a panel discussion on controlling wc costs · a panel discussion on controlling wc costs october...

A Panel Discussion on Controlling WC Costs

October 28, 2014

ABD Seminar Series

Injury and Illness Prevention ProgramWellness ProgramQuality Medical CareProactive Claims ManagementLitigation Strategy

Speaker Panel

ABD Insurance & Financial Services

Robin Hendrickson

SVP, Workers’ Compensation Practice Leader

Michael OkamuraAVP, Workers’ Compensation Claims Consultant

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Access Omnicare

Dan Azar, MD, MPHMedical Director

Nuvita

Jake SchwyzerDirector of Business Development

Callan Law Firm

Jennifer CallanAttorney at Law

2

Agenda

• Introduction of Guest Speakers and brief overview of today’s discussion

• Why Health & Wellness programs benefit employees and employers

• Physician’s perspective of health & wellness positive impact to workers’ compensation injuries and illnesses

• Effective communication & proactive claims management

• Litigation strategies

• Case studies and Q&A

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Injury & Illness Prevention Program

Health & Wellness Initiatives

Occupational Medicine Provider

Claims Management

Litigation Tactics

Maintaining Partnerships

Building a successful workers’ compensation program

4

Critical elements of your program:

Pre and Post injury strategies

1

2

3

4

5

6

Injury & IllnessPrevention Program+ Wellness…

What brings them together?

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ImprovingHealth & Wellness

Nuvita

Jake Schwyzer

Director of Business Development

ABD Seminar Series

Nuvita is the most effective wayto improved health and wellness.

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The Problem

2005

Obesity Trends Among US Adults

2001

19971985

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No Data

<10%

10%–14%

15%–19%

20%–24%

25%–29%

30%

The Problem

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Obesity Trends Among US Adults

2013

15%–<20%

20%–<25%

25%–<30%

30%–<35%

35%CA

MT

ID

NV

UT

AZNM

WY

WA

OR

CO

NE

ND

SD

TX

OK

KS

IA

MN

AR

MO

LA

MI

IN

KY

ILOH

TN

MS AL

WI

PA

WV

SC

VA

NC

GA

FL

NY

VT

ME

HI

AK

NH

MA

RI

CT

NJ

DE

MD

DC

Sources: CDC, American Diabetes Association, American Heart Association,American Physiological Society

The Problem U.S. population’s health is in rapid decline

2 3

50%

80%

70%

Of adults are overweight or obese

Are diabetic or pre-diabetic

Report high levels of stress

Get little or no physical activity

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http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&docid=XYqfv13GvAoi-M&tbnid=sArs111S5YflCM:&ved=0CAUQjRw&url=http://www.ecoportmobile.com/healthcare/&ei=O_p0U9iENoPJoAS_ioGACw&bvm=bv.66699033,d.cGU&psig=AFQjCNGs3vLiUOaLXcyAbWjIWxTO8m0kQQ&ust=1400261374038152

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&docid=XYqfv13GvAoi-M&tbnid=sArs111S5YflCM:&ved=0CAUQjRw&url=http://www.ecoportmobile.com/healthcare/&ei=O_p0U9iENoPJoAS_ioGACw&bvm=bv.66699033,d.cGU&psig=AFQjCNGs3vLiUOaLXcyAbWjIWxTO8m0kQQ&ust=1400261374038152

$8,000

$10,000

$11,500 $12,700

$14,000

$16,000

Family Premiums 2002-2012Health care costs are out of control

Expected to continue to rise through 2020

Companies are suffering with annual premium increases, workforce productivity and performance issues

The Problem

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11Source: Kaiser Family Foundation

$4,398 $4,398 $4,398

$2,522

$6,642

$-

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

Low Risk(0-2 risks)

Medium Risk(3-4 risks)

High Risk(5+ risks)

Costs associated with Risk Factors

Base Cost Excess Cost

Eddington, AJHP. 15(5):341-349

Risk factors include:

• Overweight/Obese• Lack of physical activity• Blood pressure• Diet/nutrition• Stress• Smoking• Cholesterol• Illness days• High risk behavior • Existing medical problems

What’s Driving Health Care Costs?

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75% of health care and productivity costs are associated with lifestyle choices (CDC).

What’s Driving Health Care Costs?

$4,398 $4,398 $4,398

$2,522

$6,642

$-

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

Low Risk(0-2 risks)

Medium Risk(3-4 risks)

High Risk(5+ risks)

Costs associated with Risk Factors

Base Cost Excess Cost

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13Eddington, AJHP. 15(5):341-349

Workers Compensationand Obesity

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37.5% of the adult population is obese

Obese workers vs. non-obese (Duke University)

Obesity increases the risk of co-morbid conditions that include hypertension, diabetes, stroke, coronary heart disease and cancer.

