Rerouting California’s Workers’ Compensation Claims Outcomes
By Sue Bowers, BSN, RN, CCM, CMGT-BC, Founder & Chief Experience Officer
- California has the highest indemnity durations in the nation secondary to increased permanent disability, CT, and Med-legal claims plus regional differences.
- Small percentage of claims account for a disproportionate amount of expense.
- While a small percentage of claims are secondary to truly catastrophic injuries, many involve musculoskeletal injuries with delayed recovery factors that resulted in chronic pain cases.
- Early nurse case management results in improved outcomes and reduced claims costs.
In the California workers’ compensation world where presumption, AOE/COE, statutes, and regulations are ever changing, California’s Workers’ Compensation industry experts are making a case for the need to improve health and claims outcomes.
During a presentation by Dave Belucci, Actuary at the California Workers’ Compensation Insurance Rating Bureau, at the 2023 California Division of Workers’ Compensation Educational Conferences, the data indicate California’s claims close at a much slower rate than in other states. California is a significant “outlier” and has one of the highest indemnity claim durations in the nation.
The WCIRB report states that in California, it takes approximately seven (7) years for a carrier to close 90% of its claims as compared to three (3) years in other states. The four (4) duration drivers are:
- an unusually high percentage of increased partial permanent disability (PPD) claims,
- unique to California cumulative trauma claims,
- the number of claims requiring medical/legal evaluations, and
- a significant difference between 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” 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 oftentimes incur exorbitant legal fees by the time the case is brought toward the posture of closure and settlement.
By steering the claim forward in the right direction at the onset, significant costs and outliers can be avoided. 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 referring the claim to nurse case management early. A study conducted by Liberty Mutual shows 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 expedited return to work with the injured worker.
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 in 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.
Bill Zachry, a leading expert on cumulative trauma claims, states, “The concept of cumulative trauma is unique to the California workers' compensation system. Properly managing CT claims is imperative to controlling claims costs in California.”
A study by the American College of Occupational and Environmental Medicine (ACOEM) reports adverse and harmful effects by prolonged work absence which often leads 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 prevention of further cumulative trauma disability.
There continues to be a need for Occupational Medicine trained physicians as there are higher numbers of claims involving need for 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 a workers’ compensation case.
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 applicant’s attorney to help restore the injured employee back to health and back 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 regions in the State of California, nurses can impact claims for position toward claim closure, resolution, and settlement by ensuring the required and necessary documentation is provided in any region in the state.
In conclusion, an underutilized and effective tool to re-route 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-on’s”,
- 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.
Dr. Steven Feinberg of Feinberg Medical Group in Palo Alto, CA states, “ In my 50+ years of medical practice as a physiatrist and pain medicine specialist, there is no question in my mind whatsoever but that quality nurse case management (NCM) improves outcomes and lowers costs. I have personally worked with CHOICES Case Management over many years and recommend CCM NCM services without hesitation.”
The use of expert nurse case managers clearly demonstrates the value and re-routing of these wrong way drivers. Our experience is that with quality intervention:
- 85% of claims close at full duty at 40 days (avoiding permanent disability ratings and address cumulative trauma issues early on in claim)
- Average saving of $5669.00 per referral (nurses moving files avoids need for med/legal)
- 98% Litigation prevention rate
- Earlier P&S/MMI sets up claim for posture to close
- Expert and highly skilled and bilingual nurses, develop collaborative partnerships in geographical regions where practitioners can rely on the expertise to move the case forward. Nurses are geographically located to cover and address the differences between California regions.
For Northern California contact information, Brian Stanton can be reached at: 510-421-8786
For Southern California contact information, Scotti Grant can be reached at: 925-278-3678
1 Catastrophic claims are usually spinal cord injury, severe burns, amputations, head injuries or loss of vision. Chronic pain associated with injuries may not be initially physically catastrophic but misery and loss of function to the injured worker and high claims costs can result.
- American College of Occupational and Environmental Medicine
https://ohguides.acoem.org/07-psychological-factors-and-workforce-health-delayed- recovery-from-injury-or-illness; Occupational Medicine; Basic Guide
07: Psychological Factors and Workforce Health
Delayed Recovery from Injury or Illness
Mason Harrell, MD, MPH
- Bureau of Labor Statistics (.gov) https://www.bls.gov › news.release
- Workers’ Compensation Insurance Rating Bureau of California (WCIRB); Drivers of California Claim Duration, 2023