512 Workers’ Comp Professionals Identified Their Top 10 Challenges for 2019

Attendees of the 2018 National Workers’ Compensation and Disability Conference shared their thoughts on the challenges and trends unfolding ahead.
By: | March 5, 2019 • 9 min read

Hundreds of workers’ compensation professionals converged in Las Vegas last December for the 2018 NWCDC & Expo to discuss their challenges and learn new techniques to manage them. We surveyed 512 attendees to find out what trends they’re watching and what challenges concern them most for the year ahead.

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Respondents were predominantly claim managers and risk managers working for employers or insurance carrier/payers, though the entire field was represented in some capacity, including clinical providers, TPAs and brokers.

Here’s are the top 10 challenges that concern them most for 2019:

1) Rising Cost of Care

Almost half of respondents identified escalating medical costs as the biggest challenge facing their workers’ comp program in 2019 and beyond, and nearly everyone identified cost-containment as their top priority, aside from medical providers and nurse case managers who are more focused on clinical management.

The cost of healthcare in the U.S. continues to be unsustainably expensive. According to the Centers for Medicare & Medicaid Services, healthcare spending will grow around 5.5 percent per year between 2017 and 2026 — outpacing GDP growth by 1 percentage point. In 2026 total spending is projected to hit $5.7 trillion.

A number of reasons are behind the rising expense, but chief among them are increased utilization among an aging population, more technologically advanced equipment that adds cost to services, and bloated prescription drug prices. With no end to these trends in sight, treating injured workers will continue to get more expensive.

2) Comorbidities and Poor Worker Health

Older workers combined with the rising prevalence of obesity also gives rise to greater incidence of co-morbidities. Excess weight, diabetes, hypertension, sleep apnea, joint pain and other conditions that develop as a result of lifestyle factors or age can make recovery much more complicated.

Claims managers in particular were acutely concerned about the impact of comorbidities.

“Obesity, diabetes, respiratory problems — we develop certain conditions as we age that compound injury and make it more difficult to recover,” said Bill Spiers, vice president and Risk Control Strategies practice leader for Lockton. He spoke with our editors about his clients’ chief challenges at NWCDC.

“Because of HIPAA protections, it can also be difficult to get information regarding these other pre-existing conditions, which makes it harder for adjusters to determine the best course of care,” he said.

Patti Colwell, workers’ compensation program manager for Southwest, echoed that sentiment: “With HIPAA restrictions, it is often difficult to determine an appropriate action plan for the workers’ compensation claim as it is often a struggle to receive timely medical information relating to the non-OJI [on-the-job] condition.

“Often times medical conditions unrelated to the work injury prevent or significantly delay the ability of the injured employee to receive timely, appropriate medical treatment.”

“It becomes critical for treating and consulting physicians to be aware of all comorbid conditions, and include discussion of treatment ramifications in reporting to the claims professional,” said Robert Goldberg, MD, FACOEM, Chief Medical Officer for Healthesystems.

According to an analysis by Harbor Health, claims stay open 76 percent longer when they involve multiple comorbidities, temporary total disability days increase by 285 percent, and total incurred costs also increase by 341 percent. With at least 39 percent of U.S. adults considered obese, it’s increasingly likely that related comorbid conditions will be factors on a growing proportion of claims.

3) Opioids

The opioid crisis gripping America is a full-blown public health crisis, but the impact is even more acute in workers’ comp since nearly every claim has a pain component, and addictive painkillers have long been prescribers’ go-to when treating chronic pain.

Respondents in every role acknowledged that managing opioid and other substance abuse issues will be among their biggest hurdles.

According to the CDC, the U.S. prescribing rate for opioids was 61 prescriptions per 100 persons in 2016. NCCI data shows that injured workers were prescribed opioids at three times that rate.

According to the CDC, the U.S. prescribing rate for opioids was 61 prescriptions per 100 persons in 2016. NCCI data shows that injured workers were prescribed opioids at three times that rate.

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Workers prescribed long-term painkillers often take longer to return to work. A 2018 study by the Workers Compensation Research Institute showed that workers who had longer-term opioid prescriptions received temporary disability benefits 251 percent longer than workers treated for musculoskeletal injuries without opioid prescriptions.

“The best solution to the opioid problem in workers’ comp is for physicians to adhere to current evidence-based treatment guidelines, which recommend more limited dosing for shorter durations and only after other pain control measures have been tried,” Dr. Goldberg said. “Acute use of opioids is indicated in limited circumstances, while chronic use must be curtailed if not avoided.”

On the upside, 43.8 percent of respondents working in claim management said they’ve had success implementing opioid and medication therapy management programs in 2018.

