Monday, November 30, 2015

My Dream

In just five days hundreds of people from around the nation will gather for the Fourth Annual WorkCompCentral Comp Laude Awards and Gala.

That's a mouthful of a title for a dream I've had for some time - get as many different workers' compensation interests together into one space for just an evening, and recognize what goes right with work comp.

I know it sounds Polly-Annish, and perhaps it is just wistful thinking; the hope is that if claims executives meet the subjects of benefit distribution; if the medical community meets the employers that pay into the system; if lawyers meet service providers; if government meets vendors ...

That if everyone that has anything to do with workers' compensation all get together for one day, one evening of recognizing that there are good things that can happen with the work injury protection system(s), stories will be told, messages will be heard, understandings will occur - and maybe, just maybe, people will work towards the common good for the sake of society, rather than for individualistic opportunism.

I'm not completely naive. I know that one night of education, camaraderie, and celebration isn't going to solve the problems we face in workers' compensation.

But it's a start.

Every conference I go to around the nation there is a recurring theme: silos.

Each independent interest in workers' compensation has their own conference or two.

Attorneys that represent injured workers have their own conferences;  Employers have their own conferences; Physicians and the medical community have their own conferences; there are even smaller gatherings for regulators, special vendors, researchers, insurance executives, and sub-specialty gatherings.

Even the single biggest gathering of broad workers' compensation participants, the annual WCI Conference in Orlando, FL every August, is still a hegemony of special interests - there are a dozen different education tracks that cater to each of the silos but none that speak to everyone.

Each of these conferences and seminars come with content specific to the interests of their singular groups, each of them focused on how to take advantage of some aspect of the system or law to minimize costs or maximize outcomes.

Not one of these gatherings includes injured workers. Many include their representatives, but that faction again speaks to their own interests first, and the needs of the beneficiaries second. And not one of them tells success stories.

For every story of failure, grief and hardship that we read about in the general media, there are dozens of stories where individuals go above and beyond to good outcomes, and sometimes these stories are of compelling, remarkable accomplishments.

Comp Laude is the only event where everyone from all segments of workers’ compensation are not only welcome, but encouraged, to attend and participate: executives, injured workers, claimant attorneys, defense attorneys, doctors, case managers, claims adjusters, researchers - you name it. 

My goal is to get EVERYONE under one roof at a nice event where people actually TALK AND LISTEN to one another, hear the stories, and understand all the diverging points, conflicts, interests, and perhaps, come to some understanding as to why certain things are the way they are.

At a time when workers' compensation, as a system, is under attack from the general media, the public, and lawmakers, it's important that we come together.

We don't have to change the way things are, and we don't have to solve all that ills workers' compensation.

We just need to come to a collective understanding of why things are the way they are.

It is my hope that we will, with Comp Laude, eventually help shape policy for the future that benefits all of society. 

It’s a big mission and a big risk.

But the dream is compelling to me. That dream drives me like a locomotive pulling a train, a long train filled with many people on a singular destination.

Some may disembark, some may never get aboard. Those that do ride along, I know, are aligned with that dream - that the single largest privatized social benefit system in the world can not only work, but work well, protecting people and businesses and provide stability to the economy.

We've made it easy for YOU to attend. We have special pricing for injured workers and claims examiners. We have deals for professionals that are members of recognized associations (nearly all of them!). Bring a Toy for Tots and there's a discount.

We're all in this thing together. We need to recognize that, if for only one night.

Thursday, November 26, 2015

Thanksgiving Letter

Good morning and Happy Thanksgiving Children - 

It sure seems weird calling you two adults “children.”

The funny thing, though, is no matter how old you two get, and how old Anne and I get, you’re still both our “children.”

Which is why this holiday, the first without the “children” at home, seems so different.

Yes, the birds have feathered, matured, and flown the coop - but the coop is still in place, ready for the flock to return!

I slept in today, have had a cup of coffee, it’s 40 degrees outside (bragging, Nichole) so I’ll wait for the sun to arise before alighting on my bicycle to put in the day’s miles - and along the way I shall think of all that I have and am grateful for.

Not the bicycle, not the airplane, motorcycle, cars, house, business, and properties - but my wife, my children, and the future children that will come into my life.

Anne and I were doing the old person’t thing last night - recalling all the people that we have known, and who are no longer with us. It’s astounding, when we took the time to think about it, to realize how many people we have known that have died, and most of them prematurely so (at least by Census Bureau statistics).

I got home early yesterday to lunch with Anne - delicious BLTA sandwiches (the only thing missing were fries) - and then a little motorcycle maintenance (change the oil) and then a little motorcycle ride. Not far, maybe 45 miles up Deer Creek and down Yerba Buena, then home. 

The tires are worn, so handling was a little squirrelly, and there was more traffic than I was used to in the canyons, but it was as fun a ride as ever. It was clear, and chilly, and the wind whipped me around a bit on Pacific Coast Highway.

Did a couple of wheelies (I can almost get from first gear to second gear with the front wheel in the air - but I have a lot more work to do on that!), burned through a couple of turns, skidded the rear wheel a couple times into bumpy corners like a motocrosser; it’s amazing how such a simple little relatively inexpensive toy (remember, I got The Sewing Machine for less than three grand) can bring such timeless happiness.

And that’s what I want you to remember.

We give thanks for all the wrong reasons. Sure, we’re happy to be alive when so many of our friends and family can’t experience Thanksgiving Day, 2015. Sure it’s nice to have a job, and hopefully it’s a meaningful job that gives us purpose rather than just a paycheck. And it’s great to have all the things I worked hard for that complete my physical being.

But what I’m really thankful for is that I have the ABILITY to be happy. Happiness is an individual CHOICE. We can choose to be happy, or we can choose to be miserable and intolerant.

I went for the short motorcycle ride yesterday afternoon because I knew it would make me happy. It did!

Anne makes me happy.

Usually you children make me happy, but sometimes, admittedly, you make me frustrated.

And that’s all good - because at the end of the day, whether I’m frustrated or happy is a matter of MY CHOICE.

So when you sit down at your Thanksgiving Day meal today, give thanks that you have the CHOICE to be happy or not.

We love you (and your future children).

Happy Thanksgiving Kids!


Wednesday, November 25, 2015

Contrasting Fault and Value

A case out of Pennsylvania demonstrates that nobody wants to pay for an "injury", which is why there is "fault" in workers' compensation, even though it is supposed to be a no-fault, administrative system.

But a Texas case shows why workers' compensation is a huge bargain compared to the alternative - a jury verdict.

Jamie Gahring's had a history of back problems before he became a line cook at the Stoudt’s pub in Adamstown, stemming from a 1997 industrial injury while he was working for R & R Builders.

In October 2012, Stoudt’s upped Gahring's hours at work from 40-hours to 55 hours per week.

Gahring told his supervisor that the additional hours he was spending on his feet as a line cook at Stoudt’s Brewing Co. were “making his back worse.”

After a few weeks of this schedule, Gahring said, he started having back pain that grew progressively worse with time.

