Experts: WC Procedures May Be Harming Injured Workers

Sarasota, FL (WorkersCompensation.com) – Antiquated processes, jurisdictional differences, and excessive amounts of time spent on data collection are integral parts of the workers’ compensation system. But do they end up causing unnecessary harm to injured workers? The answer is probably ‘yes,’ according to a panel of industry leaders. 

“The question becomes … how can we improve the industry, how can we ensure that in the vast majority of cases workers are getting the best outcomes through the process, remembering what it was initially set up for,” said K. Max Koonce, chief Claims Officer for Sedgwick. “Back in the 1900s, the purpose of workers’ compensation [was] to have employers focus on risks that they knew were causing injuries in their employment and then, secondly, to provide a set amount of benefits to employees. And it was set up to be fairly easy to flow through. it wasn’t intended to have a lot of litigation, as we’ve seen in some states where 50 percent of the claims are litigated.”

Koonce joined a recent panel discussion hosted by Out Front Ideas with Kimberly George and Mark Walls, as they offered insights into some of the challenges in the workers’ compensation system.  

Problem Claims

Most workers’ compensation claims are resolved fairly quickly and easily – within 12 months. They are often medical-only claims and/or involve limited time out of work, or the catastrophic injuries, in which all resources are brought to bear. But the system is by and large geared to the remaining 10 percent of claims that, for a variety of reasons, become delayed.

“The challenge is when you look at all the bells and whistles, the forms, the processes the different things that are engaged in that system, they’re really built for that 10 percent,” Koonce said. “We need to spend some time evaluating what works well for the 90 percent and why it works for them, and try to incorporate more of the 10 percent in that group.”

Overload of Mandates

One of the obstacles to closing claims quickly is the myriad laws and regulations involved, particularly across jurisdictions. Two identical claims in two states often have very different outcomes.

“It’s a very challenging process to think from one state to the other, ‘why do I have to seek authorization here,’ or ‘why does someone have to call me before they do this here,’ or ‘why do I have to have a utilization review (UR) process here for this state where I don’t in this other state to very equal injuries?’” said Michele Adams, VP of Risk Management Operations and Casualty Claims for Walmart Claims Services. “What we have across the country is a very fragmented process. So you might say, do we want a single delivery system? Each state wants what is unique to it. Why can’t we take the best out of every state and figure out what actually does work, and what would be more effective to drive better outcomes.” 

The variation in jurisdictional laws is among the biggest criticisms of the workers’ compensation systems. In fact, there are proposals in the federal government to provide money to study the system.

“Everybody cringes at the thought of federal oversight,” said co-host Walls, VP of Client Engagement at Safety National. “But at the same time, there’s certainly some opportunity for improvement and consistency among states.”

All That Data

Stakeholders, especially claims adjusters have little time to spend with injured workers these days, the speakers said. Instead, they are largely focused on collecting information which may or may not be of value.

“I think we spend so much time looking at the data for that 90 percent and the first year of the claim and then we lose track of that as we move into the claims that have gone beyond the one year,” said Susan Shemanski, VP of Corporate Risk Management at the Adecco Group, a temporary staffing agency.  “We need to spend more time on what processes, what treatments are successful.”

One reason data collection has become so prominent in the workers’ compensation system is to comply with what may be overly broad state laws.

“Way too often in this country we have legislative and regulatory responses to problems we can all agree are outlier problems and they respond to a little tiny segment of our system with a paint roller. They don’t go in with a fine point and try to fix a problem, they create these broad solutions to what I think are very isolated issues and problems,” said David Langham, Deputy Chief Judge of Compensation Claims for the Florida Office of Judges of Compensation Claims at the Division of Administrative Hearings. “As a result of that we’ve got people that are collecting data points that are probably irrelevant to anybody and spending their time doing that instead of focusing on what I think should be the focus of this system; that is the person that has been injured and the employer who desperately wants to get them back to work.”

One potential solution is what Adams called "augmented automation." That involves using automation to move simple claims through the process and allow adjusters to use critical thinking skills for the 10 percent of problem claims.

“How much better would this drive outcomes for injured workers?” Adams said.

Medical Management ‘Solutions’

Other potential time and money wasters are UR and bill review (BR). Both are involved in the process around medical treatment, one of the most complex elements of the workers’ compensation system. UR, Shemanski opined, is an outdated process.

“It’s really looking at the low cost, just transactional steps that take place on a claim, and it’s not looking at the long-term outcomes,” she said. “At times, the insurance company thinks it lowers the cost on claims, but I’ve seen numerous cases where it actually made them more expensive.”

She cited an example of a situation in which a worker being discharged from a hospital needed some medical equipment. What ensued was an extensive back-and-forth conversation about whether the worker should buy or rent the equipment. “While it sounds like it may save money it really doesn’t because now they have an attorney and they still don’t have their equipment,” Shemanski said. “The claim will end up costing a lot more just by trying to cut a bill by a couple hundred dollars.”

Similarly, the BR process may be unnecessary. “We’re fighting over prices on things we’ve authorized,” Adams said. “We do the UR up front to argue over whether or not the services were needed; we finally approve the services, then we get the bill for the service and we’re going to tangle over [it] and in the meantime the injured worker gets a collection notice they never should have gotten … when we ask the question, are we doing harm, that’s unintentional harm inherently build into the system. And we can do better.”

Share This Article: