Tag Archives: workers compensation

Workers Comp Trends for Technology in 2021

One year after the start of the COVID-19 pandemic, Mitchell International conducted its annual survey of about 100 workers’ compensation professionals to determine how technology use changed in the industry during the pandemic and how those changes will continue. The survey found:

Technology use is increasing in the workers’ compensation industry  

  • Predictive analytics and telemedicine stood out, showing that the industry rapidly increased the pace of adoption – or the desire to adopt – those technologies during the pandemic.
  • More than half of organizations report implementing telemedicine since the pandemic began, and respondents ranked telemedicine (35%) and predictive analytics (35%) as the technologies that will have the largest influence on the industry in the next five to 10 years. 
  • Claims providers are facing pandemic-related challenges and are using technology to help overcome them. Almost one-quarter (22%) of respondents ranked adapting to pandemic-related challenges as the top obstacle their organization faces today, and 40% said they believe the pandemic is the leading driver of technology adoption.
  • Despite the technology changes in 2020, the workers’ compensation industry still has an opportunity to introduce automation into the claims process. Only 23% of respondents said that their organization uses straight-through processing for 50% or more of the medical bills they manage.

Telemedicine had the most substantial impact (35%) of all technologies implemented in 2020

  • As expected, most respondents reported that telemedicine had the most substantial impact (35%) of the technologies they implemented in 2020.
  • Survey respondents also indicated that they believe both telemedicine (35%) and predictive analytics (35%) are the technologies that will have the most significant influence in the workers’ compensation industry in the next five to 10 years, compared with other listed technologies. 
  • The majority of respondents said the best application of telemedicine is or will be for provider visits (54%), followed by nurse case management (26%) and triage (21%)
  • Mobile placed at a distant third (8.5%). 

These findings aren’t too surprising, as telemedicine, predictive analytics and mobile technologies have been key focus areas in workers’ compensation for years. Prior to the pandemic, 32% of people who responded to a similar survey in February 2020 said they thought telemedicine would have the biggest impact on the industry in the future and ranked artificial intelligence and predictive analytics as the next most potentially effective technologies.

See also: Covering for a Gap in Workers Comp Data

It’s clear that telemedicine has been crucial in helping to deliver care to injured employees during the pandemic. With innovation and the addition of other technologies, such as wearables, telemedicine has the potential for broader uses in the industry and could serve a more vital purpose in helping improve claim outcomes for injured employees.

The workers’ compensation industry will see increased demand for predictive analytics 

  • Respondents list claim triage as the most popular future application of predictive analytics (35%,) followed by severity or reserving (35%), intelligent decisioning and adjuster guidance (24%) and claim automation (22%)

Indeed, these applications of predictive analytics and more will be vital for efficient and effective workers’ compensation claims processing in the years to come. From triage to automation, predictive analytics can help claims organizations get the right information at the right time to make informed and intelligent claim decisions.

Changes and pressures from the COVID-19 pandemic are the primary driver of new technology adoption

  • While 40% of respondents noted the pandemic as the top driver for change, claims organizations are still looking to solve challenges that existed before the pandemic began
  • Respondents rated efficiency (22%) as the second top driver of technology adoption, followed closely by cost containment (20%)

The workers’ compensation industry still has a significant opportunity for automation

  • Despite the rapid rate of technology adoption in the past year, less than a quarter of respondents (23%) said they automate 50% or more of workers’ compensation medical bills using straight-through processing.
  • 22% of respondents said they process 25% or fewer of their bills automatically. 
  • Even fewer respondents said their organization processes workers’ compensation claims automatically, with only 16% saying they use straight-through process automation for 10% or more of their claims, and about a quarter (24%) said they only automatically process 0-5% of claims.

Typically, an efficient workflow passes 60% to 70% of medical bills through without human intervention, and it is clear the industry still has much opportunity to reach this level of automation. Straight-through processing offers many benefits, including removing repeatable tasks from adjusters’ workloads, boosting consistency and freeing employees up to have more time to focus on complex claims that need extra scrutiny and care to help achieve better outcomes. 