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File 2x the number of claims

7x higher medical costs

13x more days or work missed

“We all know obesity is bad for the individual, but it isn’t solely a personal medical problem – it spills over into the workplace and has concrete economic costs.”

Truls Ostbye, MD, PhD Professor of Community and Family Medicine Duke University

37.5%

Obese Employees are 4 times more likelyto be absent.

Obesity and Work Comp Claims

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Duke University Study

5.80

11.65

0

2

4

6

8

10

12

14

Loss Frequency – # of Claims Filed per 100 EE’s

Normal Weight

Obese Weight

$7,503

$51,019

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

Loss Severity – Avg Medical Claims per 100 EE’s

14.19

183.63

0

50

100

150

200

Loss Severity – Lost Work Days per 100 EE’s

Health Risks that reduce productivity include smoking, excessive alcohol consumption, physical inactivity, high blood pressure, high cholesterol, and stress.

Health Risks and Work Comp Claims

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Xerox Study

Low-Risk Employees

High-Risk Employees

4.9

8.2

0

1

2

3

4

5

6

7

8

9

Loss Frequency – # of Claims Filed per 100 EE’s

$2,178

$15,162

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

$16,000

Workers’ Compensation Costs

Case Study

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% Prevalence of Risk Factors

0

10

20

30

40

50

60

70

80

Diabetes Heart Disease/Stroke

BloodPressure

Cardiovascular Obesity / BodyComposition

JUL 2012 NOV 2012 OCT 2013

620 employees50 states

Self Insured42 Average Age

Two Year Summary

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0

10

20

30

40

50

60

70

80


BloodPressure


JUL 2012 NOV 2012 OCT 2013

620 employeesSelf Insured

Average claims paid 8/1/2011 – 7/30/2012 8/1/2012 – 7/30/2013

Nuvita Participants – 90% $2,270 $1,920

Non Participants – 10% $2,865 $3,474

-32% -30% -17% -36% -14%

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http://www.physiciansweekly.com/wp-content/uploads/2012/08/Feb6th.png

http://www.physiciansweekly.com/wp-content/uploads/2012/08/Feb6th.png

Essential Characteristics for Success

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# Five Essential Characteristics Details

1Engaged leadership at multiplelevels.

• C-suite, middle management & wellness champions

2Strategic alignment with the company’s identity and goals.

• Wellness is an extension of the company’s identity.• Healthy, happy, high performing workforce is integral to

achieving companies goals

3Evidence based at all levels, with tracking, accountability and careful evaluation.

• Collection and analysis of key engagement and results metrics that drives efforts and ensures accountability.

4Effective programs & activities appeals to employees, motivating and accessible

• Personal programs designed to be: motivating, fun, based on science, and convenient

5The right incentives that drive employee engagement and motivation.

• Employees share responsibility for adopting and sustaining behaviors that reduce health risks to earn $ toward their health care premium, contribution to FSAs, other incentives.

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Nuvita meets YOU where you are.

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Nuvita Age• How young are you living?

• Physiologic age based on biometrics & Nuvita personal profile

Personalized ProgramYou and your health team will determine your customized nutrition, cardio and mobility plan to help you achieve your goals

Professional Health Team• Nuvita certified nutritionists and exercise physiologists. • Committed to your success and engagement

Health Tools to Track Your Progress• Nuvita Cardio Monitor • Mobile apps, Personal web portal

Fun and Social Programming• 12 week Live Younger • Lifestyle 360 (rest of year)

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https://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=KnYz3nGCWh8zNM&tbnid=1FYIlASQjmlXOM:&ved=0CAUQjRw&url=https://www.mint.com/how-it-works/alerts/&ei=sahNUrqJMYiVjALhhIDQDg&bvm=bv.53537100,d.cGE&psig=AFQjCNEnXh_fg8a19qIUPP97FCKfXWuX8g&ust=1380907472375899


Nuvita meets YOU where you are.

The most effective fitness tracker

Measure your cardio fitness (maxVO2) on your phone

The right plan, the right foods, the right results

PersonalCardio

PersonalNutrition

The best health team to develop and guide you to success

Health Team

23

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Proven engagement

• Understanding strategic goals and objectives inside a set budget

• Designing the right incentives based on companies goals, objectives and culture

• Detailed analytics including data driven decisions driving outcomes, real time engagement dashboards, population risk profile and utilization trends

• Take YOU to next level in good health.

• Motivate and continue to challenge YOU.

• Teach YOU some new concepts and strategies.

• Have some FUN.

Our enterprise solutions are customized for each organization

Our personalized programs are designed specifically for each individual participant.