4) Mental Health Exposures

Most of the talk around the compensability of mental injuries has concerned post-traumatic stress disorder suffered by police, firefighters, EMTs and other first responders. In the past few years, states are slowly passing legislation recognizing PTSD as a compensable injury for this population.

But mental injuries are broader than those stemming from traumatic experience. Work-related stress and anxiety are more difficult to define and diagnose, but the frequency of claims alleging that unreasonable stress at work premeditated a physical injury like a heart attack is on the rise.

New Jersey passed a statute in 2018 stating that any injury or ailment, physical or mental,  is compensable if it is caused by the work environment. They may be in the minority, but with an unprecedented number of people reporting that they experience extreme stress, anxiety and depressive symptoms, that could soon change, especially in an increasingly connected culture where workers are always ‘on.’

Even when these injuries are not considers compensable, they can complicate recovery from a physical injury.  More than 50 percent of injured workers experience clinically-related depressive symptoms at some point, especially during the first month after the injury.

“When there is unresolved or chronic pain, we start to consider the psychological component Spiers said. “When physical treatments aren’t making any progress, we have to think about the possibility of an underlying mental health problem — short term depression, anxiety about going to the doctor, or about being our of work, family issues, etc., could all be influencing factors.”

5) Growth of Complex Claims

According to Spiers, “3 to 5 percent of claims drive roughly 50 to 60 percent of costs.”

“The issue is delayed recovery. Some claimants are slow to heal, and the doctor will keep running tests, keep ordering treatments, sometimes surgeries. And if they’re not effective it’s just running the meter in terms of medical costs. And the claimant in the meantime is experiencing additional wear and tear,” he said.

According to Spiers, “3 to 5 percent of claims drive roughly 50 to 60 percent of costs.”

It doesn’t take a catastrophic injury to create a complex claim. Any one component — prescription abuse or misuse, physical comorbid conditions, psychological factors or attorney involvement can drastically increase duration and cost.

“Many complex claims develop due to the psychological aspects of the injured worker that either pre-date the injury or are caused directly or indirectly by the injury,” Dr. Goldberg said. “Early identification and intervention are required to short-circuit the development of such claims.”

“Complex claims come in all shapes and sizes,” Southwest’s Colwell said. “Some are complex because of co-morbid or underlying, unrelated medical conditions, some because of psychological issues, some because of employment/performance-related issues, and some because of the severity of the injury. Each of these complexities presents challenges to claim resolutions.”

6) Regulatory and Legislative Changes

A variety of both national and state legislative updates will change the way workers’ comp providers and payers do business.

Through the first half of 2018 alone, the NCCI tracked 814 state and federal workers compensation bills, 76 of which became law by the end of June, as well as 197 proposed regulation changes, 83 of which were adopted. Most pertained to medical fee schedules and treatment guidelines.

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More such regulatory changes are expected in 2019, when CMS is expected to update coding and document requirements around remote patient monitoring, evaluation and management. As telehealth begins to play a larger role in workers’ comp care, these changes could add expenses for those providers offering virtual platforms. CMS is also proposing major changes to the Medicare Fee Schedule Evaluation and Management reimbursement model for office and outpatient services.

On the legislative side, medical marijuana continues to be a thorn in the side of case managers and payers. Thirty-three states and the District of Columbia have legalized medical marijuana in some form, but debate over whether workers’ comp insurers should pay for treatment that remains a Schedule I drug in the eyes of the federal government has so far been settled in court. New Mexico is the only state thus far that has a fee schedule for medical marijuana.

7) Distracted Drivers and Auto Collisions

Auto insurers are not the only ones suffering from the plague of distracted driving. Commercial drivers and employees who regularly drive as part of the job or use a company car can are just as susceptible to crashed and represent a growing proportion of workers’ comp claims.

An injury from a motor vehicle accident can cost around $150,000, and a fatality as much a $3.6 million.

Not only are these cases becoming more frequent, but he injuries are more likely to be catastrophic and therefore carry more significant medical and lost time components. According to Concentra, an injury from a motor vehicle accident can cost around $150,000, and a fatality as much a $3.6 million.

Data compiled by the U.S. Bureau of Labor Statistics (BLS) and the National Academy of Social Insurance indicates that injuries from auto collisions cost employers $3.2 billion per year.

8) Claims Data Breach

Workers’ comp claim administrators are responsible for scores of private data, including both personally identifiable information and protected health information. Should any claims data be unlawfully accessed, the breach could violate HIPAA as well as non-health-related privacy protections.

