Author: WorkCompAcademy

Sedgwick may have been established as a regional claims administrator in 1969, but it has since grown into a global provider of technology-enabled risk, benefits, and integrated business solutions, with 21,000 employees spread across 65 countries. The company’s solutions span from casualty risk to benefits, and property and loss adjusting to marine claims, alongside offering innovative technology platforms and global expertise in areas such as workers’ compensation, liability, property, disability, and absence management.

The Sedgwick Institute serves as an incubator for some of the best and brightest minds to advance the conversations that affect all the players in our industry, including injured and ill members of the workforce, insurance carriers, employers, property owners, third party claims administrators, brokers, lawmakers and medical providers.

The Sedgwick Institute has released a new book that takes a critical look at the workers’ compensation market and what the future holds for the industry.

Authored by Dr. Richard A. Victor of the Sedgwick Institute, “SCENARIOS FOR THE 2030s: Threats and Opportunities for Workers’ Compensation Systems” discusses the workers’ compensation-related challenges faced by US employers, as well as injured workers, lawmakers, and practitioners of occupational medicine. The book highlights the importance of workers’ comp and how such systems have remained despite social and economic changes.

Dr. Victor was appointed to the senior fellow position at Sedgwick Institute in 2016. He is the former founder and CEO of the Worker’s Compensation Research Institute.

One of the key topics discussed in Victor’s book is that workers’ compensation insurance costs could triple from 2016’s levels, while injured workers see no real change to their benefits. Victor observed in his studies that both employers and worker advocates have agreed that the systems could be “out of balance,” despite attempts to file through legislation and regulatory reforms.

This book also explores some of today’s most perplexing questions:

— Is there a plausible scenario where many state workers’ compensation systems remain in a dangerously unbalanced state?
— And where the workers’ compensation reform process is unable to restore a reasonable balance: What might cause that imbalance? What are the threats? Where are the opportunities?
— Why will the workers’ compensation reform process be unlikely to deliver effective solutions?
— What might replace state workers’ compensation systems?

“I am very fortunate that the Sedgwick Institute supported this work. It provides an opportunity to provoke system stakeholders to think outside the box about upcoming challenges to be faced by a critical part of our nation’s social safety net,” commented Victor.

“With more than 30 years of experience in insurance and large global corporate risk management, I am pleased to have the Sedgwick Institute stand behind a book that truly shines a light on the complexity and importance of the industry and the challenges that it faces,” said Sedgwick Institute director and Sedgwick senior vice-president of strategic solutions Christopher E. Mandel.

The U.S. Supreme Court examined Obamacare for the fifth time on Tuesday. This time the case involves a group of insurers who are claiming the government (and thus taxpayers) owe them $12 billion in promised payments for the costs of providing Obamacare.

The Affordable Care Act promised to partially reimburse insurers if they lost money by covering people with preexisting conditions. The law said that the government “shall” make these payments. But in 2015, Congress attached riders to appropriations bills barring the use of the money for the promised payments.

The consequences were profound. By 2017 three-quarters of the original insurance providers were out of business, and several others stopped participating, leaving just six insurance providers and skyrocketing costs.

The insurers went to court, contending the government had cheated them of $12 billion in promised payments. The effort was to compel the Department of Health and Human Services to make the payments. Insurers involved in the case include Moda Health, Blue Cross and Blue Shield of North Carolina, Maine Community Health Options and Land of Lincoln Mutual Health Insurance Company.

Lower courts split on the merits of the legal claims. Oregon-based Moda Health won a $200 million judgment, but the $70 million claim from the now-defunct Land of Lincoln Health was rejected. A divided appellate court last June ruled against the insurers in a combined case, finding that Congress clearly took action to prevent federal payouts to the program.

Earlier this year the U.S. Supreme Court agreed to have the final word on the dispute. Oral argument was heard this week.

Inside the Supreme Court, lawyer Paul Clement, representing the insurers, told the justices that the case involves a “massive government bait-and-switch.”  When the government makes a promise to pay money, he said, it has to “keep its promise.”

Chief Justice John Roberts chimed in: You claim the insurance companies were “basically seduced” into this program, but they have good lawyers. Why didn’t they “insist upon an appropriations provision” in the law before putting themselves “on the hook for $12 billion?”

Clement replied that when the law was written in 2010, anyone who looked at the money-mandating language would have thought that was sufficient. “Now could it have been better … belt and suspenders,” asked Clement. “Sure, but it’s good enough.”

