Category Archives: Research

Workers’ Compensation and SSDI Dual Eligibility: Costly Changes Coming?

In 2014, workers’ compensation loss costs (indemnity wage replacement plus medical benefits) totalled $62.3 billion, nationally, while Social Security Disability Insurance (SSDI) paid $141.5 billion in wage replacement benefits to disabled persons and their dependents. In the same year, 10.3  1.3* million disabled workers qualified for both workers’ compensation and SSDI wage replacement. They are dually eligible for both programs given their on the job injuries.

If a worker becomes eligible for both SSDI and workers’ compensation cash benefits, one or both programs will reduce benefits to avoid making excessive payments relative to the worker’s past earnings. Social Security amendments passed in 1965 require SSDI benefits to be reduced so the combined total of payments does not exceed 80% of the injured worker’s pre-injury wages.

However, prior to the 1965 amendments, fifteen states, including New Jersey, had passed what are called “reverse offset” laws, which required that it is the workers’ compensation benefits, rather than SSDI’s, which are reduced to stay under the 80% cap. The reverse offset laws were grandfathered into the 1965 amendments. This produces millions of dollars in savings per year for insurers and employers.

A bristly fly has just done a swan dive into the reverse offset ointment. President Trump’s proposed budget calls for eliminating the reverse offset law. If this provision makes it into the final budget proposal, New Jersey employers would face the prospect of not insignificant increases in total loss costs. Thousands of injured workers in the state are dually eligible for workers’ compensation and SSDI benefits. No one knows for sure the exact number, because Social Security doesn’t have a good verification program. The president’s budget estimates eliminating the reverse offset law would save $164 million over ten years, all of which would come from the 15 states that would lose the reverse offset advantage.

If you’d like to know more about the reverse offset inside baseball game, the National Academy of Social Insurance has an excellent description on page 48 of its October, 2016, workers’ compensation annual report.

Thanks to Work Comp Central’s Elaine Goodman for a story on this issue (subscription required).

*Thanks to Mathematica’s Yonatan Ben-Shalom for catching this typographical error.

Attorney Involvement In New Jersey: We Get The Silver Medal

There are perhaps four organizations conducting the most important and highly respected research into workers’ compensation in the country. The Workers’ Compensation Research Institute (WCRI), located in Cambridge, Massachusetts, is one of them. The others are the National Council on Compensation Insurance (NCCI), the International Association of Industrial Accident Boards and Commissions (IAIABC) and the California Workers’ Compensation Research Institute (CWCRI).

This morning, the WCRI released an 18 state study looking at how the various states compare with respect to the degree of attorney involvement in workers’ compensation claims. Attorney involvement occurs when a worker hires an attorney to handle a work injury claim.

These 18 states were selected for this study because they are geographically diverse, represent a range of system features, and represent the range of states that are higher, near the middle, and lower on costs per claim.

New Jersey’s claims adjusters and defense attorneys don’t have to be told that an awful lot of cases are disputed and wind up before a judge. They intuitively sense this happens in NJ more often than in other states. However, the WCRI’s study moves intuition to fact.

Only Illinois, a state with perhaps the most messed up workers’ compensation system in the country, has more cases  handled by attorneys.

The US did not create workers’ compensation. That honor belongs to Germany and dates from 1884. Britain followed suit shortly thereafter, but it wasn’t until 1911 that Wisconsin was able to enact the first legislation in America (note that of the study states Wisconsin, with 13%, has the lowest level of claims where attorneys become involved).

It is ironic, indeed, that one of the primary reasons state-based workers’ compensation systems were created was to get the lawyers out of the picture. Until then, with no system at all, injured workers were forced to sue their employers when they suffered work injuries.

How far we’ve come since that grand vision. Now, with 49% of all work injuries disputed by warring attorneys, New Jersey stands near the top of a motion-filled mountain. If anyone thinks that’s going to change anytime soon, we have some choice real estate for sale in Florida (just as soon as the tide goes out).

You can access the WCRI study here (free for WCRI members; $5.00 for all others – a bargain).

The Buzz Is Getting Louder


“We know the single greatest roadblock to timely work injury recovery and controlling claim costs. And it’s not overpriced care, or doubtful medical provider quality, or even litigation. It is the negative impact of personal expectations, behaviors, and predicaments that can come with the injured worker or can grow out of work injury.

