“It’s complicated” is one of the most repeated phrases heard in workers’ compensation. Whether it is in legislators, employers, judges, medical providers, administrators, or insurance companies, heads nod in agreement when someone says the basic problem is that “it’s complicated.”

It does not matter if the issue is about the definition of a compensable injury, definitions of injuries, the right basis for compensation of permanent disability we use the phrase “it’s complicated” to explain the failure to find consensus. It is the same with discussions about whether temporary total disability benefits should continue until maximum medical improvement or limited to a specific period, whether disability benefits should be based on lost wages or the degree of impairment. Even consensus about the appropriate goals of workers’ compensation can be elusive.

The road to passage of workers’ compensation statutes in the United States did not begin with debates about these issues, however. It was about how to provide a compromise between those pushing for no-fault compensation for injured employees and employers who wanted protection from liability lawsuits for injuries that occurred on the job. It was a new concept and took years for laws that passed constitutional challenges to go into effect.

People have dubbed this approach to providing programs for injured employees  as both the Grand Compromise and the Grand Bargain. Whether it was a compromise or a bargain, it took until 1948 for all states to pass a workers’ compensation law. The first statutes were not generous, but they offered advantages for both employees and employers. While there were similarities among the states’ statutes, each was unique. The multiplicity of interests in our fifty states guaranteed complications, which only grew as each state dealt with emerging issues.

Some of these laws improved benefits especially in the period after World War II, but other laws did the opposite as the pendulum of political opinion swayed back and forth. In the 70s the National Commission on State Workmen’s Compensation published a report that criticized workers’ compensation laws as “inadequate and inequitable” and proposed nineteen essential recommendations that in they thought would bring state’ programs to more acceptable levels. Following the publication of the report some states amended their statutes to comply with the recommendations, but by the early nineties the cost of the workers’ compensation rose so that employers in several states successfully pushed for laws that would lower costs. These reforms brought praise from some segments of society while others castigated them as a “race to the bottom.”

So, there is no argument that much about workers’ compensation is complicated. However, there is more to workers’ compensation than the laws associated with these complications. Some of the most important determinants of the outcome of work-related injuries are not complicated and do not require a long legislative process. They are approaches to workers’ compensation that can improve outcomes for employers and their injured employees. That is not to say that these approaches are all easy to implement and maintain. Some are but others require time and effort. They are worth the effort in the final analysis.

To be successful most solutions depend on a strong relationship between employees and employers. If employers’ actions reflect the motto that many espouse, “our employees are our greatest asset,” employees and employers are more likely to work together successfully to minimize the consequences of injuries without unnecessary delays or contentious legal battles that delay recovery and poison the atmosphere in the workplace.

Building strong relationships with employees begins before they are employed by building a culture that shows the employer values its employees and treats them fairly. This message provides a durable foundation with employees and employers should communicate it on the first day of employment and reenforce the message periodically. Waiting until there is an injury to communicate employer support lessens the probability that it will convince employees the employer is really interested in their welfare.

Communications do not need to be fancy or expensive. They just need to be accurate, easy to understand, and without jargon or acronyms. They can be in the form of a written company policy, a welcome letter, newsletter, or some other method of communication. To be effective, however, the actions of management and especially immediate supervisors must be consistent with the messages communicated. The experiences of injured employees communicate the employer’s true attitude to a workforce more effectively than words. During an interview with an employer with an outstanding return to work program, I often heard employees talk about how senior officials had gone to the hospital, sent personal notes, or arranged to have yard work done for someone with a severe injury.

Standing by injured employees is not complicated but its importance is hard to over emphasize. When employees are injured, it can be stressful. They worry that their co-workers will resent having to cover for them while they are out, that they will not be able to do their job again, or that their job will not be there when they recover. WCRI conducted interviews several years ago with individuals who had workers’ compensation injuries and found that their biggest fear had been that they would lose their jobs if they filed a claim. Other studies hypothesized that a contributing factor in the decline in the frequency of injuries over the years resulted in part from employees not filing a claim for fear of losing their jobs. Alleviating these concerns makes a positive difference in employees’ attitudes which can make a significant difference in the ultimate outcome of their injuries.

Continuing communication after the initial recovery period supports the relationship with injured employees during their recovery which improves the likelihood of a good recovery. The damage caused by an employer’s silence toward injured employees who sit at home and imagine the worst about their future is significant. A good practice is to have someone on staff who is emphatic and knowledgeable to be a channel for communications between injured employees and the employer, insurance company, and/or third-party administrator. This person can be a source of information, encouragement about returning to work, and adept at being a problem solver if issues arise. If a company is large enough to have a person whose sole responsibility is to be such a person, it will be a worthwhile investment, but it is not necessary for all employers. The critical need is to stay connected with injured employees and actively encourage a good recovery, so someone who is in this role part time can still make a positive difference. It is not complicated.

In addition to communications, there are other ways that employers can improve the progress of recovery that are not overly complicated. One way is to make sure that the medical care injured employees receive is appropriate. If an employer has the legal right to select providers, they can make a significant difference in outcomes by the providers it selects. It makes a positive difference when physicians are: located within a reasonable distance of employees, are able to treat patients relatively quickly, willing to communicate with the employer or adjuster, trained to understand the psychosocial aspects of patient care, and are motivated to help employees participate effectively in their own recoveries.  Today finding such doctors may be challenging and may require higher fees, but the benefits physicians with these attributes are well worth the effort. The outcomes will be better, and the overall cost can be lower.

One of the best ways to improve outcomes is for the employer to develop a return-to-work culture. This sends the message that the employer wants to help injured employees return to their preinjury life as soon as possible and to be able to come back at work. When injured employees return to work sooner, it reduces their wage loss, cuts workers’ compensation costs, and helps employees recover sooner and more completely. It may also provide a psychological boost to injured employees when they can get out of the house and back into their familiar work world. For those interested in return-to-work programs, the state of Tennessee has developed a toolkit for employees who are interested in developing a return-to-work program. It is available to the public; the link is https://www.tn.gov/workforce/injuries-at-work/employers/employers/bwc-reward-rtw-program/reward-employer-toolkit.html.

Of course, the best solution to workers’ compensation injuries is to prevent them from happening. Safety in the workplace is another area where success depends on a strong relationship between employees and employers. Safety begins with identifying the type of accidents that occur, how frequently they occur, and the underlying causes. With this information employers can develop training programs, but like communication success depends on a positive relationship between employer and employee. In my former life I tackled a high incidence of back injuries among employees whose jobs involved lifting and the use of heavy equipment. Our first step was to interview employees. They were critical of the training videos we used because they were about people who did not do what they did, and they did not use the equipment they used. With this insight we produced a video in cooperation with a physical therapy firm that featured our employees performing their job duties and using the equipment they used. Employees gave the new video high marks and it sparked conversations with the physical therapists about how they might avoid back injuries in the future. In the year following the new training approach, back injuries dropped 25%. It was not a complicated solution; the key was employee involvement in finding a solution.

These examples only scratch the surface of what an employer can accomplish in their workers’ compensation program within the laws of the state(s) they operate despite the complexity of those laws we so often criticize. The key to successful programs requires a strong connection between employers and employees and a willingness to build programs over time, rather than look for quick fixes to change the future for the better.

