Case Management

Missed Appointments, Missed Opportunities

Eliminating missed medical appointments can significantly reduce claims costs and improve outcomes for injured workers.
By: | September 7, 2017 • 4 min read

Non-compliance with medical protocols, including missed medical, therapeutic and diagnostic appointments, “are a problem and have always been a problem” for workers’ compensation carriers.

However, the mechanisms they and care managers use to keep tabs on injured workers produce a higher compliance rate — and better outcomes — than in the general medical environment.

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Stakeholders, including employers and insurers, “have a strong incentive to get workers back to work to reduce indemnity,” said Robert Hartwig, co-director, risk and uncertainty management center, Darla Moore School of Business, University of South Carolina.

Most employees are also eager to return to work, he said, other than a few instances of claim malingering, which preventive mechanisms tend to minimize.

Ten to 18 percent of injured workers never reach “substantial return to work,” according to new research by the Workers Compensation Research Institute that compares outcomes for injured workers in six states.

By contrast, only one percent of people on Social Security disability ever return to work, Hartwig said.

The goal of worker’s compensation — to restore to the maximum degree possible the employee’s health and ability to return to work — and the resources poured into that goal, accounts for the huge difference in outcomes, Hartwig said.

The workers’ compensation system is also sensitive to overutilization of appointments and procedures, he said.

Although no studies address the cost of missed workers’ compensation appointments specifically, all missed medical appointments cost the U.S. health care system more than $150 billion per year, said Joseph McCullough, senior vice president, transportation and language, One Call Care Management.

The cost of all non-adherence to medical protocols in the U.S. is approximately $290 billion, wrote Tomas Philipson, economist, University of Chicago, in “Forbes.” That equates to about 13 percent of total health care spending, or 2.3 percent of GDP.

Some Mechanisms

Carriers and care managers are harnessing all manner of mechanisms, high and low tech, to urge, prod and remind workers of their appointments. For example, One Call partners with Lyft to provide transportation for ambulatory workers to and from their appointments.

Through text messages limited to times, travel conditions and locations, One Call’s program seeks to prevent missed and delayed treatment caused by transportation snafus, McCullough wrote in an email interview, and instantly reschedules appointments when necessary.

Robert Hartwig, co-director, Center of Risk and Uncertainty Management at the Darla Moore School of Business, University of South Carolina

CorVel uses a three-point strategy that embraces highly coordinated care management, transportation and motivation techniques to make sure workers get to their appointments, understand their importance and accept accountability for their own recovery, said Karen Thomas, director, case management innovation, CorVel.

Its case managers — telephonic, field and one-off task managers — orchestrate scheduling with workers, issuing reminders about dates and what they need to bring. Most important, she said, “We educate them on why the appointment is important and how it impacts recovery. Case managers develop a relationship with the worker.”

Like One Call, CorVel arranges transportation for ambulatory and non-ambulatory workers. It schedules pick-ups, and through a proprietary system, communicates in real time with the worker, providers, adjuster and case manager, then documents and tracks the progress of the appointment.

Finally, Thomas said, there’s the worker’s accountability. “The worker doesn’t want to let the case manager down. After the appointment. I’ll ask, ‘Did you get what you needed? Are your questions answered?’ We don’t necessarily want to pressure the worker, but buy-in is important.”

“Our challenge is to figure out how to help workers get better despite themselves.” — Karen Thomas, director, case management innovation, CorVel

More encouragement may be necessary for the small number of injured workers who throw up roadblocks to their own recovery.

Case management is an advanced practice, Thomas said, and its nurses have experience with rehab medicine, trauma, chronic pain and its associated depression and self-sabotage.

“Our challenge is to figure out how to help workers get better despite themselves,” using every available motivation: return to an active lifestyle or playing catch with the kids.

Biggest Cost: Lost Time

Most physicians waive fees for missed appointments, said Dr. Teresa Bartlett, MD, senior vice president and medical director, Sedgwick Claims Management Services Inc. But every lost workday costs $400 to $900 as well as the worker’s lost productivity. It can also protract indemnity benefits unnecessarily.

For example, a missed appointment just prior to return to work could add a week or more to the claim if the physician can’t fit in a rescheduled appointment earlier.

Depending on the jurisdiction, deliberately missed appointments and other schemes to protract benefits can jeopardize workers’ compensation payments, Bartlett said. “That’s why we do friendly reminders. It’s in their own best interest.”

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Because timely care that conforms to best practices produces the best outcomes, Sedgwick, a claims and care manager, expedites appointments from the moment of the injury, said Bartlett. Sedgwick brings care to the worker almost immediately through telemedicine.

Sedgwick also trains its examiners to spot the signs of the behaviors and comorbidities that can lead to creeping catastrophic claims — the rolled ankle that spirals into wheelchair confinement, obesity, diabetes and heart disease, for example.

“If the worker says he just doesn’t have the energy to get into the car and go to the appointment, we’ll refer him for behavioral health intervention,” Bartlett said. “To get the case back on track, that worker will be queued up for telephonic nurse case management or field case management where a nurse goes with him to the appointment.”

Susannah Levine writes about health care, education and technology. She can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

Alternative Energy

A Shift in the Wind

As warranties run out on wind turbines, underwriters gain insight into their long-term costs.
By: | September 12, 2017 • 6 min read

Wind energy is all grown up. It is no longer an alternative, but in some wholesale markets has set the incremental cost of generation.

As the industry has grown, turbine towers have as well. And as the older ones roll out of their warranty periods, there are more claims.

This is a bit of a pinch in a soft market, but it gives underwriters new insight into performance over time — insight not available while manufacturers were repairing or replacing components.