This suite of roadblocks is classified as “psychosocial” issues – issues which claims leaders now rank as the number one barrier to successful claim outcomes according to the Workers’ Compensation Benchmarking Study’s 2016 survey – and they drive up claim costs far more than catastrophic injuries, mostly due to delayed recovery.”

That’s the beginning of a new White Paper authored by friend and colleague Peter Rousmaniere and Rising Medical Solution’s Rachel Fikes. The Paper, How to Overcome Psychosocial Roadblocks: Claims Advocacy’s Biggest Opportunity, reports on Rising’s 2016 Benchmarking Survey and describes how the workers’ compensation claims management community is ever so slowly coming to realize the leading cause of delayed recovery for America’s injured workers is psychosocial in nature and that efforts to deal with this have, up to now, been woefully inadequate.

Rousmaniere and Fikes point to enlightened employers and insurers who are leading their companies to a greater acceptance of the need for competent, professional intervention to help injured workers overcome mental and emotional barriers delaying their return to employment.

They cite the work of Denise Algire, Director of Risk Initiatives and National Medical Director for Albertson Companies, a grocery chain with more than 250,000 employees. They also report on efforts by The Hartford, Nationwide Insurance and CNA.

All of the progressive actions undertaken by these organizations have one thing in common: the development of an empathic interview methodology devoted to understanding the “whole person” to discover which claims will need more intensive and specialized intervention.

At The Hartford, Medical Director Marco Iglesias reports 10% of claims fall into this bucket, but they consume 60% of total incurred costs. He says adjusters now ask each injured worker an important question: “When do you expect to return to work?” The Hartford’s analytics indicate any answer longer than ten days is a red flag for the future.

Nationwide Insurance, under the direction of Trecia Sigle, VP of Workers’ Compensation Claims, is building a specialized team to address psychosocial roadblocks. Nationwide’s intake process will consist of a combination of manual scoring and predictive modeling, and then adjusters will refer red-flagged workers to specialists with the “right skill set.”

Pamela Highsmith-Johnson, national director of case management at CNA, says the insurer introduced a “Trusted Advisor” training program for all employees who come into contact with injured workers. CNA’s Knowledge and Learning Group helped develop the training with internal claims and nurse staff.

This White Paper adds to the now undeniable research indicating the psychosocial problem is the biggest one facing the workers’ compensation claims community. The leading experts agree that empathy, soft talk and the advocacy-based claims model is the method of choice for helping injured workers whose claims carry a psychosocial dimension. The experts cited in the White Paper all agree that adjusters will require extensive and repetitive training to learn the new techniques.

However, all of this is a heavy lift for an adjuster community overburdened and overwhelmed with work, a group for which the average lost time claim load is often north of 150. Even with better training, they can’t do it alone. To really turn the psychosocial tide will require a well-rounded team of claims adjusters, nurses, case managers and external, well-trained clinicians working together with transparent, technologically advanced communication.

The missing links thus far are those well-trained clinicians and the advanced communication. And that is why Workers Compensation Psychological Network exists.

We have to say, boast really, that it’s nice to get the solid validation found in this compelling White Paper. Writing today from Berlin, where he’s vacationing, Peter Rousmaniere said, “The article was timely and definitively supports your program.”

So, yes, the buzz is getting louder.


Reader Reactions To Last Week’s Psychosocial Issues Series

We received a number of reader comments to our psychosocial claim issues series of last week. Our series highlighted the difficulty in dealing with these sometimes intractable claims where recovery is delayed and costs exacerbated.  In Part One, we listed the litany of challenges facing claim managers; in Part Two we described how we had built Workers Compensation Psychological Network  in New Jersey to overcome those challenges.

A few readers pointed out that we paid scant attention to the “social” in psychosocial. These adjusters and nurses wrote that too often they’d seen and handled claims where life and “societal issues,” the social, seemed to get in the way of recovery.

Sue Separa, who has overseen workers’ compensation claims for more than 30 years in 40 states and jurisdictions, put it this way:

Employee loses car, loses license, loses driving privileges and can’t get to work, but still needs a source of income;

Employee is having daycare issues and needs to be home, but also needs a source of income;

Employee has a sick relative or child they need to stay with/watch, but still needs a source of income;

Employee is attending school to better themselves, has a heavy school schedule, but still needs a source of income;

Employee has a comorbid or health situation that requires medical care and possibly surgery or absence from work, and has not secured short term disability, or it is not available with the employer; 

Employee has asked for vacation time and it is denied due to no time left, or not eligible, or because someone else is off work at the same time.