It’s not complicated.

NOTE: This is a guest article written by Evelyn McGill, Executive Director for the Virginia Workers’ Compensation Commission (VWC). The VWC, established in 1918, is an independent judicial and administrative state agency that oversees the workers’ compensation system for employees, employers, and insurers. VWC interprets and applies the Virginia Workers’ Compensation Act and resolves claims through hearings and mediation. Evelyn studied as a Pre-Graduate Fellow at the University of Virginia and has a Master of Business Administration from Virginia Tech, Master of Public Administration from the University of Pittsburgh, and a Bachelor of Science from Virginia Commonwealth University. Prior to becoming Executive Director at the Commission in 2013, she served as Deputy Chief of Administration and Executive Director for 14 years with the City of Richmond’s Police Department and in various other senior executive level positions in state, local and private organizations. She was awarded the 2023 International Collaboration Award by the International Association of Industrial Accident Boards and Commissions (IAIABC) after holding several leadership positions at the IAIABC.

Building a strong leadership team is a critical challenge for any organization. Leadership matters, as your best days are always in front of you and organizations need effective leaders to ensure successful operations and service delivery. Leaders should seek to position their organization as a leader in its industry.

As Executive Director of the Virginia Workers’ Compensation Commission (VWC), I have seen firsthand how important strong leadership is to fulfill our mission of serving injured workers, victims of crime, employers and various stakeholders in the Commonwealth of Virginia. As the adage goes, executives are only as effective and strong as the individuals surrounding them. Building a high-performing leadership team does not happen by accident, as intentional efforts are required.

First and foremost, it requires a “we” not “me” perspective, a team mindset. Egos must be kept in check and the team must strive towards a “we” approach. Everyone knows who the organizational leaders are, so it is not necessary to wear those titles in daily interactions and communications. Inherent respect for leaders is generally present in a thriving culture. That is the goal, a thriving culture with the tone being set and created by leaders. At times, organizations attempting to create such a culture may face resistance from existing leaders, employees and even external stakeholders. Getting buy-in requires open, honest, on-going communications; this takes time, persistence and a resilient leadership strategy.

When faced with such challenges at VWC, I held open forums with employees. Various leaders wondered why I would take such a risk to meet with our Team. From my perspective this was not a risk, it was both a learning and teachable moment for me. I needed to learn of their concerns, ensure feedback and address the issues that needed fixing. A teachable moment also existed in that I had the opportunity to provide updates to the team, share our priorities and direction while hopefully getting their support. This provided our Team Members an opportunity to have their voice heard with decision-makers. While other leaders were skeptical about holding open forums, as time went on and more were held, the communications opened and more became comfortable about hearing first-hand from Team Members, our employees.

Setting a tone at the top that you are concerned about Team Member morale, hearing their concerns and suggestions and that you will respond by fixing various issues, opens two -way communications. This is critical to your organization’s leadership model; open communications are a must in developing a thriving culture. Once your team sees that they are being heard, and problems are being resolved or their suggestions are being implemented, the message to them becomes clearer and clearer. Their voice matters!

Team Members will then begin to jump on this band wagon to support you and see strong possibilities for their career and the organization. The nay-sayers will begin to change their attitudes or leave the organization (voluntarily or involuntarily) that begins to thrive, as some will no longer fit. Our mantra at the VWC is #WeWorkAsOne, meaning, one voice as a group, one direction, working together, supporting each other, the organization. We generally hit this mark and when we do not, it is addressed in a respectful manner. Building a strong leadership team requires intention, strategy and ongoing effort. There are key principles for developing a leadership team that can drive an organization forward.

Building such a team requires a strong foundation. It starts with a clear vision, mission, and shared core values. This ambitious goal gives the leadership team a target to guide decisions and priorities. At VWC, our vision, mission, and core values are the foundation for everything we do. Our vision is to lead the nation as the most effective, innovative state agency. We seek to be the best in everything we do to serve our stakeholders. This includes an internal culture of respect, innovation, integrity, effective work, being impartial and accountable. These are our core values, our beliefs and behaviors so to speak. A vibrant internal culture transcends externally, producing high quality services to your stakeholders. VWC’s mission is to serve injured workers, victims of crimes, employers, and related industries by providing exceptional services, resolving disputes, and faithfully executing the duties entrusted to us by the Commonwealth of Virginia.

When building your leadership team, time is required to clearly define and communicate your organization’s vision, mission and core values. Ideally this should be branded internally and externally to all partners. These elements create alignment and give your team a common cause to rally behind. Each leader must understand how their role contributes to the bigger picture. Leaders set the tone for the organization and their teams.

During the development of our leadership model and strategy, not all leaders bought into this winning culture philosophy. It was clear that not all were on board. Making strong attempts to understand different thoughts is part of this process as well. If you are willing to listen, your perspective is enlightened and may even be modified. However, you must continue to move forward with designing your team and a thriving culture. Generally, people who are opposed to creating a thriving organization go outside of the lines of policy at some point with their behavior. This results in them being disciplined or leaving the organization. In our case a little bit of both happened.

As an executive, it is imperative that you are fair, honest and just in the handling of violations, regardless of the level of the employee. This shows that the organization, and more importantly, you, can be trusted. That you are serious about creating and maintaining a thriving organization as your leadership team develops.

Once the foundation is set with a vision, mission and core values are established and communicated, selecting the right individuals for leadership positions is one of the most consequential decisions to make as executives. It is more than just technical skills or experience. Finding the right individual to fit into the established culture is like a work of art. It looks right, feels good and impacts the environment in a positive manner. Selected leaders who are the right fit demonstrate character, emotional intelligence and the ability to inspire others. They buy into the design of a thriving culture, exhibit its core values while helping the organization to meet its vision and mission.

Evaluating candidates for qualities that coincide with the established core values is essential. High ethical standards, doing the right thing, are essential leadership qualities. Leaders are charged with building up and developing those around them, that is essential. There must be a willingness to take responsibility for successes and disappointments. Leaders praise their teams for successes while handling the challenges. Optimistic, creative and strong interpersonal skills are essential. Strategic thinking and sound business judgement, all these qualities are the minimum requirements for each member of your leadership team.

Seek different types of individuals with a diversity of thought, experience, background. In the VWC, we seek a diverse and inclusive leadership table where everyone’s voice matters. Diversity brings about different ideas, which enrich decision-making. It is not a myopic, one-sided view, it is more strategic and well rounded. As a leader you are making decisions for the betterment of an organization, comprised of different types of team Members. Having diversity of thought in conversations regarding administration, finance and operations, ensures that various views are discussed. Diversity in leadership is not just a moral imperative; it creates a strategic advantage. A diverse leadership team brings varied perspectives, experiences, and ideas to the table, leading to more innovative solutions to complex problems. Diversity in age, race, sexual orientation, disabilities. educational background, religions, marital status and various other socioeconomic norms promotes differences which should be discussed, not judged. If the right leaders are in place, they will seek first to understand these different perspectives, collaborate and come to the best decision for the organization.

