Tag Archives: workers’ compensation

‘Yoga Your Way’ to Better WC Results

With the advancement of telehealth and mobile workforces, an exciting concept has emerged to assist employers and employees to take control of their body and provide better quality of life. This new concept is Yoga Your Way.

Yoga popularity has grown tremendously in the past several years, and National Health Interview Survey data conducted by the Centers for Disease Control and Prevention (CDC) show increased usage for complementary and alternative medicine (CAM) treatments. In 2007, yoga was the seventh most commonly used CAM therapy. There has been a steady rise in the use of yoga since 2017 to treat musculoskeletal conditions; the limiting factors are cost, convenience, timing of class and access to studios.

Derived from the Sanskrit word “yuji,” meaning yoke or union, yoga is an ancient practice that brings together mind and body. Practicing yoga is said to come with many benefits for both mental and physical health. Proven yoga physical benefits are: reduced inflammation, reduced chronic pain, improved flexibility and balance, improved breathing and sleep. Yoga also has psychological benefits of decreasing stress, anxiety and depression.

If there is a work-related injury, yoga is considered self- care, as it can help prevent seeking medical care. It not only leads to better outcomes while helping to eliminate OSHA recordables and workers’ compensation claims, but it is a skill that can increase quality of life and be used to prevent work-related injuries in the future. Yoga, in comparison with spinal manipulation, physical therapy and acupuncture, may be more cost-effective because it can be delivered in a group format and self-administered at home. However, actual cost analysis of yoga interventions is needed.

This literature review suggests that yoga is effective in reducing pain and disability and improving both physical and mental function.

About one-fourth of U.S. adults report low back pain, lasting a whole day or more, with average duration of three to six months. It is the most common cause of limited activity in people below the age of 45, the second-most frequent reason for visits to a physician, the third-most common reason for surgery and the fifth-most common cause of hospital admission in the U.S., according to Spine Journal The majority of individuals with back pain and sciatica recover from an acute episode in four to eight weeks, and 80% to 90% return to work within 12 weeks post-injury. However, 25% to 80% of patients with low back pain experience some form of recurrent back problem in the following year. Among those who suffer from an episode of low back pain, one year later as many as 33% have moderate intensity pain, and 15% may have severe pain.

In other words, there is a huge opportunity for yoga to address.

See also: How to Optimize Healthcare Benefits  

Yoga Your Way is a new concept in a trend to take yoga outside of the studio and allow anyone to practice and integrate the benefits of mind-body interaction. Yoga Your Way can be brought to the worksite and paid for by the employer as a employee health benefit, providing customized yoga videos designed for a person’s ability and needs.

Studies have shown that practicing yoga 15 minutes per day leads to reduced illness and improved mental health. Yoga Your Way incorporates these principles for the  mobile workforce such as the transportation industry as well for a more stationary workforce. Custom programs can range from simple stretching done in a truck (while parked) to exercises for those overseas in a war zone.

Yoga Your Way is not only providing relief from work-related conditions but is a preventive measure to strengthen and increase endurance, overall health and mind/body awareness.

Yoga is not just stretching in a crowded studio. It it is anyone, anywhere and any time.

Why Not to Make Opening Statements

Times have changed. In the past, mediators would open a mediation by asking for opening statements from lawyers for each party. Problem was, though, these were typically so inflammatory that a meeting that was supposed to be about resolution started with animosity. Sometimes, one side walked out right then, before the real mediation even started.

That’s why I have never invited opening statements at the start of a mediation.

Lawyers no longer want opening statements, either. I have even had lawyers ask that there be no opening joint session with all parties present. Rather, they wanted to work with me only in caucus, one side meeting with the mediator,  keeping every communication confidential. The lawyers wanted to avoid the hostility that previously permeated the parties’ dealings.

Unless there is strong objection, I start mediations in a joint session. I introduce myself and go over logistics: important stuff such as where the bathrooms are and how we will handle meal breaks.

See also: How Mediation Should Progress  

I also assure everyone that nothing bad can happen. The parties control the outcome, and there can be no result they did not agree to.

Everything that happens in mediation is confidential and cannot be used against anyone in a different civil forum. To emphasize that rule, while we are still in the opening joint session every person present signs a confidentiality agreement.

Then we typically break up into caucus.

The only person who has made an opening statement is me, the mediator.

Understanding the Big Picture in Work Comp

In workers’ compensation, the trends over the past few years have been pointing to declining rates in most states. At the 2019 NCCI Annual Issues Symposium (NCCI-AIS), NCCI indicated the 2018 industry private carrier calendar year combined ratio was a record low of 83%. I heard comments from many carriers attending the NCCI-AIS that they were very surprised by this figure as it did not reflect what they were seeing on their book of business.