While we may never achieve full automation of all workers’ compensation claims—unlike other lines of insurance, some workers’ compensation claims will always require a level of human touch. There are plenty of opportunities to boost automation now and in the future using rules engines, artificial intelligence like predictive analytics and more. As technologies become more advanced in the years to come, claims organizations will need to think about how they can strike the right balance and implement the appropriate level of automation that allows them to spend their time focusing on the claims that need special attention.  

See also: Optimizing Care with AI in Workers Comp Claims

Survey demographics

Mitchell surveyed nearly 100 workers’ compensation professionals at a range of companies, including insurance carriers, third-party administrators, public entities, managed care and risk management organizations, and brokers. The majority of respondents (75%) had 10 or more years of experience in the workers’ compensation industry.

You can find the full report based on Mitchell’s 2021 survey here.

Bring Certainty to Remote Injury Claims

The working world is changing. Even before the COVID-19 pandemic, remote work was gaining popularity as employees sought greater flexibility and as advances in telecommuting removed barriers. Some employers even offered work-from-home options as an incentive to attract and retain top talent, save money and sharpen their competitive edge. 

Since the pandemic, remote work has become a fact of life, and, like it or not, it’s here to stay. Even with vaccinations on the rise and many watching the horizon for a return to “normal” — or to the office — many workers will never return to a physical worksite. Employers who acknowledge the shift are developing and implementing plans to provide continued work-from-home options.

But what does this change mean for your organization when a worker gets hurt on the job?

It may seem that working from home would provide employees with a safe environment and low risk of injury, but, in truth, employers won’t always know what specific hazards exist in every worker’s home. The reality is that injuries occur all the time in any environment, at home just as they do in a conventional workplace.  

Evaluate

Workers’ compensation claims for injuries sustained in the home can and should be evaluated the same as any other industrial claim — but they still present their own unique challenges. While every state has its own laws and interpretations, compensable claims generally have these things in common: the injury must be work-related; it must have occurred in the course and scope of employment; and the injury or accident must arise out of job-related activities. A proper investigation can provide the details needed to make an accurate determination and ensure the appropriate benefits are administered.

There is no requirement that an injury must occur at a place of employment outside the home — such as a worksite, factory, warehouse or office — for a workers’ compensation claim to be compensable. What is required is to establish whether it arose out of employment (AOE) or the course of employment (COE). The goal of a compensability investigation is to establish if the reported injury occurred, if it occurred in the course and scope of employment or if it was non-industrial.

See also: Pressure to Innovate Shifts Priorities

AOE/COE Compensability Determination

To be eligible to receive workers’ compensation benefits — including medical treatments, disability benefits, vocational rehabilitation and death benefits — an injury or illness must have arisen out of employment (AOE) and occurred during the course of employment (COE).  

As a general rule, if an employee deviates from work activities benefiting their employer to activities for a personal benefit, any injury occurring during such deviation is generally not considered within the course and scope of employment and is therefore not covered. But once the employee returns from the deviation to work-related tasks for the benefit of the business, any injury that occurs after that point is typically covered. 

However, there are nuances when considering the work-from-home environment. Take lunch, for example. When an employee leaves the office for lunch, compensability is typically more straightforward for injuries sustained while away from the workplace. But when an at-home employee trips and falls while walking to the refrigerator for lunch, the question may be somewhat less clear-cut. 

Investigative Solutions

It is crucial to conduct an investigation early on in any claim to document the facts, gather/secure any potential evidence and identify any potential third-party liability. The investigation will seek to determine if an accident or incident occurred, if an injury was sustained, whether anything unusual or unexpected occurred and whether the incident caused or aggravated a medical condition. 

While an accident at a job site or office may benefit from reliable witnesses or security footage, at-home employees are often working alone and unsupervised. This means injury incidents often occur without reliable witnesses to corroborate accounts. 