Successful organizations promote diversity in many ways. Diverse hiring panels, mentorship programs, creating an inclusive work environment that values different viewpoints, fostering collaboration and trust are all important. At times, not everyone will be on board with this philosophy and its required actions. When faced with push back, as a leader, you utilize the “we” perspective as much as possible. Have different voices present in front of your organization’s leadership. Provide training opportunities for various individuals and levels. Mention front line team member contributions in executive meetings so that various individuals throughout the organization are recognized for their contributions to success.

This strategy enhances the communications; it acknowledges individuals who normally would not be heard or recognized. It solidifies the “we” mentality, that together we achieve great things. A highly successful leadership team is only as strong as the relationships between its members. To build trust and promote collaboration:

1. Encourage open and honest communication
2. Establish clear roles and responsibilities
3. Celebrate team successes and learn from failures together
4. Provide opportunities for team-building activities

A continuous learning and development environment must exist. You must cultivate a growth mindset throughout the organization. Try viewing challenges as opportunities to learn and improve rather than insurmountable obstacles. To improve, changes are needed. Embrace that growth opportunity.

Post-pandemic work cultures are filled with changes, newer technologies, different work schedules and strategies for success. Be willing to listen to such innovation. It will enrich your thoughts and enhance your organizations as ideas will be freely provided in a trusting, supporting environment.

Provide access to relevant training and educational opportunities, supporting and encouraging attendance at industry conferences, regular and consistent performance feedback Implement a system for regular performance feedback and goal setting.

Goals are meant to be measured. To ensure an effective leadership team, establish clear metrics for success and hold leaders accountable. This includes setting specific, measurable goals aligned with your organization’s mission, regularly reviewing performance, reporting in a structured way results. Always be transparent and authentic in communicating successes, challenges and areas for improvement.

In conclusion, building a strong leadership team is an ongoing process that requires dedication, vision, and a commitment to excellence. It requires both creativity and precision, blending intuition and analysis. It requires clear vision, the right people, a growth mindset, ongoing development, trust and the right leaders who fit in your winning culture. When challenges exist to build such a culture, you as an executive or agency head, must address those challenges, fix the issues, hear concerns and communicate changes.

Everyone wins when the right leaders are in place, your internal team, your customers and you as the leader of the organization. It takes time and effort. A persistent, resilient attitude is a must, so is being grateful for the achievements accomplished. The payoff of a high performing leadership team is immeasurable. By focusing on these key areas – a strong foundation, shared values, diversity, collaboration, continuous learning, accountability, and challenges – you can create a leadership team that will guide your organization to new heights of success in your industry. You will be positioned as a top workplace, a leader in industry, with a team in place that is energized about its achievements, constantly seeking to advance and improve.

NOTE: This is a guest article written by Jeffrey E. Hazlewood, M.D. Dr. Hazlewood practices Physical Medicine and Rehabilitation / Pain Management in Lebanon, TN, and is an Associate Staff Member at Vanderbilt Wilson County Hospital in Lebanon. After receiving his medical degree from the University of Tennessee, Memphis, he completed his residency at the University of Alabama, Birmingham, where he was chief resident. A Fellow of the American Academy of Physical Medicine and Rehabilitation, Dr. Hazlewood is Board Certified in Physical Medicine and Rehabilitation with a subspecialty Board Certification in Pain Medicine. He also is a Certified Lifecare Planner. He is a member of the Medical Impairment Rating Registry and has received training on the 5th and 6th Editions of the AMA Guides to the Evaluation of Permanent Impairment. He also teaches 6th Edition Impairment Rating course to doctors and attorneys. His society memberships include the American Academy of Physical Medicine and Rehabilitation, the American Association of Neuromuscular and Electrodiagnostic Medicine, the American Academy of Physician Lifecare Planners, the Tennessee Medical Association, The Tennessee Pain Society, the American Medical Association, and the Rotary club. He is an experienced speaker on various aspects of pain management and topics in Worker’s compensation and Lifecare Planning. Dr. Hazlewood also previously served as an assistant medical director for the Tennessee Division of Worker’s Compensation. He primarily is a treating physician, but also performs Medical Record Reviews (regarding causation, ratings, and appropriate pain management per evidence based medicine guidelines) and IME’s.

It is the nature of workers’ compensation injuries that they almost always involve pain, and many workers endure pain for the remainder of their lives.  Successful treatment of that pain is complicated by several factors: some medical providers who look for easy or quick answers and sometimes the patients themselves complicate their treatment.  The following scenarios provide examples of how the treatment of pain can go off track and how it can be different.

Scenario #1

Ms. Smith is a sixty-year-old woman who has suffered with chronic pain after a simple lifting injury 20 years ago.  The initial MRI revealed no acute structural pathology (only degenerative bulging discs and annular tears) and indicated she had no more than a soft tissue injury.  She never had surgery after her injury but was sent to pain management.  For two decades, she received multiple interventional procedures (trigger point injections, epidural injections, sacroiliac joint injections, and nerve ablations), and several rounds of physical therapy. She was prescribed chronic opioids early on (despite all these interventional procedures).  She is now on Fentanyl patches and Hydrocodone, Neurontin, Flexeril, and Ambien through a pain clinic, and Xanax and Cymbalta from her primary physician.  She is overweight, has chronic depression and anxiety, is diabetic, and has untreated sleep apnea. Despite all this medication, she reports her pain level is eight out of ten, and she spends most of her days in her recliner.  When her pain clinic closed, she was “miserable” because she felt she could not manage life without her pain pills. Now she has gone to a new pain management specialist.

What can the new doctor do to manage this type of complicated case?  Does the doctor just continue the “status quo” medications Ms. Smith wants even though he knows she is not doing well on them? Does he continue the drugs she is on when all the medication treatment “guidelines” question continued opioid treatment because the risks far outweigh benefits?  Or does the doctor do what is best for the patient in the long run by following the updated science and guidelines and provide more proven treatment, which has a better chance to improve Ms. Smith’s quality of life and function, as well as provide her safer treatment?

Scenario #2

About 10 years ago, a heart-tugging article appeared in a paper from the wife of a chronic pain patient who had committed suicide.  Her husband had been on opioids for years when suddenly his pain clinic reduced his prescription dosages from a high level of opioids to much lower dosages.  His pain increased significantly as his ability to function decreased. His wife said that her husband felt “there was no remaining hope” and that life was not worth living so he ended it.  His wife blamed his death on “all the new state laws” that caused his doctors to stop prescribing opioids for chronic pain. She felt the law change was inhumane.

How could this man’s treatment been different to avoid this tragic outcome?

There were definite risks to the high dose opioids he had been taking. Pain management is much more than just writing opioids.  His initial treating physicians could have initiated him on a safer level of opioids.  They could have carefully explained the reasons behind national and state guidelines on opioid dosages and the dangers of using opioids for treating chronic pain.  This man could have been encouraged to consider “alternative treatments” that were available and  provided potential solutions that could improve his chronic pain, ability to function, and quality of life.  In other cases, such alternatives have resulted in the reduction and even elimination of opioid usage.