In November orthopedic surgeon Marc P. Oliveri performed a sacroiliac fusion on Gahring.

Dr. Oliveri released him to return to work in January 2013, but Stoudt’s was unable to accommodate Gahring's medical restrictions so they terminated him, and of course Gahring sought compensation.

Gahring filed a claim petition alleging R & R Builders, the 1997 injury, was responsible for the cost of his surgery and his wage-loss during his recovery.

R & R countered that Gahring's back condition was caused by his employment with the pub, and it filed a petition to join Stoudt's to the case.

At the hearing, Gahring testified that he had suffered from ongoing back pain since at least 2002, but it got worse when he started working longer hours at Stoudt's. The complaint to Gahring's supervisor at Stoudt's was corroborated.

The workers' compensation judge found Gahring's back problems were wholly attributable to his employment with Stoudt's, and dismissed Gahring's claim against R & R.

But, the WCJ determined that Gahring had not given Soudt's adequate notice of the claim in accordance with Section 311 of the Pennsylvania Workers' Compensation Act.

Up the appellate chain the case went.

The Commonwealth Court on Monday ruled that Gahring's statement that the additional hours he was spending on his feet as a line cook at Stoudt’s Brewing Co. were “making his back worse” was good enough to forewarn his employer that the aggravation of his pre-existing back problems was work-related, upholding the trial court's findings against the pub.

The case was Gahring v. WCAB (R & R Builders and Stoudt's Building Co.), No. 534 CD 2015.

In the meantime, a Texas jury schooled Tyson foods about being a non-subscriber by awarding an injured worker about $2.2 million.

Asa Ferrell claimed that he twice suffered injuries to his neck and shoulders when coworkers pulled overhead doors down onto him. Ferrell said he also severely injured his back when Tyson put him to work moving heavy boxes in a confined space that didn't allow him to use proper lifting techniques.

The jury found Tyson's negligence wasn't to blame for either of the door mishaps, but it said Tyson's negligence had led to Ferrell's back injury.

The jury awarded him $498,382 for his physical impairment from this injury plus $774,478 for his pain and suffering.

He also got $127,752 for his mental anguish and emotional distress, $358,600 for his medical expenses, and $505,936 for his lost earning capacity.

I'm sure Tyson no longer thinks workers' compensation lacks value. And the carrier for Stoudt's got a lesson in workers' compensation's no fault architecture.

So, while an employer may not be happy with the "liberal interpretation" of workers' compensation laws, including notice provisions, in favor of the injured worker, it still beats a civil jury verdict nearly any day.

Lessons learned: work comp DOES have value; and, pick your fights carefully...

Tuesday, November 24, 2015

Return To Trust

Even more so than most other systems or industries, trust is paramount to the credibility of workers' compensation.

There are so many different moving parts to workers' compensation - from funding to administration to execution, enforcement and delivery - the big circular revolution of the system from origination to repatriation back into the economy requires a high level of trust between a lot of parties with disparate interests to make it work.

Government plays a big part in the trust circle. Government sets the rules. Government is to enforce the rules, and make sure everyone plays fairly. And government has to be particularly careful about conflicts of interest, or appearances of impropriety, since it is in such a central, and powerful, position.

Trust in government can be shaken to the core when allegations of wrong doing are tossed around.

Part of the turmoil that has surrounded Oklahoma's two-year old reform law is due to lack of trust.

Not only did the state completely upend its workers' compensation system by moving to a fully administrative process, including for dispute resolution, but a new sector was carved out for employers wishing to provide an alternative to the system.

There are a couple of components that Oklahoma will need to move through as its new laws mature: allegations against the Department of Insurance that it "rubber stamps" alternative plans presented for approval with dubious analysis of equivalency to the state's work comp system; and allegations of inappropriate behavior by former executive director Rick Farmer.

Most recently, State Auditor and Inspector Gary Jones issued an audit report released Nov. 18 concluding the agency's “internal controls do not provide reasonable assurances that revenues, expenditures or inventory were accurately reported in the accounting records.”

Jones says this allowed for the potential for the misappropriation of funds, illegitimate claims for payment, fictitious payroll payments or improper changes, and the mislaying of inventory.

Current executive director Kim Bailey says, “There has been no evidence of misappropriation of funds at any time," and that “there have been no allegations of misappropriation of funds with payroll.”

Most of the problems with the internal controls cited by the state auditor related to the failure to segregate posts with the same person given the job of both approving and reviewing expenditures, Bailey told WorkCompCentral.

According to Jones' audit, there are problems over the primary self-insurers guaranty and the credit letter funds. The funds pay for loss of earnings and treatment when a self insured employer is unable to pay and must contain more than $1 million.

Through picking random samples, the agency “was not able to provide supporting documentation” in six out of 16 claims from the credit letter fund and in eight of 16 claims from the self-insurers guaranty fund.

Bailey said those issues have been addressed.

A recent lawsuit filed by former employees of the agency, whom Farmer laid off in July 2014, accuse him of religious discrimination among other indiscretions.

The plaintiffs allege Farmer hired 13 people, many of them members of the Church of Nazrene, following his appointment and that they were given higher salaries than existing employees, which the filing claims Farmer referred to as the “Nazarene bump.”

The four former employees had worked at the agency for between 10 and 20 years prior to their lay offs.

Also named in the suit are the commission, the Court of Existing Claims, and the present and former chairmen of the commission, Robert Gilliland and Troy Wilson.

The complaint alleges that a “lack of funding” was given as the reason the commission laid off 16 employees late last year. Farmer, however, hired approximately 13 new employees following the commission's creation on Feb. 1, 2014 (just over four months before the firings),” the complaint says.

None of the newly-hired employees were terminated as a result of this alleged lack of funding, the plaintiffs state.

The state Office of the Attorney General is defending the commission against the court.

There's an old saying: trust takes years to build, seconds to break and forever to repair. Bailey, the commission and the state of Oklahoma have a lot of work to do in the trust department now, making implementation of their reform even more difficult.

The distraction is unfortunate, but they'll get through it though because, "The people when rightly and fully trusted will return the trust." --Abraham Lincoln.

Monday, November 23, 2015

Reasonably Just Substitute

Jacob White was a night watchman for the New York Central & Hudson River Railroad Company. White's job was to guard the tools and materials intended to be used in the construction of a new station and new tracks upon a line of interstate railroad.

He died on the job. The courts found that his job did not involve interstate commerce and thus his death was covered by New York's workers' compensation system (as opposed to the Federal Employers' Liability Act) and awarded benefits to his widow accordingly.

A constitutional challenge to New York's workers' compensation law was raised by both the railroad and the widow:

(a) that the employer's property is taken without due process of law, because he is subjected to a liability for compensation without regard to any neglect or default on his part or on the part of any other person for whom he is responsible, and in spite of the fact that the injury may be solely attributable to the fault of the employee;

(b) that the employee's rights are interfered with in that he is prevented from having compensation for injuries arising from the employer's fault commensurate with the damages actually sustained, and is limited to the measure of compensation prescribed by the act, and;

(c) that both employer and employee are deprived of their liberty to acquire property by being prevented from making such agreement as they choose respecting the terms of the employment.