Recorded Statement

Obtaining recorded statements is a key technique for thorough remote injury investigations. At-home injuries are often unwitnessed (or potential witnesses are likely family members), so investigators will assess the credibility of the claimant and any witnesses and secure their recorded statements. Investigations must rely heavily on claimant and witness statements bolstered by medical records, scene inspections and other investigative solutions.

Here are some critical details an investigator will verify:

  • The time and date of the incident
  • Whether the incident occurred within the employee’s routine working hours
  • The activity that preceded the injury
  • Exactly what work was being done at the time of the injury
  • The mechanism and nature of the injury 
  • Medical history and claim history

Confirming when the in-home worker took breaks and other corresponding details about their daily routine are also important pieces. In addition to determining whether the employee was legitimately working for the employer at the time of the injury, investigators will inquire further to ascertain if the employee was solely engaged in work-related activities or if there were any other activity or distractions involved. If a reported injury arose from playing with the dog between calls or consuming alcohol while listening to a training, these may be valid reasons to deny the claim. 

See also: Long-Haul COVID-19 Claims and WC

Subrogation Investigation

Subrogation potential can also be complicated with a remote employee injury. What if your employee’s injury was caused by a roommate or landlord negligence? Or, imagine that a claimant reports she sustained an injury at her home workstation as a result of a broken chair. It’s then essential to obtain all needed information about the chair, any prior complaints or defects, litigation involving the manufacturer and other facts required for a potential subrogation claim.

Make a Plan

Create policies and procedures specific to your telecommuting employees. Work-from-home agreements can help ensure everyone understands expectations around creating a safe environment and guidelines for the reporting of an injury and the investigation of a claim.

COVID-19 Is NOT an Occupational Disease

When workers’ compensation was conceived over 100 years ago, it was designed to cover traumatic injuries in an industrial setting. As workers’ compensation evolved, that coverage expanded in many ways. It was recognized that there were certain diseases or conditions, like asbestosis and black lung disease, to which workers in certain occupations were exposed, and to which the general public was not similarly exposed. The cause of these occupational diseases was not a sudden traumatic exposure but instead resulted from exposure over time, and it often took several years before the disease manifested itself. The traditional workers’ compensation system was not set up for such conditions, so most states eventually passed occupational disease statutes as part of their workers’ compensation laws. 

Infectious diseases were never considered occupational diseases. Still, most states will cover infectious diseases under workers’ compensation if the worker can show all of the following:

  • They contracted the disease.
  • They were exposed to the disease in the workplace.
  • Their risk of catching the disease at work is greater than the general public. 

All of this leads us to the events of the last year with the COVID-19 pandemic. Although thousands of workers’ compensation claims were paid under the existing standard, several states passed presumption laws, assuming that workers in certain occupations contracted COVID-19 in the workplace. These presumptions changed the burden of proof for covered employees so that workers no longer had to prove they had a greater risk of catching the disease than the general public.

A troubling legislative trend is emerging in 2021, which takes this one step further. Several states are considering legislation or regulatory action that will classify COVID-19 as an occupational disease under their statutes. This consideration is alarming for many reasons.

First and foremost, COVID-19 is NOT an occupational disease. Millions of people worldwide contracted the disease, most of whom did not catch it in the workplace. An occupational disease, by definition, is particular to the risks of the occupation. That is not the case with COVID-19. Will this open the door for future infectious diseases to be covered under workers’ compensation? The flu of 1918 never went away; it lives on in a mutated form, necessitating annual vaccinations. The COVID-19 virus will likely undergo similar mutations, which could also necessitate annual vaccinations. Will all respiratory viruses be considered an occupational disease in the future?

Additionally, by making COVID-19 a named occupational disease, are policymakers not creating a de facto presumption that all COVID-19 is work-related? Policymakers seem to be using workers’ compensation to cover some of the pandemic costs, but workers’ compensation is not health insurance. There is no way for employers to run loss control against a global pandemic. There is no way for underwriters to assess the risks of a worldwide pandemic accurately.