Why were these patients in these scenarios and scores of others like them not given the pain management treatment that could afford them the best chance for a life worth living?

Some possibilities are:

Patients’ unrealistic assumptions

When patients come to a new doctor they often “just assume” that the new doctor will continue the same regimen of drugs they had been on for a long time. When the doctor does not give them the drugs or dosages they were previously given, they ask “Why then did they send me to a pain specialist if you’re not going to write my pain pills?”

Or a patient has a surgery followed by a prolonged period of taking opioids (often high dosages), and then after 3-6 months, the surgeon tells them “I can’t write the prescriptions anymore because of the new laws, but the pain specialist will.”

Now, the new pain specialist must convince the patient of the risks of opioids, especially high dosages which include:

•  respiratory depression, which can especially occur when taken in conjunction with other centrally acting agents that are sedating (muscle relaxers, anxiety and depression medications, sleeping pills, and nerve pain medications).
•  potential addiction and physical dependency as tolerance increases for the prescribed drugs.
•  opioid hyperalgesia (a paradoxical condition when the patient’s pain taking opioids over time can increase rather than decrease).
•  depression caused by these medications (they can be “downers” emotionally).
•  sexual dysfunction.
•  cognitive dysfunction.
•  and many others.

The treating provider MUST gain the TRUST of the patient to try the recommended treatments. Then the pain specialist must attempt a slow weaning of the opioids while installing alternative treatments.  There are several types of non-opioid treatment in the literature to successfully manage chronic pain, which are supported by “science.” Some examples are:

• Non-opioid medications – there are anti-depressants that can work on both musculoskeletal pain as well as nerve pain, AND they work on the depression and anxiety that is so often experienced by chronic pain patients.
• Cognitive Behavioral Therapy – typically a psychologist works with patients to reteach them to accept the pain, not give in to it, and to learn how to “turn the volume down on the pain” so they can become more functional. The psychologist works on “fear-avoidance” and “catastrophizing” tendencies that so many long-term opioid using patients have.
• Acupuncture – has been shown to be beneficial in many types of pain and is much safer than taking so many pills.
• Yoga / “Mindfulness” – treatments are combination of exercise, stretching, and meditation and are safe treatments.
• Progressive exercises and nutritional management with weight loss – so many patients do not understand  that movement will not harm them, but NOT moving will.  Anti-inflammatory diets have also been shown to have a beneficial effect on chronic pain.
• Electrical modalities – TENS units/H-wave units are simple modalities that many times can provide excellent pain control and avoid the use of harmful medications.

Such alternative treatments have a much better chance of long-term success in treating these centralized chronic pain syndromes.

The patient’s lack of understanding that false-positive findings on imaging studies can lead to misinterpreting the “pain generator”

This misunderstanding about what exactly causes the pain can consequently lead to a patient’s demand for inappropriate treatment of their pain.

In the first scenario above, the findings on the imaging studies were probably not caused by her injury, which means, more importantly, they were probably not causing her symptoms.  In cases like this, the pain specialist should explain that the findings are sometimes “normal for your age” and are not caused by the injury, much less causing the pain the patient is having. Patients often state, “I have read my report and it states I have a torn disc (annular fissure/tear) or a bulging disc.”  Patients may assume the findings were caused by the work injury. If they had never had MRI’s or x-rays of their back, they would have been unaware of existing degenerative back issues. They become confused and often distrustful because the doctors “all say different things” in terms of explaining what is causing their pain.  The doctor should explain to the patient that the literature clearly documents the incidence of false positives/age related changes, such as disc bulges and even herniations that do not correlate with patients work injuries.  Doctors may not feel it is worth the conflict they will experience when they try to discuss these issues with their patients. Sometimes they are not aware of the literature indicating this information about “false positive imaging study findings.”

In Ms. Smith’s scenario, she had a minimal mechanism of injury, no findings on imaging studies of “acute injury” structurally, yet her life morphed into years of treatments. In the end, Ms. Smith was totally miserable and non-functional. The pain generator had become “centralized” and could no longer be identified as a structural musculoskeletal or nerve injury. Consequently, opioids and injections and even potential surgery would not be successful.  The pain was driven by the opioids themselves (opioid hyperalgesia), which can happen in cases of long-term use like Ms. Smith’s.

An unwillingness of the treating providers to learn from evidence-based literature and incorporate that learning into their practice

This can lead to inappropriate treatment of their patients’ pain.

Medical providers must be educated and convinced that opioids usually do not have long-term success but do have significant risks. It is much easier and less stressful for providers (and their patients) to just continue the opioids and spend minimal time with their patients. There are even documented cases of doctors writing extremely high dosages of opioids without considering other alternatives to pain management and being resistant to any change – even when presented with “the science” indicating the danger of opioids. Patients can be very insistent about getting high dosage opioids, which also makes it difficult for providers to refuse their demands.

Also, there is the financial disincentive for spending the extensive time required to explain the problems with opioids to their patient and to discuss other options.  The resistance of the medical provider to “change course” can be attributed not only to ignorance of the updated literature, but also arrogance. Some doctors do not like being told they are wrong. Overcoming this “mindset” of some medical providers can be difficult. Compounding the problem, traditional teaching in medical schools has not placed an emphasis on alternative treatments. Sadly, this mindset can have deadly consequences for patients.

In summary

The appropriate management of chronic pain patients, in workers’ compensation especially, is usually very “complicated.”  However, if providers spend the appropriate time in educating and listening to patients, try to successfully determine the true pain generators, study the evidence-based medicine literature, and consider alternative treatments to opioids, successful outcomes can often be achieved for patients with far less chance of harm in the long run. Success for patients in such cases makes dealing with all the complications worth it. There is no need for patients to believe they will be condemned to lives of misery without opioids.  And yes, the sad outcome of the gentleman in the second scenario did not have to happen.  He did not have to “lose hope.” With appropriate care, he could have gone on to have a good quality of life and not suffer in such pain forever when his opioids were decreased.  Our task is to prevent his tragedy from happening to others with workers’ compensation injuries.

NOTE: This is a guest article written by Paul H. Sighinolfi Esq., Senior Managing Director at Ametros. Paul
was previously the Executive Director and Chairman of the Maine Workers’ Compensation Board and a partner at Rudman & Winchell where he represented both plaintiffs and defendants. He is also one of the Deans, alongside Abbie Hudgens and Albert Betts, of the Regulatory / Legislative school for WorkCompCollege. Abbie Hudgens tapped into his deep and broad experience to discuss the ever-changing subject of MSP compliance.

I was asked if I would be willing to contribute to the “It’s Complicated” series on the topic of the complexities of the Medicare Secondary Payer Act. Knowing that workers’ compensation and the Medicare Secondary Payer Act (MSP) are both perceived to be complicated, I readily agreed to contribute.

Medicare, a part of the Social Security Act, is our nation’s health insurance program and is designed to provide coverage for Social Security beneficiaries over the age of 65 and others with certain disabilities. Medicare was enacted in 1965 during the Johnson administration. Originally it was a primary payer, except when workers’ compensation coverage was available. In that case, workers’ compensation is
primary. Workers’ compensation as a primary payer for workers’ compensation beneficiaries is, therefore, not a new obligation.

