How Is COVID-19 Affecting Workers Compensation?

How is COVID-19 affecting workers compensation? How are processes in this line evolving? What challenges await? Here’s what top industry experts say we can expect in workers compensation in 2020.

The Insurance Information Institute recently said it thought workers’ compensation would be one of the most affected lines of insurance when it came to COVID-19’s impact. Do you agree?

Robyn Walsh, ExamWorks Compliance Solutions: While I’m not big on predictions, we are certainly seeing the impact of COVID-19 across all aspects of workers compensation. The two greatest areas involve the major internal logistical and personnel challenges that come with simultaneously moving claims staff to work from home and, in many cases, creating rapid-response teams able to handle COVID-19 claims on the fly. From company to company and state to state, the impact of COVID-19 claims has been quite disparate, with the biggest challenge reserved for the claimant: just getting in to see a doctor.

Richard Regna, Arcadia: In our discussions with clients, we hear that the normal workers compensation claims intake is down by about 40 percent, but there has been a surge of COVID-19 cases. Most of these are being denied, but in states that have legislated that essential workers contracting COVID-19 are presumed to have been on the job and are covered by workers compensation. At this time, it is uncertain what affect this will have on cost of the claims as there is a 98 percent recovery rate and people are returning to work. Most cases involve individuals who are in their 70s. The long-term financial impact is still unknown and could be high, however, as shown in Pennsylvania, only 1.6 percent of the 30,000 available hospital beds are being utilized for care.

Matthew Condon, Bardavon: Some workers compensation patients who have sustained injuries that require surgery are having their procedures delayed due to COVID-19. Bardavon Health Innovations knows it’s better to get these patients into prehabilitation prior to surgery rather than wait on a post-surgical status to begin physical therapy.

Our research shows that deferring surgery can negatively impact claims cost and duration for the payer. These delays may also lead to the following conditions for the injured worker: high perceived acute pain state; deconditioning; decreased return-to-work functional outcomes; increased psychosocial complications; and increased chronic pain reports. We predict that prehabilitation can prove beneficial for all parties.

Heather Sanderson, Franco Signor: Workers compensation has certainly been impacted greatly across the board. There is an obvious vast reduction in new workers compensation claims due to the shutdowns at both state and federal levels. Additionally, for the most part, past workers compensation claims have been kept open longer than normal due to the fact that injured workers cannot (or might be afraid to) go to the doctor, have their cases adjudicated, and/or they have lost their jobs. However, at Franco Signor, we have seen a slight uptick in workers compensation cases settling in “essential” industries with Medicare beneficiaries, and this is likely since older workers are concerned about future job security.

Tron Emptage, Optum: The effects of COVID-19 have driven claims volume down dramatically due to the state and national shelter- in-place/stay- at-home orders and recommendations. With the surge in unemployment claims, injury claims volumes have dropped as precipitously, thus decreasing the needs, obviously, for medical and prescription treatments, coordination, and care services. Our Care Service organization at Optum Workers’ Compensation and Auto No-fault saw this dramatic decline in the first few weeks of the national shutdown. As time progresses, claims for COVID-19 may begin to manifest themselves in an outpatient manner. As the country reopens, claims volumes should also begin to rise.

Kristian Cross, Vernis & Bowling: I have seen claims slow down and the type of claims change. Plaintiffs’ attorneys are accepting more “minor” claims that would have ordinarily been rejected and encouraged to be resolved without counsel.

In what way are workers’ compensation processes changing or evolving in 2020? In what way are they staying the same?

Kristian Cross, Vernis & Bowling: Online mediations, hearings and depositions have been employed much more frequently in 2020. South Carolina is also finalizing e-filing of all forms, pleadings, and other claims materials.

Tron Emptage, Optum: Clinical management hasn’t changed much for legacy claims; however, the need for services has. Pharmacy management changed to respond to the need for formularies specific to acute respiratory illness and supply chain management. These illnesses are typically not a factor in workers compensation, but have become increasingly important to monitor and manage. The ability to relax certain edits and requirements at the point of care, point of delivery, and point of sale also is becoming paramount.

Richard Regna, Arcadia: We see telemedicine visits being utilized more. More claims handlers are telecommuting now that carriers see that it works. DocuSign is being more widely accepted by the courts, as well as electronic filing of documents and telephonic appearances in lieu of in-person meetings.

Robyn Walsh, ExamWorks Compliance Solutions: We are certainly seeing more innovative forced efficiencies. For us, as well as all of our clients, there’s been a tremendous migration from a predominantly office-based environment to one that is conducted remotely. This presents challenges for everyone, but particularly for attorneys and physicians. Moving in-person meetings online is a forced efficiency that is here to stay. We’ve heard from clients and other business partners that moving mediations online has allowed things to move more quickly. In fact, a few weeks ago, we spoke with one structure broker who was able to do a mediation in the morning and a West Coast mediation in the afternoon. That would never have been possible just a few months ago. In some jurisdictions, workers compensation boards are particularly receptive to moving everything online. We would love to see all states adopt simple efficiencies such as approving settlements without an in-person appearance; widely incorporating e-signatures; and encouraging telehealth examinations wherever possible. 