See also: 20 Issues to Watch in 2021

If we continue to blur the lines between workers’ compensation and group health, where does this lead? Cancer and heart disease are already considered occupational diseases for specific occupations in certain states, as are hernias and bloodborne diseases. If workers’ compensation becomes responsible for common conditions that affect millions of people every year, it is no longer meeting its designed purpose. It is no longer a grand bargain for employers when they are being forced to pay claims under workers’ compensation that should be the healthcare system’s responsibility.

Perils of Pandemic Premium Audits

Because workers’ compensation premiums are usually driven by employer payroll, carriers audit the payroll figures to ensure that the worker classifications are accurate and that the premiums reflect the covered risks. States and the rating bureaus have stringent rules around what counts as payroll and how to calculate premiums. Regulators also audit carriers to ensure their premium calculations are consistent and accurate. Every carrier is held to the same standard to create a fair and competitive market. 

The premium audit process can be very contentious because it is labor-intensive, and no one wants to be told they owe an additional premium on an expired policy. However, every workers’ compensation policy has this as a condition of the coverage.  

Many do not realize that the leading cause of workers’ compensation fraud is related to payroll reporting. Some companies will try to lower their premiums by intentionally reporting lower payroll figures by misclassifying workers. Companies classify workers as either independent contractors or positions with lower premiums (e.g., reporting foundry workers as “clerical”). Sometimes, these companies will simply report a lower payroll than was paid. 

All this complexity and controversy relating to workers’ compensation premium audits existed long before COVID. However, the pandemic made things much worse. Many states issued emergency rules requiring immediate premium audits with the thought that this would bring premium relief to troubled businesses. However, these rules mostly created confusion and added high administrative costs to both businesses and carriers. No one was prepared for the massive data collection and analysis effort that the states mandated.  

While there is significant state variation in the emergency rules, here are some examples that help explain what carriers, brokers and businesses are dealing with while trying to manage their businesses during a global pandemic:

  1. It does not matter if you are self-insured and rarely report data to the bureaus. The states have imposed data reporting requirements on carriers and businesses relating to COVID. The orders apply to all workers’ compensation coverage: first dollar, deductible and self-insurance. 
  2. Furlough pay is complicated. Furloughed payroll may be excluded from premium calculations where the state has approved this exclusion and if the employees meet the definition of a furloughed worker. These definitions vary by state.
  3. If an employee is on leave due to COVID (either diagnosis or quarantine), that time off may be classified differently than someone on leave due to another illness. 
  4. If an employee’s COVID-related leave is due to exposure while on the job, it could result in a workers’ compensation claim. 
  5. Employers with temporarily reassigned workers may have premiums adjusted based on new classifications. Again, there are significant state variations on this. Essentially, this makes employers and carriers look at payroll week-to-week instead of once at the end of the policy term. It is an extremely labor-intensive process for everyone involved. 
  6. Employers are expected to maintain extensive records on furlough pay and other variations, which must be reported to the carriers and, ultimately, the states.
  7. It is important to understanding the difference between severance and furlough. Furlough is temporary, and you plan on bringing them back.
  8. Every workers’ compensation policy has a minimum premium, and these still apply. Some carriers have decreased these premiums to accommodate current circumstances, but not all have adjusted.
  9. Self-insured employers are expected to comply with the state rules in monopolistic states such as Washington and Ohio. 
  10. It cannot be stressed enough that there are many variations by state. Even all the National Council on Compensation Insurance (NCCI) states are not operating under the same rules.

See also: Has Pandemic Shifted Arc of Insurtech?

Are you confused by all the complexities? Don’t worry. You are certainly not alone. Chances are, there will be more emergency rules issued soon to add to the confusion. The best advice right now is to document everything and be patient. The carriers didn’t make these rules; the states did. Carriers, brokers and businesses need to work together to satisfy these extensive state reporting requirements.

5 Safety Keys for COVID-Era Building

In a year of COVID-19, contractors and crews need to stay vigilant and celebrate successes during Construction Safety Week.

