Claims

A Glut of Medical Causation Claims

Pinpointing whether a particular injury was work-related challenges physicians and employers. Some schemers take advantage.
By: | February 20, 2017

So called “cappers” or “runners,” who are middlemen in fraud schemes, are illegally recruiting recently unemployed workers to file murky medical-causation allegations, helping to drive a surge in Southern California workers’ compensation cases.

“We are getting slammed with really unscrupulous lawyer-developed cases,” said Robert G. Rassp, a Southern California claimant attorney and author of the law blog “The Rassp Report.”

“They add in their claim not just the back injury, but psychiatric claims, sleep disorder and sexual dysfunction. They throw the whole book at the employer. Risk managers are going berserk over it.”

The participants in such schemes take advantage of California’s workers’ comp causation standards allowing the filing of cumulative trauma injury claims after a worker has been terminated, Rassp said. California further allows compensation when the causation is less than 1 percent work-related.

Even without the involvement of cappers, California’s liberal causation standards create headaches for employers in terms of apportioning between industrial and non-industrial factors behind post-termination cumulative trauma claims.

“We have a huge problem with this,” said a Southern California risk manager who asked not to be identified.

California’s laws are just one issue currently fueling more nationwide discussions about medical causation standards and the challenge of determining whether workplace exposures are responsible for specific cumulative trauma claims.

Robert Rassp, claimant attorney

Claims-payer desire for more states to adopt stricter injury-causation standards along with the shifting nature of jobs and worker demographics are also stirring those discussions.

Claims with questionable medical-causation assertions have always presented a conundrum for payers: Failing to challenge cases when the injury cause is not work-related leads to paying unwarranted benefits and emboldens others to file similar spurious cases.

Wrongly challenging claimants, on the other hand, when their medical conditions legitimately arise from work, can needlessly drive litigation costs, with the severity of those expenses depending on state statutes.

In Pennsylvania, for example, claims payers lacking a reasonable basis for contesting an injured worker’s petition may be ordered to pay the claimant’s lawyer fees and litigation costs, said Michael D. Sherman, a defense attorney at Chartwell Law Offices LLP in Pittsburgh.

Determining causation is easier when an obvious workplace accident, with witnesses, causes an easily identified injury like a severed finger or broken bone.

But with a cumulative trauma injury or chronic problem occurring over time, such as an inflamed shoulder or lower-back pain, confirming unequivocally that it arose during the course of employment challenges employers, injured workers and even doctors.

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Doctor training focuses on treating injuries, not on uncovering their cause, said Nancy Greenwald, a Boise, Idaho-based physician who treats workers’ comp patients.

“It’s one of the hardest things we do as physicians to really pinpoint what caused that particular injury,” she said.

Throw in the possibility of pre-existing conditions or an injury aggravation occurring after the industrial harm and making the right judgment call regarding the payer’s responsibility is even trickier.

While such scenarios present a challenge in determining the scope of legitimate claims, the schemers utilizing cappers in Southern California willfully take advantage to perpetuate fraud.

Last year, for example, a San Diego grand jury indicted doctors, medical providers and attorneys allegedly participating in a scheme involving cappers and $450,000 in illegal kickbacks.

Prosecutors allege it generated millions of dollars of fraudulent workers’ comp claims.

Other cappers have been busy in Southern California’s Orange and Los Angeles counties, soliciting workers who recently lost their jobs due to plant closings or other factors, Rassp said.

Rassp is alarmed by the practice because it increases claims payer suspicions, driving them to challenge more cases even when causation is legitimately work-related, he said.

Workers validly harmed on the job pay the price.

“If the problem is employment-related, deal with that.”– Stuart Colburn, a defense attorney at Downs Stanford P.C in Austin, Texas

A “glut” of post-termination cumulative trauma claims filed in Southern California perplexes employers who may delay benefit payments and create unwarranted friction with legitimately injured workers when they attempt to protect themselves, agreed Edward E. Canavan, vice president of the workers’ comp practice and compliance at Sedgwick Claims Management Services.

“It’s unfortunate,” because injured workers have families to care for, Canavan added.

The workers’ comp industry needs to consider legislative and regulatory changes to curb Southern California abuses while continuing to pay legitimate claims, Canavan said.

Nationwide, increased discussions about causation standards come after a number of states raised the level of medical evidence required to prove a work-related injury, said Thomas A. Robinson, co-author of “Larson’s Workers’ Compensation Law.”

“There are at least a half dozen states that over the past decade and a half made it more difficult for the claimant to prove their case based on requiring more definite medical opinions,” Robinson said.

Debra Levy, SVP, York Risk Services Group

While implementation of those laws “has sort of snuck up on people,” claimant representatives are increasingly complaining about them while claims payers want legislatures in more states to adopt similar legislation.