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ImprovingEmployeeHealth

Access Omnicare

Dan Rafael Azar, MD, MPH

Medical Director

Workplace Health Promotion and Protection

Partnering with your Occupational Medicine Provider

ABD Seminar Series

Preventing Disease Onset & Progression

• Messaging

• Facilitating

• Providing Services• Vendor supported health

events

• Onsite wellness center

• Incentivizing• Socially

• Financially

Chronic

At Risk

Healthy

• Comply with treatment

• Identify need for advanced care

• Identify early

• Educate

• Encourage lifestyle change

• Prevent or delay progression

• Maintain awareness

• Emphasize benefits of prevention

• Encourage & support

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Health Promotions

1. Wellness Events / Presentations

2. Worksite Immunization Campaigns

3. Health Risk Assessments

4. Biometric Screenings

5. Outcomes Based Incentives• Extrinsic motivator• Activate employees to learn,

engage and begin behavior change:1) create an environment2) foster a culture that supports

health & wellness• Sustained behavioral change

1

2

3

4

5

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Integrated Workplace Health Protection & Promotion

• Protection from occupational injury and illness

• Promotion of personal health

• Organizational silos diminish impact of our efforts

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ACOEM (2011): WHP&P is the strategic and systematic integration of distinct HR, EHS and Benefits policies and programs into a continuum of activities that enhances the overall health of the workforce and prevents work-related injuries

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Impact of Improved Employee Health

• Decreased incidence of injury and illness

• Improved rate of recovery

• Improved workforce stability

• Decreased labor costs

• Decreased administrative burden

• Decreased legal costs and exposure

• Improved productivity

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ROI: 1.40 to 4.70 on every dollar spent on Health Protection and Promotion


• Understands the WC system and team approach

• Communicates regularly & efficiently

• Employee-Patient

• Employer

• Adjuster

• Medical Case Manager

• Broker

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• Prioritizes Quality of Care

• Shared Values

• Prevention

• Appropriately manages the cost of care

• Avoids medically unnecessary disability

• Identifies and communicates problems early

• Follows through on commitments

• Understands Customer Service

• Employee satisfaction impacts outcome

• Sensitive to business needs

• Documents thoroughly & consistently

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Approach to TreatmentThe First Visit is Critical

• Establishes causation: AOE/COE

• Arising Out of Employment/Consequence Of Employment

• Mechanism of Injury

• Was employment a significant contributor?

• What was pre-injury state?

• Establish diagnosis and body parts

• Calls employer on the first visit

• Asks questions

• Keeps you updated

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Approach to TreatmentThe First Visit is Critical

• Set tone of relationship

• “I’m here to help”

• Listen

• Clarify

• Document

• Decide

• Primary Treating Physician (PTP) as Coach

• Educates and demonstrates

• Sets expectations and motivates

• Coordinates resources

• Actively manages treatment

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Shared Goals and Communication are Critical to Success

• Restore the injured worker to pre-injury state

• As quickly as possible

• As affordably as possible

• With minimal disruption to stakeholders and relationships

• Identify ASAP when recovery to pre-injury state is unlikely

• Then manage to optimal achievable outcome

• Efficiently and thoroughly end active treatment (P&S)

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• Make sure the provider understands your workplace hazards as well as your organization’s priorities and preferences.

• For “atypical” cases call in advance and express your concerns.

• Ask questions: If you don’t understand a decision or have a concern call sooner rather than later.

• A responsive provider will return your calls and work with you on overcoming challenges.

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Effective communication & proactive claims managementAn overview

Overview of Key Factors for Successful Claims Management

• Develop and integrate your IIPP, health & wellness, disability and WC programs

• Assign designated person to oversee and manage these programs

• Develop partnerships with your designated medical clinics and claims team

• With your insurance carrier or TPA, become knowledgeable and understand the WC claim cost-containment resources

• Understand the financial impact of claims (reserves) and how this affects your ex-mod and insurance premiums

• Establish claim review meetings (at minimum – semi-annually)

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Pre-injury


• Develop an early return-to-work program – to address temporary and permanent work restrictions; clear and concise documentation process

• Develop Job Descriptions that include essential job functions

• Establish a clear and concise communication protocols with the claims team, employee, supervisor and clinic/physician

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Pre-injury


• Investigate and report claims timely

• Notify and discuss new injury with designated clinic and claims adjuster

• Keep open communications with injured employee, physician, supervisor and claims adjuster

• Manage and oversee claim through employee’s release to full duty work or to address permanent work restrictions

• If there are RTW or employment related issues, seek advice with an employment/labor law attorney

• WC litigation management and importance to assign defense counsel

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Post-injury

EffectiveLitigationManagement

Callan Law Firm

Jennifer Callan

Attorney at Law

How Effective Litigation ManagementCan Assist Claims & Employers

ABD Seminar Series

Defense Counsel?

