AORMA Worker s Compensation Claims Review and Loss Control Strategies

(1)

AORMA Worker’s Compensation Claims

Review and

Loss Control Strategies

January 19, 2013

Cindy Parker

Vice President of Operations

Sedgwick Claims Management Services

Brent Escoubas, CSP

Vice President

(2)

Agenda



_{SB 863}



_{AORMA WC Loss Summary}

(3)

SB 863

IN FOCUS

(4)

Background

• According to a recent Workers’ Compensation Insurance Rating Bureau (WCIRB) study

Costs are

up 41%

since 2005 - when costs

were at their lowest level - and

14 %

above

the highest level prior to the

reforms

(5)

Background

• 9/18/2012 - California Governor Edmund Brown

signed into law SB 863, a comprehensive

workers’ compensation reform package designed

to bring balance to the workers’ compensation

system.

• The Governor challenged the legislature to pass a

reform bill that would decrease loss adjustment

costs and eliminate areas of abuse while

increasing benefits to injured employees

• Representatives from labor and management

negotiated a reform package, which was

(6)

(7)

Permanent Disability

• Increases aggregate permanent disability (PD) benefits phased in over a 2-year period

• Adjusts the formula for calculating the benefit amount so that:

–

Compensation amounts more accurately reflect loss of future earnings

–

Ensures that no class of injured workers receive a lower award than under the present system

• Weekly PD rates for injuries occurring on/after 1/1/2013 will vary from $230 to

$290 per week depending on the percentage of disability

• For injuries on/after 1/1/ 2014 the rate will increase to $290 a week regardless of the

percentage of disability

(8)

Permanent Disability

• diminished future earning capacity (DFEC) from the determination

of permanent disability; all PD will be multiplied by 1.4

• the requirement to increase or decrease permanent impairment

benefits by 15% due to an offer of return to work for dates of

injury on or after 1/1/2013

• psychological, sleep disorder, and sexual dysfunction “add-ons” to

primary injuries that do not originally include these injuries when

calculating the level of PD; requires all appropriate medical

treatment for these injuries

This will apply to all dates of injury on/after 1/1/2013

ELIMINA

(9)

Independent

Medical Review

(10)

Independent Medical Review (IMR)

• Allows the employee to appeal a utilization review decision or MPN dispute by

requesting an Independent Medical Review (IMR)

• Eliminates the WCAB’s authority to adjudicate medical treatment disputes that

are directed to the IMR process

• Establishes a hierarchy of standards that are to be applied by the IMR, with the

Medical Treatment Utilization Schedule as the highest source for evaluating the

appropriateness of medical treatment

• Makes the results of the IMR process binding on all parties, absent clear and

convincing evidence of fraud or conflict of interest

(11)

Independent Medical Review (IMR)

• The California Division of Workers Compensation is currently in contract

negotiations with Maximus

• Maximus, based out of Reston VA, reported revenues of $929.6 million in 2011

and is anticipated to surpass the billion mark for 2012

• Maximus is currently utilized by the CA Department of Managed Care Health to

provide IMR services relating to group health disputes

(12)

(13)

Independent Bill Review (IBR)

• Provider who disagrees with the amount paid by the employer must request that

the employer reconsider its findings within 90 days of receipt of the explanation

of benefits

• If the only dispute is the amount of the payment and the provider does not

request a second review within 90 days the bill shall be deemed satisfied and

neither the employer nor the employee shall be liable for any further payment.

• The employer must respond with a final written determination on each of the

items or amounts in dispute with 14 days of a request for second review.

• Any additional payment owed must be paid within 21 days of receipt of the

(14)

Independent Bill Review (IBR)

• Establishes an independent bill review process to make medical billing

disagreements process similar to the IMR process, limiting the need for lien

filing.

• If the only dispute is the amount of payment and the provider has received a

second review that does not resolve the dispute the provider can request an

independent bill review within 30 days of receipt of the second review.

