By Edward Canavan, ARM, AIC, VP Workers’ Compensation and Compliance, Sedgwick
Some claims are truly catastrophic in nature. These are the rare, unfortunate instances in which a traumatic accident occurs resulting in a life-altering injury. Identifying and engaging the critical stakeholders and subject matter experts needed from the onset results in the development and execution of a blue print necessary to put the claim on the right path to secure a good outcome. However, most complex claims are not initially defined as catastrophic. It is the claim’s progression and path that lead to the increased complexity. Hindsight is always 20/20 and it is easy to look back and see when a claim went in the wrong direction. Being able to recognize warning signs and effectively address issues in real time can make a profound difference in the overall outcome. Important steps to prevent claims from becoming complex include identifying key indicators and then deploying targeted strategies to mitigate and resolve them. The cases with the highest propensity for becoming complex claims frequently include opioid utilization, comorbidities, psychosocial issues, consequential injuries and litigation. Without the right approach and resources to help the employee recover, a simple wrist strain has the potential to become a complex claim.
You may have seen a chart in the hospital documenting a patient’s pain level from 0 to 10. It is only natural that we all want this to be 0. However, the mechanisms pursued to secure this goal are not always the most appropriate. The inappropriate use of narcotic type medications to treat work-related injuries can have an extreme impact on the employee’s quality of life. Increased claim costs and disability durations, increased likelihood of permanent impairment and resulting prolonged claim durations are all driven by unnecessary opioid use. Claims open greater than 180 days drive 80 to 90% of total claim costs and become unnecessarily complex. How can an examiner impact a physician’s philosophy on pain management and prescribing habits? Many states rely on pharmacy management and evidence-based medicine to guide what medications and treatments are appropriate for injuries, and some have adopted pharmacy formularies that disallow narcotic medication. Statutory and regulatory guidelines may help in this regard, but the bigger solution is education and collaboration. Deploying clinical experts to educate providers and negotiate an appropriate medication from the onset is the key. Looking out for the employee’s best interests and working with all stakeholders to map an appropriate treatment plan will stop unnecessary opioid use before it starts.
The impact of unrelated medical issues
Comorbidities are strong indicators that a claim could become complex. Some of the most prevalent comorbidities today are obesity, hypertension, type 2 diabetes and heart disease. Obesity coupled with a work injury to a lower extremity can present real challenges for the employee, employer and medical provider. Surgery can be delayed due to uncontrolled diabetes or hypertension. These issues result in more time lost from work, a greater likelihood for permanent impairment and higher medical costs. In some jurisdictions, the employer may be responsible for supplying the necessary care to get the comorbidity under control to facilitate recovery from the work-related injury.
It is also possible for the work injury to exacerbate unrelated medical conditions. Inactivity due to a painful joint injury can make regular exercise difficult and lead to weight gain and high blood sugar levels for a type 2 diabetic.
So, what is an examiner to do in these instances? How can they make an impact? The worst thing they can do is ignore the secondary medical issues. That will most certainly lead to the claim becoming complex. They must enlist the help of medical professionals such as nurse case managers and peer reviewers to help bridge group health efforts with the treatment plan for the work-related injury. The treatment must be harmonized so the employee can succeed in their recovery. However, it is not always easy and some instances will require a different approach to correctly apportion, separate and treat the unrelated health issues and the work-related injury. Second opinions and medical and legal evaluations may be required. This process can also be costly as it adds time and complexity to the claim. Assessing secondary medical issues can take months and all the while, the employee is not getting better and may start claiming additional illnesses or body parts as part of the original claim. In some instances, it becomes evident that the employee is not complying with the harmonized treatment plan. The employee’s participation is essential and without it, the claim will likely become complex. It is important for the examiner to identify these markers in real time and look to effectuate an immediate, appropriate resolution. It is important that the resolution helps mitigate future exposure while providing funds for future work-related treatment needs.
Improving outcomes when psychosocial issues are present
The ability to cope and apply an optimistic outlook to a rather challenging situation can set apart individuals who will recover quickly from those who will not. Examiners and medical providers can quickly gauge the presence of psychosocial issues during initial interactions with the injured employee. Symptom magnification, statements around an inability to recover or a heightened fear around the process are clear signs that these issues are present. In these cases, it can be challenging for the employee to relate to the claims team and the provider, and to participate actively in their care; making it more difficult for them to secure a good outcome.
Just like comorbidities, it is a huge mistake to ignore psychosocial issues. Doing so will almost guarantee the claim will become complex. Examiners often times are concerned that by recognizing and helping to treat these issues, their client will end up with an admitted psyche component. This is not necessarily the case and no psychological diagnosis is required to treat psychosocial impediments. Cognitive behavioral and problem solving therapy can help equip the employee with the tools required to succeed and medical professionals will provide exercises to promote a more positive outlook. Deploying this extra step at the right time can help the employee reach a better outcome and resolution.
