Wednesday, August 21, 2013

Trusting Relationships

One of the things that I am always impressed with at large conferences like the Workers' Compensation Institute's in Orlando, FL every year is how much of a "people business" the industry is.

In what I like to refer to as the largest little industry in the financial world, relationships matter.

"Largest" because, based on the latest estimates, some $60 billion in premium was written in 2012.

That's almost as much as the net worth of Carlos Slim Helu.

"Little" because, when it really comes down to it, not that many people are in control of this industry.

That relationships matter makes sense in workers' compensation because the industry is itself a people business; the business of workers' compensation, in the end, is taking care of people.

Relationships matter between vendors, between lawyers, between brokers, between employers and employees. We don't sell a product, we sell relationships and relationships are based on trust.

The employer trusts this industry to take care of claims made against it for injury or illness on the job.

The employee trusts this industry to provide services and money to return to health and work.

Vendors and providers trust carriers and employers to pay them for services and products.

Carriers and administrators trust employers to pay them for protection and service.

Somewhere along the line there occur fractures in this relationship maze. Sometimes there are breaches of trust between industry vendors, between employers and employees, between all myriad of the complex web of various relationships.

Of all the relationships, though, trust in the government overrides all. Employers, employees, providers, vendors, carriers, administrators -  all put trust in the government to develop the work comp system in accordance with the intent and desires of the legislature.

One of the more complex relationship chores in the industry is taken on by government, and more specifically the regulators who are tasked with implementing legislative intent to keep order in the system.

Some of the folks I talked to at the WCI conference came away from the regulator's session astounded that Georgia had passed a 400 week cap on the provision of medical treatment benefits.

HB 154 was signed into law by GA governor Nathan Deal on May 6 and is effective as of July 1.

The 400 week cap on medical treatment does not apply to catastrophic injuries as defined by GA law.

As far as I know, GA is the only state at this time to implement a wholesale capitation on medical treatment benefits. There are states, such as CA regarding chiropractic services, where segments of the medical vendor industry are capped.

And there are other medical benefit provisions that have other caps, such as the prescription drug formulary in TX.

Regulators in GA, as described at WCI, face quite the task in implementing HB 154 in light of the statutory language, "which in the judgment of the State Board of Workers' Compensation shall be reasonably required and appear likely to effect a cure, give relief, or restore the employee to suitable employment." (This language appeared in the prior code section affected, but not with a duration cap.)

The law change also mandates a 15 day payment period for medical services and goods.

There is also an exception to the general rule where an attempt is made to return the claimant to work but it is unsuccessful, and the employer then needs to prove that the injured worker is not entitle to a reinstatement of benefits.

At WCI the GA presentation (as did many of the other less acutely affected state presentations) remarked how difficult the job is to draft and get approval of regulations that comply with the intent of the law.

In CA, regulators are burdened with a huge new panoply of legislative implementation, not the least of which is the new Resource Based Relative Value Scale for medical services.

Employer groups and carriers are upset with the Division of Workers' Compensation because they believe that DWC's proposed regulations are outside the legislative intent of SB 863 and will increase costs.

Some medical groups believe that segments of the medical vendor population won't receive fair compensation for services, and others believe that more attention needs to be paid to services that are "by report."

In TX, carriers and providers both agree that utilization review objections need to be in writing in comments provided to DWC's proposed UR rules.

In each of these situations, and countless more, dialogue is initiated between interests, either in cooperation or competition, and the government is in the middle, listening to the various arguments and trying to understand where regulatory action will put the workers' compensation system into the best position to maintain the critical relationship between the employer and employee.

And it is the relationships between all of us, whether there is agreement or discord, that makes all of this happen.

All of this sometimes seems insanely complex. But we put trust in the government, and in each other, to make things happen.

We may not agree all of the time and we may differ in interpretations, but most of the time we trust each other, and we trust the government, to do the best that can be done in the interests of system outcomes.

Without this trust, and without these relationships, chaos and anarchy ensue, which does nothing for anyone.

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