And nearly a hundred years ago the United States Supreme Court found that compulsory workers' compensation passed muster.

The Court's dialogue is eerily prescient of today's environment:

"In support of the legislation, it is said that the whole common law doctrine of employer's liability for negligence, with its defenses of contributory negligence, fellow servant's negligence, and assumption of risk, is based upon fictions, and is inapplicable to modern conditions of employment; that, in the highly organized and hazardous industries of the present day, the causes of accident are often so obscure and complex that in a material proportion of cases it is impossible by any method correctly to ascertain the facts necessary to form an accurate judgment, and in a still larger proportion, the expense and delay required for such ascertainment amount in effect to a defeat of justice; that, under the present system, the injured workman is left to bear the greater part of industrial accident loss, which, because of his limited income, he is unable to sustain, so that he and those dependent upon him are overcome by poverty and frequently become a burden upon public or private charity, and that litigation is unduly costly and tedious, encouraging corrupt practices and arousing antagonisms between employers and employees." [emphasis added.]

A standard was espoused by the court - a compulsory workers' compensation system must be a "reasonably just substitute" for common law tort rights:

"The statute under consideration sets aside one body of rules only to establish another system in its place. If the employee is no longer able to recover as much as before in case of being injured through the employer's negligence, he is entitled to moderate compensation in all cases of injury, and has a certain and speedy remedy without the difficulty and expense of establishing negligence or proving the amount of the damages. Instead of assuming the entire consequences of all ordinary risks of the occupation, he assumes the consequences, in excess of the scheduled compensation, of risks ordinary and extraordinary. On the other hand, if the employer is left without defense respecting the question of fault, he at the same time is assured that the recovery is limited, and that it goes directly to the relief of the designated beneficiary. And just as the employee's assumption of ordinary risks at common law presumably was taken into account in fixing the rate of wages, so the fixed responsibility of the employer, and the modified assumption of risk by the employee under the new system, presumably will be reflected in the wage scale. The act evidently is intended as a just settlement of a difficult problem, affecting one of the most important of social relations, and it is to be judged in its entirety." [emphasis added.]

But the Court warns:

"This, of course, is not to say that any scale of compensation, however insignificant, on the one hand, or onerous, on the other, would be supportable. In this case, no criticism is made on the ground that the compensation prescribed by the statute in question is unreasonable in amount, either in general or in the particular case. Any question of that kind may be met when it arises."

One hundred years ago, and the intellect, and great wisdom of justices White, Van Devanter, Holmes, McReynolds, Brandeis, Day, Clark, Pitney and McKenna saw that there had to be a balance, that in order for both the employer and the employee to be forced into a structured program for work injuries that each had to give up rights in order to achieve fairness.

I had opined in the past that workers' compensation has nothing to do with fairness or justice, and that such determinations are in the hands of the legislatures that pass the laws creating and maintaining work comp.

I still maintain that position, so long as the system created or maintained meets the standards espoused in 1917:

1) There must be certainty;
2) It must be speedy;
3) There must not be any protracted disputes about fault or damages;
4) The employer's obligation must be limited and fixed;
5) The entire program must be viewed as a whole; i.e. no one facet takes precedence over any other.

There are constitutional challenges going on in state courts around the nation. Florida, Oklahoma, California ... each of the challenges to the state programs focus on singular, specific areas of workers' compensation law.

Are things any different now, in 2015, than they were when White died in 1914?

-"the expense and delay required for such ascertainment [of AOE/COE or disability] amount in effect to a defeat of justice"-
-"the injured workman is left to bear the greater part of industrial accident loss, which, because of his limited income, he is unable to sustain"-
-"frequently become a burden upon public or private charity"-
-"and that litigation is unduly costly and tedious, encouraging corrupt practices and arousing antagonisms between employers and employees"-

A common topic of discussion in workers' compensation circles these days is whether the federal government will weigh in and mandate certain standards, or even take over all of workers' compensation.

I don't think so. There is neither the political will, interest or fortitude for Congress to do so.

But the right case to the US Supreme Court, asking it to revisit the standards espoused 100 years ago could change everything.

Are modern workers' compensation systems (or an employer's opt out program) a "reasonably just substitute"? [Page 243 U. S. 201] There's good argument that we have strayed from that standard, and it will be both an employer and it's injured worker who will make that challenge together when the employer feels it is paying too much for too little, and the employee feels he is getting too little after suffering too much.

Friday, November 20, 2015

Trees and Forests

It makes sense that the cost of medical services is less in states with fee schedules, and that costs grow slower, than in states without fee schedules.

A recent study by the Workers' Compensation Research Institute confirmed that in a comparison of 31 states.
chart courtesy WCRI, 2015

Prices paid for a similar set of professional services varied significantly across states, ranging from 33% below the 31-state median in Florida to 124% above the 31-state median in Wisconsin in 2013, the study found.

There was also “tremendous variation across states” in price changes from 2008 to 2014, ranging from a 20% reduction in Illinois to a 28% increase in Wisconsin.

States with fee schedules experienced slower growth in prices paid for professional services compared with most states with no fee schedules. The median growth rate among the fee schedule states was 6% from 2008 to 2014, compared with the median growth rate of 17% among the non-fee schedule states.

Also affecting the delivery cost of medical services are networks - network states have lower costs and likewise experience slower cost inflation.

Presumably these findings are good.

Or are they?

Looking at just a small slice of the workers' compensation pie doesn't tell the whole story.

For instance, what is the correlation between lower medical cost states and disability rates, duration and severity?

How quickly are medical services delivered in lower cost states versus higher cost states?

Are premiums affected by medical costs? Or do employers see greater premium impact via other case management techniques, such as imposition of nurse case managers?

How long do medical providers and vendors wait to get paid in low cost states versus higher cost states? Is there any correlation with litigation?

In lower cost states, is more of the pie paid to claimants for wage replacement? Or are cost containment expenses eating up a greater proportion of the pie?

Lots of additional questions, indeed - because at the end of the day there are only two things that matter: does the injured worker get benefits timely and adequately; and does the employer realize good value for its premium dollar?

Studies like this WCRI comparison are good for understanding at a micro-level how certain elements affect performance, but they need to be married up to the macro-view to see if we're really doing our jobs well.

Controlling costs means nothing if those paying into the system, employers, and the intended beneficiaries of the system, injured workers, don't get the value proposed in The Grand Bargain.

Trees make up a forest. Forests make up an eco-system. Lots of things live in that eco-system. Cut down trees and an unknown toll is exacted upon those things.

Thursday, November 19, 2015

The Nonsense of Pot in Comp

Marijuana for medicinal purposes is like prescribing alcohol for treatment.

It's just bullshit.

The real bottom line is that there are absolutely no scientifically controlled, peer reviewed, high quality studies that confirm pot is good at treating anything.

There just isn't.

There's anecdotal evidence of course.

Sure, it might make the "patient" feel better in the short term, but so does alcohol. Both have limitations on efficacy, both were illegal at some point, both gave rise to significant underground economies, both are highly susceptible to abuse, neither are controlled as to dosage, and both come in a wide variety of strengths.