(15)

Independent Bill Review (IBR)

• Duplicate submissions of medical service itemizations, for which an explanation

of review was previously provided, shall require no further or additional

notification or objection by the employer to the medical provider and shall not

subject the employer to any additional penalties or interest for failing to

(16)

(17)

Liens

• Prohibits the filing of a lien for matters that are subject to the IMR and IBR

dispute resolution process

• Prohibits the ability of medical providers to recover for unauthorized treatment

for a known industrial condition

• Establishes a $150 filing fee in order to file a lien and a $100 activation fee for

legacy liens, recoverable if the lien claimant prevails

• Adopts statutes of limitation within which liens must be filed

(18)

Fee Schedules

• Adopts a fee schedule for ambulatory surgery centers (ASCs), home care

services, and photocopy services.

• Requires the Administrative Director to adopt a medical fee schedule

methodology based on the Medicare Resource Based Relative Value Scale

(RBRVS) system, with specified modifications for California’s workers’

compensation system, including geographic adjustments

(19)

Medical Care

• Closes a loophole that allowed third parties and hospitals to charge twice for

implantable surgical hardware

• Repeals the requirement that a second opinion be obtained in cases of spinal

surgery, and instead would resolve questions of appropriateness of spinal

surgery in the IMR process

(20)

Interpreters

• Requires that the injured worker request interpreting services from the

employer when needed. This will allow the employer to channel services.

• Provides that the employer must pay for needed interpreter services when

requested by the injured worker.

(21)

Return to Work

• Modifies the Supplemental Job Displacement Benefit rules to solidify the

reimbursement amount for all injuries to $6,000

• Prohibits “cashing out” the retraining voucher in a settlement

• Specifies that an injury that occurs during retraining does not constitute a

compensable injury

(22)

Self Insurance

• Professional employer organizations and temporary service agencies will not be able to apply for self

insurance in the state on or after 1/1/2013

• A certificate of consent to self-insure shall not be issued after 1/1/2013, to any professional employer

organization or temporary services employer

• All self insurance certificates for these employers will be cancelled as of 1/1/2015

• The minimum self-insured annual security deposit will no longer be based on a percentage of the

estimated future liability

• Deposits will be based on an actuarial report that each self insured entity will calculate and produce as

of 12/31 of each year

(23)

(24)

Top Five Body Part Groups

System-wide

Body Part Claim Count Total Incurred Upper Extremity (including shoulders) 443 $1,190,587.41

Lower Extremities 239 $ 717,929.62 Spine (including hips/pelvis) 136 $ 426,797.22 Head, Face & Mouth 115 $ 66,834.28 Trunk & Internal Organs 27 $ 44,097.61

Body Part Claim Count Total Incurred Upper Extremity (including shoulders) 443 $1,190,587.41

Lower Extremities 239 $ 717,929.62 Spine (including hips/pelvis) 136 $ 426,797.22

Psyche 12 $ 102,330.10

Head, Face & Mouth 115 $ 66,834.28

443

239 136

115 27

Upper Extremity (including shoulders)

Lower Extremities

Spine (including hips/pelvis) Head, Face & Mouth

Trunk & Internal Organs

$1,190,587.41

$717,929.62 $426,797.22 $102,330.10

$66,834.28

Upper Extremity (including shoulders)

Lower Extremities

Spine (including hips/pelvis)

Psyche

(25)

Top Five Incident Types

System-wide

Incident Type Claim Count Total Incurred Cut / Puncture / Scrape 218 $117,208.87 Slip / Trip / Fall 173 $473,795.02 Lifting /Carrying 135 $545,061.65 Struck by / Against 116 $494,683.17

Burn 63 $ 18,597.81

Incident Type Claim Count Total Incurred Lifting /Carrying 135 $545,061.65 Struck by / Against 116 $494,683.17 Slip / Trip / Fall 173 $473,795.02 Repetitive Action / Motion 48 $393,390.27 Exposure / Other 40 $349,457.49

218

173

135

116

63

Cut / Puncture / Scrape Slip / Trip / Fall Lifting /Carrying Struck by / Against Burn

$545,061.65

$494,683.17

$473,795.02

$393,390.27

$349,457.49

Lifting /Carrying Struck by / Against Slip / Trip / Fall

(26)