Construction Safety Week was created six years ago by more than 40 companies in recognition that construction crews face countless risks of injury every day on job sites. COVID-19 has added risks and uncertainties. 

That’s one reason Zurich, a supporter from the start, remains a committed sponsor of Safety Week in 2020. Zurich Risk Engineers have been working to help protect construction workers in many cities and states where building has continued in exceptionally challenging times. Safety Week is an opportunity to heighten awareness of practices that can help manage those challenges to protect workers’ lives and livelihoods. 

Construction has always been a high-risk occupation. However, this Safety Week is like no other due to the additional risks crews are facing from COVID-19. Zurich has sponsored Safety Week since 2014, and we will continue encouraging practices that can help mitigate both the perennial risks and the unprecedented ones.

Here are five points that are top of mind for this year’s Safety Week, which consists of both virtual and live events across the country Sept. 14-18.

1. Continual training and communication

Crews need continual training and communication in the best of times, but the evolving challenges of COVID-19 heighten that need. Socially distanced huddle meetings at the start of a shift can offer a preview of the risks anticipated during the shift and prescribe actions to prevent injuries or accidents. Refresher training on how to wear a fall-protection harness, for example, can be especially crucial for workers who might have been out of work for weeks during the height of the pandemic, as well as for subcontractors who may lack the training resources that general contractors have. 

“Contractors should have a communications plan in place for their crews and subs, and there should be regular meetings where they’re communicating how they expect work to be performed to get everyone home safely at the end of each shift,” said Rick Zellen, construction senior risk engineering consultant for Zurich North America. 

2. Personal responsibility

Contractors and workers need to be vigilant about monitoring and adhering to state and county requirements related to COVID-19. This is complicated by the fact that mandates are evolving as COVID cases rise and fall in different areas. 

“Key points to know are requirements for wearing face coverings, temperature taking and social distancing,” Zellen said. “One of the biggest things for workers is, if you feel sick, don’t come to work.” 

Furthermore, workers need to protect themselves even when they’re not at work, which is part of looking out for each other’s well-being, too. 

3. The fundamentals

COVID concerns have at times overshadowed the Focus Four Hazards that the Occupational Safety and Health Administration talks about with construction. Workers still need to maintain situational awareness and safety practices related to the Focus Four Hazards, which include falls, electrocution, being caught in or between, or struck by, objects.

“Some contractors have us come in, and they want information about cutting-edge technology,” said Robert Labbe, another construction senior risk engineering consultant at Zurich. “I say, ‘First, let’s talk about the basics. If you don’t have people who are tying off, or something is missing in the training, let’s talk about that before we talk about the cutting-edge tech.’ Fall protection and safety glasses still have to be an integral part of safety training from the first day a worker comes to a site.”  

See also: COVID-19: Next Steps in Construction

4. Mental health

Construction is an occupation with one of the highest rates of male suicide, according to the Centers for Disease Control and Prevention, and misuse of opioids is also higher in construction than in many occupations. Social isolation and new stressors, such as providing care for children who can’t return to school because of COVID-19, can take a toll. 

Superintendents, foremen and others on a construction job site need to be attuned to subtle signs that another crew member may be suffering, get to know people on a first-name basis and take the time to pull up a five-gallon bucket to listen and talk, albeit while wearing a face covering and maintaining physical distance, if required. 

“Mental health issues in the past were swept under the rug,” Zellen said. “Our people need to be aware of the issues and know how to recognize signs and symptoms of serious distress.”

5. The power of “thank you”

In a time when contractors and crews may be rushing to make up for time lost to the pandemic shutdown, it’s easy for supervisors to forget to thank their crews for their efforts to work safely — including when they report near-misses. Many jobs have close calls, which can shed light on what action prevented a potential tragedy or what action could be improved to reduce the risk next time. 

“A lot goes into making jobs a success,” Zellen said. “On a daily basis, there are a lot of people who do good-quality, safe work; who plan, inform, protect and prevent accidents. Especially today when people are dealing with so many issues, Safety Week is a good opportunity to recognize people and celebrate the successes.”