Tide TRACKER

A Word From Our Captain:

Plotting a New Course in the Wake of SB863 By Ed Taylor
The California Senate passed SB863 with precious few moments to spare in hopes that our workers compensation system will be able to avert a rate crisis in the midst of a hardening market. The WCIRB responded to its passage by maintaining the pure premium rate at its present level, citing that time will only tell how effective the reform and its implementation will be. That said, the seas are still fraught with the perils of litigation and case law that will invariably alter how these claims are handled. We here at RiskSolutions have been studying the bill since its inception and ultimate passage. There are a lot of perks as well as its share of gray areas, which will require some creative thinking. Were most excited about the provision that disallows sleep disorder and sexual dysfunction add-ons, which have been all the craze for the applicants bar. Not only that, but the 15% bump in permanent disability has been replaced by an across the board rate increase. Factor in the new Independent Medical Review process, which is poised to carve out and streamline medical utilization and billing disputes. Another exciting new development pertains to the new lien rules and fee schedules. In the upcoming years, we anticipate significant challenges and attacks on the new legislation. Yet, once the dust settles, it will be well worth the fight. We do anticipate a significant reduction in the overall costs

Helping to Navigate the Troubled Waters of Workers Compensation Fall 2012

Table of Contents
Five Benefits of Medical Expertise at the Time of Initial Injury pg 2 How to Turn Peer Pressure into an Asset .pg 4 The Interactive Process .pg 4 Knowing When to Fold .pg 6 Wrangling Reserves: XMod Revision With the WCIRB . pg 7
to defend these cases (fewer medical-legal exams) as well as better cost containment strategies, but it will not be without peril. Remember how quickly the Sandhagen case made an impact on Utilization Review we anticipate swift litigation on the Independent Medical Review process. The biggest pluses that we see are: MPN provisions MPNs are presumed valid if already approved by the Administrative Director. Independent Medical Review Free up the judges to make judicial decisions and allow doctors to make medical decisions. Permanent Disability No more 15% increase/ decrease; eliminating add-ons for psyche, sleep disorder and sexual dysfunction. Liens New regulations; filing & activation fees; statute of limitations is now stricter; liens will be

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automatically dismissed by operation of law; new penalty of perjury declaration now required. Fee schedules Interpreters, ambulatory surgery centers, voc rehab consultants, copy services and revisions to existing fee schedules. SJDB $6,000 cap; 2 year expiration date. Many more changes that well analyze and shed light on in the coming months. We are confident that with our signature diligence, adaptability and innovation, RiskSolutions will continue to be a valuable resource for policy holders, claims personnel and brokers alike. With every reform, it helps to have our collected knowledge, experience and wisdom to guide you through these uncertain waters and the eventual iceberg-like case law that will manifest along the way.
Ed Taylor, CEO and one of the founders of RiskSolutions Inc. has more than 35 years of experience in the risk management field. He brings a passion for safety and employer service to RiskSolutions. His goal is to provide a safe workplace for workers and to educate employers and brokers. The company name expresses Eds commitment to the industry of which he is a part. As the captain, Ed directs an outstanding crew who will gladly plot the safest course through the treacherous waters of the workers compensation system.

basis. Also, employers who do not staff their on-site medical clinic during all shifts are using nurse triage to cover their employee's medical needs when their clinic is not open. When an employee is injured on the job, the employee and/or supervisor reports the accident direct to the nurse triage company where a trained nurse talks with the employee. The nurse, using proven interviewing techniques, listens carefully to the employee's description of the accident. He or she asks detailed questions and focuses on the employee's medical needs. By using treatment protocols and sophisticated medical software, the triage nurse is able to provide an injury assessment. Based on the triage nurse's assessment of the severity of the injury, the most appropriate level of care and the proper course of treatment can be determined. Then, a decision is made as to where the employee should be sent for medical care.

Five Benefits of Medical Expertise At Time of Initial Injury by Rebecca Shafer

Nurse triage is the process of having an experienced nurse evaluate an employee's medical needs and direct medical care by determining the appropriate level needed. Employers who do not have their own on-site medical clinic are turning to nurse triage as a means of controlling and impacting workers compensation cost. Nurse triage companies operate a call center where experienced, trained nurses are available on a 24/7