Last year, Oregon’s State Accident Insurance Fund Corp., the state workers’ comp insurer, fell victim to a phishing attack that compromised the information of 1,750 people, including Social Security numbers in some cases.

A breach could trigger notification obligations and, as in the case of the Oregon state fund, provision of free credit monitoring for any account that may have been impacted. If any medical records are involved, there could be further fines or legal action.

9) Cumulative Trauma

Soft-tissue musculoskeletal injuries arising from overuse or poor ergonomics are persistent claim drivers. According to WCIRB, a California-based research and advisory firm, that state’s cumulative trauma (CT) claims have grown by 50 percent over the past decade.

This type of injury typically takes longer to heal and overall incur higher medical costs. WCIRB’s study found that at 18 months, “average CT claim medical costs are lower than those for specific injury claims,” but 80 percent of CT claims are open much longer than 18 months — sometimes a decade or more.  Over their lifespan, CT claims end up being 15 percent more expensive than an average specific injury claim.

10) Litigation Management

Going to court is a surefire way to dramatically drive up claim cost. Redentor Villanueva, workers’ compensation specialist for Panasonic Energy North America, said that “trying to walk the tight rope between workers’ comp and ADA accommodations” is a constant challenge, and workers’ comp litigation is one of his top concerns.

He said it is a top priority to “make sure we dotted our i’s and crossed our t’s, and haven’t violated any part of the ADA in terms of bringing injured workers back to modified duty positions.”

Several attendees emphasized the importance of communication in managing expectations and assuaging claimants’ fears. “Ultimately, improving communication for everyone involved should lead to an improved experience for all and more timely care,” commented one respondent.

Taking a claimant to court over suspected fraud is also a risky proposition. No payer want to waste money on rewarding a fraudster, but the legal expense might not be worth the battle.

“In civil cases, most juries will rule in favor of the claimant,” said Mario Pecoraro, president and CEO of Alliance Worldwide Investigation Group Inc.

In addition to their top challenges, attendees were also queried on the trends they believe will have the greatest impact on their program in 2019, the initiatives they’ve had success with so far, their priorities for the coming year, and the areas in which technology may have the greatest impact on their program. &

The R&I Editorial Team can be reached at [email protected]

Exclusive | Hank Greenberg on China Trade, Starr’s Rapid Growth and 100th, Spitzer, Schneiderman and More

In a robust and frank conversation, the insurance legend provides unique insights into global trade, his past battles and what the future holds for the industry and his company.
By: | October 12, 2018 • 12 min read

In 1960, Maurice “Hank” Greenberg was hired as a vice president of C.V. Starr & Co. At age 35, he had already accomplished a great deal.

He served his country as part of the Allied Forces that stormed the beaches at Normandy and liberated the Nazi death camps. He fought again during the Korean War, earning a Bronze Star. He held a law degree from New York Law School.

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Now he was ready to make his mark on the business world.

Even C.V. Starr himself — who hired Mr. Greenberg and later hand-picked him as the successor to the company he founded in Shanghai in 1919 — could not have imagined what a mark it would be.

Mr. Greenberg began to build AIG as a Starr subsidiary, then in 1969, he took it public. The company would, at its peak, achieve a market cap of some $180 billion and cement its place as the largest insurance and financial services company in history.

This month, Mr. Greenberg travels to China to celebrate the 100th anniversary of C.V. Starr & Co. That visit occurs at a prickly time in U.S.-Sino relations, as the Trump administration levies tariffs on hundreds of billions of dollars in Chinese goods and China retaliates.

In September, Risk & Insurance® sat down with Mr. Greenberg in his Park Avenue office to hear his thoughts on the centennial of C.V. Starr, the dynamics of U.S. trade relationships with China and the future of the U.S. insurance industry as it faces the challenges of technology development and talent recruitment and retention, among many others. What follows is an edited transcript of that discussion.


R&I: One hundred years is quite an impressive milestone for any company. Celebrating the anniversary in China signifies the importance and longevity of that relationship. Can you tell us more about C.V. Starr’s history with China?

Hank Greenberg: We have a long history in China. I first went there in 1975. There was little there, but I had business throughout Asia, and I stopped there all the time. I’d stop there a couple of times a year and build relationships.

When I first started visiting China, there was only one state-owned insurance company there, PICC (the People’s Insurance Company of China); it was tiny at the time. We helped them to grow.

I also received the first foreign life insurance license in China, for AIA (The American International Assurance Co.). To date, there has been no other foreign life insurance company in China. It took me 20 years of hard work to get that license.

We also introduced an agency system in China. They had none. Their life company employees would get a salary whether they sold something or not. With the agency system of course you get paid a commission if you sell something. Once that agency system was installed, it went on to create more than a million jobs.