Managing migratory claims
Some claims are catastrophic because of the nature of the incident or diagnosis, but there are also claims that migrate from ordinary to complex based on the injury expanding from one part of the body to another. There are some common threads with these migratory claims such as a diagnosis of continuous trauma, opioid drug use and litigation.
Consider this example of a migratory claim – an employee strains her wrist from continuous data entry, quickly develops tennis elbow, then a rotator cuff strain, later neck pain and then the other arm starts hurting due to overuse. The examiner’s job is to provide benefits for what is related to the work injury and separate out the rest, but that can be very difficult to do. Securing a substantive medical opinion very early on from the primary treating physician regarding what is related and effectively communicating this with the employee can help. These issues never get better with age. It is essential to reassure the employee of their remedies and avenues to receive appropriate care and lost time benefits both inside and outside of the workers’ compensation landscape. It is not about denying benefits to the employee, but really about which bucket those benefits will be paid out of. The claims administrator will pay for what is related to the workplace injury or illness out of the workers’ compensation bucket, and the non-work related matters will be paid for through disability and/or group health benefits.
A subsequent consequential diagnosis like arthritis, fibromyalgia or complex regional pain syndrome can be very challenging to handle. When an employee is diagnosed with a consequential medical issue that the examiner and employer do not feel is legitimate, they instinctively will want to dig in and defend the matter. This is reasonable and in some cases necessary as it is difficult to justify providing funds to resolve something that clearly appears non-industrial in nature. It is often difficult to quantify the value of these cases without a final report valuing permanency. However, the defense of the matter is often protracted and expensive while the employee’s consequential injury continues to progress and in most cases gets worse. A case that began with a reserve of $10,000 can quickly progress to $500,000 or more. It is important to recognize the adverse potential these consequential injuries pose and work to secure a resolution as early as possible.
Litigation can also result in migratory claims, complexity and higher costs. Once an attorney is involved, the claim costs will increase substantially related to lost time, permanent impairment benefits and medical costs. It is common for the initial legal filing, especially in states like California, to include additional body parts migrating from a specific injury to continuous trauma. Deploying strategies to avoid litigation is the best solution to control these costs and prevent the claim from becoming complex. However, this is not always possible. Once the claim becomes litigated, the focus should be on mitigation and resolution. The examiner must recognize, again in real time, when to push for the right resolution. In some instances, the parties can end up litigating disagreements over smaller less impactful items, for example whether or not the employee is entitled to mileage reimbursement for a period of self-procured treatment. Meanwhile, the claim progresses and a settlement that may have cost $50,000 quickly triples in value. The examiner must recognize “when to say when” and direct the defense counsel to resolve the claim at the right time so the value clearly matches the exposure.
Problems and solutions
It is easy to understand that if someone broke their leg in three places and hurts their back falling off a ladder, it is going to be an expensive, complex claim, but employers become disenchanted with the workers’ compensation process when a claim starts out as a lower back strain and two years later they have $750,000 in reserves.
Best practices should help in identifying the key markers around complex claims. Deploying a team approach that includes subject matter experts working together to develop the right plan can make the difference. This may include using predictive analytics, analyzing injury types, identifying comorbidities, flagging litigation combined with specific diagnosis, curbing opioid utilization and helping employees through psychosocial issues. Great claims resolution hinges on identifying these markers in real time and working to ensure the employee gets appropriate, quality medical care for the claim while mitigating and resolving unrelated matters.
About Edward Canavan
Mr. Canavan is the vice president of workers’ compensation and compliance with Sedgwick Claims Management Services, Inc. (Sedgwick) based out of Riverside, California. In this position, Edward’s responsibilities include providing subject matter expertise on workers’ compensation matters; assisting the organization with workers’ compensation best practices, jurisdictional compliance and activism; and providing consultation to our clients.
Edward has 20 years of experience in claims management. He joined Sedgwick in October 2001 as a claims supervisor and went on to serve in a variety of roles on some of our largest programs. Before joining Sedgwick, Edward worked for a third party administrator specializing in public entities.
Edward currently sits on the board of directors for the California Coalition on Workers’ Compensation and received a bachelor’s degree in business administration from California State University of San Bernardino. He holds ARM and AIC designations and possesses his self-insurance certification with the state of California.
Sedgwick Claims Management Services, Inc., is the leading global provider of technology-enabled claims and productivity management solutions. Sedgwick and its affiliated companies deliver cost-effective claims, productivity, managed care, risk consulting and other services to clients through the expertise of more than 12,000 colleagues in some 275 offices located in the U.S., Canada and the U.K. The company specializes in workers’ compensation; disability, FMLA and other employee absence; managed care; general, automobile and professional liability; property loss adjusting; warranty and credit card claims services; fraud and investigation; structured settlements; Medicare compliance solutions; and forensic investigations. Sedgwick and its affiliates design and implement customized programs based on proven practices and advanced technology that exceed client expectations. Sedgwick’s majority shareholder is KKR; Stone Point Capital LLC and other management investors are minority shareholders. For more, see www.sedgwick.com.