Over the past couple of years, workers’ compensation has received what some would call unfair criticism over its alleged focus on expense reduction at the cost of injured worker outcomes.
In response, the International Association of Industrial Accident Boards (IAIABC) held three “National Conversations on the Future of Workers’ Compensation” in 2016, the results of which are shared in a summary report and video.
The association wanted to address mounting concerns and distrust about the system.
The report stated that “Current labor law is built on the 20th century economy and that is a challenge for a 21st century economy with new opportunities and new relationships with work.”
Several opportunities for action were outlined in the report:
- Raising awareness of the societal effect the workers’ comp system has.
- Improving communication among workers and employees in how to navigate the workers’ comp system.
- Reducing system complexity. In addition, lack of uniformity among states contributes to an administrative cost to policies. Simplification of the process is recommended.
- Measure performance. There is a lack of data to measure and benchmark.
Todd Brown, practice leader, compliance and regulatory affairs for Medata, said the conversations that took place were the best he’s seen in his 29 years in the workers’ comp industry.
“That was sort of refreshing to have that type of exchange when you considered how many people were involved and the array of political or philosophical differences that existed in those rooms,” said Brown.
He said the majority of stakeholders agreed that workers’ comp needs to be examined to make sure it is fair and balanced and provides adequate benefits to injured workers without breaking the bank of employers.
He said two almost universal themes to emerge from the conversations is that workers’ comp should remain the exclusive remedy for injured workers and the federal government should refrain from intervening in the workers’ comp system.
According to Brown, workers comp has evolved from what was once considered a judicial dispute process to a medical dispute process over the past 15-20 years.
“Dealing with that is a much thornier issue than just black letter law,” Brown said, noting that states and stakeholders struggle with balancing better management of medical care for better outcomes and adequate reimbursement with cost savings.
Because workers’ comp makes up just a fraction of overall healthcare spend in the United States, it has little influence on medical practices. The reported stated that the industry “must continue to focus on outcomes and implementing effective strategies to achieve quality medical care.”
One opportunity for action the IAIABC identified involves addressing the opioid epidemic and prescription drugs, in general, Brown said. The association is working on a database to collect information on what states are doing to monitor the use and prescribing restrictions of opioids. Eventually, the database will be available to stakeholders and the public.
Another opportunity for action the association identified emphasizes a stronger focus on return to work (RTW) programs and how to better deploy them in certain states. Brown said these types of programs are easier to accomplish for larger employers.
“Small employers, particularly mom and pop operations that really treat their employees like families and want to bring them back, really struggle because losing a single person out of their operations can really hurt them,” said Brown.
Brown said he expects these stakeholder conversations to continue in the future, although they may not be as formal. The board, he said, has always encouraged interaction among jurisdictions and with stakeholders. TPAs, insurers, and large employers have traditionally been part of the conversation.
Engaging smaller employers and employees in the discussion is an ongoing challenge, he said.
“Part of that is the small mom and pop employers aren’t going to be sending people to an international conference on workers’ comp. They don’t necessarily have the resources and they don’t necessarily have the staffing,” he said.
Historically, according to Brown, labor unions represented employees in the discussions but their demise has affected the voice of the injured worker.
Some of the initiatives the IAIABC plans to support include helping states that struggle with medical services pricing. The association has put together a committee to pull together all the different fee schedules that exist. States will eventually have access to the information and have the support of a technical working group to help them achieve their goals, he said.
Other initiatives the IAIABC plans to support include the following:
- Creating a claims measure survey to understand differences across jurisdictions.
- Developing a standardized workers’ comp dispute data model in order to compare dispute drivers and friction costs to include intra and interjurisdiction performances measures.
- Resolving data reporting differences with improved data transfer, data elements identification and framework for a more flexible claims standard.
- Collaboration and education for all stakeholders.
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