Author: WorkCompAcademy

A recent paper, Red Herrings and Medical Overdiagnosis Drive Large-Loss Workers’ Compensation Claims published by Keith Rosenblum, senior strategist for Workers’ Compensation Risk Control in Lockton’s Kansas City operation describes what all risk and claims professionals see time and again. The common musculoskeletal injury where recovery stalls, no treatment works and the injury becomes a “creeping catastrophe.”

“Five percent of injured workers account for 80 percent of the cost and lost time in workers’ compensation systems” according to the American College of Occupational and Environmental Medicine. “The majority of these workers end up on long-term disability following injuries that would not be considered serious at their outset.” One-third of Social Security Disability’s recipients are receiving benefits because of musculoskeletal disabilities. Low-back injuries are the most costly, and the most researched, musculoskeletal conditions. Lockton’s large claims database indicates that low back injuries represent 20 percent of all loss dollars. When looking at claims over $250,000, they represent 25 percent of loss dollars.

Studies have shown that in the Medicare population, spinal imaging (especially MRI) rose by a dramatic 300 percent in the last decade reported (1994-2004). During that period, more diagnoses have been based on detected “abnormalities” with a corresponding 300 percent increase in aggressive and expensive treatment. As a consequence, costs have increased roughly tenfold. A similar expense in delivering invasive treatments solely from these imaging studies in workers’ compensation is creating more large loss claims.

These results, according to Lockton, are ‘grossly disappointing’ because outcomes for workers have not improved. In fact, the availability of more precise imaging has meant that workers are disabled longer than historical baselines. Disability rates among working age Americans are higher than at any time in our country’s history, and the problem is getting worse. According to Lockton, If images showing structural abnormalities have not improved results, it looks like patients and medical professionals are going down the wrong path.

Based on the latest science, the Lockton pager says that many of these diagnoses are red herrings. In medicine, a red herring is a diagnosis made based on poor science or inaccurate criteria. False certainty is created, and the search for the actual problem ends. In chronic pain cases, imaging findings are often red herrings. The real source of pain and distress usually lies elsewhere, being generated by soft tissue or by the brain itself, or a combination. Medical overdiagnosis occurs when a physician labels a condition more serious than it truly is, attributing a usually benign condition to causes more serious than the scientific data and situation warrant. The medical literature suggests that in more than 90 percent of common situations, an alleged diagnosis based on MRI “abnormalities” represents medical over-diagnosis.

The American College of Physicians and the American Pain Society put together an independent panel of experts to systematically review world literature concerning low-back pain. Their findings noted many asymptomatic volunteers have changes in their spines that look exactly the same on MRI as spines of people with pain. The panel recommended that many common low-back diagnoses be completely abandoned. These included lumbar disc protrusion, lumbar disc herniation, lumbar spondylosis, and others. The panel advocated that these entities be replaced by the term “nonspecific low-back pain.” This can be interpreted as an acknowledgement that most anatomically based “diagnoses” for pain confer no medical benefit to the patient..

As a solution, the authors of the Lockton paper have been actively following, assessing, and piloting the integration of one of the innovative new models in diagnostic technology that addresses potential chronic pain cases in their various stages of development. “We have been able to definitively identify which of several possible sources is creating a specific worker’s pain by integrating NeuroPAS Global’s NP3 testing methodology along with behavioral medicine assessment in some of our clients’ claims processes. The resulting clarity has enabled more workers to be referred for appropriate physical rehabilitation or cognitive behavioral therapy in lieu of surgery and chronic opioids.” Some insurance carriers and TPAs are working toward or are starting to pilot these technologies earlier in the life of a claim.

Lockton concludes “From a claims perspective, we believe that intervening early in the claim (2-4 weeks) by engaging physicians to comply with medical treatment guidelines, diagnose patients complaints based more on evidence-based medicine and less on imaging studies where not recommended, will make a substantial impact on the 5 percent of workers’ claims and their 80 percent of costs.

