The New Business "Best Practice:"

Last month, we discussed how the lack of CMS guidance in liability cases leaves Medicare and Medicare-eligible people ('Beneficiaries') in the dark about paying for injuries and illnesses they've developed due to exposure to the coronavirus. Many companies count on those populations to make their living. Potential coronavirus exposures that occur in their place of business are now creating liability exposures if/when their clients and customers can tie those exposures to their time within those walls. Those company owners who want to both open their enterprise and reduce their risk of liability for inadvertent COVID-19 exposures should review their reopening processes carefully and build in as many "virus-avoidant best practices" as possible.

 

It's No Longer Business as Usual

It's hard to know where to start reopening a business that has been shuttered since the onset of the COVID-19 pandemic. Every company that routinely welcomes paying customers onto their premises must make accommodations to keep them safe from a potential coronavirus exposure. Employers are doubly taxed: they must provide as safe an environment as possible for their workers and their customers. Not only could an outbreak at their site create resonating workers’ compensation issues, but it also poses a risk of liability issues when it's a customer who falls seriously ill with the disease.

 

And those concerns layer over the challenges arising when trying to resume 'normal' operations:

  • Previous vendors and suppliers may not be available, requiring finding new ones or changing out products that are no longer feasible.
  • In many shops, 'social distancing' requires the reorganization of shelving units, dining tables, services bars, and even cash registers.
  • That reorganization often results in fewer 'productive square feet,' which will reduce revenues by a comparable amount.
  • In many jurisdictions, mask-wearing is the order of the day, so customers (should) know to do that. In those jurisdictions where no such mandate exists, business owners must also determine to what extent they want to impose the restriction and how they plan to enforce that new rule.

With so much to think about, it seems apparent that moving forward requires a well-thought-out strategy that balances every contingency, identifies and manages each risk, and maximizes as much as possible the profitability of each transaction.

Managing the Risks Inherent in Reopening During the COVID-19 Pandemic

Perhaps the biggest threat to the reopened company is the risk of inadvertently causing a COVID-19 outbreak. Company owners must manage two separate but similar concerns to ensure their enterprise isn't the next COVID-19 hot spot:

 

Protecting Workers

Some businesses have a higher risk of triggering an outbreak simply by their nature. Restaurants, hotels, gyms, and spas, to name just a few, must welcome the general public to stay in business. Their workers, therefore, are exposed to whatever contagions their customers carry. The close physical proximity and being indoors contribute to the spread of the virus among patrons and staff alike.

 

From a workers’ compensation point of view, the answer to one specific question arising from the situation has the potential to impact every employer in the country:

 

Is COVID-19 an 'Occupational Disease'?

Traditionally, the employer's workers' compensation (WC) insurance policy covers both injuries and 'occupational diseases,' when those arise within the 'course and scope' of the job. The coronavirus and its consequent disease, COVID-19, present a new wrinkle in the discussion about what constitutes 'course' and 'scope' of employment.

 

'Occupational diseases' typically develop when workers are exposed to toxic substances or materials inherently contained within production processes or employment practices. Firefighters and coal miners frequently develop occupationally-caused lung diseases related to the inhalation of toxic fumes and dust. Healthcare workers often contract the highly infectious conditions they find in their patients, such as tuberculosis or hepatitis.

The coronavirus is not an 'occupational disease' in the traditional sense because its contraction isn't limited to a specific occupation or job. Instead, because it spreads via airborne particles exhaled wherever an infected person might go, it can infect anyone in any position when there are insufficient protections in place to prevent that infection.

 

The hospitality industry is particularly vulnerable to triggering coronavirus outbreaks because of the frequency of customer turn-over. The more people there are entering the business, the higher the risk that one of them is an asymptomatic person carrying the virus, who, thereafter, unknowingly infects a staff person. Because hospitality workers must - by the nature of their work - interact with potentially infected customers, they can argue that their subsequent infection was, indeed, contracted within the 'course and scope' of their job. Their healthcare costs should be born by their employers WC insurer. The argument tries to move the job-related COVID-19 infection into that class of employment-related 'occupational diseases' that enjoy a "presumption of compensability:" if you contract the virus from a presumed work-based source, then your related healthcare costs are expected to be covered by the WC insurer.

 

Not surprisingly, there is a lot of push back against the 'presumption of compensability' that limits the employer's opportunity to point out the worker's other possible transmission points (family members, i.e.) and thereby deflect the burden of added COVID-19-related WC premiums.

  • Data retrieved from its 38 states by the National Council on Compensation Insurance (NCCI) notes that the cost of increased WC premiums driven by COVID-19 infections could rise to as much as $81 billion a year. New York states' estimate (not included in the NCCI study) sets that cost at $31 billion just within its borders, which represents an increase of over 350% over its 'typical' annual WC bill.
  • Others argue that coverage for COVID-19 isn't contemplated in the 'Grand Bargain' that established the concept of 'workers’ compensation' in the first place. Because a COVID-19 infection doesn't arise from any specific job but instead floats into the workplace arbitrarily on the breath of a customer, client, or some other party, it shouldn't be considered eligible for coverage by WC insurance.

Also, not surprisingly: those arguments and more are now the focus of discussion for more than one state government and WC insurer.

 

Protecting Customers

We noted last month our belief that COVID-19 cases will trigger thousands of liability lawsuits, as infected sufferers look for ways to obtain and cover the cost of the healthcare services they need. For sufferers who are also 'Beneficiaries,' those lawsuits will take on added significance. This population is at risk for worse infections with more severe symptoms and often take longer to recover. Further, because they often also have underlying health conditions that complicate their COVID-19 case, they are also more likely to suffer permanent damage and injury. In those cases, they will need COVID-19-related healthcare services for the rest of their lives. Lawsuits filed by members of this population will provide the necessary evidence to ensure that CMS doesn't bear the brunt of those added COVID-19-related expenses in its future healthcare payments. By bringing the suit, Beneficiaries will have access to a separate healthcare fund without imperiling their future Medicare healthcare coverage.

 

Sensible Precautions for All Populations

Fortunately, implementing safeguards and precautions to prevent business-based coronavirus infections protect all populations as much as is possible, considering what is currently known about how the virus spreads. Today's best business practice is implementing a virus-protection plan to avoid getting hit with unnecessary WC or liability claims for COVID-19 infections.

 

There are two fundamentals to consider when developing your plan: how to make the physical plant safe, and how to modify business practices to keep workers and customers safe.

 

Steps to Safeguard Your Workplace

A walk through the place of business and a review of current practices will each reveal vulnerabilities that might cause a virus exposure. Manage whatever threats exist, then change your policies to prevent those risks from emerging again.

  • Studies indicate that social distancing prevents transmissions, so move tables, desks, chairs, seating areas, etc., to sit at least six feet apart.
  • Studies also indicate that masks work by providing a barrier between an infected person and their uninfected neighbor. If you don't have a mask policy in place, develop one that includes both staff and customers, and enforce it rigorously. One or two lost customers aren't worth the costs incurred by triggering a virus outbreak.
  • Sanitation matters more now than ever.
    • Ensure that cleaning supplies kill viruses; not all do, despite their claims to the contrary.
    • Develop company-wide protocols for sanitation management throughout the business day and then monitor those activities every day.
  • Implement a tracking system for both employees and customers, so you know who's been inside your company doors. Tracking slows the spread of the virus by notifying those who may have been exposed and allowing them to isolate themselves so they don't pass it on.
  • Develop a Virus Response Plan that details how your enterprise will react when it discovers a possible virus exposure. It will guide your workers as they work to reduce the likelihood of further infection. At the least, it should detail:
    • How to determine when and where the exposure occurred so practices can be changed to avoid the circumstance in the future;
    • A listing of who might have been exposed, including the identification of both staff and clientele. All should be notified as quickly as possible.
    • Which agencies should receive the report of the outbreak, which might be some or all of your local, regional, and nationally based entities.
    • Most importantly, the plan should lay out how to return to operations with new systems in place to prevent a similar exposure.