New Mexico's experimentation with marijuana in the workers' compensation setting is providing a valuable lesson for the other states - write the laws now declaring pot un-reimbursable.

I'm all in favor of just legalizing pot for recreational purposes. The same scientific void as to efficacy for treatment also fails to show there is any risk to health greater than alcohol or tobacco, and the tax revenue potential could be enormous.

While New Mexico is going so far as to set up a reimbursement schedule, the fact is that none of the treatment guidelines that are widely followed in state work comp systems recognize weed as a valid treatment option.

New Mexico law is decades behind other states in describing what is "reasonable and necessary" medical treatment, which is how the courts surmised that if the patient says pot works then it must be paid for.

Which of course is ludicrous.

The same courts would not condone abusive dosages of opioids under that same theory.

New Mexico regulators figured they had better nip the issue at the bud (all pun intended) by coming up with a reimbursement schedule, which also includes an ad hominy dosage schedule (an allocation which, by the way, is unbelievably liberal - that much pot means someone's stoned 24/7/365...).

General health doesn't have this problem because there is no law out there that says a health insurance company has to pay for pot. The relationship is nearly completely contractually controlled, and in most cases those contracts provide for treatment per recognized guidelines.

Workers' compensation does not have that luxury. Workers' compensation is statutorily controlled, and there is no room for contractual restriction or modification on a personal basis with the consumer.

Consequently, when the law is interpreted by the courts, particularly New Mexico courts, the conclusion is that if the injured worker says it works, and nothing else does, then it must be paid for.

New Mexico will have to statutorily define the role of pot in workers' compensation if the state wishes to put some boundaries around the issue.

All of the other states should do so now before they end up in the same vortex of insanity that New Mexico is going through.

Declaring pot unwelcome in workers' compensation will probably draw the ire of pot advocates, and they are a growing and vocal segment of society with some votes (and a lot of money) behind them.

But work comp, for better or worse, is a political football used to make deals in unrelated matters. The deal should be centered around the legalization of pot for recreational purposes, but also declaring that it is not a part of the workers' compensation system.

There's no place for pot in work comp and states need to declare that policy now before the issue finds a slippery slope in court rooms.

Wednesday, November 18, 2015

Getting Along

Show me a business that complains about workers' compensation, and I'll show you a business that's mismanaged with a whole lot more problems than just workers' compensation.

I was at a lunch with some adjusters the other day. One of them had a great comparison story about two mining companies (this was in Nevada) which accounts she worked. 

One was actively involved in their workers' compensation claims, to the point where the CEO took the time to visit injured workers, and they liberally provided their injured everything under the law. They did not dispute much of anything, and if there was a question about compensability, they erred in favor of the employee. They brought injured workers back as soon as possible, even if the usual and customary couldn't be performed, and even if there was no particular position - just get back to the work place. They didn't use work comp to cull their labor force; if an employee wasn’t good for the company then they just let them go. Their experience was very low, and ergo their premiums were very low. 

But the other mining company treated their people like the dirt they were digging, disputed everything (she said EVERYTHING), didn’t communicate with the workers, didn't communicate with the adjuster other than to complain about paying something, and ergo, their experience was sky high and of course they were upset about their workers' compensation program.

I always go back to the experience and great wisdom of Bill Zachry, Albertson/Vons/Safeway's chief risk officer who has managed that business' work comp experience to 40% below industry average, and feels he can trim it another 30% - all without cheating injured workers out of compensation and ensuring that good vendors are paid and utilized. His rules of operation - err on the side of the employee; go beyond the law to provide what is necessary to return an employee to health; deal with all of the issues, not just the work-related/caused issues, and never forget that there is a person at the center of a claim. He holds everyone along the injured worker interaction chain accountable.

It comes down to a very simple algorithm: call everyone to task to follow the rules. Hold them accountable.

Do that and the injured worker will receive the best treatment, and if the best treatment is rendered (including allowance for dealing with psychosocial issues - i.e. treat the "whole" person) outcomes are better, faster and more complete. 

And the great news is, if the employer does this, it will cost the employer less (in premiums) in the long run, AND the employer will experience greater productivity with less lost time for employees which means others don't have to be paid overtime to fill the labor gaps.

There is nothing wrong with the ‘System’. It doesn’t need to be fixed – it needs to heal itself. It is not going to be healed by those who make their living sucking the life blood from both the injured worker and the employer. 

There's no magic here. Carriers don’t pay for benefits. They collect the basis for benefits in the form of dollars via premiums from the employers. Employers collect that money, built into their goods and services, from consumers (except for the recalcitrant cheaters who deservedly should be put behind bars). 

The carriers are gate keepers, and dole the benefits out to everyone else – least of whom is the injured worker. In the process, they keep an amount for themselves to return to investors/shareholders.

Insurers collect capital and deploy it with the intent of earning a return on investment. They even take on a bit of risk – although not exactly with their money (remember, "their" money is actually the employer's, entrusted to the insurance company for reallocation upon the occurrence of certain events).

The answer to the problem isn’t in getting the Department of Insurance, the Workers' Compensation Insurance Rating Bureau, the carriers, the brokers, the providers, and the laws and regulations to do better. 

The answer is to educate the employers that they are the ones in charge. They are paying for a service - mandated, yes, but they are the ones paying.

If you paid for a car repair and it wasn’t fixed, you’d go on a tear and demand it be corrected immediately – OR ELSE! Legal action would pursue vendor inaction. 

Everyone in the chain is responsible – carriers, adjusters, providers, etc. - and should be held accountable.

And everyone already knows that. Carriers, government, defense attorneys, claimant attorneys, medical providers, ancillary vendors: everyone in this industry is well aware of where the money comes from and to whom the obligations are owed. 

When employers press that point to those in the chain of supply (as Zachry does), everyone seems to get along much better. The injured worker and the employer get what they need and are entitled to.

In California we have Section 3762 of the Labor Code. There are two very important mandates in that section: 1) disclose everything that affects the employer’s premium, and 2) provide the employer with sufficient information to design a Return to Work program for the injured worker.

Other states have similar provisions in their laws.

That's all an educated employer needs: did you make that call today and what did you say; did you not make that call; did you authorize a treatment or did you delay/deny it; did you pay benefits on time; did you use stress and duress to extort an injured worker into taking a lesser settlement, etc.?

When the employer knows and understands what is supposed to happen, when its supposed to happen, and why, then accountability follows and everyone gets along just fine.

And the employer can go about expertly managing the rest of its business.

Tuesday, November 17, 2015

Old Dog, Old Tricks

What goes around comes around.

TENS, or transcutaneous electrical nerve stimulation, has been around as long as I can recall.

It fell out of favor because there wasn't any valid scientific affirmation that it was effective in reducing pain, and of course, the practice was abused, so the value of the technique was discounted both medically, and remuneratively.

The substitute, like many other conservative pain management techniques, was pills.

Of course, now we have an opioid "crisis" partly of our own making.