And she’s right. Of course these real life situations occur. However, they’re present and happen all the time without injuries, too. They are non-physical, “social” comorbidities; things that can easily impede and delay return to work. Unless, that is, claim adjusters are trained and experienced enough, as Ms. Separa is, to dig a little deeper, find them and address them appropriately.

We also heard from our friend Robert Aurbach who wrote from Down Under to say, while he “applauds” our efforts and thinks “they are valuable,” he suggests “perhaps they don’t go far enough.” Rob believes the “problem is partly the system itself;” we create the harm our series cited. As that great American philosopher, Pogo, opined on Earth Day, 1971, “We have met the enemy and he is us.” The system is iatrogenic (system caused).

Rob Aurbach also sent a paper he authored in late 2015 for the Injury Schemes Seminar, put on bi-annually by the Australian Actuaries Institute. In the Paper (opens in pdf), titled “Better Recovery Through Neuroscience: Addressing Legislative and Regulatory Design, Injury Management and Resilience,” (bit of a mouthful that, but it won the Taylor Fry Award for the Seminar’s best paper) Rob explores Neuroplasticity, a theory dating from the 1800s and recently confirmed by functional Magnetic Resonance Imaging. Neuroplasticity is the process by which our brains continually rewire themselves throughout life due to environment, behavior, thinking and emotions. In short, it’s true; our brains are malleable. Rob writes that when work is disrupted through injury (or, through anything, really) for a long enough period, Neuroplasticity begins rewiring the brain to adapt to the new situation – being out of work. In other words, our brain creates a new “facilitated neural network.” This can happen in as little as 12 weeks, as Rob points out:

Timing is everything. There is a substantial research literature demonstrating that if a worker does not return to work within 12 -16 weeks, the probability of eventual return is reduced to 50% or less.

Rob Aurbach’s paper is a valuable contribution to understanding how easily a claim can deteriorate to the point where an injured person’s life is forever changed, and not for the better. We urge you to read it. It’s well-researched, well-written and profoundly thoughtful. It comes in at twenty-seven pages, the last seven of which are endnotes and references. We found the first half of the text compelling and enlightening. His common sense recommendations that follow are pretty simple, but wickedly difficult to implement: Claim managers and adjusters should intervene early, demonstrate respect for the injured worker, promote early return to work, align incentives that encourage recovery, restrain negativity, listen attentively to the worker’s story, etc. In short, all the things managers, nurses and adjusters like Sue Separa know they should be doing, anyway. Trouble is, for these often overworked professionals, each managing a steamer trunkful of claims, there isn’t a lot of time to devote to Rob’s prescription. The iatrogenic system isn’t built to allow it.

And that’s where behavioral health clinicians and therapists, for the most part underused and undertrained, ought to be helping far more than they are now. Part Two of last week’s series catalogued how, recognizing the difficulties, we built Workers Compensation Psychological Network and trained our clinicians to help anyone confronted with these demanding and formidable claims get to the right outcome sooner, faster and smarter. Injured workers, as well as the professionals charged with helping them, deserve no less.

Psychosocial Issues: Costly Problems Delaying Recovery

According to the New Jersey Workers’ Compensation Rating & Inspection Bureau, over the most recent five-year period total incurred costs for head injuries were $113,000 per claim; per claim costs for concussions during the same period were $83,000. Those costs suggest a lot of time away from work for New Jersey’s head-injured workers.

Many of the injuries involved psychosocial issues not identified until well into the claim. Research shows that these issues significantly delay and impede recovering and returning to work.

With that as background, let us propose a thesis:

Our nation’s current system for treating injured workers with mental health issues is uncoordinated, overly fragmented, highly wasteful and does not focus enough on speedy return to work. There is a critical need for a more systemic approach as well as an integrated coterie of clinicians and practitioners, trained in workers’ compensation, whose goals are to provide compassionate treatment with a steady return to work trajectory. 

The issue is compounded by the way claim adjusters, supervisors, nurses and defense attorneys view psychological issues. No one wants to ”buy a psych claim,” and many  believe that referring a claimant for behavioral health treatment does nothing more than create a lifetime annuity for a psychologist. Time and again this view has been proven correct.