Tiffany Shorter, 26, and Jabe Satterfield, 77, owners of the Green Cactus Collective Medical Marijuana Dispensary in Palmdale, were arrested on multiple felony counts of insurance fraud. The owners failed to carry workers’ compensation benefits for their employees and allegedly told a security officer to lie about his employment status after he sustained severe injuries from two separate robberies at the dispensary, leaving him without benefits and responsible for expensive medical bills.

In November of 2013 Arcenio Tavares, a 34 year old security officer, was shot three times while suspects wearing bandanas and hoodies robbed the dispensary. After he spotted the three males approaching with guns in their hands he drew his handgun, but was shot multiple times by one of the suspects. Despite being hit by the bullets, Tavares returned fire and the suspects ran off on foot. Sheriff’s Capt. Don Ford said at the time that the dispensary itself was illegal because such businesses are not permitted in unincorporated Los Angeles County. Shorter and Satterfield allegedly told their employee to lie to hospital personnel by saying he was a volunteer and not an employee, which made him ineligible for workers’ compensation insurance benefits. The employee, without workers’ compensation benefits and in fear of losing his job, continued working.

In December of 2013, the dispensary was robbed again and the same employee, while still recovering from gunshot wounds from the prior attack, was beaten with a firearm and sustained further injuries. Again, the lack of coverage by his employers left him without medical benefits and liable for all medical expenses.

Shorter and Satterfield are facing up to four years in prison if convicted and were booked into the Los Angeles Sheriff’s Department Palmdale Station. The Los Angeles County District Attorney’s Office is prosecuting this case. Shorter and Satterfield are due to appear in court on May 18, 2015 at the Criminal Courts Building, Department 30.

The Green Cactus Collective was located at 36153 Sierra Highway in Palmdale. A new medical marijuana dispensary now occupies that location but the D.A.’s office said it is not known whether Shorter and Satterfield are associated with the new business.

“This case serves as a reminder that workers’ compensation fraud is a costly crime for employees who are left uncovered when their employers cheat the system,” said Insurance Commissioner Dave Jones. “The costs of these crimes are passed on to consumers through higher rates and premiums and drain the state’s economy of billions of dollars annually.”

The Division of Workers’ Compensation (DWC) has posted draft interpreter fee schedule regulations to the online forum where members of the public may review and comment on the proposals. The draft regulations include:

1) A new fee structure. The fee structure is based upon a number of factors including whether the interpreter is certified, the language to be interpreted, and the forum where the interpreting occurs. The base rate for a certified Spanish interpreter is derived from the Federal Court rate. Higher rates are paid for certified interpreters of other languages. Lower rates are paid to provisional and non-certified interpreters.
2) Establishes objective, uniform rates resulting in faster bill payment without liens and protracted litigation. Independent bill review procedure will resolve residual disputes.
3) Emphasis on a qualified interpreter. The regulations require use of certified interpreters in all forums wherever possible, with restrictions on use of provisionally certified interpreters. This is to guarantee the injured worker is provided with a qualified interpreter.
4) Detailed billing information and billing codes. The regulations require interpreters to provide detailed billing information, and set forth specific billing codes, to be compensated. The billing information and codes require the interpreter to identify the event billed, the time charged, the language, and qualifications of the interpreter, in addition to other information specific to the particular situation.
5) Selection and arrangement of interpreters. The regulations provide clarity on the selection of, and arrangement for interpreters.

The proposed regulations require that the notice of hearing, deposition, medical-legal exam, or other setting shall include a statement explaining the right to have a qualified interpreter present if the injured worker does not proficiently speak or understand the English language. Where a party is designated to serve a notice, it shall be the responsibility of that party to include this statement in the notice. It shall be the obligation of the party or individual needing interpreter services to communicate the need for an interpreter to the claims administrator as soon as the need becomes known.