Now, coming full circle, we have physicians touting chiropractic as a reasonable pain management tactic, albeit within guideline specifications.

And TENS is also being promoted as another tool in the pain arsenal that can provide some relief.

Healthesystems, a workers’ compensation cost-management company, published results from an anecdotal study indicating that one in four opioid patients can get off the drugs and manage their pain using TENS.
Bowzer's back pain...

The Healthesystems article suggests that TENS is better for "active" pain as opposed to "resting" pain - i.e. the technique is more useful where pain is experienced in movement, as in doing a job.

The American College of Occupational and Environmental Medicine treatment guidelines recommend against TENS as a treatment for acute pain, but say it may be useful as an adjunct treatment for some types of chronic pain.

Similarly, the Official Disability Guidelines from Work Loss Data Institute allow a TENS trial for some types of chronic pain, such as low back pain.

“In general, there’s not a lot of evidence to support TENS,” WLDI President Phil Denniston told WorkCompCentral, acknowledging that it does work for some patients.

And Denniston said anything that can help get patients off of opioid drugs, such as TENS or yoga, is worth considering.

There you go: the more things change, the more things stay the same (and all of the other trite phrases that express similar sentiments).

In other words, what we have learned, is what we already knew: treatments that are palliative, or even just placebos, are less expensive, and less harmful, than managing the penalty of addiction to opiates.

Or, as Bowzer would counsel, you can't teach an old dog new tricks, but you can build upon the foundation.

Monday, November 16, 2015

Back Into Perspective

Adam started fueling my plane less than 6 months ago.

30 years old, seven years in the Army, two tours in Iraq, married, seven month old daughter, going to college to complete his Bachelors, and working part time at the local Fixed Based Operator keeping airplanes washed  and fueled to make ends meet.

He would listen to tower frequency and when he heard me coming in for a landing he'd fire up the fuel truck and meet me at my hangar - I never had to call for fuel when Adam was on duty.

He told his supervisor that he liked fueling Forty One Mike because I was "nice."

It was curious when his supervisor drove the fueling truck to meet me Friday after returning from Vegas. She said Adam was "no longer with us."

I thought he had quit or was fired. My facial expression conveyed that.

"No, I mean, Adam died..."

I was floored. I just saw him - he fueled Forty One Mike on Tuesday for my Vegas departure.

He left work at 3:30, said his supervisor, went home to get his motorcycle, and was killed when the driver of an SUV made a left hand turn directly into the path of Adam. There was no room or time to maneuver. Adam died instantly.

That I was "nice" made the news particularly biting.

Alison was my college girlfriend for a couple of years. We stayed in touch after that relationship ended. She went through a couple of husbands, and had a son and daughter.

The last couple of years I did not have much communication with her. She told me she was writing a novel, and that a character in her story was based on me. I thought that was flattering.

I knew she was sick, and guessed it was cancer.

I saw some photos of her on Facebook - she did not look healthy, or happy.

After about a year of battling brain cancer she died about two weeks ago at age 56.

Woody was in the Army. At 24, he was the only child of my cousin, police officer Joey. I got the text message Saturday.

He was found, unresponsive, in his barracks after a night of drinking with his buddies. CPR failed.

And of course the Paris ISIS attacks removed from this existence 129 people who had no inkling their time was up. One was a 23 year old Long Beach State college student finishing up her senior year with studies abroad.

Nohemi Gonzalez won't graduate.

I think about workers' compensation all the time. It seems big. There are billions of dollars involved. There are tens of millions of people impacted. Goods and services reflect the cost of this social program. People get hurt. People get medical care. Some get denied. Some people get money for disability. Some go back to work, others don't. Some people cheat. Some get cheated.

Some people die.

And every once in a while, it all gets put back into perspective.

Friday, November 13, 2015

The Doctor Has No Comment

One of the curious anomalies in statistics about cost drivers in California is that the southern part of the state is disproportionately represented.

Researchers have implied, but never out-right said, that perhaps one explanation is nefarious activity by various vendors operating in the territory.

Prosecutors recently unsealed an indictment alleging individuals connected to an chiropractor and physician in an illegal kickback scheme - the WorkCompCentral analysis of the size of that scheme revealed that it was responsible for at least $240 million in claimed medical, and that's just from a review of liens that were filed.

Likely the gross amount is much more assuming other bills were paid without contest.

According to the indictments that were unsealed Tuesday after authorities executed search and seizure warrants related to the case, Ronald Grusd, 69, a Los Angeles radiologist, paid kickbacks to a chiropractor in exchange for patient referrals. 

San Diego chiropractor George K. Reese, 50, is accused of referring patients to Foremost Shockwave Solutions in exchange for kickbacks.

WorkCompCentral reporter Greg Jones found 33,260 liens filed under the names of Grusd, Reese, their medical companies and Foremost between 1990 and 2015 with a total claimed value of $240.68 million.

Jones went further in the analysis by combing the Division of Workers' Compensation's case management system, EAMS, and found the providers and related companies paid $1.57 million in filing fees on the 10,471 claims submitted since 2013.

Another 3,093 liens filed between 2006 and 2012 are marked "paid" to indicate payment of the $100 activation fee imposed by Senate Bill 863.

The total claimed value on the liens for which mandatory fees have been paid is $110.8 million.

EAMS also indicates 1,813 liens filed between 2004 and 2014 are "unpaid" and 17,761 claims filed between 1990 and 2012 are "payable." The total claimed value of all these liens is $128.69 million.

Jones found that the volume of liens filed by these providers accelerated unnaturally beginning in 2011.

Then when the drop dead date to file liens to be the implementation of SB 863 filing and activation fees, these vendors doubled their lien filing.

Jones was not able to reach Grusd on Thursday. A receptionist at his office said, "the doctor has no comment."

Likewise, Fernando Valdes, chief executive officer of Foremost had no comment.

No comment indeed.

There's an old axiom in criminal law about invoking the right against self-incrimination: guilt may be assumed by silence.

There's another axiom well known to criminologists: crooks go for the low hanging fruit.

I was asked once what constitutes a "kickback."

The question isn’t really whether something is a kick back or not. It’s about disclosure and transparency.

Incentives only become an issue if they are hidden (unless expressly prohibited by law).

In other words, if you have no comment, then you should probably think twice about that incentive.

Thursday, November 12, 2015

WTF of Work

You knew it was going to happen.

A group of technology executives, financiers, labor union leaders and public policy experts sent a letter, also published on the website, "Medium," posit to congressional lawmakers asking, "WTF?", or What's The Future of work.

Because workers are much more portable, and temporary, that in the past, the traditional two tiered analysis of employee and independent contractor no longer meet the needs of the economy or society, the letter argues, and it is now necessary to start discussions on a way to provide protections to the workers who are Dependent Contractors, the letter posits.

The earliest use of the term Dependent Contractor that I have found occurred all the way back in 2005 in a Berkeley Journal of Employment and Labor Law article by Elizabeth Kennedy.

In that article, "Freedom from Independence: Collective Bargaining Rights for Dependednt (sic) Contractors," Kennedy examines the history of collective bargaining, and goes back to the early 1930s and an attempt by newsboys in Los Angeles to organize.

