Complex Claims

Helping Injured Workers Live Their Best Lives

Providers are developing new strategies for keeping up with advances in prosthetics and finding the best options for injured workers.
By: | May 2, 2017 • 7 min read

Experts are finding ways to mitigate the challenges of workers’ compensation claims involving the use of prosthetics, given the rising costs of ever-more complex devices — and the potential for psychosocial impacts and comorbidities.

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One Call Care Management this month announced the launch of its prosthetics clinical review program, in which a prosthetist certified by the American Board for Certification will assist claims adjusters in understanding the complexities of prosthetics and in making the most informed decisions about them.

Referrals meeting one or more of the following criteria will typically trigger such reviews:

  • myoelectric upper extremity systems
  • system upgrades and/or excessive replacements
  • microprocessor-controlled knee and ankle prosthetics; and
  • excessive socket changes

Recent case studies have shown savings of up to 52 percent when clinical reviews are added to the claims approval process, according to One Call.

Jennifer McCarthy, a One Call clinical specialist based in Boston who will lead the new team, said that clinical reviews are needed because claims costs continue to rise as advances in prosthetics happen so rapidly that carriers can’t keep track of the changing technology.

“Historically in times of war or conflict that involves our military, the U.S. government awards grants to researchers to develop prosthetic technology, so we have seen a recent influx of advanced prosthetic devices,” McCarthy said.

“Because the devices often can involve robotics, they are expensive to manufacture at such a small quantity. The manufacturers then to transfer the costs of research, development and manufacturing onto the provider and payer.”

Jennifer McCarthy, clinical specialist, One Call Care Management

Moreover, since some of the devices are so new, there is no set fee schedule from Medicare, she said. The manufacturers can suggest a retail price for the providers to bill or the providers will charge an amount above their invoice costs.

“They attempt to make this pricing somewhat standardized, but there can often be a significant variance in the pricing between providers for the same device,” McCarthy said.

One Call’s prosthetics clinical review program is different than a utilization review, which verifies the medical necessity of the device being recommended from a nurse’s perspective.

“Our new program is more of a clinical oversight from a prosthetist’s perspective to make sure the recommendation is truly appropriate and there are no other types of prostheses that would allow for a better outcome,” she said.

“Our goal is to ensure that the device the prosthetist is recommending is appropriate for the patient’s functional level and will allow the individual to reach his vocational and avocational goals.”

Outreach to the prosthetist involved in the claim is often necessary to determine what other types of prostheses were considered and why they would not be appropriate, McCarthy said.

“If local expertise and resources are not available, it is sometimes more advantageous to send the patient to a center with expertise to minimize the risk and costs associated with ‘trial-and-error’ approach to prosthesis management.” — Julie Fawson, director of clinical services, Paradigm Outcomes

Sometimes the team will come to the conclusion that an alternate device may be more appropriate or there might be coding changes that more accurately represent the device recommendations, which can reduce costs.

In determining the most appropriate device, One Call’s team will also consider the health history of the injured worker, what their experiences have been with any previous prostheses and the environmental history — which includes the worker’s support system, home and social environments.

“This gives us a more holistic approach to determining whether this particular prosthesis would allow them to reach their highest functional level,” McCarthy said.

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Upon request from claims adjusters, One Call will create a prosthetics cost projection document covering the costs of maintenance, servicing and replacement for the particular device.

The company already has a clinical review program for physical therapy and dental, so prosthetics is “the next natural progression of providing clinical oversight to our customers,” she said.

Julie Fawson, RN, director of clinical services at Paradigm Outcomes in Walnut Creek, Calif., said that workers’ comp carriers face many challenges when planning for an injured worker’s prosthesis needs, especially in the current environment of rapidly advancing technology and cost of prosthetics.

“Our team defines broad achievements, such as returning to work, and detailed goals that focus on specific areas of function,” she said.

When reviewing claims involving prosthetics, Paradigm Outcomes considers the complexity of the amputation; impact of comorbidities and conditions; the expertise and resources of the treatment team; and the management of the patient’s needs and expectations.

“In general, the more proximal the amputation, the more complex and costly it can be,” she said.

“For example, an above-elbow amputation is more complex than a below-elbow amputation. While in both scenarios the amputee may be a candidate for body-powered and myoelectric prosthesis options, fabricating a prosthesis that incorporates elbow function is much more significant in terms of cost, therapy/training, maintenance and functional recovery expectations.”