If the medical care cannot be provided by the employer's on-site medical clinic or by administering first aid on-site, the triage nurse refers the employee to a preferred medical provider in their network (set up in advance) best suited to provide the medical care needed. By directing the employee to the most appropriate level of medical care, optimum medical care is provided sooner. This also eliminates expensive emergency room visits and prevents the employee from starting medical treatment with a medical provider only to be transferred to a different medical provider later. 1. A key benefit of using nurse triage is the transfer of making initial medical decisions from the employee's supervisor to a trained medical professional. The employee's supervisor may discourage the employee from having the needed medical care, as the supervisor wants the employee at work, or the supervisor will send the employee to a medical provider not best suited to treat the employee's injury. Triage nurses are experienced RNs with recent clinical experience who are specially trained to do this job, and the training centers are impressive. I have toured Medcor's training facility which is state of the art. 2. The nurse triage will notify the medical provider of the employee's injury and advise the medical provider to expect the employee's arrival. This is immediately followed by the claim being reported to all appropriate entities including the risk management department, safety, human resources and the work comp claims office. By addressing the injury immediately with the employee, the employer and insurer have the greatest chance of influencing the cost and overall outcome of the claim. If arrangements have been made with the nurse triage company, they can gather all the information needed and file the first report of injury with the claims office and the appropriate state government entity. 3. Nurse triage can also assist with early return-towork programs by obtaining an employee's job description and providing the job description to the

medical provider. When the medical provider indicates light duty restrictions instead of returning to work full duty, the triage nurse will contact the employer with the details of the light duty restrictions. A timely determination is made on the employer being able to accommodate the restrictions and place the employee back on the job. 4. A triage nurses immediate involvement in a workers compensation claim shows all employees their physical well being is important to the company. The leads to a higher level of morale and trust in the employer. It also provides a big benefit for the employer bottom line savings on the cost of their workers compensation as the benefits of nurse triage greatly outweighs the cost for the employer. The nurse triage company can provide your company a cost benefit analysis that will show you the savings generated from using a nurse triage company. 5. Nurse triage provides a way for the employer to be proactive in the management of workers compensation claims while at the same time being compassionate to the employee's injury and needs. During a recent assessment of 20 locations of a trucking company using nurse triage, we found that the immediate conversation with the nurses turned many potential lost time claims into either med only claims or "self-care" claims where the employee could ice the injury, for example, and remain at work with his or her ankle inclined.
Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and website publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing, publishing, pharmaceuticals, retail, hospitality, and manufacturing. For more information, resources, articles and tips, please visit: www.LowerWC.com www.ReduceYourWorkersComp.com. Contact: RShafer@ReduceYourWorkersComp.com.

How to Turn Peer Pressure into an Asset

By Joe Stevens We all tend to think of peer pressure in negative terms. We have seen how the influence of a few disgruntled workers with bad attitudes can poison a whole workforce and jeopardize a companys best efforts to maintain an injury-free environment. If the situation isnt turned around quickly, the whole safety culture suffers, and careless and unsafe behavior are seen as acceptable. It doesnt have to be that way. With a little effort in the right direction, companies and organizations can establish a different culture, one that encourages responsibility, discourages risky behavior, and engenders pride in performance. Every company has loyal employees who perform their jobs the right way and observe all the safety requirements. They come to work every day expecting to be safe, and knowing that they must observe all the safety rules in order to do so. But every company must also acknowledge that they have workers who are less dedicated, and are more likely to be careless. If those fellow workers routinely take shortcuts, or take chances that put them at risk, they are leading by example, in the wrong direction. Call it negative peer pressure. So the question becomes how to turn that around? The first step is to neutralize the influence of the slackers; the second step is to put the peer pressure in

The Interactive Process

By Lisa Sanchez Pop quiz: What do you do with an injured employee who has been assigned permanent work restrictions? If you said something other than fire them, youre probably getting on the right track. Employers are required under the California Fair Employment Housing Act (FEHA) and American Disabilities Act (ADA) to engage in the interactive process for both work-related and non-work related disabilities or impairments. Compliance and documenting the return-to-work process can help employers avoid costly violations under FEHA and ADA. The interactive process is a collaborative effort between the employer and employee to determine if the employees work restrictions can be accommodated in a modified or an alternative position. It involves a face-to-face meeting with the employee and representative(s) for the employer which is usually someone from human resources or risk management. The following are some situations that trigger the Interactive Process: An employee has sustained an injury and has been issued permanent work restrictions. Generally, an injured employee with temporary work restrictions does not qualify as disabled. As previously indicated, the requirements of FEHA and ADA apply to a workers compensation injury just as it would to any non-work related injury. The employer receives work restrictions from a medical provider or workers compensation claims administrator. An employee regularly misses work, telling the employer that he/she is ill.