 

It's abundantly clear that covering the healthcare and related costs of just one COVID-19 case are high, and that they become exponentially greater when staff and customers are the sufferers. Establishing appropriate safety precautions throughout the enterprise to protect both staff and customers is imperative for every business struggling to keep afloat in the wake of the COVID-19 pandemic. It's always better to prevent a disaster than recover from one, and all too often, a COVID-19 outbreak has caused the demise of many excellent companies. Don't let yours be one of them.

 

For America’s employers, the COVID situation is creating havoc. Those who have shuttered their businesses for the duration of the crisis may not be able to open again once it subsides. Those who are open, however, especially those that offer essential services like grocery stores, are finding themselves facing workers’ compensation (WC) concerns that are unique to this pandemic. These businesses are already facing the challenges that typically arise from public crises and their subsequent recessions. Now, they must also navigate the new world of work-related injuries and illnesses directly related to the COVID-19 virus itself.

 

Nowhere is that concern more significant than in those companies whose workers are on the front lines of the challenge.

 

Healthcare Organizations

The healthcare industry, as a whole, is reeling from the effects of managing the virus. Not enough supplies and too many patients have overwhelmed entire healthcare systems. As the pandemic evolves, healthcare workers themselves are contracting the disease caused by the virus, which reduces the number of people who work in the clinics and wards. Further, the virus is not only impacting the capacity of the medical professionals, but it is also compromising the capacities of lateral and support services upon which they rely, such as lab services, clinic technicians, and even the janitorial crews. Employees working in a healthcare setting or with healthcare professionals are exposed to a heightened risk of being infected with the virus.

 

First Responders

Community services providers aren't immune from the concern, either. Firefighters, ambulance personnel, and distributed healthcare clinic workers, as well as the staff who work with them, are also exposed to the virus through their work. Frequently the first on the scene of a healthcare crisis, these workers face any number of threats posed by the environments in which they find their patients, in addition to the threat posed by the virus, all of which increase the likelihood that they will suffer an injury or illness while on the job.

 

Essential Services Personnel

Services deemed 'essential' are those that provide the goods and services people need simply to survive even when there isn't a viral threat in the air. Grocery stores, gas stations, pharmacies, and the like provide vital supplies that keep communities functioning. However, every day, their workers face health threats posed by shoppers who are infectious but not yet symptomatic, a circumstance that is unique to COVID-19. Without knowing they are infected, these workers can infect their coworkers and customers for days before they become symptomatic themselves.

 

The organizations and businesses that employ these vital workers must now attempt to prevent the virus from causing illness or injuries in their workplace. The fact that there is still much that is unknown about the virus and few proven resources available to avoid or combat it makes their jobs that much more difficult.

 

Consequently, today's employers are not just facing increased WC and SSDI claims due to the unemploymentcaused by the coronavirus, but they are also facing a new wave of a different type of WC created by the health threats caused by the virus.

 

COVID Will Change WC Litigation

The unique and evolving constellation of symptoms and conditions caused by the virus are not just confusing medical personnel, however. Legally, there are new challenges presented by the virus that have never before been seen by the WC and legal systems. As cases flowing from these issues mature and claimants seek support as they recover, their claims will most likely change how work-related COVID cases - and cases originating from the pandemic itself - are managed in the legal setting.

 

Legal Cause Concerns

One fundamental legal mandate will trigger much of the incoming legal deluge: proving 'cause.' The legal system flows from a simple relationship: cause and effect. Lawyers must identify the cause of a legal issue and connect the damage that it creates (its effect) directly with the entity presumed responsible for the action or situation where the injury or damage occurred. Defenses to the 'cause' element center on two possible options: nothing the defendant did (or did not do) caused the injury, and/or the claimant themself contributed to the cause of their own damages.

 

COVID cases confound this fundamental legal concept because, in many cases, there's no way to prove with certainty that any one location or exposure 'caused' the transmission of the virus. Yes, healthcare personnel are more likely to contract the virus because of their exposure to it through their occupation or workplace. However, science has determined that asymptomatic people are spreading the disease - people who show no evidence of being sick. So, while, yes, healthcare workers are more likely to contract the disease at their workplace, they also live in a community where the virus is active. These workers are also susceptible to contracting the virus through their interactions at home, while at their grocery store, or any place where they may come in contact with an asymptomatic person.

 

The virus's capacity to spread via non-symptomatic people makes it extremely difficult to assign 'cause' to one specific entity or location. This challenge to proving 'cause' poses new questions to all parties to a WC case:

  • For WC claimants, the legal challenge moving forward will be to establish, with certainty - that their COVID-related injuries or damages are directly connected to their actions on the job.
  • For employers, especially healthcare employers, the challenge is that virtually every staff-person-COVID case will have an assumption that it is work-related. Companies will find it difficult, if not impossible, to determine where, if not at work, the claimant was exposed to the disease.
  • For insurers, the inability to determine the specific cause of the claimant's illness or injury will undoubtedly create economic challenges as the number of healthcare-based, COVID-related cases increases.

 

Legislative Changes

As if the legal challenges aren't tricky enough, WC cases will also face challenges posed by the increased flood of local, regional, and national legislative efforts to stem the spread and contain the damages caused by the virus. Every state has been scrambling to manage their specific COVID crisis, with many passing laws and emergency regulations on a weekly (or sometimes daily) basis.

 

However, these short-term legislative fixes address only the crisis of the day. In many (if not most) cases, their potential long-term impacts have not been fully vetted, and those who act in accordance with the new rule may create additional challenges and liabilities in the future.

 

These issues and more will be the subjects of an increasing number of litigations as future lawsuits and WC claims are processed in the coming months and years.

 

 

MSA Litigations May Also Increase

Increasing numbers of COVID-related WC claims will almost certainly prompt a rise in MSA applications, as claimants seek as much coverage as possible for future services related to their COVID injuries. In these cases, it will be even more important to consider the interests of the Centers for Medicare and Medicaid Services (CMS) when crafting those MSA documents. As the Mandatory Secondary Payor, CMS is not authorized to spend Medicare resources on health conditions caused by or the responsibility of a third party. The 'COVID cause' concern will pose challenges in these cases, too, if there is an insufficient declaration of cause in the MSA application.

 

(On a side note, the COVID crisis may also trigger a rise in Social Security Disability Insurance (SSDI) claims, too. The number of those cases also rises in the aftermath of a societal crisis. These SSDI claims will also be plagued by the 'COVID cause' challenge insofar as science has yet to determine if the virus can cause permanent disabilities as well as as-yet-undiscovered injuries and illnesses.)

 

The COVID-19 virus has already caused countless job-related injuries and illnesses in businesses and industries across the country. It is on track to generate thousands more before healthcare and scientific resources can fully contain it. Even without the myriad of legal challenges it is engendering, the related WC claims it will generate will also trigger the demand by both injured parties and the CMS to develop comprehensive MSA applications to manage the costs of covering those injuries. As the country works through both the pandemic and its ensuing recession, the coronavirus of 2019-2020 will almost certainly restructure how America's workers' compensation and Medicare Set Aside sectors operate in the future.

 

Even before the COVID-19 virus situation was declared a global pandemic by the World Health Organization (WHO), world events indicated that a future recession was possible. Now that we are living amidst the full force of the COVID-19 effect, it seems like a recession is inevitable. Further, the high numbers of newly unemployed workers and shuttered businesses indicate that any recession that might emerge during the pandemic will be more severe than it would have been without the virus surfacing. The whole situation makes it difficult for business leaders to know what to expect once the COVID threat subsides. However, there are lessons to be insights to be gained for those who take the time to evaluate how the global community experienced and managed past recessions.

 

Swift, Massive and Unrelenting

The origins of the onset of the pandemic remain unclear; scientists only recently learned that the first two American deaths attributable to the virus (on February 6 and 17, respectively) occurred well before the first reported such death (February 29). If confirmed, it means that the coronavirus has been in the U.S. longer than previously believed and that its spread is wider than previously asserted. That assertion would help to explain the astonishing speed with which the virus overtook many U.S. cities and communities. As of this posting, the number of reported cases in the country tops 850,000, and the number of deaths caused by the virus is over 50,000, all having occurred in less than three months.

