In Depth: Workers' Compensation

When Claims Go Off the Rails

Case managers and pharmacy benefit managers are key pieces of the puzzle for payers trying to rein in catastrophic claims before they’re too far gone.
By: | November 2, 2016 • 6 min read

When a worker faces the rest of his life in a wheelchair or is relearning how to tie his shoes, most people wouldn’t be surprised if he battles anger, depression and maybe opioid abuse. But why do some people move on after a catastrophic injury and others do not?


And why, after a garden-variety ankle sprain, can most workers return to work quite quickly, while 10 to 20 percent of them descend into a lifetime of unrelenting pain and disability?

“True catastrophic injuries” are medically very different from “migratory” or “creeping” claims, like the ankle sprain that devolves into disability.

Michael Coupland, a psychologist, rehabilitation counselor and network medical director with the IMCS Group, said a large body of data suggests that both creeping catastrophic and “runaway” catastrophic claims are characterized by complicated recoveries, higher costs and more medical complications when the patient presents with one or more of these psychosocial risk factors:

  • Tendency to catastrophic thinking.
  • Guarding or fear avoidance behavior.
  • Perceived injustice and disability mind-set.
  • Adverse childhood events, which weaken the immune system.
  • Psychological comorbidities.
  • Stressors and weak family and social supports.
  • Abdication of control.
  • Lifestyle and demographic risks.

Predictive modeling has advanced to the point that these factors can be identified and acted on earlier, said Dr. Michael Choo, chief medical officer, Paradigm Outcomes.

Once these factors are identified, Choo said, claims managers can put into place the necessary support systems and work with the injured worker to gradually ease them into a more productive recovery.

Michael Coupland, psychologist and rehabilitation counselor, network medical director, IMCS Group

Michael Coupland, psychologist and rehabilitation counselor, network medical director, IMCS Group

Behavioral therapies are also part of the protocol for traumatic brain injuries, said Zack Craft, vice president, rehab solutions with One Call Care Management. He said brain injuries predictably produce personality changes, including angry outbursts.

The frontal lobes, the part of the brain most vulnerable to injury, are the emotional control center and home to personality, according to the Centre for Neuro Skills. Damage can affect motor function, problem-solving, spontaneity, memory, language, initiation, judgment, impulse control, and social and sexual behavior.

In a historical departure, carriers have started to pay for behavioral therapy in migratory claims, said Maddy Bowling, principal, Maddy Bowling & Associates Consulting. “Payers had suspected malingering in migratory claims and were reluctant to pay for psychological treatments,” but they now assume motivational or psychological problems and recognize that these therapies could be helpful.

Chronic Pain Management

About two weeks after an injury, workers take a pain-screening questionnaire, scored from one to 10: How would you rate the pain that you have had during the past week? In your view, how large is the risk that your current pain may become persistent? A high score, said Coupland, predicts a high chance of chronic pain and delayed recovery.

“We don’t tell patients our goal is to get them off drugs. We say, ‘This is a way to manage your pain.’ ”  — Michael Coupland, psychologist and rehabilitation counselor, network medical director, IMCS Group.

In March 2016, the Centers for Disease Control called the nation’s prescription drug epidemic a “doctor-driven crisis” and offered new, non-binding prescribing guidelines. More doctors are weaning their patients from opioids and seeking non-pharmaceutical techniques to help them manage their pain.


Predictably, Coupland said, patients who satisfy any or many of the identified risk factors are fearful of separating from their painkillers and of the debilitating pain that led them to opiate use in the first place. Most are not addicts, and most are compliant patients, following doctor’s orders perfectly.

Still, Coupland said, “getting off opioids is hard,” typically triggering depression, anxiety and withdrawal.

“We don’t tell patients our goal is to get them off drugs,” he said. “We say, ‘This is a way to manage your pain.’ ” He then introduces non-pharmaceutical techniques such as cognitive therapies, biofeedback or hypnosis.

“We have the patient say, ‘I can cope with my pain.’ When the brain hears that, even if the patient isn’t convinced, the words can stand down the stress arousal response, which is a pain generator.”

