it could happen, so employers need to be prepared.
It would reduce potential overlap and complications if an employer needs pays only for conditions and treatment that arise out of the course and scope of employment. The best approach to this is to have objective information as to what the employee’s physical condition was before an injury so he can be returned to pre-injury status.
An EFA-STM program can provide that baseline for musculoskeletal disorder (MSD) claims, a leading cost driver in worker’s compensation. MSD claims are often difficult to diagnose and treat, and oftentimes the individual does not receive appropriate care. The EFA-STM program evaluates either new or existing employees with a customized evaluation that is consistent with the job. The baseline evaluation is not read until there is reason to think a work-related MSD might have happened. At that time, a second test is conducted to not only determine if there is a change in condition but to ensure that the employee receives the appropriate care for any work-related injury.
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.
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.
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.
Neck and back disorders account for an estimated one third of all work-related injuries in the private sector. In only about 5% of all cases is back pain associated with serious underlying pathology requiring diagnostic confirmation and directed treatment, yet magnetic resonance imaging (MRI) is, controversially, often used for diagnosis. New technology can specifically diagnose muscle-related back pain and produce better outcomes.
According to the Centers for Disease Control and Prevention, back pain is the single most common reason Americans seek medical attention, and a U.S. Department of Health study showed that managing this type of health disorder costs $850 billion annually. About 20% to 40% of the working population is estimated to experience back pain at some point, with a recurrence rate of 85%.
The majority of back pain comes from musculoskeletal disorders (MSD), which are treatable through medication and physical therapy. MRI is frequently used to diagnose back pain, yet it is overly sensitive in identifying the cause unless it correlates with an objective clinical exam. European Spine Journal ran an article in February 2012 that found that a considerable number of cases of lumbar disc herniation (HNP) and spinal stenosis that were diagnosed through MRI may have been classified incorrectly. MRI is overly sensitive in exposing structural abnormalities of the spine, but not specific enough to diagnose accurately the cause of the back pain. Even though MRI imaging is commonly used to diagnose the cause of back pain, it is costly, ineffective and contributes to overuse. In fact, lumbar spine scans have risen dramatically in recent years and account for about a third of all MRIs done in some regions, despite the poor correlation between its findings and clinical signs and symptoms.
In addition, there are at least two studies that have been conducted to assess MRI findings in patients without back pain and that have raised concerns. In 2001, Spine published a study of 148 patients; all were asymptomatic, yet an MRI scan showed that 83% had moderate desiccation of one or more discs, that 64% had one or more bulging discs and that 32% had at least one disc protrusion. The second study, published in the New England Journal of Medicine in 1994, found that only 36% of 98 asymptomatic subjects had normal test results from an MRI.
The evidence indicates that it is common for patients who experience back pain to have abnormal MRI scans, regardless of their condition. Spine surgeons, knowing that MRI can be overly sensitive and non-specific in diagnosing back pain, also use discography, a provocative and invasive test, to attempt to accurately pinpoint the cause of pain. In reviewing many studies of this tool, it is clear that even discography can be overly sensitive and often inaccurate in identifying the cause of back pain and in predicting the outcome of surgery. In addition, because it is invasive, discography can actually contribute to further injury in certain patients. Imaging diagnosis for acute back pain often leads to surgery, and complications from unnecessary surgery can prolong back pain or lead to permanent disability.
Because costly imaging studies often fail to produce positive health outcomes for patients with back pain, X-ray, MRI and CT scans should be used primarily for patients with neurogenic disorders or other serious underlying conditions. Because the majority of back pain is musculoskeletal in nature, the primary tools used to diagnose back pain are ineffective.
What is needed is a tool that effectively diagnoses a musculoskeletal disorder. Electrodiagnostic Function Assessment (EFA) is an emerging technology that is a non-invasive and safe diagnostic device registered with the FDA. It can distinguish between spinal, neurogenic and MSD conditions, which can greatly help physicians reach a specific diagnosis. This is especially true in terms of workplace injuries, where MSD conditions are prevalent and difficult to diagnosis and treat, given that the complaints are often subjective.