 

The earlier transmission date of early February also indicates that more people have probably contracted the coronavirus or are at risk of suffering from it than was previously thought. Making the situation worse is the vast array of unknowns still surrounding the disease, its spread, its treatment, and its actual toll. Without a clear idea of where the virus is spreading or what methods are truly containing it, government leaders can't re-open their communities for fear of triggering an even larger pandemic much closer to home.

 

Early Responses Also Cause Chaos

The most comprehensive response to the virus (so far) has been to order people to remain 'safer at home' to stop unintended viral transmissions through inadvertent social contact. The mandate became necessary in early 'hot spot' locations, including cities in Northern Italy, across Europe, San Francisco, and New York City. In those situations, the calamitous rise in the volume of critically ill patients quickly consumed all available medical resources, which, in turn, lead to more deaths because there were no resources left available to treat those later arriving patients. To prevent this situation in areas where the rise in case numbers was slower, many communities around the globe elected to tell their constituents sooner rather than later to stay home so that they did not face the unacceptable risk posed by a lack of sufficient medical interventions.

 

The consequence of the 'safer at home' mandate is that millions of people are now quarantined in their homes, unable to leave except for 'essential' reasons such as grocery shopping or if their work requires them to be out. Those who can work from home are now doing so. For the millions who can't, the stay-at-home mandate also means the loss of their job.

 

In the U.S., some 26,000,000 people have filed for UI (UI) as of late April, as the shops, restaurants, and services companies that employed them were forced to close their doors. Too many of those workers were existing on a paycheck-to-paycheck basis, meaning they don't have the resources they need to sustain their living situation while the pandemic runs its course. The UI funds will allow them to pay their rent and buy food until the situation lightens, their previous jobs become available again, or they can find another line of work.  Unfortunately, for many of them, the old job will be forever gone, and there will be no other resource available to assist them after they exhaust their short-term unemployment benefits.

 

For workers already suffering from a work-related injury or disability, the current crisis is creating an even more dire situation. Workers who are currently unemployed or receiving disability coverage because of an on-the-job event have been working to regain their health and capacity to return to their occupation. With so many healthy workers now available to take that job as soon as it becomes available again, these workers now find themselves essentially 'unemployable.' Even when they are strong enough to return to the workforce, the current situation indicates that there will be no jobs available for them to take. What will they do when that day comes?

 

The analysis of events that occurred after previous recessions and economic downturns suggests that many of today's unemployed workers will file worker's compensation (WC) claims or, if appropriate, social security disability claims (SSDI) to fill the void created by no job and exhausted UI benefits. Further, that research also shows that an increase in both WC and SSDI claims often also leads to an increase in requests for Medicare Set Aside accounts.

 

The Past Informs the Present

It's always helpful to look at relevant past events to make sense of current happenings. The economic crisis generated by today's COVID-19 pandemic is certainly similar to the housing crisis that caused the 2007-2009 Great Recession, so social responses to that situation can provide insights and direction for today's business leaders.

 

The message in brief: expect an influx of both UI and SSDI claims, as well as a swell of MSA applications. Data gathered over time reveals that the number of both UI and SSDI claims rose during the last seven recessionary periods, all of which occurred during the past five decades. Simply put, people who can't find work will seek alternative resources to fill that economic void. That pivot away from a work search to alternative financial supports usually takes them to either WC or SSDI options, and, in both cases, the opportunities to file an MSA application grow.

 

Newly Unemployed Workers:

Many employees will continue to work through an on-the-job injury if they can, prefering to retain their incomes even if that means slowing their recovery. These now unemployed workers may not be able to return to their old jobs, nor are they likely to find new work as stronger, healthier competitors vie for what is sure to be a limited opportunity for employment post-pandemic. These former employees may turn to WC resources as an alternative to returning to their old job or looking in vain to find a new one. They may also see the value of establishing an MSA within the case to ensure their health needs are covered regardless of the state of the future global economy

 

SSDI Recipients

In a similar vein, workers who are already collecting SSDI benefits may find themselves also blanked out of any work they might have taken or returned to as healthier applicants compete against them for that work.

Further, many of them may now also qualify for an MSA if they've been on SSDI for more than two years. This option is available regardless of their age. In 2008, the number of displaced workers who applied for SSDI benefits topped 2.3 million, which was the record at that time.

 

Research conducted after the Great Recession receded confirmed that many workers who struggled through that event filed either or both WC and SSDI claims to replace lost wages and healthcare coverage. The population receiving federal disability benefits grew from 7.6 million in 2009 to 8.9 in 2013 because their combined health and employment challenges provided the opportunity to access these resources rather than attempt to return to work. And    F    subsequent research indicates that 'most' Medicare MSA claimants are eligible because they have been on SSDI for the requisite two years, and not because of their chronological age.

 

Impact on CMS

This research suggests that many of today's unemployed workers will be turning to both UI and SSDI for alternative financial support during and after this pandemic. That influx of cases will significantly increase the already high demands being made on UI and SSDI providers, as well as on the Centers for Medicare and Medicaid Services (CMS). Making things worse for CMS: the Agency is already facing massive budget challenges as the number of workers who continue to pay into the system is shrinking while the number of those taking resources out of it is rising.

 

These unique and difficult challenges suggest that, as a response to heightened demand and reduced resources, the Agency will also become significantly more stringent regarding MSA compliance practices. Its efforts to enforcing the Mandatory Secondary Payor Act will almost certainly require more stringent attention to detail in every MSA case to prevent CMS from shouldering any inappropriate economic burdens that belong to other entities.

Last month's post discussed the history of how and why the 'workers’ compensation' (WC) industry evolved out of medieval 'employment' practices:

  • Employers often demanded that their employees put in long hours under harsh conditions to justify paying them a minimal wage.
  • Workers were subjected to challenging conditions in unsafe factories that exposed them to innumerable health and safety risks; injuries often ended their working career, and none had sufficient economic resources to fall back on when their earning days were cut short.
  • The rise of skilled workers gave that population more power, which they used (through strikes and work stoppages) to leverage better pay and better conditions.

Eventually, in 1871, Prussia's (now Germany) Baron von Bismarck recognized that constant employment disruptions destabilized the nation's economy and growing industrial sectors and that the existing system wasn't adequately addressing the conflicts. Consequently, he instituted the world's first "Employers Liability Law" that provided an alternative to lawsuits to recover damages when workers were injured at work. The new policy was a balance between the needs of the employers (to have a profitable workforce and avoid costly legal bills) and the needs of the workers (to have a safe place to work and a way to recover physically and financially when on-the-job injuries occurred).

 

This notion of a 'balance' in the work arena set the stage for today's WC industry, which remains a balancing act between the interests of employers and employees. That balancing act has expanded, however, and now also includes third parties and other entities that may play a unique role in each WC case. The result is a network of standards and organizations that work together to ensure the nation's work gets done and that its injured workers can get back to work as quickly as possible.

 

The overarching premises of today's WC industry are:

  • to keep workers safe while at work, and help them recover from injuries that occur on the job;
  • to ensure that companies can avoid costly litigation and have the resources to respond to on-site, workforce injuries, and
  • to hold all contributors to the unsafe conditions liable for damages caused by those conditions, including the cost of medical services to the injured worker.

 

"Modern" Workers’ Compensation Practices

Look around any of today's workplaces and you're likely to see more than one 'accident' waiting to happen, even in the safest locations. Some industries involve inherently dangerous activities, and those businesses often experience more - and more serious - on-the-job injuries than their less hazardous counterparts. Further, you can multiply all those injury opportunities by the number of business machines, building configurations, and other industry incidentals that facilitate the work, so even in a quiet office setting, accidents do happen, and injuries do occur. It's not surprising, then, that more than four million non-fatal injuries happen in US businesses every year.

 

For almost all of those injuries (and with a few exceptions), hurt employees submit claims to their employer-funded WC insurance carrier, which both insures the employer against having to litigate a subsequent lawsuit and ensures that the injured party gets the medical and rehabilitation support they need to recover and get back to work.