Congress misjudged the cost of Medicare. How surprising is that? Costs to the Medicare trust fund significantly exceeded projections. As time passed, solutions were proposed to limit the fund’s exposure and in 1980 Congress further amended the Social Security Act to include the Medicare Secondary Payer Act (MSP). As its name suggests, this legislation establishes Medicare’s status as a secondary rather than a primary payer if other insurances are available. The Act does allow for payment of medical bills if there is a question about the availability of a primary payer. This arises when there’s a contested workers’ compensation or liability claim. Medicare therefore should only pay when other coverage is unavailable to prevent cost shifting.

The policy underlying the Medicare Secondary Payer Act is simple. Since Medicare is funded from tax revenue, the public interest is best served by having those legally responsible for the payment of medical care pay for that care. In the case of a tort claim it is the tortfeasor or in the case of a workers’ compensation claim it is the employer or employer’s insurance carrier.

Seldom is legislation ever as simple as initially envisioned. Such is the case with the Medicare Secondary Payer Act.

Where are the COMPlications?

1.       Conditional Payments.

Under MSP, if Medicare makes a payment because it is not clear there is a responsible primary payer, those payments are considered conditional. These situations may arise because a case is contested and thus the responsible party has yet to be identified. Sometimes they arise when the medical provider inadvertently bills Medicare, knowing the patient is a Medicare beneficiary and not realizing other coverage should pay. Once compensability is determined or the inadvertent billing has been identified, Medicare is entitled to reimbursement. The obligation is a “conditional payment obligation.” Medicare has
collection rights against the Medicare beneficiary, a medical provider, or a beneficiary’s attorney. This reimbursement right belongs to Medicare and private insurers providing Advantage or Supplemental Medicare coverage.

2.      Medicare, Medicaid, and SCHIP Extension Act.

In 2007 and again in 2009, Congress added more layers to the Social Security / Medicare statutory scheme. Legislation was enacted creating mandatory reporting requirements on carriers when a workers’ compensation or liability claim involved a Medicare beneficiary. Under Section 111, a Responsible Reporting Entity is required to report the claim and provide identifying data, payment amounts and use ICD10 codes to describe the nature and scope of injuries sustained. Failure to follow the reporting requirements can and in the future may lead to significant penalties. These reports will include additional data points beginning April 2025.

3.      Medicare Set-Aside Arrangements.

Medicare Set-Aside Arrangements (MSAs) are probably the best-known by-product of the Medicare Secondary Payer Act.

Although the Act was passed in 1980, it is fair to say it was ignored by those to whom it applied. In 2001, the Centers for Medicare & Medicaid Services (CMS) published a memo prepared by one of its business staff, Parasher Patel. In the memo, Mr. Patel addresses CMS’ concerns; there was little to no compliance with the Secondary Payer Act, trust funds are expended on beneficiaries when they should not be, and a Medicare Secondary Payer Trust is needed to solve the problem. It appears Mr. Patel, because he was not an attorney, did not realize calling the device a trust had legal significance. He was really suggesting the creation of a Medicare Set-Aside account. The memo caused a stir in the workers’ compensation community. Authors of legal literature, continuing legal education programs, and the national bar did all they could to learn how to comply with the Act and the specific MSP obligations. In addition, CMS followed up on Mr. Patel’s work, issuing a series of memoranda offering compliance guidance.

In 2013 CMS produced a Reference Guide. The Guide informed us its contents superseded all prior guidance. In addition, it provided a road map on how a party settling a workers’ compensation claim with future medical exposure involving a Medicare beneficiary can secure CMS approval of settlement proceeds, administer the funds, and comply with MSP obligations. There are options on securing approval and administration. A settling party can self-administer the account or retain the services of a
professional administrator.

In principle the administrative obligations appear manageable. In practice they are COMPlex. There are six administrative requirements.

1.      Funds must be put into a separate interest-bearing account. This is usually an interest-bearing account from which you can write checks. Problems arise with this requirement when a beneficiary acts as a self-administrator and tries to put a substantial sum into an account of this nature. It is not unusual for bank officers to try to talk the self-administrator into other more attractive investment options. The problem is these options run the risk of losing money as well as making money. Professional administrators know how to comply with this obligation and do so without risking the funds. Professional administration is recommended by CMS but is not required.

2.      Funds can only be used for treatment related to the injury. This sometimes leads to complications because it is not always clear whether the needed medical care is causally related and necessitated by the work injury. Making that decision is oftentimes difficult for the non-medically trained.

3.      Funds can only be used for Medicare covered expenses. Medicare annually publishes a booklet, Medicare & You. This booklet provides some guidance on what Medicare covers. The Medicare website provides additional guidance. Neither, however, are definitive resources for determining what Medicare will and will not cover. It is no easy task for someone who does not work directly with Medicare on a regular basis to make this determination. In addition, what Medicare will and will not cover can and does change. Tracking this is a challenge.

4.      Payment of bills must be consistent with the appropriate states’ medical fee schedule. Forty-six states have medical fee schedules. Some states require users to purchase a publication that contains the fee schedule. Other states have their fee schedule on state websites. All are updated with some regularity. All use the American Medical Association CPT codes. Some introduce complexities that require medical education to fully understand the fee schedule. Once the administrator determines what the fee schedule allows, the larger problem is negotiating with the medical provider or medical institution for a payment amount less than the bill as insurance companies would do. Having the leverage to be able to negotiate is virtually impossible for an individual, but much easier for a professional administrator who negotiates bills regularly.

5.      Someone must prepare and submit an annual report to CMS. This requirement is one where CMS tracks the spending in beneficiaries’ medical set aside accounts. The form is straightforward. It requires reporting on funds available at the beginning of the year, the funds expended for medical and pharmaceutical expenditures over the course of the year, and the resulting balance. This form must be filed annually and is another administrative challenge.

6.      Someone must maintain line-item detail for all payments made from the Medicare set aside account. This requirement has the administrator tracking all payments made from the account for as long as there are funds in the account. It is clear the purpose of this requirement is to demonstrate what payments were made and when they were made and to whom they were made so that if there is an audit the expenditures from the account can demonstrate the beneficiary is in compliance with the Act. To require the untrained to comply with this requirement is a daunting task.

The forgoing demonstrates administering a Medicare Set Aside account has requirements that can be, and often are, difficult for the average Medicare beneficiary. Opening an account is not difficult unless someone at the institution where you are parking the funds thinks they have a better idea of how to invest that money and this is not an unknown occurrence. Determining whether medical treatment is associated with the injury can be a simple judgment call, but not always. There can be a legitimate question of whether the treatment is the logical medical sequelae to the injury or is it necessitated by some other cause. Paying bills consistent with a fee schedule can be difficult even for those who have a working knowledge of CPT codes and know where to find the appropriate fee schedule. For others this will be much more difficult. One of the more problematic aspects is getting medical providers to accept
payment consistent with a fee schedule. This requires negotiating skills the average patient simply does not have. The annual reporting is not a problem if you don’t mind filling out forms, making sure they are correct, and have the skills needed for this task. Finally maintaining records over an extended period is again not a big ask for some but for others it could be more than they have the patience, skill, and/or willingness to do.