• Litigated claims

•Questionable claim

•Red Flags

• A fair amount of lost time for a relatively minor injury.

• Job performance issues and counseling leading up to claim filing.

• Other pending litigation/claims, including in other forums.

• Litigious claimant.

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Coordination with Claims & Employers on Front End

• Client’s objective

• Early assessment of exposure

• Any deadlines?

• Likelihood of success

• Anticipated discovery

• Costs of Litigation

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Discovery

Documents may include:

• Accurate and complete job description or job analysis

• Personnel file

• Medical records

• Other records, including regarding MVAs, prior WC claims, other accidents/injuries, etc.

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Via nature of claim, what documents and information are relevant and needed, and how best can they be secured?

Discovery

1. If investigative agency involved, have investigator direct reports to defense counsel.

2. Interview all relevant defense witnesses, including supervisors(particularly if Good Faith Personnel Defense to psychiatric injury claim).

3. Depositions

4. Subpoenas

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Medical-Legal Evaluations

• PTP, Panel QME or AME

• Panel QMEs: Luck of the draw.

• AMEs: Ability to select physician, but typically set farther out.

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Coordination of Efforts with Discovery, Stipulations & Settlement Exploration

• What information can be shared?

• The impact of Stipulations

• Global Settlement?

• Resolve WC matter in conjunction with other pending cause of action.

• WC portion of any global settlement must be approved by the WCAB.

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ForDiscussion

Case Studies /

Hypotheticals

Q&A

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ABD Seminar Series

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Case Study

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0

10

20

30

40

50

60

70

80


BloodPressure


JUL 2012 NOV 2012 OCT 2013

620 employees50 states

Self Insured42 Average Age

Two Year Summary

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0

10

20

30

40

50

60

70

80


BloodPressure


JUL 2012 NOV 2012 OCT 2013

620 employeesSelf Insured

Average claims paid 8/1/2011 – 7/30/2012 8/1/2012 – 7/30/2013

Nuvita Participants – 90% $2,270 $1,920

Non Participants – 10% $2,865 $3,474

-32% -30% -17% -36% -14%

Sue Smith filed a WC claim for stress, depression, anxiety andparanoia due to prolonged discrimination and harassment. Heremployer, Pay-a-Lot, accepted liability and paid workers’compensation benefits for the claim.

Sue also filed a civil action and during the course of the civil trialargued that because Pay-a-Lot knowingly accepted liability for herWC claim, Pay-a-lot was judicially estopped from asserting a contraryposition in the civil action.

Effective Litigation Management

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Hypothetical #1

Court of Appeal ruling:

Trial court did not err in allowing such evidence to be presented tothe jury.

When Pay-a-Lot admitted Sue’s WC claim was compensable, itnecessarily acknowledged she had presented sufficient objectiveevidence of harassment and that the harassment was thepredominant cause of her injury.

[See Dufresne v. City of Hayward (2009) Alameda Superior Ct. CaseNo. 2002-067063 (Unpublished).]


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Hypothetical #1 Result

Sue Smith filed a WC claim alleging an injury to her low back, hips and psychewhile working for Pay-a-Lot. The WC claim was denied.

Sue also filed a civil action alleging disability discrimination, failure to engage inthe interactive process, age discrimination, and other causes of action.

After several depositions and other discovery, the parties ultimately entered into aGeneral Release and Separation Agreement for the sum of $250,000.00 whichreflected that any and all causes of action were fully and finally resolved, includingthe pending civil action and workers’ compensation claim.

.


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Hypothetical #2

No release of liability or compromise agreement regarding a workers’compensation matter is valid unless it is approved by the appeals board orreferee. (Labor Code §5001)


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Hypothetical #2 Result

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What’s Next?

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Month – Illness Prevention Program Workshops, Q1 2015

Thank You!

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Robin [email protected]

Michael [email protected]

mailto:[email protected]

mailto:[email protected]

Content Disclaimer: The information provided herein is intended for use only as a guidelineand is not intended as, nor does it constitute legal advice. ABD makes no warranty, express orimplied, that adherence to, or compliance with any recommendations, best practices, checklists,or guidelines will result in a particular outcome. ABD does not warrant that the information in thisdocument constitutes a complete list of each and every item or procedure related to the topicsor issues referenced herein. Federal, state or local laws, regulations, standards or codes maychange from time to time and the reader should always refer to the most current requirementsand consult with their legal and HR advisors for review of any proposed policies or programs.

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