Top Five Body Part Groups

Location Comparison – by Claim Count

Auxiliary C

Body Part Claim Count Total Incurred Upper Extremity (including

shoulders) 58 $ 38,461.01 Head, Face & Mouth 20 $ 15,714.25 Lower Extremities 19 $ 9,899.92 Spine (including hips/pelvis) 14 $ 17,623.12 Trunk & Internal Organs 3 $ 633.74 Auxiliary B

Body Part Claim Count Total Incurred Upper Extremity (including shoulders) 25 $ 6,593.62 Lower Extremities 15 $ 13,316.30 Spine (including hips/pelvis) 11 $ 16,339.23 Trunk & Internal Organs 4 $ 993.44 Head, Face & Mouth 3 $ 1,301.27 Auxiliary A

Body Part Claim Count

Total Incurred Upper Extremity (including

shoulders) 22 $ 21,985.54 Lower Extremities 18 $ 26,373.95 Head, Face & Mouth 8 $ 5,775.14 Spine (including hips/pelvis) 6 $ 16,408.99 Trunk & Internal Organs 3 $ 480.61

22 18 8 6 3 Upper Extremity (including shoulders) Lower Extremities

Head, Face & Mouth

Trunk & Internal Organs 25 15 11 4 3 Upper Extremity (including shoulders) Lower Extremities Spine (including hips/pelvis) Trunk & Internal Organs Head, Face & Mouth 58 20 19 14 3 Upper Extremity (including shoulders) Head, Face & Mouth

Lower Extremities

(27)

Top Five Body Part Groups

Location Comparison – by Total Incurred

Auxiliary A

Body Part Claim Count Total Incurred Lower Extremities 18 $ 26,373.95 Upper Extremity (including shoulders) 22 $ 21,985.54 Spine (including hips/pelvis) 6 $ 16,408.99 Head, Face & Mouth 8 $ 5,775.14 Trunk & Internal Organs 3 $ 480.61

Auxiliary B

Body Part Claim Count Total Incurred Spine (including hips/pelvis) 11 $ 16,339.23 Lower Extremities 15 $ 13,316.30 Upper Extremity (including shoulders) 25 $ 6,593.62 Head, Face & Mouth 3 $ 1,301.27 Trunk & Internal Organs 4 $ 993.44

Auxiliary C

Body Part Claim Count Total Incurred Upper Extremity (including shoulders) 58 $ 38,461.01 Spine (including hips/pelvis) 14 $ 17,623.12 Head, Face & Mouth 20 $ 15,714.25 Lower Extremities 19 $ 9,899.92 Trunk & Internal Organs 3 $ 633.74

$38,461.01 $17,623.12 $15,714.25 $9,899.92 $633.74 Upper Extremity (including shoulders) Spine (including hips/pelvis)

Head, Face & Mouth Lower Extremities $16,339.23 $13,316.30 $6,593.62 $1,301.27 $993.44 Spine (including hips/pelvis) Lower Extremities Upper Extremity (including shoulders) Head, Face & Mouth $26,373.95 $21,985.54 $16,408.99 $5,775.14 _$480.61 Lower Extremities Upper Extremity (including shoulders) Spine (including hips/pelvis)

(28)

Top Five Incident Types

Location Comparison – by Claim Count

Auxiliary A

Body Part Claim Count Total Incurred Slip / Trip / Fall 15 $ 7,149.34 Cut / Puncture / Scrape 13 $ 1,980.01 Lifting /Carrying 9 $116,513.18 Burn 6 $ 541.97 Strain 4 $ 79,182.74

Auxiliary B

Body Part Claim Count Total Incurred Cut / Puncture / Scrape 16 $ 2,918.68 Lifting /Carrying 11 $ 7,559.51 Slip / Trip / Fall 8 $ 14,715.52 Burn 7 $ 2,076.39 Struck by / Against 5 $ 2,323.32

Auxiliary C

Body Part Claim Count Total Incurred Cut / Puncture / Scrape 30 $ 11,912.60 Slip / Trip / Fall 17 $ 47,961.86 Struck by / Against 13 $ 8,593.05 Lifting /Carrying 12 $ 11,941.98 Burn 9 $ 3,838.25 30 17 13 12