And he develops a weaning plan with the patient’s doctor. “We set a goal: Get pain down from an 8 to a 5 or 3. Even an 8 to a 7 is fine.”

Role of Pharmacy Benefits Management

Catastrophic injury claims are complex, with multiple providers prescribing multiple drugs, including painkillers.

Phil Walls, chief clinical officer, myMatrixx

Phil Walls, chief clinical officer, myMatrixx

A profusion of medications can cause a “cascade” effect, said Phil Walls, chief clinical officer, myMatrixx.

The appropriate response, Walls said, is to reduce the drug causing the original problem, especially opioids. “They cause drowsiness. We see Ritalin, amphetamines, and other stimulants to counter the drowsiness.” Those in turn may cause sleeplessness, jitters or dry mouth, which could be addressed by yet another medication.

If the prescribing practices — such as dosages, possible drug interactions and duration of the prescription — fall outside guidelines published by the CDC and other health organizations, Walls may contact the prescribing physician.

Do they resent the interference? Not often, he said.

“Medical schools teach collaborative care. They’re taught to embrace interaction when other providers reach out to them.” Even when they give attitude, the post-intervention data Walls monitors shows they make the change anyway 79 percent of the time.

Using their data on providers, types of drugs, dosages and duration of a prescription, pharmacy benefits managers are in a unique position to identify trigger points where an intervention would benefit a claim, said Nikki Wilson, pharmacy product director, Coventry Workers’ Comp Services.

Regrettably, claims often have problems by the time pharmacy benefits managers get involved, she said, especially when the pharmacy benefit is a stand-alone product.

“Medical schools teach collaborative care. They’re taught to embrace interaction when other providers reach out to them.”  — Phil Walls, chief clinical officer, myMatrixx

Multi-product managed care organizations have access to more information about the patient’s and the claim’s history than stand-alone providers. Their risk models may trigger early alerts to potential issues.

For example, “the first opioid prescription we fill will trigger outreach to guide the claim to the best outcome,” Wilson said.

A Minor Claim Gone Awry

All claims require management, but not all runaway claims involve excessive pain or medications.

Eighty percent of excess carrier costs derive from migratory claims, said Zack Craft of One Call. He recalls a claim One Call inherited for a restaurant manager who rolled his right ankle on an oil drip on some stairs.

“He went to an urgent care center, then an ortho group, which gave him an orthotic shoe and a brace, and sent him home.”

That should have been the end of the story, but the man wore the hard orthotic shoes more than prescribed and developed a blister.

“Now he had a wound that didn’t heal right, and then he was diagnosed with diabetes.”

After a stay in the hospital with his foot elevated, he developed foot drop — a gait abnormality — which required more orthotic shoes.

And then he suffered a wound on his left ankle, which he neglected. That resulted in another hospital stay, with an almost 100-pound weight gain from inactivity, poor nutrition and medication. After more than a year, with a degrading condition, he underwent an above-the-knee amputation.

“Now he was into prosthetics, and the weight gain forced him into a power chair,” Craft said. His rental home required a ramp for the power chair, and he went on disability.


“It’s good practice for a case manager to step in when a symptom like an unhealing blister emerges,” said Bowling, which could (and did) indicate a more serious condition.

A case manager could work with doctors on diet and exercise to control weight and avoid the abnormal gait and stress fracture.

“Field case managers go to the physician’s office with the patient, help with referrals, and meet with the family to make sure they understand the treatment plan and their role in compliance,” she said. &


R10-1-16p40-42_3Catastrophic.inddFacing the Unthinkable: What happens in the hours, days and weeks following a sudden, disabling injury?


R10-15-16p38-40_4Catastrophic.inddRoad to Recovery: When it’s time to send patients home, there are new challenges to tackle, for both patients and payers.


Man on wheelchairCreeping Catastrophes: This final story of the series focuses on “creeping” catastrophic claims.


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

More from Risk & Insurance

More from Risk & Insurance

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.


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.


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?


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.


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.


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]