Only 39% of ultimate accident year medical payments in California are made within the first 36 months of an injury, compared to a national average of 67%.
As a consequence, California employers pay more for workers' compensation insurance than any other state no matter what study is used to compare statistics.
The WCIRB analyzed 1 million claims and $4.4 billion in medical benefit payments. The claims were divided into categories based on the interval between the date of the accident and the date of medical service.
Of the claims reviewed, 84% had medical services provided within the first three years following the accident. These claims accounted for 66% of total medical payments reviewed.
About 12% of claims had medical services being provided between three to 10 years from the date of injury, accounting for $970 million, or 22% of payments reviewed. And while only 4% of claims were still getting medical services between 10 and 30 years after an injury, payments for these claims totaled $559 million, or 13% of costs.
Greg Johnson, director of medical analytics for the WCIRB, said in a WCIRB Research Forum webinar yesterday that claims start to develop similar patterns the longer they stay open: Prescriptions for narcotic painkillers and psychoactive drugs increase for workers still receiving medical care three years following an injury.
Prescription drugs account for 10% of payments made for services provided up to three years following an accident. That number increases to 27% of payments services provided three to 10 years following an injury and 37.2% of payments 10 to 30 years after the accident.
Johnson noted that the amount spent on drugs is about 4% to 5% higher than the amount paid to pharmacies for each cohort, and that physician dispensing is the culprit, and that the longer a claim stays open the more likely narcotic prescriptions become involved.
Johnson couldn't say whether there was a cause and effect in the relationship, only that we know there is a relationship.
In addition, three years after an injury payments for services such as physical therapy and chiropractic care drop off considerably, which makes sense given California's hard cap and reimbursement restrictions on those service codes.
Physical medicine accounts for 11.1% of payments for services up to three years following an injury, 4.2% of payments for services provided three to 10 years after an injury and 2.2% of payments 10 to 30 years after an injury.
Of course those conditions evolve from acute to chronic in nature, further complicating the treatment picture.
"This shows me we've got an aging population," Johnson said. "If you look at the health care statistics in the population, these chronic problems obviously develop with other people, and the comp system is paying for many medical problems of aging. The acute injuries are related to the original injury, but the individuals here evolve in terms of the primary diagnosis to more chronic problems over time."
I'm sure there's all sorts of other explanations as well, and everyone can point a finger at someone else for this phenomenon.
All that doesn't matter. Everyone's to blame and no one does anything about it.
The fact of the matter is that behavior of everyone in the system is a product of the laws and regulations that establish the boundaries. Those boundaries drive incentives. Incentives drive behavior. Behavior drives costs.
I wrote on Tuesday about trust. There is very little trust in workers' compensation. There's even less trust in California.
That's why we have artificial limitations on physical medicine services - because there was a group of providers who couldn't be trusted.
That's why we have fee schedules for copy and interpreting services - because there was a group of vendors who couldn't be trusted.
That's why there's a claims audit process and a penalty system - because there was a group of claims payers who couldn't be trusted.
That's why there's payroll audit and employer premises inspections - because there was a group of employers who couldn't be trusted.
That's why there's sub rosa investigation and prying into the private lives of injured workers - because there was a group of employees who couldn't be trusted.
With each level of mistrust there's greater gesticulation by the conductor, and all of us react in amplified manners to the point where the entire "orchestra" is flailing and creating the comedy that gets ridiculed and despised.
If you look at the top performers in the self-insured/administered category you don't find these statistical anomalies, and claims get closed faster, employees return to work and have less disabilities - because the employers trust their providers and their employees, and the providers trust the employers and the employees, and the employees trust their employers and providers.
It's a complex trusting relationship that takes a lot of work to establish and maintain and frankly it comes down to money.
The friction in the system is money. But the lubrication in the system is also money. There's a fine line between the two. That distinction is understood by those top performers and they use those incentives to drive their claims cultures.
Those with good experiences look at the moon, not at the finger pointing at the moon. They pay for good results up front, not for bad results at the end.
It's really quite simple, yet unnervingly complex.
Prescription drugs account for 10% of payments made for services provided up to three years following an accident. That number increases to 27% of payments services provided three to 10 years following an injury and 37.2% of payments 10 to 30 years after the accident.
Johnson noted that the amount spent on drugs is about 4% to 5% higher than the amount paid to pharmacies for each cohort, and that physician dispensing is the culprit, and that the longer a claim stays open the more likely narcotic prescriptions become involved.
Johnson couldn't say whether there was a cause and effect in the relationship, only that we know there is a relationship.
In addition, three years after an injury payments for services such as physical therapy and chiropractic care drop off considerably, which makes sense given California's hard cap and reimbursement restrictions on those service codes.
Physical medicine accounts for 11.1% of payments for services up to three years following an injury, 4.2% of payments for services provided three to 10 years after an injury and 2.2% of payments 10 to 30 years after an injury.
Of course those conditions evolve from acute to chronic in nature, further complicating the treatment picture.
"This shows me we've got an aging population," Johnson said. "If you look at the health care statistics in the population, these chronic problems obviously develop with other people, and the comp system is paying for many medical problems of aging. The acute injuries are related to the original injury, but the individuals here evolve in terms of the primary diagnosis to more chronic problems over time."
I'm sure there's all sorts of other explanations as well, and everyone can point a finger at someone else for this phenomenon.
All that doesn't matter. Everyone's to blame and no one does anything about it.
The fact of the matter is that behavior of everyone in the system is a product of the laws and regulations that establish the boundaries. Those boundaries drive incentives. Incentives drive behavior. Behavior drives costs.
I wrote on Tuesday about trust. There is very little trust in workers' compensation. There's even less trust in California.
That's why we have artificial limitations on physical medicine services - because there was a group of providers who couldn't be trusted.
That's why we have fee schedules for copy and interpreting services - because there was a group of vendors who couldn't be trusted.
That's why there's a claims audit process and a penalty system - because there was a group of claims payers who couldn't be trusted.
That's why there's payroll audit and employer premises inspections - because there was a group of employers who couldn't be trusted.
That's why there's sub rosa investigation and prying into the private lives of injured workers - because there was a group of employees who couldn't be trusted.
With each level of mistrust there's greater gesticulation by the conductor, and all of us react in amplified manners to the point where the entire "orchestra" is flailing and creating the comedy that gets ridiculed and despised.
If you look at the top performers in the self-insured/administered category you don't find these statistical anomalies, and claims get closed faster, employees return to work and have less disabilities - because the employers trust their providers and their employees, and the providers trust the employers and the employees, and the employees trust their employers and providers.
It's a complex trusting relationship that takes a lot of work to establish and maintain and frankly it comes down to money.
The friction in the system is money. But the lubrication in the system is also money. There's a fine line between the two. That distinction is understood by those top performers and they use those incentives to drive their claims cultures.
Those with good experiences look at the moon, not at the finger pointing at the moon. They pay for good results up front, not for bad results at the end.
It's really quite simple, yet unnervingly complex.
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