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How To Turn Peer Pressure Into an Asset The Interactive Process

the hands of the first group, those loyal employees who understand and value safety. Its easier than you think, because most employees want to be safe, and know that taking unnecessary risks put them in danger. The key is to empower the majority, and give them some clout. Call it positive peer pressure. We all value teamwork, and the results that it produces, but did you realize that the key component of teamwork is actually peer pressure? The positive influence that group members exert on each other to do the job the right way is the very essence of positive peer pressure. Encouragement, suggestions, assistance and advice are all forms of positive peer pressure. How can you empower this group? Start by creating a measurement system that recognizes workers for the performance of their team or department. When you reward individuals for their contribution to the whole team, either through recognition or awards, or both, you also tell them that they are part of something bigger, and thus have a responsibility to more than themselves. Careless or unsafe behavior puts the whole group at risk. Conversely, safe behavior has a payoff, so encouragement and assistance to a fellow worker is legitimized. Consider incentive programs that recognize teams and departments for staying safe. Giving gift cards or money shows that there is a tangible reward for doing the right thing. Just as important is giving recognition. Newsletter articles, congratulations from upper management in front of all employees, and pictures that are prominently displayed all reinforce the value of safety, and encourage safe behavior. Turning peer pressure into a positive can turn your safety culture into a strength of the company, reducing injuries and saving a great deal on workers comp costs.
Joe Stevens is the founder and president of Bridge Safety Consultants, a company that provides recommendations, consultations, and programs for companies seeking to improve their safety culture. Mr. Stevens is a frequent speaker and is currently writing a book called 10 Steps to a Stronger Safety Culture. He can be contacted through the companys web site:www.bridgesafetyconsultants.com

The employee requests a reasonable accommodation, specifically or by reference to his/her limitations. A family member, friend, health professional, or other representative may request a reasonable accommodation on behalf of an individual with a disability. Once triggered, ensure that at least two people from the company are present to document what was discussed during the meeting. Ask the employee what reasonable accommodations they think can be made for them based on the permanent work restrictions issued by his/her treating physician. The employer will need to evaluate the options for a modified or alternative position within the company and determine if they will make an offer to the employee. If an offer is made and the employee does not accept it, ask the employee to sign a Declination of the Modified/Alternative Position. For workers compensation injuries, its imperative that the employer notify the insurance carrier if an offer was made because this will affect the payment of benefits to the employee. Once a decision is made, the employer needs to explain the reason for the decision to the injured employee. It is important to note that a company is only required to do what is reasonable considering its size and resources. This is by no means an exhaustive guide, but it is imperative to understand what the interactive process involves and be aware of situations that trigger it. Be sure to document any communication with the injured employee to show that a good faith attempt has been made to discuss reasonable accommodation. This will help with the defense against any potential FEHA and ADA claims. Also, implement and enforce procedures when addressing a reasonable accommodation decision. Finally, maintain regular communication with the injured employee and your insurance carrier. Ensure that your insurance carrier is instructed to notify you, as the employer, as soon as the injured employee has reached Maximum Medical Improvement and permanent work restrictions have been issued.

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The Interactive Process

Knowing When to Fold

Settle now or settle later either way youre going to pay; its just a question of how much By James Carey
Do you reach for your favorite antacid at renewal time? Or cry yourself to sleep after a grueling claims review where it feels like every claim has gone Chernobyl? In these tough economic times, every penny counts not just to the employers, but to the claimants as well. While we all like to dance around the elephant in the room, the truth is that workers compensation claims dont age like a fine wine they age like vinegar. Luckily, there are some strat-

Lisa Sanchez, CSIA, WCCP is a graduate of the University of California, Riverside and has a Bachelors degree in Business Administration. She is a seasoned bilingual claims adjuster with more than eight years experience, having handled claims at a self-insured, self-administered employer before being drafted to the RiskSolutions team. She brings a unique, employer-driven perspective with her and hands on experience working one-on-one with management and injured workers alike helps employers to fathom the endless depths of Californias workers compensation system.

egies for effective resolution that will satisfy everyones pocketbooks. First, put a dollar figure on what the claim should settle for. A good adjuster will do this up front so as to have a goal to work toward and have factored in every known variable. With the target set, take aim with a proactive plan of action that incorporates short term and long term goals. Most cases settle once a claimant has reached Maximum Medical Improvement. For the remaining problem cases, look for opportunities to settle. Every denial brings an immediate opportunity to shut down a case with a nominal value settlement. Applicants attorneys generally carry a high volume of cases to keep the lights on. Often, they will be most amenable to settling a case at a deposition because they can collect fees for the deposition and then again from the settlement proceeds. One caveat avoid settling cases based on strong factual denials where an affirmative defense has been raised. These cases are worth litigating to the bitter end and getting a Take Nothing. And avoid the temptation to use a weak denial as a bargaining chip. This has backfired more times than it has actually worked. Youre only delaying the inevitable. Accept the case and have more effective cost control or settle it up front.

