The goal of workers' compensation is to support employers and workers in offering the benefits workers need to recover from injuries or support themselves after becoming disabled. Every state has a workers' compensation insurance system and specific guidelines within which businesses and employees must work. While the system has worked for many years, in recent years there has been an examination of how workers' compensation across the U.S. has changed and may not be helping injured workers in the ways it was intended to assist them.
A recent report from the U.S. Department of Labor asks the question "Does the Workers' Compensation System Fulfill Its Obligations to Injured Workers?" This is a difficult question to answer with a simple yes or no. Instead, it offers a valuable opportunity to take a look at recent changes and upcoming reforms in workers' compensation. Further, this inquiry can open up a discussion on ways to improve the system.
Evolving Workers' Compensation Systems
The DOL report discussed a number of changes made to workers' compensation systems across the U.S. over the past 25 years. Some of these alterations have spread from one state to another, effectively altering how workers' compensation programs typically work. For instance, all but seven states now allow agreements that fully settle claims, called compromise or release agreements. By coming to a full settlement with employers or insurers, workers can receive the money they need quickly. However, workers may accept agreements that are not in their favor, while giving up current and future rights to benefits.
Another noteworthy change has shown up in states like Florida and Utah where they have lifted fee restrictions for attorneys. Usually, workers pay a contingency fee based on a percentage of their settlements to their attorneys. They do not pay retainers or hourly fees. This is starting to change because states are witnessing attorneys put a great deal of work into cases that ultimately result in small settlements. Some proponents of these changes believe that when states have low contingency rates for lawyers, there are fewer attorneys willing to take on workers' compensation claims. However, retainers and hourly wages make it difficult for workers to pursue valid claims and higher contingency rates significantly decrease settlements.
While the DOL report notes that, by 2015, 33 states had passed laws reducing benefits or limiting the diseases and injuries that qualify for benefits, there is something to gain from these reforms. One such gain is to reduce workers' compensation fraud or prevent workers who were injured outside of work or who are now recovered from taking advantage of the system. In fact, the DOL found that as exclusions tightened, the number of benefit denials increased.
The Role of Utilization Review
Utilization review (UR) of workers' compensation claims is one tool businesses and insurance companies are using to improve the likelihood the injured worker will receive appropriate care in a timely manner. UR is the evaluation of the medical necessity, appropriateness and efficiency of the use of health care services under the provisions of the applicable workers’ compensation statute or regulation.
There are specific guidelines and limitations on the injuries and conditions covered under each state's workers' compensation program. If there is an issue with the doctor or medical provider's diagnosis or treatments, a request for utilization review (UR) may be appropriate. UR is an increasingly effective method for reviewing workers’ compensation claims to ensure appropriate care is covered utilizing nationally accepted clinical guidelines. Another option is a pre-service physician level review to determine the most appropriate treatment and whether it is covered under their workers' compensation insurance before moving forward.
Improving Workers' Compensation Systems
Increased automation and electronic submissions are also improving workers’ compensation systems. New technology throughout the medical, insurance and workers' compensation industries allows for better record keeping, more collaboration and faster automation.
One example of improved technology is the speed at which employees can have utilization reviews performed. At Advanced Medical Reviews (AMR), a URAC-accredited IRO, UR for the workers' compensation market is completed through a patent pending technology platform. “Our state-of-the-art client web portal with customizable submission templates not only guides our reviewers through an intuitive analysis of all of the medical records, but it also offers exceptionally fast turnaround times,” notes Megan Kaufman, Director of Operations at AMR. “We understand that all parties in a workers’ compensation claim- employee, employer, insurance carrier- want the most efficient results to assist a worker in getting the care they need.”
A second example of advanced technology is, beginning Jan. 1, 2017, companies with more than 250 employees and covered by the Occupational Safety and Health Administration's (OSHA) recordkeeping standards as well as other employers in high-risk industries must electronically submit injury and illness data. The final OSHA rule also contains provisions promoting worker education and protection from retaliation to ensure employees feel safe reporting injuries.
Other improvements are showing up in states like California, where certain physicians and medical providers with a history of fraudulent medical billing are prohibited from treating injured workers. The California system is working to curb exploitative practices by workers’ compensation medical professionals.
Workers' compensation has a long and storied history, but the goal has always remained the same: to support injured, sick or disabled workers. It is vital for stakeholders - providers, businesses and employees - to rely on continued improvements and advanced technology to ensure workers receive the best treatment possible.
References:
https://www.dol.gov/asp/WorkersCompensationSystem/WorkersCompensationSystemReport.pdf
http://www.sun-sentinel.com/business/careers/fl-nsf-workers-comp-restrictions-20160420-story.html
https://www.dol.gov/osha/report/20150304-inequality.pdf
http://projects.propublica.org/graphics/workers-comp-reform-by-state
http://www.businessinsurance.com/article/20160414/NEWS08/160419898
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