What to do about that? Ay, there’s the rub. For in that question lies a host of difficulties. These, for instance:

  1. Most mental health professionals do not understand workers’ compensation. They do not realize either its statutory requirements or the concept of maximum medical improvement. They have spent many years being trained to treat the entire person. The players are the patient and the therapist, and it is like sitting on a two-legged stool. They do not fathom that, in workers’ compensation, the stool has five legs, with the other three occupied by the employer, the treating physician and the claim adjuster.
  2. Too often, by the time an adjuster or nurse recognizes that psychosocial issues may be impeding recovery and return to work the claim may have gotten a little long in the tooth; it could be months old, or more.
  3. It can take a claim adjuster weeks, in rare cases, months, to find a psychologist and schedule an appointment. It can also take weeks or months for a report to make it back to the file. Moreover, finding a clinician with even a smattering of workers’ compensation knowledge or experience is often problematic (See 1, above).
  4. Because there is no mental health electronic health record system for workers’ compensation, every report is its own island, sometimes good, sometimes bad.
  5. Everything is paper-based, which wastes claim adjuster time and increases expense.¹
  6. Although psychologists understand the value of work as therapy, many see no reason to help coordinate early return to work with employers, claim adjusters or medical providers

These are deep and difficult considerations. Tomorrow, we’ll describe how we created an entirely new approach that successfully addresses each of them.

¹ Claim adjusters also report that a not insignificant number of these reports are essentially unreadable, because they are handwritten.

The Oregon Bellwether Bi-Annual Study’s Conclusion: Workers’ Comp Is REALLY Expensive in New Jersey!

Every two years, Oregon’s Department of Consumer and Business Services publishes its Workers’ Compensation Premium Rate Ranking Summary. Last week, the state issued its 2016 Study Summary. Just before the Study was released, Workers’ Comp Insider published a Primer on how to interpret it. This from that post:

The executive summary of this year’s study is due to be released in the next few days, and the findings are closely watched in quite a few states. Unlike the National Academy of Social Insurance report, issued last week, the Oregon study takes the comparison beyond simple averages. Instead, Oregon derives average rates for what a hypothetical set of comparable employers would pay, thus factoring out much of the difference in states’ risk profiles.

Oregon’s Premium Ranking Study looks at premium rates for a set of the most common job classifications, establishes a single index rate for each state based on the job classification rates and then compares those index rates among all the states.

California, the state which, if it were a country, would have the world’s fifth leading GDP, is always in its own universe in studies like this. However, after discounting California, the state with the highest index ranking in the nation at $2.92 per hundred dollars of payroll is (drum roll): New Jersey. The New Jersey index rate is 158% higher than the median rate for all states.

New York and Connecticut are right behind New Jersey in cost, with index rates of $2.83 and $2.74, respectively.

There is no medical fee schedule in New Jersey, which is one of the reasons for the high costs. Fee schedules do exist in New York and Connecticut, but they’re quite high. On the other hand, Massachusetts also has a fee schedule, one of the lowest in the nation, and it’s index rate reflects that. Massachusetts’s index rate of $1.29, which is 70% of the median, makes it the sixth lowest cost state in the country.

At Workers Compensation Psychological Network we are highly sensitive to the high costs within New Jersey, because head injuries and psychosocial issues impact those costs in a significant manner. According to the New Jersey ‘ Compensation Rating & Inspection Bureau, total incurred costs (paid plus reserved) for all head injuries for the 5-year period from 2009 through 2013 were $1.72 billion. And that’s just for insured companies. It does not include self-insureds, which means that total state costs are more than likely near $3 billion for the period.

Clearly, carriers and third-party administrators representing insured and self-insured employers need all the help they can get. Early evaluation and intervention in claims that may contain mental health components delaying recovery is a proven way to eat into the high costs that so bedevil workers’ compensation professionals in New Jersey. That’s why we’re here with solutions that are: Sooner, Faster, Smarter.

Are Nurses And Health Care Workers Facing More On-The-Job Violence?

If you asked the average person to list professions with the highest rates of violent assault, few would put health care professionals high up on that list. But the reality is that when it comes to workplace violence, nurses, nursing aids, and paramedics have the dubious distinction of being very high up on the list; only police and correctional officers suffer a higher rate of on-the-job assaults. And many nurses say that the violence is only getting worse. In a fact sheet on violence, The International Council of Nurses, a federation of more than 130 national nurses associations representing the millions of nurses worldwide, says that:

  • Health care workers are more likely to be attacked at work than prison guards or police officers.
  • Nurses are the health care workers most at risk, with female nurses considered the most vulnerable.
  • General patient rooms have replaced psychiatric units at the second most frequent area for assaults.
  • Physical assault is almost exclusively perpetrated by patients.
  • 97% of nurse respondents to a UK survey knew a nurse who had been physically assaulted during the past year.
  • 72% of nurses don’t feel safe from assault in their workplace.
  • Up to 95% of nurses reported having been bullied at work.
  • Up to 75% of nurses reported having been subjected to sexual harassment at work.