Greg McKenna, senior vice president for external affairs at Gallagher Bassett, expects more states to consider reforms with strengthened causation standards.

But passage of such laws probably will depend on balancing them with increased benefit amounts, he said.

“I really think lawmakers and employers are wrestling with a new kind of workforce,” McKenna said.

In the past, when workers remained at a single job for years, employers could more easily accept workplace responsibility for cumulative trauma, McKenna said.

But with workers frequently changing jobs, and perhaps even working a second job in the “gig-economy,” employers are asking whether they should accept cumulative-trauma injuries that workers may have acquired during previous employment.

Similarly, an older U.S. workforce raises questions about whether injuries are work-related or stem from age-related continuous degenerative processes.

The aging workforce, general increase in co-morbid conditions and uncertainty over group health make it more important than ever for payers to confirm that alleged injuries actually resulted from workplace accidents, said Maureen McCarthy, senior vice president, workers’ compensation claims, at Liberty Mutual.

Meanwhile, a U.S. Department of Labor report released in 2016 reviewed the impact of state laws with stricter causation standards that increased the burden of proof required for claimants to prove a workers’ comp claim, Robinson noted.

The report said that “issues of causation of injury or illness have always presented challenges.”

It added that “there is substantial cause for growing alarm,” because of increasingly complex challenges workers face with new causation standards requiring work to be the major contributing cause of disabilities.

Observers fret that the DOL’s report will drive federal intervention in state workers’ comp programs.

That still leaves the common challenge of filtering out other injury causes from workplace causation. The number of cases presenting those challenges can shift.

For full report: www.cwci.org/store.html

The Texas Department of Insurance, for example, has seen an increase in injured workers challenging the findings of designated doctors. They are requesting a “causation analysis” to determine issues such as maximum medical improvement, impairment rating, and extent of injury, a TDI spokesman said.

The department has not determined why more causation challenges are occurring.

But defense attorney Stuart Colburn at Downs Stanford P.C. in Austin said claimants have grown smarter at meeting requirements for challenging doctor findings that determine issues such as the extent of injury and return-to-work ability.

Mitigating claims with questionable causation issues calls for employers to identify the problem’s origin, Colburn said.

Employers experiencing multiple, unwitnessed, soft-tissue injuries should take a “big-picture approach” to learn, for example, if issues such as problematic employer/employee relations or the frequent assigning of unpleasant tasks is driving claim filings, he advised.

“If the problem is employment-related, deal with that,” Colburn said.

Return-to-work programs can help reduce unwarranted claims when workers realize they will be assigned other tasks rather than receiving time off, Colburn said.

Do not allow claims examiners to become jaded and assume a battle is lost when a jurisdiction’s laws, such as California’s, frequently work against favorable outcomes, said Debra Levy, senior vice president of product management and national workers’ comp practice leader at York Risk Services Group.

“Adjusters shouldn’t say, ‘That’s just the way the state is,’ without thoroughly investigating a claim,” she said. &

Roberto Ceniceros is a retired senior editor of Risk & Insurance® and the former chair of the National Workers' Compensation and Disability Conference® & Expo. Read more of his columns and features.

More from Risk & Insurance

More from Risk & Insurance

Risk Scenario

The Betrayal of Elizabeth

In this Risk Scenario, Risk & Insurance explores what might happen in the event a telemedicine or similar home health visit violates a patient's privacy. What consequences await when a young girl's tele visit goes viral?
By: | October 12, 2020
Risk Scenarios are created by Risk & Insurance editors along with leading industry partners. The hypothetical, yet realistic stories, showcase emerging risks that can result in significant losses if not properly addressed.

Disclaimer: The events depicted in this scenario are fictitious. Any similarity to any corporation or person, living or dead, is merely coincidental.

PART ONE: CRACKS IN THE FOUNDATION

Elizabeth Cunningham seemingly had it all. The daughter of two well-established professionals — her father was a personal injury attorney, her mother, also an attorney, had her own estate planning practice — she grew up in a house in Maryland horse country with lots of love and the financial security that can iron out at least some of life’s problems.

Tall, good-looking and talented, Elizabeth was moving through her junior year at the University of Pennsylvania in seemingly good order; check that, very good order, by all appearances.

Her pre-med grades were outstanding. Despite the heavy load of her course work, she’d even managed to place in the Penn Relays in the mile, in the spring of her sophomore season, in May of 2019.

But the winter of 2019/2020 brought challenges, challenges that festered below the surface, known only to her and a couple of close friends.