R&I: So Starr’s success has meant success for the Chinese insurance industry as well.

Hank Greenberg: That’s partly why we’re going to be celebrating that anniversary there next month. That celebration will occur alongside that of IBLAC (International Business Leaders’ Advisory Council), an international business advisory group that was put together when Zhu Rongji was the mayor of Shanghai [Zhu is since retired from public life]. He asked me to start that to attract foreign companies to invest in Shanghai.

“It turns out that it is harder [for China] to change, because they have one leader. My guess is that we’ll work it out sooner or later. Trump and Xi have to meet. That will result in some agreement that will get to them and they will have to finish the rest of the negotiations. I believe that will happen.” — Maurice “Hank” Greenberg, chairman and CEO, C.V. Starr & Co. Inc.

Shanghai and China in general were just coming out of the doldrums then; there was a lack of foreign investment. Zhu asked me to chair IBLAC and to help get it started, which I did. I served as chairman of that group for a couple of terms. I am still a part of that board, and it will be celebrating its 30th anniversary along with our 100th anniversary.

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We have a good relationship with China, and we’re candid as you can tell from the op-ed I published in the Wall Street Journal. I’m told that my op-ed was received quite well in China, by both Chinese companies and foreign companies doing business there.

On August 29, Mr. Greenberg published an opinion piece in the WSJ reminding Chinese leaders of the productive history of U.S.-Sino relations and suggesting that Chinese leaders take pragmatic steps to ease trade tensions with the U.S.

R&I: What’s your outlook on current trade relations between the U.S. and China?

Hank Greenberg: As to the current environment, when you are in negotiations, every leader negotiates differently.

President Trump is negotiating based on his well-known approach. What’s different now is that President Xi (Jinping, General Secretary of the Communist Party of China) made himself the emperor. All the past presidents in China before the revolution had two terms. He’s there for life, which makes things much more difficult.

R&I: Sure does. You’ve got a one- or two-term president talking to somebody who can wait it out. It’s definitely unique.

Hank Greenberg: So, clearly a lot of change is going on in China. Some of it is good. But as I said in the op-ed, China needs to be treated like the second largest economy in the world, which it is. And it will be the number one economy in the world in not too many years. That means that you can’t use the same terms of trade that you did 25 or 30 years ago.

They want to have access to our market and other markets. Fine, but you have to have reciprocity, and they have not been very good at that.

R&I: What stands in the way of that happening?

Hank Greenberg: I think there are several substantial challenges. One, their structure makes it very difficult. They have a senior official, a regulator, who runs a division within the government for insurance. He keeps that job as long as he does what leadership wants him to do. He may not be sure what they want him to do.

For example, the president made a speech many months ago saying they are going to open up banking, insurance and a couple of additional sectors to foreign investment; nothing happened.

The reason was that the head of that division got changed. A new administrator came in who was not sure what the president wanted so he did nothing. Time went on and the international community said, “Wait a minute, you promised that you were going to do that and you didn’t do that.”

So the structure is such that it is very difficult. China can’t react as fast as it should. That will change, but it is going to take time.

R&I: That’s interesting, because during the financial crisis in 2008 there was talk that China, given their more centralized authority, could react more quickly, not less quickly.

Hank Greenberg: It turns out that it is harder to change, because they have one leader. My guess is that we’ll work it out sooner or later. Trump and Xi have to meet. That will result in some agreement that will get to them and they will have to finish the rest of the negotiations. I believe that will happen.

R&I: Obviously, you have a very unique perspective and experience in China. For American companies coming to China, what are some of the current challenges?

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Hank Greenberg: Well, they very much want to do business in China. That’s due to the sheer size of the country, at 1.4 billion people. It’s a very big market and not just for insurance companies. It’s a whole range of companies that would like to have access to China as easily as Chinese companies have access to the United States. As I said previously, that has to be resolved.

It’s not going to be easy, because China has a history of not being treated well by other countries. The U.S. has been pretty good in that way. We haven’t taken advantage of China.

R&I: Your op-ed was very enlightening on that topic.

Hank Greenberg: President Xi wants to rebuild the “middle kingdom,” to what China was, a great country. Part of that was his takeover of the South China Sea rock islands during the Obama Administration; we did nothing. It’s a little late now to try and do something. They promised they would never militarize those islands. Then they did. That’s a real problem in Southern Asia. The other countries in that region are not happy about that.

R&I: One thing that has differentiated your company is that it is not a public company, and it is not a mutual company. We think you’re the only large insurance company with that structure at that scale. What advantages does that give you?