 

In many cases, however, the WC case involves more than just providing services to the worker and funding their health care team. Filing that WC claim can also trigger a more extensive evaluation of the injury and its cause by the WC Insurer to determine if there is another element of fault involved and who, besides the employer, might have contributed to the cause of the incident.

 

The Insurer's contracted duty is to cover medical costs on behalf of the employer only, and not on behalf of others who contributed to the cause of the injury. Further, the Insurer must protect the interests of its insureds and not squander its financial assets by paying for damages for which its insureds aren't responsible. The point of the investigation, therefore, is to reduce the insurance company's exposure to unnecessary expenditures and to hold all liable parties accountable for their share of the damages.

 

The injured employee can also file a lawsuit against a third party that contributed to the cause of their injury.

 

There are as many ways parties other than employers can contribute to an injury as there are workplaces in the country:

  • Eroded or failing equipment may have a defect that contributed to the injury. The manufacturer or installer may be liable for those failures.
  • The physical plant may have failures, as well, that reduced the quality of the work environment. A leaking roof, for example, may cause slippery floors or machinery. A negligent maintenance contractor may be responsible for that condition.
  • Training or business practices may not have been sufficient for the task at hand. New employees may not be aware of or take appropriate precautions to protect against known risks, opening themselves to the risk of being injured. Other workers may be responsible for failing to train or manage workers properly.
  • Even the employee could be found to be at least partially responsible for the injury if their behavior or activities on the job site were negligent or inappropriate.

The investigation will reveal where, how, and why the injury occurred, as well as who was responsible for contributing to that situation. After making that determination, the employer, the Insurer, and/or the employee can decide whether it is appropriate to pursue a legal action to determine who contributed to the cause of the injury and should therefore also add financially to the cost of the injured worker's medical care.

 

Who Pays? How Much? Why?

Assigning liability in any WC case requires an evaluation of the actions of all the parties who might be involved. The investigation is looking for all the workplace elements involved in causing the injury; discover who had control over those elements and evaluate whether those elements could have been safer to avoid the injury or reduce its damage. After identifying all the factors associated with the cause of the injury, then the question becomes whether each individual factor also creates liability in its controlling entity. And this is where most cases get complicated; many potentially liable entities deny their involvement and fight to prevent being held responsible.

 

Their reluctance is understandable. 'Facts' can be relative based on who experiences them; what seems abundantly clear to one person can be the polar opposite experience compared to that of another witness. So, to resolve the issues that frequently arise in WC cases, a legal case is often also filed.

 

In the legal case, those entities that might hold liability are the defendants. The Judge will make several decisions, each of which will determine which defendant pays how much to cover the injured worker's medical costs. In workplace injury cases, there are often several defendants involved, and the Judge will assign each of those determined to be liable a percentage of 'fault' for causing the injury. Those percentages are then applied to the overall cost of the medical coverage, and each defendant will pay that percentage of the damages.

 

The optimal result is multi-layered:

  • The injured employee wants to get all the financial and medical support needed to make a full recovery (or come as close to that as possible).
  • The employer wants to avoid being held liable for causal factors that are out of their control.
  • The Insurer wants to protect its insured resources by containing costs as much as possible, and
  • The offending third parties will both make appropriate reparations to the injured worker, and also improve their safety or quality concerns to reduce the opportunity for a similar incident to occur in the future.

 

So, When Does Medicare Become Relevant?

Medicare and Medicare Set-Asides play an integral part in the cases of many injured workers. In our next post, we will explain where that third party - the Centers for Medicare and Medicaid Services (CMS) - enters the injured worker's story.

 

It's mid-summer, and many of our readers are off on well-deserved vacations. For those who are still in the office (and are as fascinated as we are by all things ‘workers’ comp'), we are taking this opportunity to offer some updates to one of the major subjects we've been following and to provide a heads up about what we'll be highlighting later this year.

 

Updates on Opioids

For more than two years, we've been profiling the challenges posed to the nation's workers and employers by opioids. We've tried to explain:

 

We've looked into what employers can to do (and their struggle with those activities) to reduce the likelihood that their injured workers will suffer the additional pain of a subsequent opioid addiction. And we've reported how some of America's medical professionals have contributed to (and profited dramatically by) the problem by prescribing so many of the drugs in inappropriate quantities and dosages.

 

Clearly, opioids as pain relief for workplace injuries have wreaked havoc across the country for at least two decades, and America's employers and employees have borne the economic and emotional brunt of that disaster.

 

Seeing a Turnaround?

However, increased attention to the issue has also increased responses to it, and all parties involved - employers, employees, insurers, healthcare providers, and government agencies - are now working in conjunction with each other to reduce the problem.

 

Consequently, we're now happy to report three good news stories about how those added attentions and intentions have had a positive impact on the opioid concern:

 

1) The Dollar Amount of Spending on Opioids is Falling

Recently released data reveals that in 2018, all 27 respondents to the 16th annual "Survey of Prescription Drug Management in Workers’ Comp" reduced their spending on opioids for injured workers by an aggregate of 23.2 percent in 2018. The drop signals the third year in a row that opioid spending was down, by 16% in 2017 and 13% in 2016.

 

Those reductions are the result of several changes in how medications are managed in the workers’ comp system. Insurers are now more careful about the number and dosage of opioids that they're will to cover, and ethical healthcare providers are reducing the numbers of opioid prescriptions that they write. And injured persons are also assuming more responsibility for their healthcare, by becoming more aware of the dosage and duration of prescriptions and moving off the drugs earlier in their recovery period.

 

In many cases, the shift in opioid usage reflects the growing reality that workers who remain on the drugs beyond medically accepted terms take longer to recover, are more likely to not return to work, and more likely to not regain their previous level of function even after they've recovered from the injury itself.

 

2) Adding Acupuncture to the List?

On a related note, in mid-July, the CMS (Centers for Medicare & Medicaid Services) for the first time suggested a willingness toauthorize the use of acupuncture treatments for their Medicare patients who suffer from chronic low back pain (cLBP). It's not available for everyone just yet, however; the agency issued a 'proposed' decision, indicating that they'd make a final determination on the question based on the results received by study participants who are enrolled patients in CMS-approved research or clinical trials sponsored by the NIH (National Institutes of Health).

 

Earlier in the year, CMS launched a  National Coverage Analysis (NCA) of scientific evidence that supports or negates the use of acupuncture as a pain-relieving alternative to medical interventions such as opioids. While there's no posted information as to why cLBP is the current focus, again, statistics may reveal why the CMS chose that particular ailment. A 2016 National Health Survey showed that at least 50 million American adults suffered from some form of cLBP and that 19.6 million of those experienced "high impact chronic pain." Both levels of pain are associated with increased anxiety, depression, and, in many cases, opioid dependence. Using the non-medical intervention of acupuncture instead of opioids would be a game-changer for many people if it curtailed their pain and improved their quality of life without the need for opioids.

 

The NCA is also part of a Strategic Plan developed by the National Institute of Drug Abuse (NIDA) to reduce the impact of opioids on Americans. The strategy includes four approaches to improved pain management that might assist with the alleviation of pain but not exacerbate the health situation with an unnecessary opioid addiction. The approaches include exploring for more non-opioid medical interventions; assessing the efficacy of non-pharmacological pain treatments such as acupuncture and biofeedback; finding adjunctive supports for cases where opioids remain the best pain controlling mechanism and developing strategies to improve opioid management practices so that opioid use disorders don't develop.

 

3) The National Safety Council (NSC) Agrees with CMS

In a show of national unity, the NSC agreed publicly with the CMS and asserted its support of the decision to consider alternative pain treatment methods like acupuncture instead of opioids. The NSC put the opioid crisis in context by noting that the odds of dying prematurely because of a fatal opioid overdose have surpassed the odds of being killed in a car accident for the first time ever. The agency went on to encourage all employers and their benefits providers to consider accepting alternative pain treatments as a way to not just reduce the threat of opioid dependency but to avoid it altogether.

