Friday, February 26, 2016

Cleaning Up

My broken record mantra: workers' compensation has three stakeholders: employer, employee and government.

Everyone else is a vendor.

Employees get lots of attention because, well, they're the recipients of the system. Sometimes they don't get what they deserve, and sometimes they do.

The government also gets lots of attention because it makes the rules, and then is supposed to enforce those rules. Sometimes the rules are good, and are enforced, and sometimes they aren't.

Employers tend to get the least attention. Sometimes there's a recalcitrant employer who gets punished for cheating or being a schmuck, and on a much more rare occasion there's the employer who is recognized for bucking trends and treating their workers as a valued asset.

Regardless, in between all three stakeholders are various vendors with various "solutions" to problems that may not even exist.

"Solutions" became an overused term when Silicone Valley was growing up, and is still abused today.

I hate that term.

Before there is a "solution" there has to be a problem. 

Vendors are good at creating problems so they can sell their "solution."

Quite often, there are "solutions" that exist only between vendors.

It's these vendor-centric "solutions" that tend to get the attention of one of the stakeholders, principally because of the additional friction created generates heat between the stakeholders: UR, BR, IMR, IBR, etc.

This creates confusion on the part of the public.

Our reporting at WorkCompCentral is guilty of this. All too often, our reporters use the term "employer" interchangeably with the insurance company or third party administrator, when in fact the actual employer, i.e. the person or entity that signs the paycheck to the employee, has nothing to do with the decision making of its carrier or TPA.

So we read about something bad that has happened to an injured worker by his or her "employer" when in actuality the employer likely has no idea what is going on until well after the fact.

A consultant wrote me the other day about an employer he was servicing. The consultant was doing an account review. He noted that the insurance carrier had terminated temporary total disability indemnity to the injured worker when he wandered outside of the carrier's Medical Provider Network, but reinstated it when that worker found his way "home" back into the network.

This is, of course, against the rules, and the carrier is not authorized to do that, and in fact under California law that carrier is now required to pay that balance to the injured worker along with the self-imposed penalty and interest.

But will the carrier step up and own it's mistake and make restitution?

My consultant friend thinks that's unlikely. He thinks they'll institute the "F y'all defense" and make good only if REALLY pressed.

That's a shame. This vendor interposes friction between the employer and its employee. That friction generates heat, and that heat gets misdirected.

Another example - at the Public Agency Risk Managers Association conference this week I met a very long term friend of mine within our industry - we go back to our 20's.

My friend has been through the ranks in work comp claims: adjuster, manager, supervisor, etc. He has worked for insurance companies, TPAs, self-insureds; large and small.

He left his last big TPA job because he couldn't stomach the vendor's profits before compassion mentality. He readily admits that the company forced utilization and bill review on every case, for every procedure, because it owned the vendor entities performing those services, and those entities were critical to the TPA's profit margin.

Now my friend is at a very small TPA where the adjusters are trusted to make their own judgment - imagine that, a claims adjuster actually treated as a professional to make independent decisions based on skill, training and knowledge...

The employer gets hosed. The employee gets hosed, except worse.

The vendor gets profits.

Where's the government in this?

Well, the plain fact is that the threat of significant enforcement has been so diluted over the years that the "F y'all defense" is even more strong than ever before.

So what's the "solution"? Where do the stakeholders get resources and traction to ensure the vendors comply with the law.

Well, for one, let's stop confusing who's who in workers' compensation. When we communicate about work comp, we need to stop calling insurance carriers "employers" when the employer is no where to be actually found in a court case (for example, Florida is particularly guilty of this, as nearly all 1st DCA decisions refer to the case defendant as the "employer/carrier" or "E/C").

Secondly, if the government is to be the enforcer, then the government needs to step up and exercise its authority using all means possible. The government has power to fine payers, to impose audits, to suspend or revoke licenses.

But the different governmental departments rarely, if ever, communicate, coordinate or cooperate.

That needs to change.

Third, it's up to US, you, me, and your colleagues, to call attention to WHO is actually doing WHAT.

I don't want to hear the "oh, whoa is me" line from the vendor community, because that's bull. If vending in the workers' compensation system is so burdensome, costly and unreasonable, then make the prudent business decision and take your focus to some other industry.

Employers and their workers are in this together. They both have the same common interest - to make sure that work injury claims are dealt with promptly, expeditiously, fairly and without undue encumbrance.

Call out the vendors interposing their profit will over us.

But also bring attention to those vendors who do their jobs admirably and compassionately.

And in particular, celebrate those employers who don't let vendors get in the way of their employment relationships.

It's been said many times that workers' compensation is a "dirty business."

It doesn't have to be - we just need to clean up after ourselves...

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