Let’s pretend COVID-19 didn’t exist. What other challenges do you see facing workers compensation?

Heather Sanderson, Franco Signor: Medicare recently released its Proposed Notice of Rulemaking (NPRM) on civil monetary penalties as it pertains to noncompliant Medicare Section 111 Mandatory Insurer Reporting with the comment period closing on April 20, 2020. The next step is for Medicare to review the comments and finalize the rule. Once that is complete, Medicare can start issuing penalties against noncompliant insurers up to $1,000 per day/per claim for failing to report claims and settlements with Medicare beneficiaries. What keeps me up at night is concern that there are numerous insurers/self-insured entities that may not be ready or have their data reporting in place to avoid such penalties. I also worry that the final rule will not adopt a sliding scale to account for good-faith efforts (as contemplated by the SMART Act of 2013) on behalf of the insurers that may not have properly reported the claim due to lack of cooperation from the Medicare beneficiary or technological/claim software issues.

Matthew Condon, Bardavon: After decades of stagnation and entrenchment in the status quo, the workers compensation, insurance, and risk management industries are ripe for change agents. There are several companies who are ready to be those agents, including forward-thinking companies like Ametros, Authentic 4D, Clara Analytics, Remedy, and Bardavon Health Innovations, along other with emerging, cutting-edge newcomers in the marketplace. We see the coming decade as a time when innovative companies will bring new ideas and improved processes to the entire marketplace, breaking down the obsolete structures that wallow in ambiguity and unnecessary complexity.

Historically the market has been fragmented, and currently we’re seeing consolidation. In most cases this consolidation isn’t about driving improvement to the continuum of care for the injured worker. Rather, this consolidation is simply shifting market share and revenue.

Workers compensation is overdue for new solutions that simplify and clarify, driving a new perspective on value. Utilizing new technologies and the smart use of data, trailblazing companies will break down barriers and bring transparency to an industry that has been resistant to change. As we dismantle those silos and entrenchment, all parties—payors, providers, emerging health care technology companies, and most importantly, patients—will thrive.

Robyn Walsh, ExamWorks Compliance Solutions: Our clients have faced a number of compliance and cost-related challenges over the last few years. Drug costs and inconsistent regulatory actions are two areas that concern us and our clients. Our core business involves Medicare Secondary Payer (MSP) compliance and many of our clients have been frustrated by the lack of predictability over the last few years. Medicare and its contractors have certainly been responsive to the industry’s concerns, but more could be done. While we would like to see Medicare expand upon its “self-service” options for claim-by-claim compliance, a big opportunity is in the area of Medicare Advantage. Thanks to several court decisions over the last nine years, Medicare Advantage plans are able to use the MSP’s private cause of action to sue workers compensation insurers and employers in federal court years after a settlement. Medicare provides no information to claims payers about Medicare Advantage enrollment, and claimants are unaware of the importance of the issue. To eliminate this risk, Congress should pass the PAID Act, which would require Medicare to share Medicare Advantage information with workers compensation insurers.

Kristian Cross, Vernis & Bowling: The largest challenge I see facing workers compensation is ever-increasing medical costs and a decreasing number of medical providers willing to treat workers compensation patients. The combination is driving the medical side of claims up each year. The medical providers that tend to remain in the system seem to be the more claimant friendly providers, which will eventually translate to an increase in the indemnity portion of claims.

Tron Emptage, Optum: Several challenges exist in the delivery of medical, ancillary and pharmacy care in workers compensation, including but not limited to cannabis (its use, management, reimbursement, efficacy, and research); aging population (remaining in the workforce, retiring, settling claims, medication management, and comorbidity diseases); public policy changes (formulary variability, medical treatment guidelines, fee-schedule changes, cannabis, and social pressures); technology’s use in medical treatment (telehealth, telemedicine, and video services); and behavioral health (its place in workers compensation, evidence-based treatments, and compensability).

Matthew Condon is chief executive officer at Bardavon. mcondon@bardavon.com

Kristian Cross is workers compensation managing attorney at Vernis & Bowling (Columbia, S.C.). kcross@scarolina-law.com

Tron Emptage, MA, RPh, is chief clinical officer for Optum. tron.emptage@optum.com

Richard Regna, CSSC, is president of Arcadia Settlements Group. rregna@teamarcadia.com

Heather Sanderson is chief legal officer for Franco Signor. heather.sanderson@francosignor.com

Robyn Walsh is president of ExamWorks Compliance Solutions. info@examworks-cs.com