The issue of safety for nurses and allied health professionals was brought to the forefront after the deaths of two California healthcare workers in separate incidents in a single week. Psychiatric technician Donna Gross was strangled to death and robbed at Napa State Hospital. Days later, nurse Cynthia Barraca Palomata died after being assaulted by an inmate at Contra Costa County’s correctional facility in Martinez. The deaths have sparked a new push for better security and stronger worker safeguards, particularly in settings treating prisoners and psychiatric patients.

While the occupational danger in environments like prisons and psychiatric hospitals is recognized and real, these are hardly the only high-hazard settings in which nurses work. Hospital emergency rooms are widely recognized as a hazardous environment, but violence occurs in other wards, too. The Well, a NY Times healthcare blog, featured an article by RN Theresa Brown entitled Violence on the Oncology Ward. And the CDC spotlighted research focusing on an increase in assaults on nursing assistants in nursing homes. In that study, 35% of nursing assistants reported physical injuries resulting from aggression by residents, and 12% reported experiencing a human bite during the year before the interview. There are no healthcare settings that are immune. Assaults routinely occur in general hospitals, in health clinics, and in patients’ homes.

And the Bureau of Labor Statistics reports:

Over the past ten years, healthcare workers have accounted for over half of the nonfatal workplace violence injuries involving days away from work across all industries.

The perpetrators of violence are varied: While many assaults are by patients, friend and family members of patients also can commit the assaults. There are also rapists or muggers who are targeting healthcare settings or solitary workers; drug addicts and robbers, who are looking for medications; and domestic violence also visits the workplace.

It’s unclear why violence is on the rise. Many point to staff shortages. Others see the preponderance of alcohol, drugs, and ready access to weapons as contributing factors; others think that hospital administrators do too little in the area of prevention.

One organization trying to help is the Emergency Nurses Association, which has issued a Workplace Violence Toolkit, targeted specifically at emergency department managers or designated team leaders.

Others are seeking legislative relief that would require hospitals and healthcare facilities to have safety and security plans and training in place.

As far back as 2008, the New Jersey legislature passed and enacted the Violence Prevention in Health Care Facilities Act, which states in part:

Within 6 months of the effective date of this act, a covered health care facility shall establish a violence prevention program for the purpose of protecting health care workers.

Although, writing in 2015, Ann Twomey, president of Health Professionals and Allied Employees (HPAE), New Jersey’s largest union of nurses and health care workers, opined:

Shockingly, the NJ Department of Health has failed to conduct any outreach to either employers or employees to inform them of their rights and responsibilities under the law. No surprise then that an informal survey of hospital staff HPAE conducted in 2013 found fewer than 50% of the respondents reporting their hospital was in full compliance with the law.

A bit biased? Perhaps, but the issue of workplace violence in New Jersey’s health care settings continues to be real and palpable. At Workers Compensation Psychological Network we have been privileged to assist a number of health care professionals  as they cope with PTSD and strive to return to work after suffering the trauma of a violent attack.

Sadly, we do not expect to see a rapid decline in that variety of patient.



Early Intervention: Good For The Injured Worker, And It Saves Money, Too

It’s long been known that workers’ comp claims in which behavioral health issues are present cost more than those without such issues. Often a lot more. This month’s issue of Health Affairs reports on a Canadian Study that found that the average cost for a “mental health high-cost patient” was roughly 33 percent greater than the average cost for other high-cost patients. The authors suggest that intervening early when behavioral health issues are first detected can mitigate these higher costs.

Also, the Robert Wood Johnson Foundation’s Health Policy Snapshot, published in March 2013, examined the prevalence of mental disease in the U.S., and described how early treatment and intervention can improve lives and ultimately lower related health care costs.

Patients and payers are best served when screening occurs during the first month of any workers’ comp claim involving head injury or when the claimant is depressed, overly anxious or fearful. These can delay return to work and increase the cost of the claim. Intervening early leads to Recovery: Sooner, Faster, Smarter.