The fees for Spanish language certified interpreter for hearings and depositions are $210 for each half-day of service and $388 for each full-day of service. For a certified interpreter for hearings and depositions in all languages other than Spanish the fees are $240 for each half-day of service, and $418 for each full-day of service. “Half-day” means all or any part of a morning or afternoon session, when appearing at any Workers’ Compensation Appeals Board hearing, day-time arbitration, or when appearing at a deposition, all or any part of 3.5 hours, or when appearing at an evening arbitration, all or any part of 3 hours. “Full-day” means services performed which exceed one-half day, up to 8 hours.

However, the employer may negotiate for an agreed upon rate with an interpreter since the proposed regulations provide “Nothing in this section precludes an agreement for payment of interpreter services, made between the interpreter or agency for interpreting services and the claims administrator, regardless of whether or not such payment is less than, or exceeds, the fees set forth in this section.”

All interpreters who provide interpreter services at medical-legal exams shall include with the bill, a signed statement from the examining physician verifying time spent providing interpreter services beyond two hours. All interpreters at medical treatment appointments shall include with the bill, a signed statement from the treating physician verifying time spent providing interpreter services beyond one hour. Proof of certification may be requested by the claims administrator and shall be provided by the certified interpreter for the purposes of hearings and depositions if the interpreter is not listed on the State Personnel Board webpage.Proof of certification may be requested by the claims administrator and shall be provided by the certified interpreter for the purposes of medical treatment appointments and medical-legal exams if the interpreter is not listed in the CCHI or National Board website directory.

The forum can be found online on the DWC forums web page. Comments will be accepted on the forum until 5 p.m. on Thursday, May 7, 2015.

Many workers’ compensation risk managers are using predictive analytics to guide claim management for better treatment outcomes. A new study that shows a relationship between MRI findings and the development of chronic pain may be a new tool in the predictive analytics tool chest.

While most people should expect to fully recover from whiplash injuries within the first few months, about 25 percent have long-term pain and disability that lasts many months or years. Using special MRI imaging, Northwestern Medicine scientists have identified, within the first one and two weeks of the injury, which patients will go on to develop chronic pain, disability and post- traumatic stress disorder (PTSD). This is the earliest these patients have ever been identified, according to the scientists. The ability to identify these patients so early will enable faster and more specialized treatment, which could be particularly beneficial for the PTSD.

After one to two weeks of the injury, Northwestern scientists found unusual muscular changes in the chronic pain group using a sophisticated MRI that measures the fat/water ratio in the muscles. The imaging revealed large amounts of fat infiltrating the patients’ neck muscles, indicating rapid atrophy. The presence of fat in the muscle does not appear to be related to a person’s body size or shape.

“We believe this represents an injury that is more severe than what might be expected from a typical low-speed car crash,” said lead investigator James Elliott, assistant professor of physical therapy and human movement sciences at Northwestern University Feinberg school of Medicine. The study was published March 17 in the journal Spine. “This opens up a new door for research on whiplash,” Elliott said. “For a long time whiplash has been treated as a homogenous condition. Our study has shown these patients are not all the same; they have different clinical signs and symptoms.”

Whiplash-associated disorders from motor vehicle collisions affect more than 4 million Americans annually, harming their quality of life and costing an estimated $30 billion for medical/rehabilitative care per year.

The finding builds on previous research Elliott did as a post-doctoral fellow at the University of Queensland, Brisbane, Australia. That study, which used standard MRI imaging, also found a large amount of fat in neck muscles of whiplash patients at one and three months post injury. Those patients went on to develop chronic pain and disability.

Not everyone needs a MRI scan after a whiplash injury from a motor vehicle collision. However, these findings help physicians understand water/fat MRI, in tandem with other clinical signs/symptoms can be used to identify who is likely to develop post-traumatic stress disorder. This then could be used to justify the referral of the patient to a psychiatrist or psychologist, Elliott said. PTSD is a disorder caused by experiencing or witnessing a traumatic event. “These patients have shown to not respond well to traditional rehabilitation such as physical therapy,” Elliott said. “It appears that they may require a more concerted effort for pain management from their physician and help from a psychologist.” Emerging, yet preliminary evidence suggests this to be a reasonable strategy.