 

A Brighter Future

Both the reduction in opioid spending and the possibility of acupuncture coverage for controlling pain are significant strides toward a definitive solution to the opioid crisis. We will continue to monitor how the country is managing this scourge and keep our readers informed about how they can be part of that solution, too.

 

 

So, What IS an MSA?

CompEx MSA also intends to explore its roots and will be providing an overview of the need for and development of Medicare Set-Aside accounts. Protections for worker safety and healthcare management have evolved over a long period that also saw the institution of mandatory work hours, minimum wages, and safe working condition standards. Through it all, employers have had to walk a fine line between profitability and maintaining attention to emerging government and industry regulations. The MSA is one tool they can use to make that process easier.

 

At CompEx MSA, we believe we can assist our clients better if we help them to better understand how the MSA process works and how it works within America's industries and communities. We will be launching that series next month.

Workers’ Compensation Insurance plays an integral part in America's economy by allowing employers, either privately or through their workers’ compensation insurers, to cover the medical costs stemming from on-the-job injuries. As a corporate expense, the funds used to pay those premiums and fees are taken off the top of corporate revenues, so keeping them as low as possible is essential to ensure that the company remains economically viable.

 

Additionally, the value of those fees is a critical component of Medicare Set Aside accounts (MSAs), which are used to cover injury-related expenses after the injured worker has left the job. Employers who are responsible for generating and funding those MSAs should be fully aware of the costs for professional medical services in their community to ensure the value of the MSA covers the actual future costs of needed medical services.

 

Those Costs, They are a-Changing …

A recently released reportby the Workers’ Compensation Research Institute(WCRI), however, reveals that how much a company pays for professional medical services varies greatly across the country, with some states paying almost 160% more than others for comparable medical services. Those higher fees are passed on to the workers’ compensation insurer who, in turn, passes them on to the employer. And those higher fees also jack up the overall cost to the employer/insurer when the injured worker requires the establishment of an MSA to cover future costs flowing from the on-the-job injury.

 

Understanding the rates in your community and how those are calculated may help you make better decisions for your workers and your organization if or when you have an injured worker who is or becomes eligible for Medicare benefits.

 

The 2019 WCRI Report

The newly released report notes and compares the actual fees paid to medical services providers for services delivered to injured workers across 36 states. It is the 11th such report and focuses on data gathered in 2017 and 2018 (although it also tracks trends evolving since 2008). Measuring the actual prices for the most commonly used services accessed by injured workers, the report gives policymakers, insurers, and corporations insights into how and why medical costs fluctuate year after year.

 

A notable analysis in this year's report is the comparison of prices in states that have a legislated fee schedule for medical pricesversus states that have no such schedule. Perhaps not surprisingly, entities in states without an established fee schedule also usually paid higher prices for services than those in states where a fee schedule prescribes the price. Therefore, employers in those non-scheduled fee states paid more for medical services for their injured workers than those employers in states where there were legally prescribed caps on those prices.

 

Finally, the report also shows trends regarding where prices have risen and fallen over the past 11 years, providing some insight into the possible trajectory of health care prices for those services in the future.

 

Determining Medical Services Prices

In states with fee schedules, the workers’ compensation prices for medical services are either at the statutory fee rate, or they are negotiated between the insurer and the provider using the schedule as a guide. In states without a fee schedule, the costs for services provided by an out-of-network provider are usually what that provider charges or an averaged calculation of the 'usual and customary' value charged within that community. For in-network providers, the price is negotiated between the provider and the insurer. Consequently, both fee schedules and network contracts are the main influences on setting the prices for medical services provided to injured workers.

 

How Prices Compare Across the Country

Although the report indexes data from just 36 states, that data also represents 88% of the workers’ compensation benefits paid out across the entire nation. To accurately compare state to state, the researchers established the median value and identified it as "100%," then calculated each state's derivation above or below that median:

  • At the low end of the comparison table is Florida, which is assigned a comparison value of around 75%, or three-quarters of the national median. Companies in Florida pay 25% less than that median average for medical services for injured workers. The next nine lowest priced states are South Carolina (79%), New York (80%), California (81%), Michigan (84%), Oklahoma (85%), Arkansas (88%), Massachusetts (89%), Maryland (91%), and Tennessee (91%).
  • At the high end is Wisconsin, a non-fee scheduled state, where prices were averaged at 258%, or 158 percentage points above the median. Leading up to that pinnacle are (also non-fee scheduled states): New Hampshire (201%), Indiana (169%), Missouri (147%), New Jersey (141%), Virginia (137%), and Iowa (133%). States with both fee schedules and the highest comparison values include Oregon (134%), Illinois (129%), Nevada (129%) and Connecticut (118%).

 

The 183-point difference between Florida and Wisconsin indicates a significant disparity in the prices paid for comparable medical services to injured workers in those two states.  Ergo, employers in Wisconsin paid significantly more in health care costs for their injured workers and were compelled to provide more resources up front for MSAs when those workers became eligible for or began receiving Medicare benefits.

 

How Changing Prices Impact Employers, Too

Another relevant factor affecting overall medical care pricing is its trend for growth or contraction over time. Only 31 of the states had data regarding the fluctuations in prices over the decade spanning 2008 to 2018, and that information is also interesting:

  • Four of the states (Illinois, Nebraska, Michigan, and South Carolina) saw prices drop over the course of the decade, with Illinois prices failing approximately 15%. (Nebraska dropped by just 3% and Michigan and South Carolina each dropped just 2%.)
  • Wisconsin saw the highest rise in medical prices for workers compensation cases, an uptick of 44% over the price of the same services ten years before.
    • Three other states topped a 30% rise (Missouri by 39%, and Arizona and Indiana by 34%);
    • Six states topped a 20% rise (North Carolina by 26%, Kentucky and Texas by 25%; Georgia by 23%; Maryland by 24%, and Oregon by 21%), and
    • Nine states saw their prices rise by more than 10% (Massachusetts by 18%; Colorado and California by 17%; Kansas and Iowa by 16%; New Jersey by 14%; Virginia by 13%, and Pennsylvania by 12%).
    • Nine states experienced price increases of 10% or less: Florida and Minnesota by 10%; Oklahoma by 9%; Louisiana by 6%; Connecticut by 5%; Mississippi by 3%; Arkansas by 2%, and New York by 1%.
    • Only the prices in South Carolina remained stable over the ten-year span.

 

Virginia Provides a New Perspective

An interesting case study developing now is Virginia, which introduced a workers’ compensation fee schedule in January 2018. The state used only statistically reliable data regarding the average/historical costs of services for workers’ compensation injuries when establishing its fee schedule prices and consequently, the prices paid for those professional services dropped 14% in 2018 from comparable services provided in 2017.

 

In terms of actual services rendered, the new fee schedule also dropped the prices paid for specific services: the price for neurological/neuromuscular testing, for example, dropped by 7% while the price for minor radiology dropped by 24%. While, overall, Virginia remained in the higher-priced group of states, its price differential over the median dropped significantly - from 43% to 21% - after the introduction of the price regulation.

 

What the Numbers Might Mean

Depending on the state(s) in which they do business, employers should carefully note the medical services pricing numbers that are relevant to those communities so they can accurately estimate their workers’ compensation and MSA values. If trends hold true, then it's likely that medical care prices for injured workers will continue to rise over the next decade, possibly even in states with fixed fee schedules. As a result, forecasting an accurate estimate of MSA funding levels at the time of case settlement will be even more critical for both employers and insurers who must calculate the potential costs of future medical pricing for injured workers who become Medicare-eligible.

The true cost to the nation's employers of America's opioid crisis is almost inestimable. From lost wages to lost productivity to the thousands of unnecessary deaths caused by the over-prescription of opioids and their subsequent addictions, the value of the losses suffered by individuals, families, communities, and businesses is beyond calculation. Gaining control over the issue is an immense challenge, so it was gratifying to see that the Office of the Inspector General (OIG) is taking significant steps to hold to account those who created much of the problem, at least in the Appalachia region.