To fully understand the workers’ compensation marketplace, it is very important to understand what information is included in NCCI and the independent bureau analysis in addition to the different ways they look at data. It is also important to understand the drivers that ultimately affect the costs of workers’ compensation.

The calendar year combined ratio is not necessarily the most-reliable or accurate measure of rate adequacy or the profitability of a book of business. Instead, calendar year combined ratio is essentially an accounting measure that may be materially affected by things like carrier reserve strengthening or releasing of reserves for all prior accident years. A carrier could be writing unprofitable business yet still show a calendar year combined ratio below 100% if it is releasing prior-year reserves. A better measure to understand industry profitability is the accident year combined ratio. For 2018, NCCI indicated that this figure for private carriers was 89%.

It is also important to understand what bureau data may NOT include. In general, it does not include any data from self-insured employers. That exclusion omits most data from municipalities, states and school districts. It also misses a significant amount of data from other industries, such as higher education, retail and healthcare.

Bureau data may also exclude information from deductible policies (read those footnotes). It is estimated that the “retention” marketplace, defined as employers that retain risk through self-insurance or high deductibles, covers close to half of the payroll in the U.S. If the database does not include information from the retention market, it is missing a very big piece of the overall picture.

You also need to check to see if the data set includes just “private carrier” information. If it does, it is likely excluding data from state funds, which tend to operate at much higher combined ratios.

Also, keep in mind that there is no single source for workers’ compensation industry data. There are 15 states that have independent bureaus or are monopolistic. These states are not included in NCCI’s analysis. Three independent bureau states (CA, NY and WI) have more workers’ compensation payroll than the combined NCCI states.

To further illustrate this point, the National Association of Insurance Commissioners (NAIC) indicated that the 2018 accident year combined ratio was 97%. In theory, the NAIC data set includes information from the bureaus around the nation, so it is likely closer to the actual industry figure in the guaranteed cost marketplace for private carriers.

This explains why many carriers may not fully embrace the 83% combined ratio figure that was cited at the NCCI-AIS conference. NCCI data is accurate for what they analyze. But, because they only see a piece of the entire picture, their data may not be a true reflection of what is really going on in the entire workers’ compensation landscape, and it may not reflect what individual carriers are seeing on their book of business. It is a piece of the puzzle, but not the complete picture.

See also: The State of Workers’ Compensation  

According to data reported at the 2019 NCCI-AIS, over the last 20 years, the cumulative change in indemnity claim cost severity was 100%. This was about 20% higher than wage inflation. The cumulative change in medical lost time claim cost severity was 150%, which was 89% higher than medical inflation. During the same time period, carriers’ loss adjustment expenses (LAE) also increased steadily. LAE includes the costs of claims handling, including payroll, benefits and facility costs, as well as claim-specific expenses such as litigation costs. Data from the other bureaus shows similar trends, although California claim costs did drop after some significant reform legislation.

Given the upward trend in costs over the last 20 years, why have we seen a decrease in rates the last few years? The answer is simple: frequency.

NCCI data shows that, during the last 20 years, the average annual decrease in frequency was 3.9%. That is a significant decrease in the number of claims due to factors such as automation of certain tasks and an increased emphasis on safety and loss prevention. During the last few years, the decreases in frequency more than offset the increases in the average workers’ compensation claim costs, leading to declining rates in the guaranteed cost marketplace.

The impact of frequency is a very important distinction between the performance of the guaranteed cost market and the retention marketplace. Thousands of small employers in the guaranteed cost market will have no claims. However, in the retention market, all large employers will have claims. Ultimately, it is claims severity (costs), not frequency, that determines the rates and profitability of the retention marketplace.

There has been very little study of the retention marketplace, especially of the larger claims, as those cases tend to be outside the analysis of the bureaus. In September, the New York Compensation Insurance Rating Bureau (NYCIRB) published a study on loss development patterns for claims with incurred losses over $250,000. According to this study, “Large claims can take several years to emerge above the $250,000 threshold. Typically, only a small share of large claims are recognized as such at first report, and that share will grow considerably over the subsequent three or four reports.”

The NYCIRB study noted that large claims only accounted for 4% of the claim count, but over 50% of the ultimate claim incurred losses. The study also illustrated how these larger claims tend to develop over time.

The guaranteed cost industry standard is to use seven to 10 years of data to determine an experience rating. Thus, those carriers generally stop looking at loss data past 10 years post-accident. In the retention marketplace, things are very different.