And so went the back and forth arguments. The case is now under submission, and the Supreme Court will decide the case, for or against the insurance companies, shortly.

Kirk Hollingsworth was involved in a fatal accident while working for defendant Heavy Transport, Inc. in June 2016. His wife, Leanne Hollingsworth, and son, Mark Hollingsworth, filed a wrongful death complaint in superior court on January 22, 2018.

Plaintiffs alleged that Heavy Transport did not have workers’ compensation insurance. They also alleged that defendant Bragg Investment Company purported to have merged with Heavy Transport in 1986, but that the two companies had always maintained separate operations. Plaintiffs asserted that Bragg “sought to extend Worker’s Compensation Benefits” to them. Plaintiffs also alleged that defective Bragg equipment contributed to the incident.

On March 14, 2018, Bragg and Heavy Transport filed an application for adjudication of claim with the WCAB. The application listed Bragg as the employer, included insurance information, and noted that a lawsuit had been filed.

Bragg and Heavy Transport demurred to plaintiffs’ complaint. They asserted that Heavy Transport was a fictitious business name for Bragg, and therefore they were the same entity. Bragg had a workers’ compensation policy that covered the accident, so plaintiffs’ action was barred by workers’ compensation exclusivity. The Superior Court overruled the demurrer.

In December 2018 the WCAB determined that the accident had occurred in the course of decedent’s employment. The WCAB then set a hearing for February 19, 2019 to determine if any applicable workers’ compensation insurance covered the incident.

Defendants made an application to the Superior Court that the civil case be stayed until the WCAB determined the insurance issue, which would then determine which tribunal had exclusive jurisdiction. Plaintiffs also had filed a motion with the WCAB to stay those proceedings, but rather than grant the motion, the WCAB set the case for trial before a WCAB arbitrator on June 6, 2019, on the issue of insurance coverage. The Superior Court conceded jurisdiction to the WCAB on the issue of insurance coverage.

Plaintiffs then filed a petition for writ of mandate in the Court of Appeal , and requested an order staying the June 6 arbitration scheduled in the WCAB proceeding. It issued an alternative writ and an order staying the WCAB proceedings, and requested briefing from the parties.

This case presented a relatively simple question: Which tribunal – the superior court or the WCAB – should resolve the questions that will determine whether the superior court or the WCAB has exclusive jurisdiction over plaintiffs’ claims?

The Supreme Court in Scott v. Industrial Acc. Commission (1956) 46 Cal.2d 76, 81, decided this issue in 1956, and held that whichever tribunal exercised jurisdiction first should make the necessary findings to determine which tribunal has exclusive jurisdiction over the remainder of the matter.

The Court of Appeal followed that rule, and found that the trial court erred by deferring to the WCAB to determine jurisdiction in the published case of Hollingsworth et al., v. The Superior Court of Los Angeles County et al., (2019) 84 Cal.Comp.Cases 718.

The WCAB argued the statement in Sea World Corp. v. Superior Court (1973) 34 Cal.App.3d 494, at p. 501 that “[p]recedential jurisdiction” – concurrent jurisdiction to determine exclusive jurisdiction – “may be the subject of waiver by the court having it.”

In Sea World the court cited Scott and several similar cases, and noted that “the court where jurisdiction first attaches may yield it, and that it is the right of the court to insist upon or waive its jurisdiction.” Here, however, the evidence does not support a finding of waiver or estoppel, and neither the WCAB or defendants assert facts to support such a finding.

To the contrary, from the initiation of the action, plaintiffs and defendants consistently asserted their respective positions regarding jurisdiction, unlike the employer in Sea World. Thus, waiver or estoppel does not compel us to depart from the rule in Scott.

Here, the superior court exercised jurisdiction first. Plaintiffs’ complaint was filed on January 22, 2018, and defendants’ demurrer was filed on March 5, 2018. Defendants’ WCAB application was filed on March 14, 2018. Under Scott, the appropriate tribunal to determine the question of exclusive jurisdiction is the superior court, because that tribunal exercised jurisdiction first.

The  FDA is approving new drugs so fast that companies are now preparing for a green light months in advance of the scheduled decision date, a pace that’s helping patients with rare or untreatable diseases but raising alarm among consumer advocates.

Global Blood Therapeutics Inc., maker of a new sickle cell disease drug called Oxbryta, built a booth to showcase the medicine at the annual meeting of the American Society of Hematology that begins this weekend — even though the Food and Drug Administration’s deadline for approval was Feb. 26.