First came betrayal at the hands of her boyfriend, Tom, right around Thanksgiving. She saw a message pop up on his phone from Rebecca, a young woman she thought was their friend. As it turned out, Rebecca and Tom had been intimate together, and both seemed game to do it again.

Reeling, her holiday mood shattered and her relationship with Tom fractured, Elizabeth was beset by deep feelings of anxiety. As the winter gray became more dense and forbidding, the anxiety grew.

Fed up, she broke up with Tom just after Christmas. What looked like a promising start to 2020 now didn’t feel as joyous.

Right around the end of the year, she plucked a copy of her father’s New York Times from the table in his study. A budding physician, her eyes were drawn to a piece about an outbreak of a highly contagious virus in Wuhan, China.

“Sounds dreadful,” she said to herself.

Within three months, anxiety gnawed at Elizabeth daily as she sat cloistered in her family’s house in Bel Air, Maryland.

It didn’t help matters that her brother, Billy, a high school senior and a constant thorn in her side, was cloistered with her.

She felt like she was suffocating.

One night in early May, feeling shutdown and unable to bring herself to tell her parents about her true condition, Elizabeth reached out to her family physician for help.

Dr. Johnson had been Elizabeth’s doctor for a number of years and, being from a small town, Elizabeth had grown up and gone to school with Dr. Johnson’s son Evan. In fact, back in high school, Evan had asked Elizabeth out once. Not interested, Elizabeth had declined Evan’s advances and did not give this a second thought.

Dr. Johnson’s practice had recently been acquired by a Virginia-based hospital system, Medwell, so when Elizabeth called the office, she was first patched through to Medwell’s receptionist/scheduling service. Within 30 minutes, an online Telehealth consult had been arranged for her to speak directly with Dr. Johnson.

Due to the pandemic, Dr. Johnson called from the office in her home. The doctor was kind. She was practiced.

“So can you tell me what’s going on?” she said.

Elizabeth took a deep breath. She tried to fight what was happening. But she could not. Tears started streaming down her face.

“It’s just… It’s just…” she managed to stammer.

The doctor waited patiently. “It’s okay,” she said. “Just take your time.”

Elizabeth took a deep breath. “It’s like I can’t manage my own mind anymore. It’s nonstop. It won’t turn off…”

More tears streamed down her face.

Patiently, with compassion, the doctor walked Elizabeth through what she might be experiencing. The doctor recommended a follow-up with Medwell’s psychology department.

“Okay,” Elizabeth said, some semblance of relief passing through her.

Unbeknownst to Dr. Johnson, her office door had not been completely closed. During the telehealth call, Evan stopped by his mother’s office to ask her a question. Before knocking he overheard Elizabeth talking and decided to listen in.

PART TWO: BETRAYAL

As Elizabeth was finding the courage to open up to Dr. Johnson about her psychological condition, Evan was recording her with his smartphone through a crack in the doorway.

Spurred by who knows what — his attraction to her, his irritation at being rejected, the idleness of the COVID quarantine — it really didn’t matter. Evan posted his recording of Elizabeth to his Instagram feed.

#CantManageMyMind, #CrazyGirl, #HelpMeDoctorImBeautiful is just some of what followed.

Elizabeth and Evan were both well-liked and very well connected on social media. The posts, shares and reactions that followed Evan’s digital betrayal numbered in the hundreds. Each one of them a knife into the already troubled soul of Elizabeth Cunningham.

By noon of the following day, her well-connected father unleashed the dogs of war.

Rand Davis, the risk manager for the Medwell Health System, a 15-hospital health care company based in Alexandria, Virginia was just finishing lunch when he got a call from the company’s general counsel, Emily Vittorio.

“Yes?” Rand said. He and Emily were accustomed to being quick and blunt with each other. They didn’t have time for much else.

“I just picked up a notice of intent to sue from a personal injury attorney in Bel Air, Maryland. It seems his daughter was in a teleconference with one of our docs. She was experiencing anxiety, the daughter that is. The doctor’s son recorded the call and posted it to social media.”

“Great. Thanks, kid,” Rand said.

“His attorneys want to initiate a discovery dialogue on Monday,” Emily said.

It was Thursday. Rand’s dreams of slipping onto his fishing boat over the weekend evaporated, just like that. He closed his eyes and tilted his face up to the heavens.

Wasn’t it enough that he and the other members of the C-suite fought tooth and nail to keep thousands of people safe and treat them during the COVID-crisis?

He’d watched the explosion in the use of telemedicine with a mixture of awe and alarm. On the one hand, they were saving lives. On the other hand, they were opening themselves to exposures under the Health Insurance Portability and Accountability Act. He just knew it.

He and his colleagues tried to do the right thing. But what they were doing, overwhelmed as they were, was simply not enough.