 

Surprising Arrests in Appalachia

In April, the OIG arrested 60+ individuals and charged them with health care fraud and opioid 'pushing.' Included in the group are 31 doctors, eight nurse practitioners, seven pharmacists, and seven other health care professionals, all of whom are believed to be responsible for the prescribing and dispensing of more than 350,000 prescriptions - more than 32 million doses- of opioids in 2016. That volume of doses is the equivalent of one per every personin the five states covered by the OIG's investigation: Kentucky, Ohio, Tennessee, West Virginia, and Alabama.

 

These arrests follow an exhaustive 2017 investigation into the opioid situation in that region because data suggested the problem was more significant there than it was in other parts of the country. In 2016, of the 42,000+ opioid-related deaths in the U.S., more than 7,000 occurred within those five Appalachian states. The agency's primary question for the investigation was whether the number of opioid-related deaths or overdoses occurred specifically in Medicare Part D beneficiaries, the direct population over which they have authority. If data revealed that that was the case, was there also an element of fraud in how those drugs were prescribed or dispensed?

 

The investigation found that more than one in three (36%) Medicare Part D beneficiaries in those five states had received at least one opioid prescription, and almost 49,000 of those Part D beneficiaries received doses and prescriptions at levels that 'far exceeded' the levels of concern as iterated by the Centers for Disease Control (CDC). The evidence led to the belief that yes, certain health care professionals were definitely selling opioids as a money-making operation, and not as a legitimate health care practice. The evidence also revealed not just the dosages and prescriptions, but also the identities of the medical professionals who were responsible for moving the drugs into the population through otherwise legitimate healthcare settings.

 

Not Just in Appalachia

More arrests are expected, too. The OIG has taken a methodical approach in its investigation into the opioid concern, focusing on three main issues: improving the efficiency of the HHS systems that prescribe opioids; empowering system partners by sharing data and information, and holding accountable the people who are exploiting and defrauding those systems. This third tact - accountability - is now pursued by a series of 'Medicare Fraud Strike Forces' that are deployed in 17 locations around the country, including Los Angeles, the New York metropolitan area, Miami, Chicago, Detroit, Texas and Louisiana.  First established in 2007, the Strike Force teams have been investigating Medicare fraud in those areas where data suggests fraud may be occurring. They work in conjunction with the OIG and also with the Department of Justice, the F.B.I, the Offices of United States Attorneys, and local law enforcement agencies.

 

Regarding opioids, the Strike Forces look for instances where there is an excessive amount of opioids in a given community, then discovering if there is a legitimate reason for that reality. If they don't find that valid reason, then they look to see what other factors might indicate a crime is occurring. In the Appalachia cases, the health care professionals are accused of filling or writing prescriptions outside of their normal course of medical practices and dispensing the drugs with no legitimate medical reason for doing so. They are actually charged with illegally distributing Schedule 1 drugs, and their charges flow from standard drug enforcement laws. The Assistant Attorney General who filed the cases declared that    the defendants would be treated like drug dealers if their actions are proven to be those of drug dealers.

 

Employers Remain on the Front Line of the Crisis

Medicare Part D beneficiaries aren't the only workers who can be negatively impacted by opioids, however. Employers in every industry should welcome the investigations and arrests because they shoulder much of the financial burden of the medical costs resulting from on-the-job injuries through their workers’ compensation insurance premiums. Not only is it expensive to maintain treatment for injured workers, but the employer also endures a loss of productivity if the injured party is a critical employee; the cost of any substitute worker, and even the cost to find and onboard a new worker if the injured person develops an opioid addiction and can't return to work.

 

Further, some employers may be more adversely affected than others:

 

Rural Employers

Appalachian employers may face higher than average odds of suffering economically due to the opioid crisis, too.  A recent study  revealed that workers in remote communities who sustain an on-the-job injury are 25% more likely to receive an opioid prescription for pain than their more urban counterparts.  The Workers’ Compensation Research Institute (WCRI) reviewed more than one million post-injury pain medication prescriptions dated between October 2014 and September 2015 and found that two of every three injured folks in 'very rural' areas (<20,000 population) received at least one opioid prescription and one in three received two or more.

 

Small Business Employers

Other WCRI studies reveal additional challenges for owners of smaller companies, those with an annual payroll of less than $20 million. Injured workers in small businesses are also more likely to be prescribed an opioid for their injury-related pain. They're also more likely to receive more than one such prescription and to have those prescriptions last a longer term than do workers at companies with more employees.

 

Special Class Workers

Employers in the more labor-oriented industries are also more likely to experience opioid challenges in their injured workers' cases. People injured in mining, construction, and other heavy labor jobs are more likely to get an opioid prescription for the pain caused by that injury, as are those workers between the ages of 40 and 60 years.

 

Workers’ Compensation Burdens

Of course, all employers are at risk of economic losses caused by opioid-affected employees. The National Institute for Occupational Safety and Health (NIOSH) estimates that 95% of the people who died from a drug overdose in 2016 were people within the working age population - 15-64 years. That doesn't mean that all of those preceding injuries were on-the-job occurrences, but it does suggest that every employer should be alert to the possibility of an opioid challenge arising from any on-the-job injury and take precautions to reduce that likelihood. Those precautions would include maintaining a safe work environment to reduce the risk of injuries; maintaining a vigilant oversight of medical cases and drug prescriptions when injuries do occur and actively pursuing alternative treatments to opioids for ongoing pain management.

 

After 25 years of watching the opioid epidemic grow across the country, it is gratifying to see the federal government finally pursuing those people who are most likely the cause of much of the problem. The actions follow the CDC's 2016 restatement of its pain management protocols to reduce the volume of opioids as pain medications, so the actual number of opioid prescriptions is falling, too. Hopefully, the enhanced enforcement of drug laws as those relate to opioids will also reduce or eliminate the number of opioid deaths and workplace complications, so employers and their workers can avoid unnecessary losses even when on-the-job injuries do occur.

Despite the strong connection between workplace injuries and opioid addiction, a majority of the Nation's employers do not feel they are fully capable of dealing with the concern, says the National Safety Council (NSC). Data reveals that many employers remain hesitant to take the steps necessary to prevent or control the risks posed by a potential opioid problem in their workforce and, as a consequence, injured workers continue to suffer a higher than normal incidence rate of opioid addiction. However, by focusing their efforts on two primary objectives – drug use policies and health care oversight - corporate leadership can reduce both the likelihood of injury and the risk of potential opioid addiction if an on-the-job injury actually occurs.

The Status of Opioid Management in the Workplace

According to the NSC, three in four employers (75%) report work-based opioid challenges are negatively impacting their business, with more than a third (38%) experiencing poor performance or absenteeism, and almost a third (31%) suffering through an overdose or an on-the-job injury. In fact, workplace overdose deaths (by drugs or alcohol) have risen 25% in each of the past five years, another indicator that organizations are struggling to contribute all that they can to reduce (or at least stem) the tide of workplace-situated, addiction disasters.

A closer look at the NSC survey adds depth to the conclusion that employers are perplexed by the problem:

  • Significantly, their attention is not focused on the drug issue but instead, is focused on finding qualified applicants and providing them with sufficient benefits.
  • Of those that do have drug-related policies in place, only half are confident that those are appropriate to deal with any drug issue that arises.
  • Ironically, concerns about workers’ compensation costs, which are already high, do not also compel employers to try to reduce those costs by addressing their drivers: unsafe working conditions and on-the-job drug use, opioid or otherwise.

Despite years of data and information relating to the opioid crisis and its impact on America's workforce, it appears that the country's employers - the front line in many cases for injury and opioid addiction prevention - have not yet embraced the concern as their own or one they should be controlling.

Not New; Not Going Away

Ignoring the issue is not an appropriate response, however. At CompEx MSA, we've dedicated several articles over the past two years to the opioid concern, paying specific attention to its impact on the workers’ compensation sector.