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Knowing When To Fold

Every denial gives the claimant open season to treat outside of any established medical provider network (MPN). Liens for self-procured treatment easily hit upwards of $40,000-150,000. While you may think the claimant does not deserve anything, handing over a settlement of $5,000 before any medicallegal exams easily saves $4,000-12,000. It also stops the clock on an EDD/State Disability lien, permanent disability and SJDB ($4,000-10,000). Finally, it makes life even more difficult for the lien claimants because now they have no med-legal reports to prove their cases with. Doesnt that $5,000 up-front settlement look a lot better now? How about $7,500? Either way, it still beats a realistic probable exposure of $16,00063,000, which equates up to a 92% cost savings. On medically complex cases where a claimant has prior injuries, co-morbid medical conditions or a need for surgery, start discussing settlement. Sometimes giving the claimant a small premium to avoid surgical costs and complications will save you from having an expensive millstone around your neck for three years. The most important factor is to know the claimant up front. In previous issues, weve discussed delayed recovery and early intervention, or the DREI Matrix as we call it. This is a powerful tool that can also help identify a ticking time bomb and alert an adjuster to defuse it before it has a chance to explode. Finally, set your personal feelings aside and remember that there is a potential for a significant cost savings at the end of the road.
James Carey, CSIA, WCCP is a graduate of the University of California, Irvine and a veteran claims adjuster with more than a decade of experience. He has handled claims at insurance companies, third party administrators and government entities with strong experience handling highly complicated cases across multiple states and jurisdictions. He brings an aggressive, employer-oriented style to the table along with practical knowledge to help employers navigate the treacherous waters of the workers compensation system.

Wrangling Reserves: XMod Revision With the WCIRB

By Melissa Rehm Do you feel like every claim on your loss run is out-of-control and running amok? Dont panic some reserve reductions will actually net you an XMod revision. One of the advantages of our Claims Oversight service is to ensure reserves on all open claims are set appropriately. Best practices hold that reserves are set for the most probable outcome based on the facts of the case and we hold adjusters to these standards. However, many adjusters have a differing perception as to the probable outcome. Some estimate medical costs based on bills before they go through bill review in accordance with the Official Medical Fee Schedule (OMFS). Others may reserve for a worst case scenario however, this is both uncommon and inappropriate, as existing case law is very clear on this matter. Most claims managers are very sensitive and responsive when the specter of worst case scenario reserving is alluded to in any discussion. One problem area is reserving for future medical care after a claimant becomes permanent & stationary. Adjusters generally increase reserves based on the future care provisions indicated in the final medical report. These reserves are almost always overstated because adjusters typically calculate future medical costs by averaging the prior three years costs and then multiplying that number by the claimants life expectancy. The correct calculation is to take the future medical care provisions outlined in the final report, apply it to an annual anticipated utilization (frequency), multiply by life expectancy (duration) and then apply a present value calculation at a 3% discount. What you end up with is a number significantly lower than what typically appears on that reserve line. When we review cases with the adjusters, we also work to negotiate reserve reductions. Sometimes, these reductions can be quite significant and a question may arise as to how one

can secure a revision with the WCIRB. Generally, claims professionals have limited knowledge of how to file for a revision and it must be addressed with an underwriter. Your broker can then advocate for the XMod revision to be filed. There are a few conditions for filing an XMod revision most people generally know of the non-compensable revision wherein a denial on a claim is upheld by a judge at the Workers Compensation Appeals Board with a Take Nothing or a Dismissal. This revision will essentially wipe the slate clean for that particular claim as if it never happened and a credit will be applied to your policy going forward. Another scenario is where a claim or claims close for 60% less than the highest total incurred value of the highest unit statistical estimate. John C. Martin, a producer at Colony West Business Risk Solutions, advises that SB1217 tweaked the language that was enacted by AB1913, focusing on aggregate losses as opposed to individual losses. This gave some relief to the insurance carriers in that a revision only had to be filed if the sum total of all claims incurred during a policy year had closed at less than 60% of the aggregate highest total incurred value. The WCIRBs system is set up to automatically check for this scenario at the time of the Unit Statistical Reporting by the carriers. However, it is always wise to work with your broker to ensure that this has taken place. In our Claims Oversight operations, we keep track of reserve reductions that were able to secure on your behalf either through closure or a negotiated reduction. Not only do you get an extra set of trained eyes looking at your claims, you also get to rest a little easier

knowing that these eyes are looking for every opportunity to request an XMod revision. Melissa Rehm, CSIA, WCCP is the manager and backbone of RiskSolutions Claims Oversight department. With a flair for customer service and experience in the forestry, hospitality, healthcare, manufacturing and automotive industries, she brings practical knowledge and uses it to develop innovative solutions for the clientele of RiskSolutions. With her experience and tenacity, she helps employers anchor their costs and keep their XMods afloat amidst the murky depths of the California workers compensation system.

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(951) 943-6775 ext 151 Fax: (951) 943-5221 etaylor@risksolutions-Inc.com