The move paid off: Oxbryta was given the go-ahead by the FDA on Nov. 25, almost three months ahead of schedule, and the branded booth will make its debut at the ASH conference in Orlando, Florida, on Saturday.

Oxbryta’s approval added to a growing number of breakthrough products that have beaten their FDA deadlines by weeks and sometimes months. For normal medicines, the agency typically has 10 months to issue a ruling. For those with exceptional benefits, or that treat conditions with few existing therapies, it offers a priority review that takes just six months. From mid-October to mid-November, the agency approved five medicines in as little as eight weeks.

The shift is emerging as the FDA is approving new drugs at a record pace, and breakthroughs in biotechnology and genetics are enabling drug companies and their scientists to provide more specific data to federal regulators.

But even as drugmakers, investors and patients cheer on the agency’s pace, patient-safety advocates argue that speed comes at a price. Studies show medicines approved on a faster time line are more likely to have safety problems emerge after they become broadly available, while other treatments offer fewer benefits than anticipated.

While the Trump administration has focused on reducing regulation across the U.S., the FDA’s new-found speed had its genesis more than a quarter-century ago. Drugmakers agreed to pay the agency user fees in return for firm deadlines after years of wild guesses. Congress and the FDA layered on programs providing incentives for drug developers to craft products for patient groups with critical unmet needs, especially for rare conditions.

It’s not just speed. The FDA also is approving more drugs, hitting a record 59 new therapies in 2018. Almost three-fourths received a priority review. That, combined with more efficient data collection, is responsible for the faster FDA action, said Aaron Kesselheim, a professor at Harvard Medical School. Companies are also communicating earlier and more often with the agency, which can head off issues at preliminary stages and help them get products through on the first attempt, he said.

Vertex Pharmaceuticals Inc.’s Trikafta, a triple combination of drugs to treat cystic fibrosis, won FDA approval in October, five months earlier than expected. Investors dubbed it an early Christmas gift from the FDA.

Clearance for Novartis AG’s Adakveo, another new medication for sickle cell disease, came in November. It was 62 days ahead of the FDA’s deadline, known as the PDUFA date. BeiGene Ltd.’s Brukinsa was approved three months ahead of schedule for mantle cell lymphoma.

Access to care is a major concern in all healthcare systems, as well as workers’ compensation programs that are mandated to provide local care under MPN rules. Although hospitals can improve financially when they join larger health systems, the merger may also reduce access to services for patients in rural areas, according to a new RAND study reported in a story by Reuters Health.

After an affiliation, rural hospitals are more likely to lose onsite imaging and obstetric and primary care services, researchers report in a special issue of the journal Health Affairs devoted to rural health issues in the United States.

“The major concern when you think about health and healthcare in rural America is access,” said lead study author Claire O’Hanlon of the RAND Corporation in Santa Monica, California.

More than 100 rural hospitals in the U.S. have closed since 2010, the study authors write.

“Hospitals in rural areas are struggling to stay open for a lot of different reasons, but many are looking to health-system affiliation as a way to keep the doors open,” she told Reuters Health by email. “But when you give up local control of your hospital to a health system, a lot of things can change that may or may not be good for the hospital or its patients.”

Using annual surveys by the American Hospital Association, O’Hanlon and colleagues compared 306 rural hospitals that affiliated during 2008-2017 with 994 nonaffiliated rural hospitals on 12 measures, including quality, service utilization and financial performance. The study team also looked at emergency department and nonemergency visits, long-term debt, operating margins, patient experience scores and hospital readmissions.

They found that rural hospitals that affiliated had a significant reduction in outpatient non-emergency visits, onsite diagnostic imaging technologies such as MRI machines, and availability of obstetric and primary care services. For instance, obstetric services dropped by 7-14% annually in the five years following affiliation.

At the same time, the affiliated hospitals also experienced an increase in operating margins, from an average baseline of -1.6%, typical increases were 1.6 to 3.6 percentage points, the authors note. The better financial performance appeared to be driven largely by decreased operating costs.

Overall, patient experience scores, long-term debt ratios, hospital readmissions and emergency department visits were similar for affiliating and non-affiliating hospitals.

“Research on these mergers has been mixed, with some suggestions they are beneficial for the community (access to capital, more specialty services, keep the hospital open) and other evidence that there are costs (employment reductions, loss of local control, increase in prices),” said Mark Holmes of the University of North Carolina at Chapel Hill, who wasn’t involved in the study.