  • Because on-the-job injuries are a common occurrence and frequently involve pain and pain management activities, doctors issue a high number of opioid prescriptions to injured workers for pain management.
  • Employers bear a significant financial burden for the crisis.
    • According to the International Risk Management Institute (IRMI), companies paid over $50 billionfor opioid prescriptions for injured workers between 2007 and 2016. That statistic doesn't include the added costs of lost time, reduced productivity, or the costs of extended health care needed to manage not just the underlying injury but also the resulting opioid addiction (when those occur).
    • Employers are also adding the expense of opioid treatment services to their employee's health care benefits, as a means of proactively keeping costs down.
  • Governments and agencies have stepped up their responses to the crisis by layering controls over the prescription of opioids that reduce their strength per pill, the number of pills available per fill, and the duration of the prescription.

Despite these efforts, the opioid challenge continues to take lives prematurely, to such an extent that it has single-handedly reduced the country's average life expectancy by 2.5 months (so far).

The Disconnect Needs Attention

These facts and figures about the prevalence and toxicity of the opioid concern across America's industrial complex should raise every employer's concern about their possibly less-than-comprehensive response to the issue. The best response would incorporate each of the three elements of the current concern to lay a sustainable and effective foundation for a comprehensive solution that:

  • addresses the employer's preferences (quality staff, appropriate benefits and cost controls);
  • reduces the number of injuries that occur at the workplace (preventing the opportunity to develop an opioid addiction), and
  • manages existing pain concerns with appropriate controls over prescribed opioids.

While maintaining the quality of staff and value of benefits is specific to each business, all businesses can benefit from addressing the other two legs of the triad, preventing injuries and properly caring for those that occur. In reality, attention to the latter two (prevention and care) also assists in the retention of the first (a high-quality staff).

Preventative Actions

Maintaining a safe workplace is perhaps the best route to an uninjured workforce, which is also key to keeping corporate costs in line. Most employers are careful to maintain the workplace safety guidelines established for their industry by the government; keeping those current is a critical component of managing a healthy workforce.

One element that is often missing from those 'workplace safety' standards, however, is a fully informed and enforced drug-free workplace policy. The NSC survey indicates that, although 86% of companies have such policies on their books, only 60% have procedures specifically requiring workers to report to their bosses their use of prescription opioids. Half of the survey respondents (49%) were not confident that their HR policies had sufficiently covered the issue of opioid misuse and use in the workplace. Further, even if the policies themselves were completely comprehensive about all opioid-related concerns, almost four in five (79%) employers did not believe that their workers would be able to identify the warning signs of a growing opioid dependency accurately.

Clearly, there are many policy and educational options available to employers today to improve how employers manage the use of drugs in the workplace that can escalate their risk of developing an opioid crisis within their staff. Accordingly, the NSC recommends that every organization review their existing documentation to ensure that it includes:

  • a clearly written statement regarding the use of drugs in the workplace;
  • policies that require workers to receive appropriate education about the issue (so they can determine for themselves if they have or are developing a problem), and
  • policies that require supervisors to receive training so they can ask about drug use and spot the signs and symptoms that might indicate an addiction is pending.

Remedial Actions

There are also actions employers can take after discovering an addiction in a worker, too, that can reduce overall costs and get the employee back on the job as quickly as possible.

  • They can ensure that their prescribers follow the opioid management guidelines set out by the Centers for Disease Control.
  • By working closely with insurers and pharmacies, employers can structure their health plans, benefits packages, and policies to keep an eye on pain management in general and the use of prescribed opioids in particular.
  • Tracking the data related to opioid prescriptions - dosage; the number of pills per fill, and the duration of the prescription - can flag if or when that situation is going off its course.
  • Not insignificantly, employers can offer education and support to workers who might need opioids because of a job-related injury, so they know what to watch for and where to get help.

Every day, over one hundred people die prematurely because of an opioid addiction or overdose. A significant percentage of those people began their journey to addiction because of a job-related injury. Employers, therefore, are in a singularly unique position to address the opioid crisis through better management of their organization and workforce. Ironically, by changing their corporate goals to prioritize safety and drug-use management, they will also achieve their ultimate goal: attracting and retaining a highly qualified – and drug-free, uninjured - staff. For thousands of workers across the country, it's becoming increasingly imperative that more employers adopt this reprioritization sooner rather than later.

Hidden behind America's disturbing opioid addiction and premature death rates is a related and equally troubling reality: the contribution to the crisis played by benzodiazepines in those numbers. When used appropriately, 'benzos' are perfectly good medications for the maladies they were designed to address. When used inappropriately and in conjunction with opioids, however, the drugs can drive individuals into an ever-spiraling drop into further addiction and destruction. Tragically, however, the over-use of benzos is tied to the same challenges posed by opioids, and now the country must also focus on this second front if it intends to reduce or eradicate the opioid (and its related benzodiazepine) epidemic.

 

Why Benzodiazepines?

Because of their effectiveness in treating alcohol withdrawal, anxiety, and sleep disorders, the various formulas of benzos are some of the most prescribed medications in the U.S. By triggering tranquilizing neurotransmitters in the brain, the benzodiazepine calms the nerves and provides relief for a variety of symptoms, including insomnia, seizures, panic attacks, and General Anxiety Disorder.

 

Not surprisingly, the drugs also come with side effects that can be disabling all by themselves, let alone when the benzo is used along with an opioid. Standard side effects of benzodiazepines include drowsiness, dizziness, confusion, trembling, and impaired coordination. In some people, the drugs may also impair vision and trigger depression. For users over 65 years, there may be a link to an increased risk of dementia.

 

Interactions with other drugs taken simultaneously with the benzodiazepine, especially antidepressants, can cause problems by enhancing the severity of the side effects. While not as likely as opioids to cause an overdose, benzos contribute to overdoses caused by other drugs (including opioids) by suppressing the central nervous system, which can lead to an inability to remain awake or to awaken, or the suppression of breathing sufficiently to cause suffocation.

 

Benzodiazepines go by several names, with the most recognized being Xanax, Librium, Klonopin, and Valium. Despite their value, there are a lot of factors that suggest that benzos should be used sparingly and with significant oversight.

 

Benzo's and Opioids

The co-prescribing of opioids and benzos has been concerning since the 1970's when medical systems first noticed the trend. Even back then, there was sufficient data to suggest that the dual-prescribing practices were increasing the risk of overdose and subsequent emergency medical interventions. Studies at the time noted that the benzos enhanced the effects of the opioids, which supported the conclusion that the combination of the two carried a high risk of abuse.

 

The value of the double-dosing, however, is hard to overlook. Opioids are prescribed to relieve pain from any cause and are frequently (although erroneously) prescribed to manage long-term pain. Many painful physical ailments also trigger fears and concerns in their sufferers, including concerns about their ability to pay for health care, return to work, or manage other aspects of their lives while living with the pain. While the opioids reduce the physical sensation of pain, the benzodiazepines reduce the anxiety that the pain has triggered.

 

The challenge is that using the two together exacerbates their individual threats and escalates the potential for misuse of both. A British Medical Journal study of 2,400 fatally overdosed veterans revealed that 49% had had dual prescriptions for the benzos and opioids. Further evaluation also pointed out that, in many people, the initial prescription by a physician of the two drugs together was the trigger for the higher risk of addiction and overdose.

 

The Impact of Benzo and Opioid Combinations

Even though medical research had raised concerns about the benzo-opioid threat back in the 1970s, healthcare professionals continued to prescribe the duo throughout the subsequent decades and even added a third class of drugs into the mix.

 

Overdose numbers grow ...

Between 1999 and 2014, the number of Americans prescribed both benzos and opioids grew by 250%, to about 4.3 million, and abuse of the combination has proven to be involved in 30% of all opioid overdoses, as of 2018.

 

As the number of benzo-specific prescriptions grew, so did the prescribing challenges they presented: the quantity of the drug per 100,000 adults grew from 1.1 kg to 3.6 kg Lorazepam equivalents, meaning patients were receiving a larger dose of the drug in each pill than they had received in previously prescribed pills. Also, prescription durations were extended to last much longer than the two-to-four week recommended duration. Patients were getting more drug volume over a longer period of time than ever before.

 

Follow-up studies have revealed that that people receiving the double prescriptions are ten times more likely to suffer a premature death caused by overdose than those who receive only opioids.