It is also important to consider comorbidities or conditions that may add to the complexity of amputation and prosthesis management, Fawson said. For instance, a patient with extensive muscle or nerve tissue damage at the amputation site, or with a very short residual limb, will be more complex in terms of fabrication, fit and function of the prosthesis.

A patient could also require reconstructive surgeries of the residual limb over time, which will change the composition of the residual limb, thereby increasing the frequency of costly socket revisions in the first couple of years.

Complexity on Many Levels

In all prosthestics claims, expertise of the treatment team — the physician, therapist and prosthetist — and the resources they provide, are vital to the success of managing complex amputees, especially given the high technology, high cost prosthesis options available today, she said.

“If local expertise and resources are not available, it is sometimes more advantageous to send the patient to a center with expertise to minimize the risk and costs associated with ‘trial-and-error’ approach to prosthesis management,” Fawson said.

It is also important to understand the patient’s occupational goals, lifestyle and avocational interests, to guide the treatment team and patient to make the most appropriate prosthesis choice that will optimize the patient’s functional and psychological outcome, she said.

Julie Fawson, director of clinical services, Paradigm Outcomes

To alleviate the challenges of locating qualified providers of prosthetics, Memphis-based Sedgwick Claims Management Services Inc. developed a provider benchmarking tool to help identify providers who are known for consistently delivering high quality care and desired outcomes, said Kimberly Talton, a Sedgwick complex claims advisor based in Dallas.

“Another challenge is determining what to expect when it comes to amputees’ ongoing needs and care,” Talton said.

“Within the complex claims unit, we work with the team to provide education about critical care pathways to identify what to expect with these types of injuries, ongoing needs and costs of these types of claims.”

One of the challenges is determining the appropriate type of prosthetic for a particular person, as every individual and amputation is unique, said Riverside, Calif.-based Edward Canavan, vice president of Sedgwick’s workers’ compensation practice and compliance.

“Some individuals with amputation could end up being diabetic, and so they’ll have different needs than other amputees,” Canavan said.

“We want to get individuals to the right doctor who can give them the right recommendation to fulfill those needs, and then we can partner with the individuals to get them the right prosthetics.”

Other challenges are centered around the fast-paced evolution of technology for prosthetics, and determining whether the medical and peer review guidelines allow the use of particular devices that have recently been developed, he said.

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“There is so much research going on in every sort of prosthetic to help the injured worker, including the development of devices to feel what they are touching, exoskeleton research to help the person walk again, and stem cell therapy,” Canavan said.

“We need to balance that with determining what can help the injured person get the best possible outcomes. That’s where complex claims review comes into place. We can also leverage the right resources such as a prosthetics clinical review program.”

Prosthetics claims can be impacted if the affected amputation area hasn’t healed properly and completely before being fitted, said Rachael Ruther, a Sedgwick complex claims advisor based in Brea, Calif.

“Prosthetics are so specialized,” Ruther said.

“You want to be sure there is a proper fit; otherwise, the prosthetic may not be functional and may go unused.”

The key to providing the best care possible is to get patients as close to a normal level of functionality as possible, Talton said.

“Hopefully we can reduce some of the mental issues that come with these types of injuries such as depression and anxiety,” she said. &

Katie Kuehner-Hebert is a freelance writer based in California. She has more than two decades of journalism experience and expertise in financial writing. She can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

Robotics Risk

Rise of the Cobots

Collaborative robots, known as cobots, are rapidly expanding in the workforce due to their versatility. But they bring with them liability concerns.
By: | May 2, 2017 • 5 min read

When the Stanford Shopping Center in Palo Alto hired mobile collaborative robots to bolster security patrols, the goal was to improve costs and safety.

Once the autonomous robotic guards took up their beats — bedecked with alarms, motion sensors, live video streaming and forensics capabilities — no one imagined what would happen next.

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For some reason,  a cobots’ sensors didn’t pick up the movement of a toddler on the sidewalk who was trying to play with the 5-foot-tall, egg-shaped figure.

The 300-pound robot was programmed to stop for shoppers, but it knocked down the child and then ran over his feet while his parents helplessly watched.

Engaged to help, this cobot instead did harm, yet the use of cobots is growing rapidly.

Cobots are the fastest growing segment of the robotics industry, which is projected to hit $135.4 billion in 2019, according to tech research firm IDC.

“Robots are embedding themselves more and more into our lives every day,” said Morgan Kyte, a senior vice president at Marsh.