The findings may indicate the importance of changing standard imaging protocols to identify these individuals early and start accelerated treatment. Routine imaging does not reveal this fat infiltration in individuals with whiplash injuries.

A small preliminary study previously done by Elliott and Northwestern colleagues shows whiplash victims with chronic pain also have a high level of muscle fat in their lower legs, indicating muscle atrophy. Elliott hypothesizes these patients may have partially damaged their spinal cord. They reported feeling fatigued and clumsy when walking and weakness in their legs, with difficulty pushing hard on the gas pedal of a car or standing on their tiptoes. “We haven’t found an effective treatment for these folks with chronic whiplash, and I think it’s because we haven’t really figured out what’s wrong with them,” Elliott said.

The finding helps to demystify the condition and let individuals know their chronic pain is not all in their heads. A basic exam will not consistently show a fracture, herniated disc or ligament tear. “If you’re a whiplash patient with ongoing chronic pain, but no objective imaging finds anything wrong, people are frequently informed that nothing is wrong with them,” Elliott said. “It’s been a huge problem. That fat appears to be a response to an injury,” Elliott said. “What has actually been injured remains for us to find out. But now we know to look more deeply into the problem.”

The WCIRB has completed its report on workers’ compensation insurer loss and premium experience through December 31, 2014. This report is based on data reported to the WCIRB by insurers who wrote almost 100% of the statewide market.

The major findings of the report include:

1) California written premium for calendar year 2014 is approximately $16.5 billion – approximately 11% above the written premium reported for 2013 and 88% above the written premium reported for 2009.
2) The projected industry average charged rate per $100 of payroll for 2014 is $2.93. This is approximately 2% above the average rate charged for 2013 and 40% above the average rate charged for 2009. However, the average rate charged for 2014 remains approximately 53% less than the average rate charged for the second six months of 2003.
3) The WCIRB projects total ultimate losses and allocated loss adjustment expense (ALAE) for accident year 2014 to be $12.6 billion. While approximately 4% above the projection for accident year 2013 and 27% above the projection for accident year 2009, it remains below the highs experienced prior to the 2002 through 2004 reforms.
4) The WCIRB projects a preliminary ultimate accident year combined loss and expense ratio of 103% for 2014. Of this, 61% is attributable to the indemnity and medical loss ratio and 42% is attributable to the loss adjustment and other expense ratio. Like the projected 2014 loss and ALAE ratios, this projection is primarily a result of increased premium levels and relatively low claim severity growth in 2014.
5) The preliminary calendar year combined loss and expense ratio for 2014 reported by insurers is 105%, which is somewhat below the combined ratios for the last several years, but 2014 is the seventh consecutive year with a combined ratio over 100%.
6) The WCIRB projects indemnity claim frequency for accident year 2014 to be 1.2% above the frequency for 2013 and approximately 12% above the frequency for 2009. The frequency increases experienced over the last few years are largely attributed to increases in cumulative injury claims, late reported indemnity claims, claims involving injuries to multiple body parts, and claims originating in the Los Angeles area. See related report, Analysis of Changes in Indemnity Claim Frequency – January 2015 Update Report in the Research and Analysis section of the WCIRB website (www.wcirb.com).
7) The WCIRB projects the average severity of a 2014 indemnity claim to be approximately $84,000, which is generally consistent with the projected severities for the last several accident years.
8)The WCIRB currently projects the total statewide ultimate losses on all injuries that occurred on or before December 31, 2014 to be approximately $6.8 billion more than the amounts reported by insurers. These estimates are somewhat below those presented in recent prior summaries as a result of favorable loss development experienced in recent quarters.

The full report is available in the Research and Analysis section of the WCIRB website (www.wcirb.com).