That backdrop case, NLRB v. Hearst Publ'ns, Inc., 322 U.S. 111 (1944), recognized that there were marginal classes of workers that did not have sufficient bargaining power themselves to negotiate fair labor standards and benefits.

"The Court recognized that economic forces themselves may create conflict between employers and workers, who by strict definition do not have a proximate employment relationship," Kennedy summarizes. "In those instances, the economic realities of the relationship may more closely reflect the evils sought to be remedied by the NLRA [National Labor Relations Act] and justify the inclusion of independent contractors under the Act. The drafters of the Act had this imbalance in bargaining power in mind. This was the 'mischief' the NLRA sought to correct."

Business didn't like it, so Congress was petitioned, and did, exclude independent contractors from the NLRA when it passed the Taft-Hartley amendments to the Act in 1947.

Kennedy argues that the twin silo distinction between employee and independent contractor harkens back to medieval concepts that were no longer adequate to define the modern work force.

And the problem is that a large population of the modern work force is left without a voice, without representation and, most importantly, left in the vast void between the two silos in the world of work protections.

Kennedy posits that a Dependent Contractor Labor Board should be established to provide a mechanism for these workers to access the rights and privileges of employment while ensuring the benefits of independence that both those workers, and their employers, seek to preserve.

The model is already in place, Kennedy notes, in California with the Agricultural Labor Relations Board.

Kennedy was examining collective bargaining by disparate groups of workers who were classified as independent contractors but were singularly reliant upon an employment relationship.

Come full circle ten years later, and seeing the risk to their business models that eliminate the friction of "employment" in the "gig economy," big business is seeking what Kennedy posits - a new, third, classification of workers.

The tech giants and their financiers say, "Everyone, regardless of employment classification, should have access to the option of an affordable safety net that supports them when they’re injured, sick, in need of professional growth, or when it’s time to retire."

The group's tenets: flexible workers are good for the economy and should have protections from unforeseen maladies and calamities; the Affordable Care Act is a stepping stone towards providing an avenue to protections to this third class; and it's time to open the conversation.

But the group doesn't say how all of this is going to be paid for. Presumably, for now, the necessary first step is business' willingness to open the discussion towards a solution that won't destroy the investments behind Uber, Lyft, AirBnB, etc., and this letter is that step.

I can't help but think that the workers' compensation industry is uniquely poised with the long term experience and knowledge on how to make the concept of Dependent Contractor a reality, and provide mechanisms for the financing and administration of such a system.

Indeed, this has already started to happen - the Opt Out movement has drawn criticism from skeptical Labor and Insurance because of lack of transparency, mis or non understanding of ERISA, and mistrust.

But what Opt Out fans are saying is that independence is what the modern economy dictates - independence from the traditional two silo version of work.

Dependent Contractor relations is, essentially, workers opting out, but still having a back-up in case something bad happens.

Now is the time for workers' compensation industry leaders to help shape this emerging public policy change. It is THIS industry that has the knowledge, the know how, the intelligence, and the experience, that can direct how a new classification will be defined, how a system can be constructed to administer and regulate the relationships, and ultimately, how it's all going to be paid for.

The Dependent Contractor status is creating huge new opportunities for the business world and the economy. It is also a new huge opportunity for insurance and related industries to introduce new products and services to meet the needs of business and workers as this all evolves.

Dependent Contractors will, ultimately, be legally recognized. I have no doubt about that. We can help define it, and consequently benefit by doing so.

Wednesday, November 11, 2015

It's Just Money

Yes - "It's just money."

Every business or organization that spends money (that would be all of them) must do the same thing.

Sort the expense line items in descending order. Attack the biggest one first. Once it has been "worked to completion" (can't do any more to improve that one), move on to the next.

You will probably never reach the bottom of the list (or anywhere near it). It doesn't matter. The bottom of the list isn't costing the most - even if it is wildly out of line.

“The California Department of Insurance," says the footer of the department's website, "established in 1868, is the largest consumer protection agency in California. Insurers collect $259 billion in premiums annually in California. In 2014 the California Department of Insurance received more than 175,000 calls from consumers and helped recover over $54 million in claims and premiums.”

That works out to 0.021% - that is two/one-hundredths of one percent of all premium (note, this is NOT just workers' compensation premium).

I'm not sure that's a very good track record to be boasting about, particularly when you see the size of the fraud that gets reported.

No doubt, everyone has to pick their battles. Is employer fraud, provider fraud, employee fraud, or (yes, it happens) carrier fraud the worst problem facing the work comp system?

It seems in terms of overall public impact, the fraud problem is, in descending order, the first three.

But, carrier fraud, which I'll lump brokers and agents (procurement fraud) into, may be bigger in terms of gross dollars. In insurance terms, frequency is less, but severity is greater, than the other types of fraud, and certainly not just in California.

In 2012, $16 million in restitution and jail time was ordered for operatives of a Nebraska insurance agency found to be bilking the system.

And of course there's the Antonucci/Park Avenue fraud involving hundreds of millions down the pipe.

It goes all the way to the top of the big guys - GenRe copped to sham reinsurance deals with AIG inflating loss reserves by $500 million so AIG wouldn't have to pay premium taxes.

Compare those to an indictment that was unsealed this week, exposing the arrest and allegations against physicians, chiropractors and their operatives for illegal kickbacks in the California work comp system amounting to about $25 million. That indictment was the product of years of investigation at considerable cost.

While the return on investment in terms of pure dollars spent and recouped in fraud investigation and prosecution doesn't seem to pan out, public perception and communication of the message that fraud is wrong is an important element to the ROI equation - most people are honest, and will stay honest if they know someone is watching...

I have mixed emotions about reducing the cost of work comp. That is an employer problem that gets passed on to the consuming public.

For instance, the $16 billion in California premium, if amortized against the state's 38.8 million people works out to $412 per person per year. When costs are reduced, will that $412 per person per year be impacted dramatically? No. Will the impact be even noticed by the consuming public. No.

In my opinion, our industry's insane focus on cost containment would better be directed towards benefits for injured workers. We have to fight fraud, no question about that. It seems to me, though, that fraud, and other costs, are a distraction.

Think about it – Medicare claims 3% in administrative costs. Their worst critics claim 8%. Right now, the California carriers are spending over 40% in loss adjustment and administrative expenses.

Remember - the workers' compensation system is intended to be a benefit for employers and their workers - not all of the vendors that ride on the system's coattails (and that includes district attorneys)...

And another thing - brokers and agents. The vast majority of employers are small businesses. They simply don't need sophisticated services that brokers offer. Increasingly, in fact, there is a trend of insurance direct services through the Web.

Why would we pay brokers 6.7% to procure government mandated coverage? Good Lord! In less than three years we set up "Insurance Exchanges" for individuals to handle the Affordable Care Act's mandate. States can elect to create their own or let their citizens use the Federal site.