Hank Greenberg: Two things. First of all, we’re more than an insurance company. We have the traditional investment unit with the insurance company. Then we have a separate investment unit that we started, which is very successful. So we have a source of income that is diverse. We don’t have to underwrite business that is going to lose a lot of money. Not knowingly anyway.

R&I: And that’s because you are a private company?

Hank Greenberg: Yes. We attract a different type of person in a private company.

R&I: Do you think that enables you to react more quickly?

Hank Greenberg: Absolutely. When we left AIG there were three of us. Myself, Howie Smith and Ed Matthews. Howie used to run the internal financials and Ed Matthews was the investment guy coming out of Morgan Stanley when I was putting AIG together. We started with three people and now we have 3,500 and growing.

“I think technology can play a role in reducing operating expenses. In the last 70 years, you have seen the expense ratio of the industry rise, and I’m not sure the industry can afford a 35 percent expense ratio. But while technology can help, some additional fundamental changes will also be required.” — Maurice “Hank” Greenberg, chairman and CEO, C.V. Starr & Co. Inc.

R&I:  You being forced to leave AIG in 2005 really was an injustice, by the way. AIG wouldn’t have been in the position it was in 2008 if you had still been there.

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Hank Greenberg: Absolutely not. We had all the right things in place. We met with the financial services division once a day every day to make sure they stuck to what they were supposed to do. Even Hank Paulson, the Secretary of Treasury, sat on the stand during my trial and said that if I’d been at the company, it would not have imploded the way it did.

R&I: And that fateful decision the AIG board made really affected the course of the country.

Hank Greenberg: So many people lost all of their net worth. The new management was taking on billions of dollars’ worth of risk with no collateral. They had decimated the internal risk management controls. And the government takeover of the company when the financial crisis blew up was grossly unfair.

From the time it went public, AIG’s value had increased from $300 million to $180 billion. Thanks to Eliot Spitzer, it’s now worth a fraction of that. His was a gross misuse of the Martin Act. It gives the Attorney General the power to investigate without probable cause and bring fraud charges without having to prove intent. Only in New York does the law grant the AG that much power.

R&I: It’s especially frustrating when you consider the quality of his own character, and the scandal he was involved in.

In early 2008, Spitzer was caught on a federal wiretap arranging a meeting with a prostitute at a Washington Hotel and resigned shortly thereafter.

Hank Greenberg: Yes. And it’s been successive. Look at Eric Schneiderman. He resigned earlier this year when it came out that he had abused several women. And this was after he came out so strongly against other men accused of the same thing. To me it demonstrates hypocrisy and abuse of power.

Schneiderman followed in Spitzer’s footsteps in leveraging the Martin Act against numerous corporations to generate multi-billion dollar settlements.

R&I: Starr, however, continues to thrive. You said you’re at 3,500 people and still growing. As you continue to expand, how do you deal with the challenge of attracting talent?

Hank Greenberg: We did something last week.

On September 16th, St. John’s University announced the largest gift in its 148-year history. The Starr Foundation donated $15 million to the school, establishing the Maurice R. Greenberg Leadership Initiative at St. John’s School of Risk Management, Insurance and Actuarial Science.

Hank Greenberg: We have recruited from St. John’s for many, many years. These are young people who want to be in the insurance industry. They don’t get into it by accident. They study to become proficient in this and we have recruited some very qualified individuals from that school. But we also recruit from many other universities. On the investment side, outside of the insurance industry, we also recruit from Wall Street.

R&I: We’re very interested in how you and other leaders in this industry view technology and how they’re going to use it.

Hank Greenberg: I think technology can play a role in reducing operating expenses. In the last 70 years, you have seen the expense ratio of the industry rise, and I’m not sure the industry can afford a 35 percent expense ratio. But while technology can help, some additional fundamental changes will also be required.

R&I: So as the pre-eminent leader of the insurance industry, what do you see in terms of where insurance is now and where it’s going?

Hank Greenberg: The country and the world will always need insurance. That doesn’t mean that what we have today is what we’re going to have 25 years from now.

How quickly the change comes and how far it will go will depend on individual companies and individual countries. Some will be more brave than others. But change will take place, there is no doubt about it.

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More will go on in space, there is no question about that. We’re involved in it right now as an insurance company, and it will get broader.

One of the things you have to worry about is it’s now a nuclear world. It’s a more dangerous world. And again, we have to find some way to deal with that.

So, change is inevitable. You need people who can deal with change.

R&I:  Is there anything else, Mr. Greenberg, you want to comment on?

Hank Greenberg: I think I’ve covered it. &

The R&I Editorial Team can be reached at [email protected]