9 Cut / Puncture / _Scrape Slip / Trip / Fall

Struck by / Against Lifting /Carrying Burn 16 11 8 7 5 Cut / Puncture / Scrape Lifting /Carrying

Slip / Trip / Fall

Burn Struck by / Against 15 13 9 6

4 Slip / Trip / Fall Cut / Puncture / Scrape Lifting /Carrying

Burn

(29)

Top Five Incident Types

Location Comparison – by Total Incurred

Auxiliary A

Body Part Claim Count Total Incurred Lifting /Carrying 9 $116,513.18 Strain 4 $ 79,182.74 Repetitive Action / Motion 4 $ 19,834.48 Twist 2 $ 15,484.91 Slip / Trip / Fall 15 $ 7,149.34

$116,513.18 $79,182.74 $19,834.48 $15,484.91 $7,149.34 Lifting /Carrying Strain Repetitive Action / Motion Twist

Slip / Trip / Fall

Auxiliary B

Body Part Claim Count Total Incurred Fall from Elevation 1 $ 15,242.04 Slip / Trip / Fall 8 $ 14,715.52 Lifting /Carrying 11 $ 7,559.51 Bending,Stooping,Squatting,

Climbing 4 $ 6,130.16 Cut / Puncture / Scrape 16 $ 2,918.68

$15,242.04

$14,715.52 $7,559.51

$6,130.16 $2,918.68

Fall from Elevation

Slip / Trip / Fall

Lifting /Carrying

Bending,Stooping,Squatting, Climbing

Cut / Puncture / Scrape

Auxiliary C

Body Part Claim Count Total Incurred Slip / Trip / Fall 17 $ 47,961.86 Stress: Emotional / Psychological 2 $ 26,920.01 Lifting /Carrying 12 $ 11,941.98 Cut / Puncture / Scrape 30 $ 11,912.60 Running / Walking 4 $ 10,002.04 $47,961.86 $26,920.01 $11,941.98 $11,912.60 $10,002.04

(30)

Did you know…

30 Alliant Risk Control

provides safety

consulting services

for

all

AORMA

members at no

(31)

Safety Self-Assessment

1. Does your Auxiliary have a current Safety Program

and IIPP?

2. Do all new employees receive safety related training

prior to beginning work?

3. Are accident investigation reports conducted? And

are they conducted in within 24 hours?

4. How does your Auxiliary record/report a near miss?

(32)

32 Safety Self-Assessment

6. Is safety training fully documented and kept on file?

7. Are safety assessments shared with employees? How

often?

8. Are emergency evacuation procedures up to date?

9. Does the Auxiliary have a Cal/OSHA inspection

policy?

(33)

(34)

(35)

(36)

(37)

(38)

(39)

(40)

(41)

(42)

42 IIPP Introduction



_{Title 8 California Code of Regulations Section}

3203(T8 CCR 3203)

Injury/Illness Prevention Program(IIPP)



Each Auxiliary is required to have a written

program.

(43)

Injury Illness Prevention Program

1. Responsibilities under the IIPP

2. Compliance

3. Communication of Workplace Hazards

4. Hazard Assessment

5. Accident/Exposure Investigations

6. Hazard Correction

7. Training and Instruction

8. Recordkeeping

(44)



_{Hazard Assessment and Regulatory}

Compliance (Cal/OSHA)



_{Slip/Fall Assessments}



_{Kitchen Safety}



_{Workers’ Compensation and Liability Claims}

Audits



_{Premises Liability Loss Control Audits}



_{Fire and Property Protection}



_{Accident Investigation}



Custom Specific Self-Inspection Programs

and Checklists



_{Ergonomic Evaluations and Program}

Development

44

(45)

Custom Programs



_{Golf Cart Training}



_{Special Event Risk Management}



Customer Service



_{Fraud Prevention}



_Ergonomics

(46)

46 Loss Control Solution Center Hotline



_{Live telephone advice, research, problem solving by loss}

control experts.

(47)

(48)