From the taxpayer’s perspective, the Medicare Secondary Payer Act is a good piece of legislation. It is designed to help preserve the funds Medicare has available to pay for Medicare beneficiaries’ medical needs. It can, however, pose problems when a Medicare beneficiary settles a workers’ compensation claim with funds intended to pay for future medicals for work related injuries. The Act places obligations and expectations on the untrained beneficiary that are COMPlicated.

NOTE: This is a guest article written by James “Jay” Hicks, an ombudsman attorney with the Tennessee Bureau of Workers’ Compensation. Abbie Hudgens requested he leverage his expertise on the complicated subject of self-represented injured workers to share insights on the process, trends, and best practices.

Imagine that you got hurt on the job. You are unable to work because of the pain in your lower back. Now your benefits have been terminated, and you do not understand why. The insurance company says that the doctor they provided you does not believe that your injuries are “work related.” Without an income, bills start piling up and your rent or mortgage payment is overdue. You tried to hire an attorney, but they said your case is not worth enough for them to represent you. You’ve never had any legal training or any experience with the workers’ compensation system, but you have no choice but to represent yourself. After your attempts to reach a compromise with the insurance company failed, you reluctantly filed a lawsuit. Shortly after your filing, an attorney for the insurance company mails you documents. They say “Employer’s First Set of Interrogatories and Requests for Production” at the top of the page. An attached letter says you have thirty days to respond to them, and you have no idea where to begin.

Now picture yourself in a courtroom. You may not even be sure where you are supposed to stand when addressing the judge or questioning a witness. Everything going on in the courtroom feels foreign and confusing to you. The attorney representing your employer and their insurance carrier is sitting at the table next to yours. When you testify, the attorney stands up and makes objections based on rules you do not understand. When you offer a document to prove part of your case, another objection is raised. You do not feel that you are being treated fairly. Are you stressed out yet?

This could be you if you were injured on the job and had to represent yourself. If you were to sit down and talk with someone going through one of these ordeals, you would hear the worry in their voice. Eventually, the conversation would transition from the injured worker’s immediate economic and medical concerns to a discussion of whether “the system” is fair. A substantial number of self-represented injured workers feel that the system unfairly favors the employer. Finding the right balance between the interests of employers and their insurance carriers and fairness to self-represented injured workers is hardly a new issue, but it is a persistent one. Debate over it continues more than a century after the first workers’ compensation laws were passed in the United States with the intent of creating a self-executing system of disability and medical benefit payments to injured workers that would eliminate the need for costly litigation. In practice, litigation from the early days of workers’ compensation systems has continued.

Today, the courtroom is where you are most likely to find a public display of the difficulties faced by self-represented injured workers. Unable to hire legal counsel, self-represented injured workers are required to do the same work and observe the same rules as licensed attorneys. This presents multiple opportunities for error that may and probably will negatively affect the outcome of a case.

While most would agree that disputes over workers’ compensations benefits should be resolved in an efficient, fair, and impartial manner, there is disagreement on what it takes to be “efficient, fair, and impartial.” One of the cornerstones of courtroom practice is the application of rules of evidence. These rules are intended to ensure that case outcomes are based upon reliable information. Fairness dictates that those rules should apply equally to both parties. This line of thinking, all things being equal, would be logical, but all things are not equal. A self-represented injured worker will have difficulty following those rules because they are complex and require highly specialized knowledge to navigate. Outcomes will be negatively affected for them by legal technicalities and maneuvering rather than the merits of their case. So how do we reconcile the tension between equally applying court rules to both parties and the fact that injured workers are at a disadvantage because they do not have equal access to legal counsel?

Employers and insurance carriers absolutely have the right to do their due diligence in preparing for trial through discovery requests made by their attorneys, and objections made in the courtroom are inherent to litigation. It is possible to accept this reality and still acknowledge that it represents an imbalance of power and knowledge between the parties to a lawsuit when the injured worker is unrepresented. Addressing this problem, the Tennessee Supreme Court’s Access to Justice Commission observed the following about General Sessions Courts:

There is a growing and accepted school of thought that a judge must be pro-active in seeking and adopting policies and procedures that are friendly to all parties, including those represented by counsel and those representing themselves. Many authorities now recognize, as does the Tennessee Supreme Court, that for a judge to do nothing to address the needs or problems faced by self-represented litigants actually advances injustice and contributes to the loss of respect for the judicial system by a substantial portion of the public.[1]

Their analysis also applies to workers’ compensation systems. If we intend to advance justice and contribute to the public’s confidence in our systems, we should consider whether adequate resources are in place to allow self-represented injured workers to participate in workers’ compensation disputes on a level playing field.

Several states have created “ombudsman programs” to address the needs of self-represented injured workers. Ombudsman programs in Virginia, Tennessee, and Texas represent a spectrum of increasing levels of free assistance to self-represented injured workers. Virginia ombudsmen primarily assist unrepresented parties by providing legal information. This includes explanations of basic workers’ compensation legal terms and principles, the burden of proof required to win at a hearing, and how to obtain medical evidence. Virginia ombudsmen can also help by explaining an unrepresented party’s options and discussing their pros and cons. However, Virginia ombudsman are prohibited from providing legal advice to self-represented parties.

Tennessee’s ombudsman program aids injured workers through a hybrid approach. Prior to filing a lawsuit injured workers can access four non-attorney ombudsmen primarily through a toll-free phoneline or in-person appointment. These non-attorney ombudsmen, like Virginia, provide much-needed help by providing legal information. What distinguishes Tennessee’s program from Virginia’s is that it also includes three “ombudsman attorneys” who are authorized to provide “limited legal advice” to self-represented injured workers without providing representation. This allows Tennessee ombudsman attorneys to help prepare self-represented injured workers for hearings by explaining how they are conducted, what constitutes admissible evidence, and the process for admitting evidence during the hearing. However, ombudsman attorneys are not able to make court appearances with or on behalf of injured workers, communicate with opposing counsel, or advise the injured worker to settle their case.

The Texas Office of Injured Employee Counsel (OIEC) is an excellent example of an ombudsman program that takes the next step into actual courtroom assistance to self-represented injured workers. OIEC’s ombudsmen assist unrepresented injured workers prior to and during proceedings before the Texas Division of Workers’ Compensation (DWC). This function often includes requesting supporting documentation, ensuring all issues are identified, and if possible, helping reach agreements prior to a proceeding. Proceedings at the DWC include mediation, contested case hearings before Administrative Law Judges, and any appeals to the DWC’s Appeals Panel. This closely resembles the role of an advocate as Texas ombudsmen routinely make opening statements, introduce exhibits, conduct direct and redirect examination of the injured worker, and make closing arguments. However, they do not provide legal representation or legal advice because Texas ombudsmen are not licensed attorneys.

States like Virginia, Tennessee, and Texas began these programs because they acknowledged the need to provide more assistance to self-represented injured workers. They also demonstrate that there is no “one size fits all” approach, and we should feel encouraged by the fact that there are a variety of ways to make the system more equitable. Sadly, these states find themselves in the minority as less than half of all states currently operate workers’ compensation specific ombudsman programs.