The following are two case examples where EFA technology, in combination with a neurosurgeon’s evaluation, was used to make accurate diagnosis and treatments:
In the first case, a 34-year-old patient sustained a work-related injury from repetitively using an air-powered grinder. As a result of a court-ordered independent medical exam (IME), the patient went to a neurosurgeon with complaints of bilateral, radiating neck pain and numbness in his right hand. After undergoing an EFA examination, it was found that his resting readings were within normal limits for all muscle groups evaluated. The EFA did indicate non-significant spine and muscular irritation, with chronic muscular weakness. The patient then underwent an MRI, which was abnormal, showing diffuse stenosis but no herniated discs or neural impingement. The IME doctor deemed he was not a surgical candidate and recommended treatment with conservative, site-specific physical therapy and muscle relaxants. The EFA and neurosurgeon prevented unnecessary surgery and were able to help with appropriate care to get this case satisfactorily closed.
The second case involved a 30-year-old mechanic who sustained a work-related injury, straining his neck while opening the hood on a semi. The EFA revealed no muscular irritation, but spinal pathology revealed an issue in the neck area that could be clinically significant. In addition, the EFA findings indicated acute neck pain, increased curving of the spine and loss of range of motion. In this case, the IME neurosurgeon requested an MRI, which confirmed the findings of the EFA examination. The MRI further showed a herniated disc consistent with the patient’s symptoms and exam. The patient failed physical therapy, and appropriate surgery was recommended. The patient underwent surgery and had an excellent outcome.
In both of these cases, the administering physicians were able to make exceedingly accurate diagnoses by having the correct tools available to them. This would not have been possible without the assistance of the EFA. By using the appropriate diagnostic tool, each physician was able to render a more accurate diagnosis and appropriate treatment, which not only assisted the patient but helped to lower healthcare and workers’ compensation costs.
The use of MRI or other imaging technologies alone in diagnosing causes for back pain can be misleading and inaccurate in localizing pain generators. However, a more accurate diagnosis can be made when used in conjunction with the findings of EFA, so that appropriate site-specific treatments can be provided, leading to better patient outcomes and improved healthcare.
The authors invite you to join them at the NexGen Workers’ Compensation Summit 2015, to be held Jan. 13 in Carlsbad, CA. The conference, hosted by Emerge Diagnostics, is dedicated to past lessons from, the current status of and the future for workers’ compensation. The conference is an opportunity for companies to network and learn, as well as contribute personal experience to the general knowledge base for workers’ compensation. Six CEU credits are offered. For more information, click here.
Comment from Brent Nelson, Area Medical Director/Medical Director Occupational Medicine AZ at NextCare Urgent Care:
Very interesting article. As a physician treating and managing providers who treat work related injuries, I am often surprised at the number of referrals I see for advance imaging for back/neck pain. I was trained in an industrial athlete model for treating musculoskeletal injuries and one of the key points in the model is that an MRI or other advanced imaging should only be ordered to confirm a diagnosis, not find one. When this method is employed, the use of the imaging is less, and the findings are usually accurate and directly related to the complaint.
When an MRI is ordered simply for back pain that is not responding to treatment as well as expected, and the provider does not have a clear idea of what the problem may be, ambiguous findings may serve only to muddy the waters and increase the cost of treatment and possibly even result in unnecessary procedures. A bulging or ruptured disk without nerve impingement, annular tear, facet arthropathy, etc. are findings that may exist in asymptomatic populations, and may not be the cause of the pain.
A very detailed and thorough examination should always be performed at each visit, and this coupled with a detailed history should lead to an accurate diagnosis.