“Collaborative robots have taken the robotics industry by storm over the past several years,” said Bob Doyle, director of communications at the Robotic Industries Association (RIA).

When traditional robots joined the U.S. workforce in the 1960s, they were often assigned one specific task and put to work safely away from humans in a fenced area.

Today, they are rapidly being deployed in the automotive, plastics, electronics assembly, machine tooling and health care industries due to their ability to function in tandem with human co-workers.

More than 24,000 robots valued at $1.3 billion were ordered from North American companies last year, according to the RIA.

Cobots Rapidly Gain Popularity

Cobots are cheaper, more versatile and lighter, and often have a faster return on investment compared to traditional robots. Some cobots even employ artificial intelligence (AI) so they can adapt to their environment, learn new tasks and improve on their skills.

Bob Doyle, director of communications, Robotic Industry Association

Their software is simple to program, so companies don’t need a computer programmer, called a robotic integrator, to come on site to tweak duties. Most employees can learn how to program them.

While the introduction of cobots into the workplace can bring great productivity gains, it also introduces risk mitigation challenges.

“Where does the problem lie when accidents happen and which insurance covers it?” asked attorney Garry Mathiason, co-chair of the robotics, AI and automation industry group at the law firm Littler Mendelson PC in San Francisco.

“Cobots are still machines and things can go awry in many ways,” Marsh’s Kyte said.

“The robot can fail. A subcomponent can fail. It can draw the wrong conclusions.”

If something goes amiss, exposure may fall to many different parties:  the manufacturer of the cobot, the software developer and/or the purchaser of the cobot, to name a few.

Is it a product defect? Was it an issue in the base code or in the design? Was something done in the cobot’s training? Was it user error?

“Cobots are still machines and things can go awry in many ways.” — Morgan Kyte, senior vice president, Marsh

Is it a workers’ compensation case or a liability issue?

“If you get injured in the workplace, there’s no debate as to liability,” Mathiason said.

But if the employee attributes the injury to a poorly designed or programmed machine and sues the manufacturer of the equipment, that’s not limited by workers’ comp, he added.

Garry Mathiason, co-chair, robotics, AI and automation industry group, Littler Mendelson PC

In the case of a worker killed by a cobot in Grand Rapids, Mich., in 2015, the worker’s spouse filed suit against five of the companies responsible for manufacturing the machine.

“It’s going to be unique each time,” Kyte said.

“The issue that keeps me awake at night is that people are so impressed with what a cobot can do, and so they ask it to do a task that it wasn’t meant to perform,” Mathiason said.

Privacy is another consideration.

If the cobot records what is happening around it, takes pictures of its environment and the people in it, an employee or customer might claim a privacy violation.

A public sign disclosing the cobot’s ability to record video or take pictures may be a simple solution. And yet, it is often overlooked, Mathiason said.

Growing Pains in the Industry

There are going to be growing pains as the industry blossoms in advance of any legal and regulatory systems, Mathiason said.

He suggests companies take several mitigation steps before introducing cobots to the workplace.

First, conduct a safety audit that specifically covers robotics. Make sure to properly investigate the use of the technology and consider all options. Run a pilot program to test it out.

Most importantly, he said, assign someone in the organization to get up to speed on the technology and then continuously follow it for updates and new uses.

The Robotics Industry Association has been working with the government to set up safety standards. One employee can join a cobot member association to receive the latest information on regulations.

“I think there’s a lot of confusion about this technology and people see so many things that could go wrong,” Mathiason said.

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“But if you handle it properly with the safety audit, the robotics audit, and pay attention to what the standards are, it’s going to be the opposite; there will be fewer problems.

“And you might even see in your experience rating that you are going to [get] a better price to the policy,” he added.

Without forethought, coverage may slip through the cracks. General liability, E&O, business interruption, personal injury, cyber and privacy claims can all be involved.

AIG’s Lexington Insurance introduced an insurance product in 2015 to address the gray areas cobots and robots create. The coverage brings together general and products liability, robotics errors and omissions, and risk management services, all three of which are tailored for the robotics industry. Minimum premium is $25,000.

Insurers are using lessons learned from the creation of cyber liability policies and are applying it to robotics coverage, Kyte said.

“The robotics industry has been very safe for the last 30 years,” RIA’s Doyle said. “It really does have a good track record and we want that to continue.” &

Juliann Walsh is a staff writer at Risk & Insurance. She can be reached at [email protected]