Tag Archives: scope of employment

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.

What Do New Workers' Compensation Reforms Sweeping the Country Have in Common?

AOECOE – Not Just Another Acronym

California Senate Bill 863 was passed in the fall of 2012 and went into effect on January 1, 2013. Senate Bill 1062 was just signed into law by Governor Mary Fallin of Oklahoma and will take effect January 1, 2014. On April 30, 2013, Tennessee Governor, Bill Haslam, signed into effect Senate Bill 200. House Bill 154 is expected to go into effect in Georgia in July, 2013. What are these bills? The first of many sweeping Workers' Compensation reforms. A common theme in these bills and other pending reforms is to level the playing field for employers and accept only those claims that arise out of the course and scope of employment, AOECOE.

A well-known term of art in the Workers' Compensation arena, AOECOE is not just an acronym. It is transitioning from a term of art to a statement with teeth, as reforms are actually including such wording into bills. The purpose of doing this is to establish whether an employee's alleged injury is work-related and happened in the course and scope of employment, or whether the injury is non-industrial or affected by third parties.

Workers' Compensation is a no fault system and thus benefits the injured worker, as, in order to receive benefits, he or she does not need to prove that the employer was negligent. However, it is the injured party's burden to show that the injury did, in fact, occur while at work, while employed as an employee and while undertaking some activity for the benefit of the employer. The injury itself must have been caused by the accident or employment conditions, and not from some other non-industrial related factors or degenerative factors.

The determination of AOECOE has long been an OSHA policy. OSHA's Injury and Illness Recordkeeping Regulation Section 1904.5: Determination of work-relatedness contained under section (a) basic requirement states in order for an injury or illness to be work-related an event or exposure in the work environment is either caused or contributed to the resulting condition or significantly aggravated a pre-existing injury or illness. Work-relatedness is presumed for injuries and illnesses resulting from events or exposures occurring in the work environment.

California's SB 863 was signed into law by Governor Brown on September 18, 2012, for a January 1, 2013, effective date. While certainly not the first bill to consider AOECOE issues, it is one of the most significant Workers' Compensation reform bills to specify AOECOE language. SB 863 calls for an Independent Medical Review (IMR). While this process may be problematic for an employer, since an IMR can be requested only by an injured worker following a denial, modification, or delay of a treatment request through the utilization review (UR) process, the bill specifically states that this does not apply if the injury is in question for AOECOE reasons.

On May 8, 2013, Oklahoma Governor Fallin signed into law historic Workers' Compensation reform, Senate Bill 1062. The bill defines compensable injury as arising out of the course and scope of employment and does not include: any strain, degeneration damage or harm to disease or condition of the eye or musculoskeletal structure or other body part resulting from the natural result of aging, osteoarthritis, degenerative process or pre-existing, except if a treating physician clearly confirms an identifiable and significant aggravation arising out of AOECOE.

On April 29, 2013, Tennessee Governor Haslam signed a Workers' Compensation reform bill into law, SB 200. It specifies that injuries arise out of and in the course and scope of employment only if proven by a preponderance of evidence that employment contributed more than 50% to causing the injury, AOECOE.

In my experience, the majority of injuries are real, but they are not AOECOE. Injured parties may exaggerate the severity and extent of their injuries or may attempt to hide pre-existing conditions. So how do any employers determine if injuries are AOECOE? The answer is simple. They need to ascertain what the employees' statuses are pre-injury. This is effectively done with baseline testing.

Baseline testing is a bookend solution. To be effective, it should be objective, meet the criteria for evidenced-based medicine, be job related and consistent with medical necessity. It needs to be specific to the metrics being evaluated. A good example of a specific baseline test that is recognized in some jurisdictions by statute is audiometric testing. Hearing tests are routinely done in environments with high noise exposure to determine a baseline that is referenced once a claim is filed. This is commonly referred to as the lock box defense.

Audiometric testing is beneficial for documenting hearing loss but is not designed to address other conditions such as musculoskeletal disorders (MSD). MSDs are the most frequent and costly claims for an employer. In order for a baseline test to be utilized for MSD, it must not only be objective and reproducible, it must contain measurements to ascertain electromyography (EMG), range of motion (ROM) and function.

In addition, baseline testing must be legally defensible. In 1990, Congress enacted the Americans with Disabilities Act that outlines what makes a legally defensible test. To be legally defensible, the testing needs to be job-related and consistent with business necessity i.e. the employer must show that it “substantially promote[s]” the business' needs. It must be repeatable, objective and address functionality. Also, since baseline testing is considered to be a medical exam, it needs to evaluate some functions of the job.

Baseline testing is not a post-offer, pre-placement test, as it can not identify disability because the data is not read and no hiring decisions are made with baseline evaluations. When a work-related injury occurs, a post loss test is conducted, at which time the baseline test is read and compared to the post loss results, hence the bookends.

When compared, the results can determine if an injury exists and if it has arisen out of the course and scope of employment, thus determining an employer's true responsibility. Good baseline testing is non-discriminatory and prevents “false” claims. The sweeping Workers' Compensation reforms allow for a new definition of “false” claim: one that is not AOECOE. A false claim no longer means fraud! A proven example of an effective baseline test is the EFA-STM.

Workers' Compensation statutes are helping employers by allowing them to accept the claims that are only AOECOE. Employers need to see that they comply with legislation, and baseline testing now gives them an objective assessment to do just that.