Bowers & Luna: Rerouting State's Workers' Compensation Claims Outcomes

Monday, April 10, 2023 | 0

In the California workers’ compensation world where presumption and AOE/COE standards are ever-changing along with statutes and regulations, industry experts are making a case for the need to improve health and claims outcomes. 

Carlos Luna

Dave Bellusci, actuary at the California Workers’ Compensation Insurance Rating Bureau, presented data during the 2023 Division of Workers’ Compensation Educational Conferences that indicate claims close at a much slower rate in California than they do in other states. California is a significant outlier and has one of the highest indemnity claim durations in the nation.

The WCIRB report says that in California, it takes approximately seven years for a carrier to close 90% of its claims, compared to three years in other states. The four duration drivers are an unusually high percentage of increased partial permanent disability claims; unique-to-California cumulative trauma claims; the number of claims requiring medical-legal evaluations; and a significant difference among California regions. How then does California address the outliers and drivers to combat rising indemnity, medical and legal costs? 

A small percentage of workers’ compensation claims account for a disproportionate amount of system expense, claims administration time and effort. A considerable number of these “catastrophic”1 claims involve injured workers who are diagnosed with a “chronic pain” syndrome. 

Settlement likely comes at a much higher cost, as delayed claim closures generally equate to higher dollar settlement values. Claims become chronic pain cases, “add-on compensatory issues” and often incur exorbitant legal fees by the time the case is brought toward the posture of closure and settlement.

Steering the claim forward in the right direction at the onset can avoid significant costs and outliers. At the beginning of any claim, if the claim heads in the wrong direction, immediate action and intervention should be employed to reroute its course. Risk factors for delayed recovery can be identified early, and compelling data exists that quality nurse case management can prevent and reverse these outlier costly claims. 

The solution for California’s higher share of PPD claims is to refer the claim to nurse case management early. A study conducted by Liberty Mutual shows that early medical case management contact with the injured employee decreases TTD by approximately 2.7 weeks. This is a direct product of establishing a relationship with the injured worker that promotes value and care to the employee.

In addition to establishing a productive collaborative rapport with the injured worker, effective nurse case management also drives appropriate health outcomes by establishing appropriate expectations with the medical provider. This results in an increased focus on what the injured worker can do and sets the stage for an expedited return to work.

When a claim has alleged cumulative trauma, it can often easily become bogged down in the litigation swamp of depositions and multiple medical-legal evaluations. Chronic pain and other severe problems are often the result of delays in compensability decisions and proper care. These problems can be ameliorated with faster determination of compensability and faster authorizations of proper care, all of which can be facilitated by a nurse case manager. 

“The concept of cumulative trauma is unique to the California workers' compensation system," said Bill Zachry, a leading expert on cumulative trauma claims. "Properly managing CT claims is imperative to controlling claims costs in California.”

The American College of Occupational and Environmental Medicine reports that adverse and harmful effects of prolonged work absence often lead to physical and psychosocial decline. Studies have confirmed that the likelihood of returning to work decreases with each day off work. The nurse case manager, who is an advocate for the total workers’ compensation process, can assist to mitigate a downward and delayed physical and psychosocial spiral by also becoming a liaison and advocate for the employee. This often results in the prevention of further cumulative trauma disability.

The need for occupational medicine-trained physicians continues, as there are higher numbers of claims involving medical-legal reports. Following California reforms, a change in the workers’ compensation physician landscape led to practice changes in which physicians declined to see or treat workers’ compensation cases. Deferral to QME/AME physicians causes significant delays and cost to the claim. Effective nurse case management engages and empowers the employee and builds trust in the medical relationship. It ensures that treaters respond to and address appropriate written documentation to keep the claim moving forward, thereby reducing the need for medical-legal reports.

The differences between the Northern and Southern California regions are large and vast. An experienced expert nurse case manager can work diligently with the injured worker, the providers and the applicants' attorney to help restore the injured employee back to health and to work. Nurses who understand the claims and medical process across all regions prevent claim and treatment delays. By advocating for the process, irrespective of the geographical region, nurses can impact claims for position toward claim closure, resolution and settlement by ensuring that the required and necessary documentation is provided in any region in the state.

“In my 50-plus years of medical practice as a physiatrist and pain medicine specialist, there is no question in my mind whatsoever that quality nurse case management improves outcomes and lowers costs,” said Dr. Steven Feinberg, of Feinberg Medical Group in Palo Alto.

Our experience is that with quality intervention: 

• About 85% of claims close at full duty at 40 days (avoiding permanent disability ratings and addressing cumulative trauma issues early on).
• The litigation prevention rate is 98%.
• Earlier permanent and stationary or maximum medical improvement determinations set up claims to close.
• Highly skilled and bilingual nurses develop partnerships in regions where practitioners can rely on their expertise to move the case forward. Nurses are geographically located to cover and address the differences between California regions.

In conclusion, an underutilized and effective tool to reroute the four common duration drivers is early utilization and implementation of an experienced nurse case manager. Nurses can assist in mitigating permanent disability ratings, control cumulative trauma and add-ons, reduce the need for medical-legal reports by instrumentally working with physicians to address and document necessary claims requirements, and navigate requirements in all California regions.

Sue Bowers is the founder and chief experience officer for Choices Case Management. Carlos Luna is president and chief executive officer for Choices Case Management.