Charles Long, area SVP, renewable energy, Arthur J. Gallagher

“There is a lot of capacity in the wind market,” said Charles Long, area senior vice president for renewable energy at broker Arthur J. Gallagher.

“The segment is still very soft. What we are not seeing is any major change in forms from the major underwriters. They still have 280-page forms. The specialty underwriters have a 48-page form. The larger carriers need to get away from a standard form with multiple endorsements and move to a form designed for wind, or solar, or storage. It is starting to become apparent to the clients that the firms have not kept up with construction or operations,” at renewable energy facilities, he said.

Third-party liability also remains competitive, Long noted.

“The traditional markets are doing liability very well. There are opportunities for us to market to multiple carriers. There is a lot of generation out there, but the bulk of the writing is by a handful of insurers.”

Broadly the market is “still softish,” said Jatin Sharma, head of business development for specialty underwriter G-Cube.

“There has been an increase in some distressed areas, but there has also been some regional firming. Our focus is very much on the technical underwriting. We are also emphasizing standardization, clean contracts. That extends to business interruption, marine transit, and other covers.”

The Blade Problem

“Gear-box maintenance has been a significant issue for a long time, and now with bigger and bigger blades, leading-edge erosion has become a big topic,” said Sharma. “Others include cracking and lightning and even catastrophic blade loss.”

Long, at Gallagher, noted that operationally, gear boxes have been getting significantly better. “Now it is blades that have become a concern,” he said. “Problems include cracking, fraying, splitting.

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“In response, operators are using more sophisticated inspection techniques, including flying drones. Those reduce the amount of climbing necessary, reducing risk to personnel as well.”

Underwriters certainly like that, and it is a huge cost saver to the owners, however, “we are not yet seeing that credited in the underwriting,” said Long.

He added that insurance is playing an important role in the development of renewable energy beyond the traditional property, casualty, and liability coverages.

“Most projects operate at lower capacity than anticipated. But they can purchase coverage for when the wind won’t blow or the sun won’t shine. Weather risk coverage can be done in multiple ways, or there can be an actual put, up to a fixed portion of capacity, plus or minus 20 percent, like a collar; a straight over/under.”

As useful as those financial instruments are, the first priority is to get power into the grid. And for that, Long anticipates “aggressive forward moves around storage. Spikes into the system are not good. Grid storage is not just a way of providing power when the wind is not blowing; it also acts as a shock absorber for times when the wind blows too hard. There are ebbs and flows in wind and solar so we really need that surge capacity.”

Long noted that there are some companies that are storage only.

“That is really what the utilities are seeking. The storage company becomes, in effect, just another generator. It has its own [power purchase agreement] and its own interconnect.”

“Most projects operate at lower capacity than anticipated. But they can purchase coverage for when the wind won’t blow or the sun won’t shine.”  —Charles Long, area senior vice president for renewable energy, Arthur J. Gallagher

Another trend is co-location, with wind and solar, as well as grid-storage or auxiliary generation, on the same site.

“Investors like it because it boosts internal rates of return on the equity side,” said Sharma. “But while it increases revenue, it also increases exposure. … You may have a $400 million wind farm, plus a $150 million solar array on the same substation.”

In the beginning, wind turbines did not generate much power, explained Rob Battenfield, senior vice president and head of downstream at JLT Specialty USA.

“As turbines developed, they got higher and higher, with bigger blades. They became more economically viable. There are still subsidies, and at present those subsidies drive the investment decisions.”

For example, some non-tax paying utilities are not eligible for the tax credits, so they don’t invest in new wind power. But once smaller companies or private investors have made use of the credits, the big utilities are likely to provide a ready secondary market for the builders to recoup their capital.

That structure also affects insurance. More PPAs mandate grid storage for intermittent generators such as wind and solar. State of the art for such storage is lithium-ion batteries, which have been prone to fires if damaged or if they malfunction.

“Grid storage is getting larger,” said Battenfield. “If you have variable generation you need to balance that. Most underwriters insure generation and storage together. Project leaders may need to have that because of non-recourse debt financing. On the other side, insurers may be syndicating the battery risk, but to the insured it is all together.”

“Grid storage is getting larger. If you have variable generation you need to balance that.” — Rob Battenfield, senior vice president, head of downstream, JLT Specialty USA

There has also been a mechanical and maintenance evolution along the way. “The early-generation short turbines were throwing gears all the time,” said Battenfield.

But now, he said, with fewer manufacturers in play, “the blades, gears, nacelles, and generators are much more mechanically sound and much more standardized. Carriers are more willing to write that risk.”

There is also more operational and maintenance data now as warranties roll off. Battenfield suggested that the door started to open on that data three or four years ago, but it won’t stay open forever.

“When the equipment was under warranty, it would just be repaired or replaced by the manufacturer,” he said.

“Now there’s more equipment out of warranty, there are more claims. However, if the big utilities start to aggregate wind farms, claims are likely to drop again. That is because the utilities have large retentions, often about $5 million. Claims and premiums are likely to go down for wind equipment.”

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Repair costs are also dropping, said Battenfield.

“An out-of-warranty blade set replacement can cost $300,000. But if it is repairable by a third party, it could cost as little as $30,000 to have a specialist in fiberglass do it in a few days.”

As that approach becomes more prevalent, business interruption (BI) coverage comes to the fore. Battenfield stressed that it is important for owners to understand their PPA obligations, as well as BI triggers and waiting periods.

“The BI challenge can be bigger than the property loss,” said Battenfield. “It is important that coverage dovetails into the operator’s contractual obligations.” &

Gregory DL Morris is an independent business journalist based in New York with 25 years’ experience in industry, energy, finance and transportation. He can be reached at [email protected]