Quality of physical therapy must also be assessed when patients do not return to baseline as quickly as expected. Is the patient being treated by a physical therapist with experience in sports medicine? These PTs tend to have a better outcome for back and neck pain. Is there an indication for kinesio taping? Would an IFC/stim unit help breach a plateau? These are all considerations in treatment that may help with resolution prior to an MRI.
And again, an MRI should be ordered to confirm a diagnosis, and is most often indicated for a persisting radiculopathy or for an injury that may have resulted in an acute facet injury (not the same as degenerative changes in facet joint).
Simple XRays when conservative treatment begins to fail can give hints as to underlying degenerative issues which mean patient will take a little longer to return to baseline, and help prevent advanced imaging being ordered prematurely.
In short, the physical exam should give a good physician an idea of the problem and advanced imaging ordered only when one wants to confirm a suspected diagnosis.
The importance of knowledgeable physicians and therapists working in collaboration, and involving the carrier during the process, is often overlooked (and often times hard to find). The majority of the time, the patients answers to questions and an appropriate physical exam will give one the answers to the questions about origin of pain and indicated treatment.
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
% Reduction With Baseline
This resulted in a dramatic return on investment (ROI)
Reduction in Claims Cost
Total Program Cost
ROI (Impact to Claims)
The utilization of this book-end strategy allows for unprecedented access to information and allows for better treatment.
The Obama administration has said that the Patient Protection and Affordable Care Act, enacted into law in 2010 and scheduled to take effect on Jan. 1, will reduce workers’ comp claims because so many additional people will be covered under personal insurance policies. But there is reason to think otherwise.
The first issue is that so many companies are reducing the insurance they offer employees or are cutting employees’ hours so much that they fall below the law’s threshold, so employees don’t have to be covered at all. Employees who aren’t covered under corporate policies or who are underinsured are more likely to make workers’ comp claims.
Here are just a few examples from National Review Online:
SeaWorld used to let part-time employees work as many as 32 hours per week, but the company is dropping the limit to 28 hours to keep them under the 30-hour threshold at which it would be required to provide health insurance under Obamacare. More than 80 percent of the company’s thousands of employees are part-time or seasonal.
Carnegie Museum in Pennsylvania scaled back the hours of 48 of its 600 part-time employees to less than 30 hours a week to sidestep the mandate to provide health-care coverage
Virginia Gov. Bob McDonnell decided to limit the state’s part-time employees to 29 hours per week.
Brevard County, Florida told a local television station that the county’s 300-plus part-time employees will be “capped at something less than 30” hours to save the county about $10,000 per employee in health insurance.
Fatburger announced that franchises had begun making efforts to keep employees under the 30-hour threshold, including some franchises’ engaging in “job sharing.”
As more companies shift to shorter work weeks, you can expect claims under workers’ comp to keep climbing.
Proponents of Obamare still say it will decrease workers’ compensation costs in several ways, including through the elimination of lifetime caps on medical insurance coverage. The argument is that these caps on employees’ private policies pushed them to file workers’ compensation claims. Really? Many of the leading cost drivers for work-related injuries are Musculoskeletal Disorders (MSD), better known as soft tissue injuries. According to the Bureau of Labor Statistics (BLS), soft tissue injuries (sprains and strains) accounted for 40% of all work-related injuries that resulted in lost days of work. I do not believe that these types of injuries would affect the lifetime maximum for health insurance, which is typically $1 million.
Proponents also note that a healthcare insurer can no longer refuse to provide coverage because of preexisting conditions, conditions they claim were often not covered by private healthcare and thus encouraged employees to seek coverage under workers’ compensation. While this is a good point, the National Review’s examples show that many people are losing healthcare coverage or will see it reduced, meaning that there will be a greater likelihood of workers’ compensation claims. Yes, there are penalties for not securing healthcare coverage, but they are modest, especially in the early years of Obamacare, and there is no real mechanism for enforcement. The IRS has the responsibility for collecting penalties but has no true powers to do so.
How are people supposed to afford care if their hours have been cut? You guessed it: workers’ compensation.