PART THREE: FALLING DOMINOES

Within the space of two weeks, the torture suffered by Elizabeth Cunningham grew into a class action against Medwell.

In addition to the violation of her privacy, the investigation by Mr. Cunningham’s attorneys revealed the following:

Medwell’s telemedicine component, as needed and well-intended as it was, lacked a viable informed consent protocol.

The consultation with Elizabeth, and as it turned out, hundreds of additional patients in Maryland, Pennsylvania and West Virginia, violated telemedicine regulations in all three states.

Numerous practitioners in the system took part in teleconferences with patients in states in which they were not credentialed to provide that service.

Even if Evan hadn’t cracked open Dr. Johnson’s door and surreptitiously recorded her conversation with Elizabeth, the Medwell telehealth system was found to be insecure — yet another violation of HIPAA.

The amount sought in the class action was $100 million. In an era of social inflation, with jury awards that were once unthinkable becoming commonplace, Medwell was standing squarely in the crosshairs of a liability jury decision that was going to devour entire towers of its insurance program.

Adding another layer of certain pain to the equation was that the case would be heard in Baltimore, a jurisdiction where plaintiffs’ attorneys tended to dance out of courtrooms with millions in their pockets.

That fall, Rand sat with his broker on a call with a specialty insurer, talking about renewals of the group’s general liability, cyber and professional liability programs.

“Yeah, we were kind of hoping to keep the increases on all three at less than 25%,” the broker said breezily.

There was a long silence from the underwriters at the other end of the phone.

“To be honest, we’re borderline about being able to offer you any cover at all,” one of the lead underwriters said.

Rand just sat silently and waited for another shoe to drop.

“Well, what can you do?” the broker said, with hope draining from his voice.

The conversation that followed would propel Rand and his broker on the difficult, next to impossible path of trying to find coverage, with general liability underwriters in full retreat, professional liability underwriters looking for double digit increases and cyber underwriters asking very pointed questions about the health system’s risk management.

Elizabeth, a strong young woman with a good support network, would eventually recover from the damage done to her.

Medwell’s relationships with the insurance markets looked like it almost never would. &

Bar-Lessons-Learned---Partner's-Content-V1b

Risk & Insurance® partnered with Allied World to produce this scenario. Below are Allied World’s recommendations on how to prevent the losses presented in the scenario. This perspective is not an editorial opinion of Risk & Insurance.®.

The use of telehealth has exponentially accelerated with the advent of COVID-19. Few health care providers were prepared for this shift. Health care organizations should confirm that Telehealth coverage is included in their Medical Professional, General Liability and Cyber policies, and to what extent. Concerns around Telehealth focus on HIPAA compliance and the internal policies in place to meet the federal and state standards and best practices for privacy and quality care. As states open businesses and the crisis abates, will pre-COVID-19 telehealth policies and regulations once again be enforced?

Risk Management Considerations:

The same ethical and standard of care issues around caring for patients face-to-face in an office apply in telehealth settings:

  • maintain a strong patient-physician relationship;
  • protect patient privacy; and
  • seek the best possible outcome.

Telehealth can create challenges around “informed consent.” It is critical to inform patients of the potential benefits and risks of telehealth (including privacy and security), ensure the use of HIPAA compliant platforms and make sure there is a good level of understanding of the scope of telehealth. Providers must be aware of the regulatory and licensure requirements in the state where the patient is located, as well as those of the state in which they are licensed.

A professional and private environment should be maintained for patient privacy and confidentiality. Best practices must be in place and followed. Medical professionals who engage in telehealth should be fully trained in operating the technology. Patients must also be instructed in its use and provided instructions on what to do if there are technical difficulties.

This case study is for illustrative purposes only and is not intended to be a summary of, and does not in any way vary, the actual coverage available to a policyholder under any insurance policy. Actual coverage for specific claims will be determined by the actual policy language and will be based on the specific facts and circumstances of the claim. Consult your insurance advisors or legal counsel for guidance on your organization’s policies and coverage matters and other issues specific to your organization.

This information is provided as a general overview for agents and brokers. Coverage will be underwritten by an insurance subsidiary of Allied World Assurance Company Holdings, Ltd, a Fairfax company (“Allied World”). Such subsidiaries currently carry an A.M. Best rating of “A” (Excellent), a Moody’s rating of “A3” (Good) and a Standard & Poor’s rating of “A-” (Strong), as applicable. Coverage is offered only through licensed agents and brokers. Actual coverage may vary and is subject to policy language as issued. Coverage may not be available in all jurisdictions. Risk management services are provided or arranged through AWAC Services Company, a member company of Allied World. © 2020 Allied World Assurance Company Holdings, Ltd. All rights reserved.




Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at [email protected]