Yes, the sites are complicated and the decisions are too. But it can be done in about half an hour. The point is that the "small market" is just as adequately serviced without an intermediary placing the insurance and adding nearly 7% to the cost as it is with that intermediary - the value added for the small market isn't there, and takes money away from the benefits bag.

All I'm saying is that we need to step back and breath. Don't get your undies in a bunch about "costs." Costs in the system drive more costs, and sometimes I think we have lost sight of the big picture.

The thing that hath been, it is that which shall be; and that which is done is that which shall be done: and there is no new thing under the sun. (Ecclesiastes 1:9 King James Version)

Tuesday, November 10, 2015

Any Childhood Experience

Ask Bowzer about his childhood...
Adverse Childhood Experience - ACE.

This is the new buzz phrase to describe early childhood psychological issues underlying complaints of pain that can't be explained by objective physical measurements. The theory: something bad happened early in life that manifests in generalized complaints of pain as an adult.

ACE was also a topic explored at the 17th Annual AAOS Workers' Compensation and Musculoskeletal Injuries course in Boston, MA this past weekend.

Case studies were presented to orthopedists in the audience to show how this phenomenon materializes.

The remedy, at least from the orthopedic standpoint, was less clear.

ACE can have a profound effect not only on the "experience" of incurring a work injury (or any injury for that matter) but also the duration and extent of disability - perhaps even more so.

Yet, ACE is something that is more universally applicable to claims than we likely appreciate.

That childhood experiences affect adult behavior has long been settled in the psychological world.

And while ACE certainly impacts the injured worker's claim experience, I suspect it affect how a claim is handled as well - i.e. ACE in reverse.

Underlying psychological trauma is, for a lot of people, difficult to accept, and is part of the reason that in workers' compensation there is a very low threshold of "causation," because the process is supposed to be administrative and essentially self-executing.

The theory is that while there will be some claims for which someone's co-morbidities are being paid for through the work comp system, those are exceptions and just a cost of the system, whether it is psychology, obesity, cardiac, etc.

That theory was temporarily lost on a Pennsylvania claims adjuster that was probably frustrated and having a bad day when she told a claimant with a known history of childhood sexual abuse that the carrier was "tired of paying for something that happened to you as a child," in a settlement conversation.

The claims adjuster later retracted that statement and apologized, but the damage was done and she, and the carrier, were sued in civil court by the claimant for psychological harm.

The carrier, PMA Insurance Group and the claims representative, Mylene Zimmerman, raised the defense of exclusive remedy.

The Pennsylvania Superior Court last week said there is no such protection and that the claimant, Matthew Charlton was not barred from seeking a tort recovery from them.

Since Charlton's claim was premised on the idea that Zimmerman intentionally caused him injury by referencing a non-work-related psychological injury, which exacerbated the harm caused by the non-work-related psychological injury, the court said his claim was not based upon a work-related injury.

What we experience as children shapes us as adults. These could be adverse, or positive - in either situation an employer, and ultimately the claims payer, must take the worker as he or she is at the moment, including any baggage that may come along (which is why I propose that the phrase be renamed, "Any Childhood Experience," to reflect this reality).

Workers' compensation laws have been dissected over time, and exceptions to liability for the Whole Person in a claim have been carved out, largely because there are folks who are, "tired of paying for something that happened to you as a child."

Ultimately, though, that emotion may cost more than simply treating the Whole Person, as we see in Charlton vs. PMA/Zimmerman.

Monday, November 9, 2015

Chiropractic Cure to Opioids?

An interesting comment was made by James Rainville, MD, at the 17th Annual AAOS Workers' Compensation and Musculoskeletal Injuries course in Boston, MA this past weekend.

But first a little about Dr. Rainville.

Dr. Rainville is a University of Massachusetts Medical School trained physician with a boat load of publications and scientific studies to his name. He's an Assistant Clinical Professor at Harvard Medical School, is Chief of Physical Medicine and Rehabilitation at New England Baptist Hospital, is a member of several professional organizations including the North American Spine Society, American Academy of Physical Medicine and Rehabilitation, and the Physiatric Association of Spine, Sports and Orthopedic Rehab, pecializes in medical management of spine conditions, disorders and injuries and medical musculoskeletal management.

In other words, he really knows his stuff about back and neck pain.

And what he said made me think that our own laws have been a major contributing factor to the dramatic increase in opioid abuse along with the attendant disabilities, deaths and other human horrors that these awful, addictive, destructive drugs wrought on individuals, and ultimately society.

We blame the drug companies for overt pushing because these drugs are big profit.

We blame unethical and immoral physicians seeking greedy new revenue streams.

We blame "crack head" addicts for getting out of control, and then supporting their habits by circling the pharmacy planet so they can make a few bucks on the black market.

We seek to address the problem by creating more complex rules, drug formularies, pharmacy benefit management programs, throwing docs in jail for murder and other circuitous ways of dealing with the problem.

But the opioid "problem" didn't just occur over night. It was brewing for some time, and a big part of the "problem" was the making, I believe, of our own doing ... by legislation.

Dr. Rainville pointed out in his lecture that physicians, when confronted with a case of generalized back or neck pain, should prescribe chiropractic; it is better for the patient that chiropractic be dispensed than opioids, because chiropractors can not (at least yet) make prescriptions.

But chiropractic treatment has come under artificial limitations.

California, in response to abusive chiropractic practices, in 2004 limited by statute the quantity of chiropractic and physical medicine to 24 visits.

I don't know the actual numbers, and I'm not sure anyone has really done a study - but I certainly don't remember opioids being an issue before the artificial chiropractic limitation.

They certainly were afterwards, and it took only a few years for that trend to develop into a hockey stick graph.

A presentation by Joseph Barr, MD, presented some cursory statistics that would tend to support this theory - Oxycontin was introduce to the market around 1996. Rapid increase in the prescription and consumption of that drug started occurring in the early 2000s, about the same time that abusive chiropractic practices were coming under scrutiny.
Could it be that the legislature's good intentions at curbing some small element of the system in fact helped create a much bigger, more sinister problem?

Other states also restricted chiropractic in workers' compensation around that same era.

It may be coincidental, or it may not. I don't have that answer - but there is an interesting correlation nonetheless.

Now we have guidelines, lots of them, that didn't exist in 1996, or weren't well known or adopted by workers' compensation. All of them make evidence based recommendations on the number of chiropractic and physical medicine treatments.

While the claims payer may limit treatment per some guideline, the nice thing about guidelines is that they are only guides ... and can be rebutted by facts or other evidence.

Laws can't be changed, and may be relied upon by payers for short term cost containment to the detriment of long term claim expense and ultimately a destroyed human life. But guidelines don't have to be followed (although in practice I'm afraid these too are all too often relied upon as hard "ceilings" on treatment).

Sure, you don't want some chiropractor providing treatment three days per week for years. There are other sensible ways of corralling incorrigible chiropractors other than hard limits.

Shutting down care absolutely, though, doesn't seem to have been the answer.

Friday, November 6, 2015

The $1000 Ibuprofen

The following is a guest blog post from Lesley Anderson, MD, a practicing knee and shoulder surgery specialist in San Francisco, CA.