 

While the Workers’ Compensation system suffers

The opioid/benzo addiction situation impact on the workers’ compensation system can't be overestimated. Recently released statistics indicate:

  • that opioid users are more likely to become addicted even when they take the drug for a medically appropriate reason, such as an on-the-job injury, and
  • overlapping prescriptions of opioids and benzos at least some of the time can be signs of inappropriate prescribing or use or both.

 

Further, in the work world, circumstances related to the workplace or work-place injuries can accelerate the potential for an addiction to develop:

  • Psychosocial stress, such as concerns about letting coworkers down or a potential inability to return to work, can lead to increased reliance on benzodiazepines to relieve that anxiety, and on opioids to relieve pain, thereby facilitating the capacity to work.
  • Use of both drugs can also lead to additional injuries. Together, they can impede psychomotor capacities which can lead to falls or mishandling of machinery or tools.
  • The combined use of the drugs also contributes to higher healthcare costs as worker/patients attend more doctor visits and develop more disabilities.

 

Addressing the challenges

In 2016, the Centers for Disease Control (CDC) issued new directives that recommend avoiding prescribing benzodiazepines and opioids together. As a result, both prescriptions now carry 'black box' warning labels that clearly describe the dangers of using the two together. Injured workers should pay attention to those warnings and ask their doctors for alternatives to either or both medications as possible treatment for their particular injuries.

 

For employers, the rising concerns should justify enhanced attention to the treatments their injured workers are receiving. Any worker under the influence of either drug alone but especially the two together is at risk of further, potentially more damaging injury. Maintaining a drug-free workplace policy could alleviate the challenge while overseeing the use of any such drugs during the treatment of on-the-job injuries can curtail the possible development of addiction.

 

Additionally, it is in their best economic interest as well for business owners to retain vigilant over the concern. Not only do opioid prescriptions double the risk of developing a disability after one year, but Appellate courts have held that both insurers and employers can be held accountable for an injured worker's overdose death.

 

On-the-job injuries continue to represent a significant cost of doing business for employers across all industries. The challenges presented by the inappropriate use and combinations of prescription drugs to treat those injuries present additional economic concerns and should be managed with all the caution and attention they deserve. By keeping an eye on their injured workers, including the medications they are taking, today’s business owners can help to keep their costs down and their workforce healthy.

The Medicare Secondary Payer (MSP) law requires that "Responsible Reporting Entities" (RREs) notify the Centers for Medicare and Medicaid Services (CMS) when a Medicare beneficiary (or soon-to-be beneficiary) is injured. Failure by an RRE to notify CMS of such an injured person may result in significant “civil monetary penalties” (CMPs), according to federal law. CMS has announced that it will begin developing rules around enforcing this CMP provision in late 2019. The announcement raises several questions that are of concern to insurers of any sized company (including self-insured companies).

Why is CMS focused on this issue now?

In a nutshell, the proposed rule would create and clarify reporting standards for insurers to follow so they do not trigger an inquiry or subsequent CMP related to their RRE reporting activities. The Medicare Access and CHIP Reauthorization Act of 2015 repealed duplicative MSP reporting requirements but opened up to public discussion what might the potential criteria be for enforcing non-compliance with the remaining reporting requirements. One such requirement is that of reporting to CMS when a Medicare beneficiary (or soon to be beneficiary) is injured and needs medical care because of those injuries.

There is no current legislation that details when non-compliance with this reporting rule should trigger a CMP, nor are there standards that clarify what insurers can do to prevent being subject to such a fine. (The statute does, however, clarify that provisions (e) and (k) of §1128a (42 U.S.C. 1320a-7a) of the Social Security Laws apply to these CMPs the same way they apply to Social Security non-compliances. Those provisions detail how to appeal if such a penalty is assessed (at paragraph (e)) and authorizes the Secretary to proceed to federal courtif it learns that a company might become subject to a CMP (at paragraph (k).)

Enforcing the rule provides CMS with two benefits:

1) It will comply with the MSP law.

Being a secondary payer, Medicare resources cannot be touched until those of the primary payer are exhausted. CMS has an affirmative legal duty to avoid paying for injuries that are covered by a primary healthcare insurer and the statute gives it the authority to know when its participants are receiving that support from their primary insurance resource. By mandating notice in every applicable case, CMS can monitor all of its injured participants and plan appropriately for providing benefits when the primary benefits run out. Without advance notice, that oversight and planning can't happen.

2) It may increase its revenues

Ostensibly, every unreported case could become a future Medicare case requiring access to Medicare dollars. Without notice of the extent of earlier medical care, a subsequent claim to CMS could trigger an expensive investigation into whether those primary benefits were properly utilized in every case.

From the carrier's perspective, and while there is no statistical data about how many unreported cases exist, any insuring company may have relevant cases going back years, and therefore may have hundreds of eligible claimants on their books. Each one of those claimant's cases might trigger a monetary penalty of up to $1,000 per day of non-compliance and applying such a fine to even just a few cases in any one company could raise millions of dollars which the federal agency could use to provide even more care for its enrollees.

Who will be affected?

The statute itself applies to insurers that provide medical coverage to their insureds, including companies that are self-insured. In statutory language, a “Responsible Reporting Entity” is any "applicable plan" offered by any liability insurance company, no-fault insurance company or workers’ compensation insurance carrier (42 U.S.C. 1395y(b)(8)).

  • Insurers that issue these types of plans must register with CMS as an RRE and report to CMS when they become aware of an injured person within their plan who is also a Medicare beneficiary (or soon-to-be beneficiary.)
  • Their report must include the identity of the injured person and any other information that assists the CMS secretary in determining eligibility and coordination of benefits (42 U.S.C. 1395y9b)(7)(B)).
  • Failure to file the notification can result in a "civil money penalty" of $1,000 for each day of non-compliance for each individual about whom a report should have been filed (42 U.S.C. §1395y(b)(7)(B)(i)).

Why would an insurer not report?

Despite the rule that every eligible case must be reported, not all insurers are dedicated to pursuing that mandate. Some companies may not be aware of their insured’s Medicare eligibility, so they don’t know about Medicare and MSP requirements. In some cases where Medicare eligibility is a factor, the injuries will, in all likelihood, heal well within the scope of the primary carrier's obligation, so Medicare resources will never be needed. In other cases, insufficient internal resources or 'operator error' may have inadvertently missed the requirement to make a notification in any given situation. In all likelihood, most if not all insurance carriers probably have at least some percentage of cases that should have been reported to CMS but were not.

What should insurers do now?

In anticipation that the enforcement procedure becomes clearer, there are two steps every insurer should take now to avoid as much as possible being fined for non-compliance with this reporting rule:

1) Begin an assessment of all cases to determine if any are or may be subject to the CMP rule. Insurers with thousands of open cases will find this task burdensome; however, that investment of time to set records straight will be well worth it when weighed against the cost of the potential but avoided CMPs.

2) Contribute to the conversation about what the new reporting standards should or could be. The proposed rule would seek public comment on the criteria and practices applicable to CMPs assessed under the MSP. At the moment, that rule is silent about the CMP specifics, such as how companies can avoid the penalties for past failures, or when the $1,000/day period should begin. Although it states the  CMP is applicable for “each day of non-compliance,” when does ‘non-compliance’ begin? Would it be back-dated to the time of injury? What if the injured person became Medicare-eligible after medical treatment had begun?

Other questions also come to mind: Should the CMP value have a cap? Would that cap change depending on the size of the insuring company? How might CMS pursue their CMP opportunity? (Paragraph 1128(k) suggests that a federal lawsuit might be the method by which CMS can enforce its fining provision although there are, at present, no standards or rules established that detail how CMS might go after those penalties.)

The recent notice of rulemaking indicates that CMS is intending to tighten its oversight of injury cases when potential Medicare recipients are involved. RREs who have been lax about their reporting processes or haven't updated or audited them recently may be facing significant CMPs if they have on their books multiple unreported Medicare beneficiaries receiving medical benefits because of accidental or work-related injuries.

 

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