By Lisa Anne Bickford, Director, Government Relations, Coventry
In workers’ compensation, we study frequency and severity for insights into injury trends. Understanding how often injuries occur and how bad they are can help us find better ways to help injured workers. This same methodology can be applied when examining overall setbacks to the workers’ compensation system. Recent trends suggest there have been increases in the frequency and severity of major disasters that test how we care for injured workers. More than ever, proper disaster planning is necessary to ensure that the workers’ comp systems can rebound from catastrophe.
In just the past few years, natural disasters have generated startling headlines. In 2017, colossal hurricanes lashed the coasts of Florida, Puerto Rico, and Texas before scraping across enormous inland areas. The following year, in fall 2018, the deadliest U.S. wildfire in a century swept across Northern California, leveling an area the size of Chicago.
In dollars — an admittedly inadequate yardstick relative to the human toll involved — many of the most recent disasters have been among the worst recorded. In 2017, Hurricanes Harvey and Maria became the second- and third-most expensive hurricanes to strike the U.S. (Irma, which also hit in 2017, was fifth.) And California’s Camp Fire was the most expensive natural disaster in the world last year.
Scientists and government forecasters have indicated that we can expect increases in these types of harsh events. To better prepare for all types of disasters, the workers’ comp industry, regulators, and clinicians will need to construct more robust backup plans, more resilient systems, and more flexible rules for emergencies. They will also need to be ready for the surges in claims that major disasters can generate. Some states, pressed into action by experience, are responding by fortifying their regulatory frameworks. Other states could benefit from making similar preparations.
In Florida, for example, regulators are taking proactive steps to prepare for events that could compromise workers. The Sunshine State’s 8,400 miles of coastline, flat topography, and porous limestone foundation leave it susceptible to rising sea levels, storm surges, and massive sinkholes. In response, Florida has devised a regulatory mechanism through the Office of Insurance Regulation (OIR) that kicks in automatically when the governor’s office declares an emergency. The OIR is empowered to issue specific administrative orders without delay.
Texas adopted a different, yet no less effective, approach following the havoc that Hurricane Harvey delivered in the final days of August 2017. The state issued temporary administrative rules to ensure that injured workers could continue to receive care.
Despite facing its own challenges, including hampered communication issues, the Texas Department of Insurance (TDI) had to provide answers to the injured workers, medical providers, attorneys, claims administration organizations, and others who turned to the agency. TDI issued a benchmark regulatory response highlighting a number of temporary emergency measures, which remained in effect until January 2018. The measures included:
- Requiring carriers to continue benefit delivery in affected counties
- Waiving penalties/restrictions for emergency and non-emergency care with non-networked providers and payment for those services
- Extending deadlines for medical examinations
- Authorizing payments to pharmacies for up to a 90-day supply of prescriptions regardless of the most recent refill date
- Providing for expedited change-of-address processing
- Temporarily suspending a number of regulatory cutoff points, including claim notification and filing deadlines, medical billing deadlines, medical and income benefit payment deadlines.
Fires erupt in the west
The hurricanes that ravaged the U.S. in 2017 gave way to disasters of a different sort the following year. In the summer and fall of 2018, wildfires ripped across broad swaths of the West. The strongest wildfires in California history became emblematic. The notorious Camp Fire killed more than 80 people in November 2018; the fatalities surpassed the combined toll from the state’s previous worst three fires. The two-week inferno also destroyed more than 18,000 structures — more than were lost during the seven next most destructive fires.
As with the 2017 hurricanes, elected officials deployed emergency-response mechanisms. On November 8, 2018, Gavin Newsom, then the state’s acting governor and now governor, declared a state of emergency for Butte County, in California’s Central Valley. The state’s then-outgoing governor, Jerry Brown, issued an executive order to streamline recovery efforts. Within days, President Trump declared three of the hardest-hit counties federal disaster areas.
Health care leaders, clinicians, and administrators also jumped into response mode, even as many were forced to flee their own homes and workplaces. The Adventist Health Feather River Medical Center was located in the heart of the fire in Paradise, California. Health care workers in the area set up a makeshift clinic in a nearby parking lot in an attempt to help evacuated fire victims while portions of the hospital burned. Sadly, heroic as those efforts were, the hospital could not stave off the blow to its operations. In February 2019, Adventist issued the final paychecks to health workers whose positions were eliminated indefinitely while the hospital works to rebuild the portions the fire razed. Adventist helped hundreds of health workers relocate to other locations and spent $30 million to extend pay and benefits into early this year.
Next week we’ll discuss other lessons we can learn from these events to minimize disruptions to injured workers when disasters occur.
About Lisa Anne Bickford
Lisa Anne Bickford is the director of government relations and has over 20 years of broad-based experience in government affairs, information technology (including project management, process engineering and analysis), law, and management consulting. In her current role, Ms. Bickford provides workers’ comp and auto regulatory expertise across the United States, with special focus on California, Florida, Texas, Illinois, New York, and any state considering major regulatory reforms or bills with potential broad-reaching impacts.
Coventry offers workers’ compensation cost- and care-management solutions for employers, insurance carriers, and third-party administrators. With roots in both clinical and network services, Coventry leverages more than 30 years of industry experience, knowledge, and data analytics.