Yesterday it was reported that the California Workers' Compensation Insurance Rating Bureau found more savings in SB 863 than imagined, but that IMR volume was much higher than predicted, and that the cost of review likewise was much higher.

This anecdote may, in an unfortunate way, explain why...


After practicing for 32 years, I have finally had it. People complain all the time about how dysfunctional the health care system is. In many ways it is, with rules and regulations dictating choices caregivers have, and roadblocks for patients to obtain care.

I have a 53 yo patient who has fairly significant arthritis of her knee. She injured her knee on the job, and her job requires her to be on her feet most of the day. She has had surgery twice over the past 10 years and needs a knee replacement, but she is too young. She has been able to continue working by using Ibuprofen when her pain increases.

She called about 3 months after her last visit asking for a refill for her Ibuprofen, which costs about $10-12. She did not feel a need to come in for an exam, as it would take time away from her work. She used it occasionally.

We have to submit a form to her workers’ comp insurance company for approval rather than just calling in a refill, and the adjuster sent it to another doctor to be “reviewed for medical necessity”. This reviewing doctor denied our request. Said they had called the office twice to try to speak to me.

Our notes: "Mark with Mitchell UR called and said you can speak with Dr. Brooks, reviewing physician, if there is any other info you would like to add to the ibuprofen refill request. Mark said you do not necessarily have to call if there is nothing else to add. They already have the last report.”

So I appealed his decision, thinking this was a mistake. I sent our request to the next level appeal, to the “Independent Medical Review”, a board of reviewers the legislature passed in 2012, set up as the final word. Kind of like God… you really don’t know what he/she looks like…There is no list of who is on the board, it is a secret, and after all the records were sent for review, to my surprise, it was denied again.

The 4 page denial stated the according to the Chronic Pain Guidelines I needed to document that she had failed a trial of Tylenol. (She had Tylenol use documented, just not the statement that it had FAILED.) NSAIDS such as Motrin are not for long term use”… This was the first refill in 3 months. What- they want me to give her Percocet instead?

The problem is the law also states that we cannot ask for a review for 12 months. She will have to pay for it herself.

What did it cost to deny a $10 bottle of Ibuprofen?

Request for refill of Ibuprofen……….$NA

Cost to fill out Request for Authorization form 10 min……….$40

Phone call from physician reviewer to me (2 times)……….$60

UR Reviewer denial estimated fee……….$100

Administrative time to send initial 7 page denial est ………. $50

My time to prepare appeal, talk to patient to explain denial……….$125

Filing costs to IMR ……….$400

Estimated physician reviewer fee #2……….$100

Phone call to patient explaining denial #2……….$50

Total estimated cost to deny Motrin……….$925

Time away from actually treating patients……….priceless

So let’s see… what happened to common sense for a $10 medication? Why is this happening?

Several years ago, then Gov Schwarzenegger and a few key legislators (called the Gang of 5) put together a bill that required utilization review for all care patients receive in the workers compensation system (SB 899). This was supposed to hold down the rising cost of premiums for employers, avoid unnecessary tests, surgeries, and use of narcotics. In the big picture, there was some abuse, and some of the tenants seemed reasonable.

Instead, an entire new industry was born- Utilization Review Companies, whose job it is to review requests for medications, crutches, a simple sling to surgery requests and every postoperative need the patient may have. Some of the companies deny as much care as possible to save money for the insurance company and have every request from a sling to Motrin reviewed. A few are reasonable and leave the decision to protocols for the adjuster. Many of the physicians are hired from out of state, are not required to practice here, just have a California license. Many are retired from actively practicing. I met one recently at an orthopedic meeting who was at least 80 years old, and clearly was not practicing and had in fact denied an anti-inflammatory for one of my patients.

Has this system saved money for the employer and improved care for the injured worker? NO.

One recent study indicated that over 50% of the cost of care for the patient is in utilization review. If a bottle of Motrin can cost $1000, no wonder.

The people getting hurt here are hardworking blue collar workers, many of whom have never had an injury in their work life. Many do not have English as their primary language, and have limited recourse for denials. Or they hire a workers’ compensation attorney, and this too can increase costs and complicate the case. As physicians, our main goal is to help heal the patient. 90% of the doctors caring for these patients are doing just that.

Only the legislature who passed this bill can make this better. Will I continue to treat injured workers? For the few companies that have reasonable review, yes. But my no-fly list is getting longer by the month. Maybe, only when access becomes a crisis will anything change.

Thursday, November 5, 2015

Song Remains the Same

California sunlight, sweet Calcutta rain
Honolulu Starbright - the song remains the same
-Led Zeppelin-


The cost of providing workers' compensation insurance coverage in California by carriers is going down more than the Workers' Compensation Insurance Rating Bureau had projected.

The insurance industry will see $700 million annual savings from SB 863. The original projection was a third of that.

But independent medical review and liens aren't part of the savings.

Bill Mudge, president of the WCIRB, said in yesterday's joint meeting of the Actuarial Committee and Claims Working Group that it can't be determined that there is any one provision of SB 863 by which these savings come from, but it's clear that the bill is responsible.

Medical severity is down, but the cost per transaction is up - nearly canceling each other out.

Eliminating pass through spinal hardware is going to result in more savings than projected (which to me indicates the pervasiveness of that procedure).

IMR itself isn't responsible for the savings; there more IMR requests than originally forecast.

But it's possible that the IMR process is shortening temporary disability duration pending medical decisions.

Chief Actuary Dave Bellusci said there have been no significant increases in total temporary disability benefit payments, which totaled $1.6 billion in both 2013 and 2014, compared to $1.5 billion in 2011 and 2012.

Between the increase in frequency and wages, Bellusci said he expects to see TD payments increase by about 5% per year. The fact that isn't the case "would suggest some reduction in TD duration is happening."

In fact, besides eliminating the projected $180 million in loss-adjustment expenses attributed to IMR in 2014, the WCIRB is now projecting IMR will increase loss-adjustment expenses by $70 million a year, which reduces SB 863's second-largest component of savings from $390 million to $140 million per year.

As of June 30, 2015, IMR contractor Maximus Federal Services had billed payers $103.6 million for 245,751 completed reviews.

Liens, which was also projected to result in greater savings to carriers, are coming back to life. Filings have been increasing steadily, and Chief Actuary Dave Bellusci said in the meeting that figures from 2013 and 2014 may have been artificially depressed because claimants were trying to avoid payment of the filing fee - now that pent up demand is being processed.

And frictional costs still seem stymied.

"There's not a lot of evidence anywhere we look of any sort of frictional cost savings," Bellusci said.

What does all this mean?

Carriers are saving money in the system.

Some will say it is at the expense of injured workers and that those savings are being passed along to other benefit systems, such as general health, social security and Medicare, as costs.

Others will say that employers in California will be seeing more competitive insurance pricing.

Still others will say the insurance industry is staying healthy as investment income continues its moribund state.

These are all fine and well, but there really are only two measures that matter: 1) are injured workers getting benefits the law says they're supposed to? 2) are employers seeing a reasonable value for their investments?

I think that story is still being written.