According to one large national retention market insurance company, at 10 years post-accident, only 70% of the claims that will ultimately breach the retention will have been reported to the carrier. This is because the most severe catastrophic claims that will exceed the retention are reported quickly, usually in the first 12 months. But the majority of remaining claims that will eventually breach the deductible/self-insured retention are not catastrophic injury claims at all, but instead are slow-developing claims that take years to reach required reporting thresholds. Because of this slow development of retention claims, at 10 years post-accident, actual claim case incurred is approximately 40% of the expected ultimate claim costs. So, when the first-dollar marketplace stops looking at the data, the retention marketplace is still actively seeing new claims, and significant additional incurred development is expected.

As an example, consider a 30-year-old claim involving a now 62-year-old worker that recently necessitated a $1 million incurred increase. The claim had been reserved appropriately based on then-known information, but the exposure worsened, as the injured workers’ condition now requires 24/7 attendant care. The cost of 24/7 institutional attendant care can run $300,000 or more a year. The bureaus and the guaranteed-cost marketplace are not looking at development like that because it is occurring long after they stop monitoring such things. This is only one example of the extremely long claims tail in the retention marketplace. Because of this long tail, carriers in the retention market are affected more by increasing claims costs as they handle and pay out such long-duration claims for 60 years or more.

There has been much publicity around the “shock losses” being seen in the general liability, auto and property marketplaces, with carriers seeing claims creep higher than ever. Factors such as excessive jury awards and runaway wildfires are contributing to carriers having to redefine what their worst-case exposures may be in these lines.

The significant cost increases currently being seen in liability and property coverage are also being seen on catastrophic workers’ compensation injuries. Although catastrophic injury claims are only a tiny percentage of the total claims count, these injuries are a significant percentage of total workers’ compensation claim costs. Catastrophic injuries include spinal cord injuries, brain injuries, severe burns, major amputations and other severe traumatic injuries.

There are several reasons for these rapidly increasing costs. First, consider that, unlike with group health insurance or Medicare, there is no policy limit or excluded treatments in workers’ compensation. The carrier is responsible for any treatment deemed reasonable to “cure or relieve” the injury without limitation. On workers’ compensation catastrophic injuries, it is common for the carrier to have to pay for things like attendant care, prosthetics, home and auto modifications, skin grafts or new housing, transportation and even experimental treatments.

Standards of care for seriously injured individuals are constantly evolving. What was the norm five to 10 years ago is not the standard today, and in five years that standard will be even different. Think of all the medical innovation you see in the news regarding spinal cord injury recovery. The medical technology is evolving at a pace never seen before.

Consider Christopher Reeve, the actor who suffered a spinal cord injury in 1995 that left him a quadriplegic. He was 43 years old at the time of the accident. Reeve received the best care money could buy from experts around the world. He lived less than 10 years after the accident. Fifteen years after his death, medical science has advanced to the point that a quadriplegic can live a near-normal life expectancy because physicians are able to prevent the complications that lead to shortened lifespans.

Accident survivability is another factor affecting the increasing costs of catastrophic injury cases. Due to advances in emergency medicine, both on the scene of accidents and at Level 1 trauma centers, many patients who died shortly after their injuries will now live. According to the American College of Surgeons, from 2004-2016, the fatality rate for the most severe traumas declined over 18%. Every one of those cases likely results in millions of dollars in medical care. For example, I saw a severe burn claim that would have likely resulted in death within days 10 years ago. That person survived for three months, and, during that time, that individual received over $10 million in medical treatment.

See also: 25 Axioms Of Medical Care In The Workers Compensation System  

These rapid advances in treatment for catastrophic injuries are saving lives and significantly increasing the function and life expectancies of seriously injured patients. But they have also resulted in costs that have never been seen before by the workers’ compensation industry. When I started handling claims 29 years ago, $5 million individual claims were rare. Today, the workers’ compensation industry has seen numerous individual claims with incurred exposures over $5 million  and losses in excess of $10 million and even higher are becoming more frequent. These claims are likely to get even more costly as increasingly expensive medical advances come along.

To understand the big picture in workers’ compensation, it is important to take a close look at the data you are relying on. Pay careful attention to understand what this data includes and what it does not. It is also important to distinguish between the guaranteed cost market and the retention market. Because the retention market has an extremely different developmental tail, rate trends are very different than in the guaranteed cost market. Claim frequency trends in the guaranteed cost market are fairly predictable and significantly influence rates. However, in the retention marketplace, rates are driven by severity, which is evolving to levels never seen before in a world of rapid medical advances.