Before the widespread adoption of workers’ compensation legislation in the United States, President Theodore Roosevelt once said, “The practice of putting the entire burden of loss to life or limb upon the victim or the victim’s family is a form of social injustice . . .” These words are as true today as they were when Roosevelt spoke them. The question that needs to be answered now is whether the failure to provide assistance in a system that requires legal expertise to obtain fair outcomes is putting too much of a burden on the injured workers who have to represent themselves. There is no easy answer. It’s complicated.

James “Jay” Hicks is an ombudsman attorney with the Tennessee Bureau of Workers’ Compensation. He lives in middle Tennessee with his wife, Rachel, and their dog, Tully. You can contact him by email at james.hicks@tn.gov.

[1] “Meeting the Challenges of Self-Represented Litigants: A Bench Book for General Sessions Judges of the State of Tennessee.” 2013, www.tncourts.gov/sites/default/files/docs/final_pro_se_benchbook_-_may_2013.pdf, p. 2.

Some might say “second injury funds (SIFs)” are dinosaurs. However, structured effectively SIFs can enrich a state’s efforts to maximize their workforce. They have been a crucial element in states’ workers’ compensation for over a century. As early as 1916 states established programs to encourage employers to hire employees who had permanent disabilities by limiting the employer’s risk to costs related to subsequent injuries compensable under that state’s workers’ compensation statute. Second injury fund is a generic term and used by some states, but state funds also have other names such as Subsequent Injury Fund (TN), Special Fund (AZ), Special Disability Fund (DE), Handicap Reimbursement Fund (OH), and Multiple Injury Trust Fund (OK). In most cases these funds were separate from statutory workers’ compensation in benefits and funding. In other cases, a separate administrative agency administrated the fund. 

The number of states with SIFs increased after World War II because leaders were concerned that disabled veterans would return home to a labor market that would not hire them because of potential impact of war injuries on future workers’ compensation costs. The thought of state leaders was that if employers were protected from expenses related to a war injury, they would be more willing to hire veterans with preexisting disabilities. Additional states developed SIFs until the mid-70’s. Montana (1973), Nevada (1973), Louisiana (1974), and Virginia (1975) were the last four states to establish a SIF.¹ 

The attractiveness of SIFs came into question as states began to experience financial problems. The problems came as states incurred large unfunded obligations for future benefits to injured workers. As concern about these financial problems mounted insurance companies, employers, and government officials advocated for the closure of SIFs to solve the problems. An additional point to the argument to close SIFs was the passage of the Americans with Disabilities Act (ADA) in 1990. Their point was that the ADA would eliminate the need for second injury funds because the ADA prohibited discrimination against workers with disabilities and required employers with 15 or more employees to provide individuals with a disability the same employment opportunities and benefits of people without disabilities. This argument for the abolition of SIF funds continued even though there has been no compelling evidence that ADA has increased employment significantly for disabled workers.  

Despite these issues more than half of the US states still maintain a SIF, but the future of these funds may be uncertain. Given the questions about whether SIFs are the best use of the funds collected, it is worthwhile to consider the role that second injury funds can play in mitigating the effects of preexisting injuries on employees and employers. 

Second injury funds are a classic workers’ compensation program. There is not a standard model; each state is unique. They may have different names, different designs, different funding sources, different benefits, and/or different types of administration. Within these differences there are common features. 

1. The injured worker must have a qualifying pre-existing disability. 

2. The employer must have had knowledge of the pre-existing disability when the employer hired the injured worker. 

3. The worker’s subsequent injury combined with the pre-existing injury resulted in an injury that was greater than the subsequent injury alone. 

4. The employer (insurance carrier) is liable only for the costs of the subsequent injury and the SIF pays for the remainder of the benefit due to the injured worker. 

Differences among states’ programs are more numerous than commonalities and include:² 

• A requirement that the pre-existing disability must be related to a work injury OR the pre-existing disability can result from any cause.  
• States such as Nevada and Arizona require that the pre-existing impairment rate exceeds a specific impairment level such as 6% (NV) or 10% (AZ) in accordance with the AMA Guides to the Evaluation of Permanent Impairment or.³ 
• Benefits are available for permanent partial or permanent total disabilities OR are only available for an injury that results in total disability. 
• A requirement that the original disability and subsequent injury arose from an injury to a member of the body specified in the law OR an absence of such a requirement. 
• Some states require medical evidence that the worker’s subsequent disability is greater than it would have been if there had been no pre-existing disability OR this is not a requirement of other states’ programs. 
• Funding comes most frequently from assessments on carriers or self-insured employers based on claims paid OR from premium taxes.⁴   

 
The plan design of SIFs plays a significant role in the development of a program that provides value to workers and maintains its financial viability. Using the lessons learned from decades of second injury operations, states can design plans to pay benefits within revenues and fund future liabilities similar to a pension plan.  

One state that did this was Tennessee which went from large deficits to a fully funded program through changing the eligibility for benefits to permanent, total disability and implementing a Next Step program to provide funding for education for injured workers who could not return to their pre-injury jobs.  

The goal of maximizing a state’s workforce by reducing the barriers to hiring employees with permanent disabilities is as important as it has ever been. A SIF offers the hope to workers with disabilities that they can still find meaningful work. It offers employers a way to meet their needs for workers without incurring the cost of workers’ previous injuries. Funding the cost of risk related to workers’ compensation has been through insurance or self-insurance, so it is reasonable to manage the cost risk of employing workers with preexisting disabilities in the same way. The cost of workers’ compensation continues to decrease and funding the exposure of preexisting injuries remains appropriate through workers’ compensation. In addition, there is little evidence that ADA eliminated the need to encourage employers to hire workers with a disability.  

Injuries continue to occur and leave workers with disabilities. They continue to need meaningful employment after their recovery. Members of the military continue to be involved in hostilities and get injured serving their country. They too need employment when they leave the service just as much as they needed it after World War II.  Employers still need incentives to offer employment to workers with preexisting disabilities. The country needs its citizens to be employed to the greatest extent possible. A SIF continues to be an effective tool to meet all these needs.  

The use of utilization review (UR) in workers’ comp has defenders and critics. Some consider UR (insurance companies and third-party administrators, et al) to  be a basic tool to prevent unnecessary medical services and reduce costs. Others (physicians and plaintiff attorneys, et al) consider utilization review to be a cause of unnecessary delays in medical care that can result in poorer outcomes and frustration for physicians and injured workers. Finding the right balance in the use of utilization review is important if the system is to provide medical care that serves the goal of effective recovery of the injured worker at a reasonable cost which serves the injured worker, employer, and society best. 

Many states authorize utilization review and usually describe it generally as a review process to ensure that medical services are medically necessary. It is hard to argue with the appropriateness of such a process. No one wants an injured worker to become addicted to drugs because a medical provider prescribed opioids for an excessively long period when the patient has chronic pain, especially if the drugs don’t result in significant improvement. Nor would anyone want a patient with back problems to have a spinal fusion with its less than impressive success rate if there were better options.  

