Risk Sensitivity and Dangerous Neigborhoods

At the heart of workers' compensation, or any insurance based program for that matter, is risk management.

Risk management entails understanding the fundamentals of a process or system, exploring the possibilities of an event interfering with that process or system, then implementing strategies or preparations to mitigate any negative outcome should such an event occur.

This requires a bit of soothsaying - one must have a broad enough imagination, typically fostered by historical education - to "see" the possibilities.

Science is involved too. Probabilities can be assessed with mathematical models; known cause and effect can be weighed based on past experiments; and a bit of art might be used as well to finesse outcomes and influence psychology.

A great teacher in risk management is aviation. The act of flying is inherently risky. Those in aviation know the risks, understand the probabilities, and implement methods and actions to mitigate those risks most of the time.

Failure to mitigate risk invites disaster, and even small risks can be catastrophic given a particular set of circumstances.

John and Martha King are icons in aviation, because of their famous pilot training materials and courses. They are passionate about flying safety, both having been through tough lessons throughout their careers.

John King recently blogged about the single biggest cause of aviation accidents, loss of control. In that post King speaks about acquiring sensitivity to dangerous elements, or what he calls "dangerous neighborhoods." Like walking into a dark alley, or an unwelcome situation, he says we need to be able to “smell” trouble.

"Sometimes avoiding loss of control requires good stick and rudder skills," he writes. "When we talk about stick and rudder skills, we are often thinking mostly about the physical manipulation of the controls. But knowing what to do with the controls and when is key. That requires a sensitive 'seat of the pants'—a feel for what the airplane is doing."

King says there are two overriding "sensitivities" to which pilots must pay attention. One has to do with whether the wings of the aircraft are equally exposed to the relative wind, and the other has to do with how much G load is on the wings.

"Pilots who have these two sensitivities are far more likely to keep their airplane under control even if they do stray inadvertently into a 'dangerous neighborhood,'" concludes King.

Risk management includes sensitivity to gremlins...

The California Division of Workers' Compensation seems to have acquired a bit of loss of control sensitivity; Utilization Review and Independent Medical Review appear to be challenging to the claims community either by management fiat, process ineptitude, or just plain overwhelming work load.

Regardless, DWC is likely getting frustrated that the process is failing at the base level: failure to provide all medical records to the reviewer so that a fair decision can be made about a treatment request.

Yesterday DWC issued a notice of pending regulations that would impose penalties on claims payers for failing to provide all medical records to a reviewer.

I was told that one claims house had imposed an arbitrary limitation of 50 pages of records to be submitted for any treatment review request. I have to assume that DWC likewise has similar information.

Even anecdotally, by simple review of IMR decisions posted on the DWC website, one can see that there is a failure to supply records problem.

A recent Maximus webinar concluded that the primary reason for the current delays in issuing IMR determinations is delay in receiving records.

A copy of slides from the Oct. 22 webinar states that about 19,000 of the 42,000 open IMR cases "are missing medical records past the deadline for submission." A Notice of Assignment and Request for Information on about 80% of those 19,000 open cases without medical records was not sent until on or after June 1, 2014.

There are IMR decisions posted on the DWC site that flat out deny requested treatment due to lack of medical records: 13-103, 13-114 and 13-119 all include notices that the claims administrator had not submitted medical records for review in the case. All three decisions, which had been issued before the DWC rescinded the other two decisions, affirmed the UR denial anyway.

These are just representative of a larger issue that wasn't taken into account when UR and IMR were dreamed up: either willful, or negligent disregard for the process.

In other words, the law, and its implementation, lacked sensitivity to factors that have lead to loss of control in the medical review system.

There simply was not good risk management in the construction and deployment of the UR and IMR concept.

The concept was good, in my opinion. Workers' compensation had grown into a free-for-all medical treatment system. Anything that a doctor "ordered" or prescribed was ipso-facto regarded as "reasonable and necessary" because there was a couple of extra letters at the end of the name of an "expert."

This, of course, lead to abuse, which of course lead to "reform," which may or may not be effective depending on how all of the players in the system react to the environment.

And it turns out that there really wasn't a good understanding or appreciation for the neighborhood we were entering - most people play nice, but a couple of them, for one reason or another, don't seem to be able to abide by the rules.

So now DWC has to implement even more rules and regulations to control that minority that has a tough time understanding their roles in the bigger scheme of benefit delivery.

Diane Worley, director of policy implementation for the California Applicants' Attorneys Association, told WorkCompCentral that the problem starts at UR and has been ongoing for some time.

"Unfortunately, this problem begins with utilization review, where there are many denials of requests for medical treatment issues because no records were provided," she said. "A solution to the problems with UR needs to be addressed, too. You can't have evidence-based medicine without evidence."

When new laws and regulations are contemplated, those responsible should take a walk through the dangerous neighborhoods so they can appreciate the risks, or at least talk to those who have been through those neighborhoods to acquire better sensitivity to abnormal characteristics.

Creating law also requires risk management skills.

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I'll be off line for the Thanksgiving Holiday; back on Monday December 1.