Key Tips on Prep to Settle the Claim

It’s time to settle the most onerous bodily injury case in your inventory. The medicals have been evaluated, and you’ve scheduled a time this week to open the negotiations with the claimant attorney. This three-year-old file is ripe for resolution. The diary is set to flash on your screen. Are you ready for battle?

Perhaps you are ready for some adages first?

Cover all the bases.
Dot the i’s and cross the t’s.
Hope for the best, but prepare for the worst!

Here are some key tips:

  • It is crucial to be prepared for the negotiation from the start. Know your file! The claimant attorney may have 10, 25, or 40-plus clients and may not be an expert with the nuances of the case like you can be. The attorney’s negotiations may even dance around similar injuries of their other clients (neck and back being the most common). Read the medicals in detail. Ask for missing records if something does not add up. Check the doctor’s release notes and enlist the assistance of a handwriting expert if needed (the best argument can often be what the claimant’s own doctor documented hidden deep in the 200 pages of medicals that the attorney glanced over casually).
  • Make a list of your strengths and weaknesses. Understand the direction the attorney will go to argue his key points, and be prepared for counterarguments. (Yes, I understand that your client had quite a bit of pain and suffering as you are stating, but on the release date your client reported a one on a one-to-10 pain scale so your argument the client is still in excruciating pain is difficult to fathom based on what you’ve provided).
  • Don’t get into a dollars-based negotiation. Often, attorneys may try to trick the adjuster into a back and forth of only numbers without regard to the details of the case. Let the facts lead in the negotiation, and the dollars will follow. (Make me understand better why your client deserves a $10,000 increase in the offer; what am I missing in my evaluation based on the medicals you provided me?) Concessions and deviations (when supported by facts) are perfectly acceptable.
  • Sometimes just a call before negotiating can also let the adjuster assess the style and technique of the opponent. Your initial call on the attorney’s demand may let you ask questions to see how the attorney came up with the number. You are not forced to make a counter right away. That initial call may let you know that you need additional preparation. You can also adjust your negotiating style. Remember to be an active listener.
  • Always consider the intangibles. The injuries and treatment are one aspect, but is there aggravated liability, a potential credibility issue for witnesses on either side, permanency such as scarring (valued differently on everyone) or an impact on the claimant’s daily lifestyle following the loss (unable to enjoy life’s pleasures post-accident)?
  • Can your medical evaluation benefit from a claim nurse reviewing the file or an additional doctor’s review to understand the case notes?
  • Patience is a huge factor in negotiations. They do not need to be finalized in one phone call!
  • Remain professional even if your adversary is not. Lack of professionalism can be a barrier to settlement. Your opponent may not have a case he is confident about and can use a harsh tone to try to intimidate the adjuster.

See also: The Switch to Preventing Claims  

A former manager offered me some unique words to live by when negotiating. He would say to the attorney that, at the end of the day, let’s arrive at a number that is appropriate for the case. If it doesn’t make either of us overly happy, that’s fine, as long as we are both equally unhappy!

While you will rarely find yourself performing cartwheels at the culmination of the claim, with the right amount of preparation you can certainly position the settlement closer to your intended goal.

Measuring Success in Workers’ Comp

The adage says, “What gets measured gets managed.” What does that mean for workers’ compensation? What can we measure to truly improve outcomes for everyone in the workers’ compensation system, from injured workers, to employers, to insurers and others? Are we measuring the most important metrics, or are we as an industry spending too much time measuring less relevant issues and excluding those that can have a real impact? How can we drive optimal outcomes by adjusting what we measure and the analytics we use to measure success? Finally, what should we measure as the industry moves forward?

There is certainly no shortage of data in the workers’ compensation system, but what we do with it, how we measure it and, most importantly, how we apply it are key. Four prominent industry thought leaders joined us to discuss this important issue during our most recent Out Front Ideas webinar, which also served as the opening keynote session for the 74th annual Workers’ Compensation Educational Conference in Orlando:

  • Anna Hui, director of the Missouri Department of Labor and Industrial Relations
  • David North, president and CEO of Sedgwick
  • David Stills, vice president of global risk management for Walmart
  • Joan Vincenz, managing director of risk management for United Airlines

Our speakers did not necessarily agree on which specific metrics are the most important to measure. But they were unanimous on what they considered the most important element of any program – treating injured workers well and getting them back to health and work as quickly as possible. Anything measured should be considered a tool to accomplish that in the most caring and efficient ways possible.

Process Versus Outcome Measurements

It is easy to get absorbed in our processes and to overlook the most important thing – helping the injured worker. The definition of “success” may differ for an adjuster, the employer and the medical provider. Collectively, we need to be creating measurements that will ensure a focus on providing the best outcome for the injured worker.

Defining success and deciding what to measure is not a black-and-white issue in workers’ compensation. As one speaker said, “It’s not as if we are counting widgets; these are individuals, all with different issues and backgrounds.”

Processes and outcomes must go hand in hand. While optimal outcomes are the goal, the processes used to get there are important. Measuring each, to a certain extent, is important. For example, measuring the timeliness of first reports of injury is valuable if it helps a large number of injured workers.

Commonly Used Metrics

Three-point contact, adjuster caseloads and the speed of communicating with the injured worker all are metrics that are, or have been, extensively measured. But are these still relevant? Does success for these measurements lead to better outcomes, or should they evolve?

There is no definitive answer except that measurements are important if they ultimately lead to better outcomes. For example, two of our speakers disagreed on the importance of the adjuster orally communicating with the injured worker within the first 24 hours.

One believed it is absolutely critical to the employee’s experience and the outcome of the injury to speak with the adjuster quickly because the contact shows that the employer cares. Also, injured employees have a tendency to say things that they might not write in an email or text, and they are more likely to remember events of the incident closer to the timing of it.

However, another panelist viewed 24-hour contact as an “age old requirement” that does not fit with the adoption of mobile technology. In addition to possible logistical problems, such as being unable to contact the injured worker as he is getting medical attention, there is little, if any, information to share with him at that early point.

Allowing metrics to evolve with advancing technology is important, the speakers explained. For example, the first communication with the injured worker (whenever it occurs) may be a very different conversation than it was just a short time ago. Some employers can now view employer video footage within hours of a claim being reported. That means the first conversation with the injured worker does not need to focus on discovering exactly what happened, because that is already known.

See also: Social Determinants of Workforce Health  

The number of cases per adjuster is another metric that may be losing its importance. Despite some calls for an industry standard, many feel it is less relevant than it was several years ago. Technology has made medical-only claims much easier to handle. Also, factors such as the skill level of the adjuster and the complexity of each claim should dictate the number of cases each adjuster handles.

Measuring savings from managed care may be less significant than it once was. Savings from bill review, and looking at a 12-month rolling average, do not show how well an organization is doing as opposed to a comparison over time or to another benchmark. Some employers are investing heavily in onsite clinics to make sure injured workers get quality medical care as soon as possible.

One panelist said the most important metrics to measure are those that focus on these core factors:

  • The speed with which the claim goes through the system.
  • The quality of the medical care.
  • Efforts around return to work.
  • Keeping a balance on the metrics measured.

Using Metrics Appropriately

A criticism of the workers’ compensation system is the inability to make certain measurements meaningful, collecting all sorts of data but not using that information to improve.

One panelist pointed out that, while the industry extensively measures first report of injury, it does not measure or adequately discuss the small percentage of disputed claims that actually go to trial. They noted that the number of settlements has gone up dramatically, while the number of awards is decreasing. While that may indicate improvements in the workers’ compensation system, the information is not being used to improve processes.

According to the panelists, sharing data is one of the biggest opportunities to improve the system.

Safety information and workers’ compensation data are being gathered in the same building but not shared among the departments collecting them. Breaking down the silos within the regulatory side of the industry has also been a major focus as this can result in more aggregate information available to all stakeholders. Regulators are also providing more data to the industry, which can allow employers and injured workers to explore trends and see types of injuries by county, injury type and industry.

Understanding what is being measured, and relating it back to how the system functions, can improve performance and outcomes.

Finally, the panel explained that maintaining actuarial predictability is very important for employers. If you are making significant changes to your program, be sure to discuss these with the actuaries so they can adjust their modeling. Employers should meet with actuaries frequently to monitor trends that are affecting their program. It is important to show actuaries how all the metrics work together to see the whole story, rather than looking at any one metric in isolation.

See also: Bridging Health and Productivity at Work  

The Future

The industry will need to learn to trust the metrics more, the speakers said. Sometimes the data that is captured through predictive analytics and other new tools contradicts what we think is correct. But it is time for stakeholders to rely on the technology, rather than what their guts are telling them.

At the same time, it is crucial to make sure the customer is happy, regardless of what the measurements show. Measurements do not matter if the injured worker has a bad experience. There is no single measure that will guarantee success. The metrics can lead to positive outcomes as long as they are viewed as one factor in the overall injury management program and organizations are willing to evolve and change with technology and the experiences of injured workers.

At the end of the day, it is how well we care for injured workers that is the most important thing.

You can view the complete presentation at http://www.outfrontideas.com/archives/.