But critics of utilization review question a process that can deny treatment considered medically necessary by the authorized medical provider or delay approval until there have been time consuming appeals. Critics complain about: 

• perceived biases of reviewers to refuse treatments for cost containment considerations 

• failure to make good faith attempts to communicate with authorized treating physicians before denying treatment 
• excessive referrals by insurance companies and third-party administrators of requests for treatment approvals to utilization review 
• practice of suddenly withholding approval of pain medications after a long history of approving the same medications and without a weaning period for a patient that is now dependent on the medications 
• denials based on an inconsequential variation from treatment guidelines 
• denials without adequate explanations of the reason for the denials 

In response to critics, utilization review organizations point to: 

• failure of physicians to adequately document the medical necessity of requested treatment 
• provision of incomplete medical files to the utilization reviewer 
• failure of physicians to respond to opportunities for peer-to-peer discussion with the utilization review physician 

So, how do workers’ compensation systems gain the advantages of utilization review with less friction and fewer negative consequences? One approach is to improve the communication flow between the physician and the utilization reviewer by: 

• inclusion of specific references to applicable evidence based medical treatment guidelines in requests for authorization of medical services and explanations of how guidelines apply to the treatment requested 
• reasonable access to peer-to-peer contact with the medical reviewer so the physician can: 

•  clarify or amplify the information sent with the request for approval of medical treatment 
• discuss the rationale for the requested treatment and the validity of the proposed treatment for the patient’s best recovery 

One solution is more fundamental for states that allow employers to provide a panel of physicians from which injured workers must choose their authorized treating physician. Employers (or their insurance companies or third-party administrators) could  choose physician panels based on quality and willingness to document requests for treatment approvals on evidenced based medicine. Then employers or their representatives could consider exempting physicians’ treatment requests from utilization review or only requiring it when physicians made requests for approval of “red flag” type treatments. Not only might this approach eliminate inappropriate delays in treatment but increase the attractiveness of providing medical care to workers’ compensation patients. 

Regulators in states that authorize utilization review can monitor the services provided in their state periodically. Reviews could include: 

• review of a random sample of requests for authorization received by the utilization review organization in the most recent twelve-month period using objective standards that apply to every organization reviewed 
• number of: reviews completed, requests for treatment approved without appeal; number denied, number approved after appeal to the utilization review provider; number approved after appeal to state regulatory agency; complaints filed against the vendor; penalties assessed by the regulatory agency.  

Solutions that improve communications and provide for transparency and efficiency in the process offer hope to retain the advantages of utilization review and minimize the friction that has been detrimental to the goal of good outcomes from medical care. A good starting place for solutions is that they follow the admonition in Hippocrates’ text Epidemics  “to do no harm.” 

Everyone agrees that workers’ compensation is too complicated. But one aspect of it rises above others on the complicated scale – permanent partial disability benefits.

The difficulty of finding the right balance for permanent partial disability benefits is at the heart of the differences among approaches, and it started with the grand bargain itself.

The grand bargain means that benefits for workers’ compensation claims aren’t determined like claims based on the negligence of another party. Workers’ compensation entitles workers to benefits if their injury happened in the course and scope of their employment, even if the injury didn’t result from anyone’s negligence. It’s a tradeoff: benefits are available for all work-related injuries, but they’re not as large as they would be if the employer’s negligence had caused the injury. The question for which no universal answer exists is, what’s a fair trade-off for injured workers between what they gave up and what they gained?

If you looked for answers in state statutes, you’d find overwhelming the permutations in permanent partial benefits. My state studied the differences in 2011 for only eleven states, and the report was thirty-two pages long. This year, the table on permanent partial disability in the joint publication of WCRI and the IAIABC on workers’ compensation laws was only six pages, but the print was very small.

Among the differences among states were:

Basis of Benefits. Many states base certain permanent partial disability benefits on the injured worker’s impairment. Most of them use the AMA Guides to the Evaluation of Permanent Impairment to measure the impairment. However, six hardbound editions are published, and beginning in 2021, the first of what will be annual virtual updates became available. Currently, states only use the third, fourth, fifth, sixth, sixth 2021, and sixth 2022. Impairment ratings for the same condition are different in each edition, which brings up the question of, which is the right one to use?

The impact of the choice of edition is significant enough that a Kansas Court of Appeals opined in Howard Johnson v. U.S. Food Service (Kansas Court of Appeals No. 117,725; August 3, 2018) that Kansas’s move from the fourth edition of the guides to the sixth edition was unconstitutional. The opinion stated, “(T)he gradual erosion of the fair exchange between rights under the Act and common-law rights to tort recovery have, for the injured worker, amounted to death by a thousand paper cuts. What is the last slice that tips the balance from a fair exchange of rights and remedies to one that is unconstitutionally inadequate from the injured worker’s point of view?”

The Supreme Court of Kansas later overturned. But the question of what constitutes the appropriate quid pro quo lingers. It’s interesting to note that the correctness of the editions wasn’t a prime consideration in the appeals court’s analysis, but the disparate impact of the two editions on the amount of compensation an injured worker would receive was. If the goal is a fair exchange between a no-fault system and a tort system, shouldn’t a correct assessment of the impairment or disability of the injured worker be pertinent?

Increased benefits. Basing benefits on impairment doesn’t end the options. Some states provide benefits if the injured worker doesn’t lose income and has returned to work; others don’t. Others start the calculation of benefits with the impairment rating and increase it based on factors such as age, education, and lack of transferable skills, when injured workers are unable to return to meaningful employment.

Nonscheduled or scheduled. Some states use the impairment on nonscheduled injuries (“body as a whole”) and not on scheduled injuries, which could be a lengthy list of injuries such as “one arm and the other hand” or “one eye and a foot.” Other states treat all injuries as nonscheduled injuries.

Earning capacity. Still other states base permanent partial disability benefit on loss of earning capacity. This requires a forecast of the future or loss of actual wages, which can lead to litigation, as the parties may disagree on the true loss.

Truly, a 1,000-piece jigsaw puzzle might be easier to put together than a coherent picture of permanent partial benefits in this country under workers’ compensation.

It’s hardly surprising that questions have arisen about whether permanent partial disability benefits have veered away from the initial goal: offering just, timely compensation for injuries that occur in the course and scope of employment and enabling employees to return to their jobs and normal lives, uninterrupted by contentious litigation.

What would it take to determine a simple but fair method of determining benefits in keeping with the grand bargain?

Have you ever thought about whether you could live on your state’s temporary total disability (TTD) benefits if you had a workers’ compensation injury? It’s a scary thought.

The benefits in most states have formulas that begin with an injured worker’s average weekly wage based on the prior 52 weeks’ wages and multiply it by 66 2/3%. Then the resulting amount cannot exceed the maximum weekly wage for TTD benefits in that state.

The Workers Compensation Research Institute (WCRI) reported in its Workers’ Compensation Laws as of January 1, 2022, that the maximum weekly benefit for injured workers had “nearly doubled” from 2000 to 2022 to a median of $1,074. Remembering your school days math class, the “median” means that half of the benefit amounts were over $1,074 and half were less.

State maximums may cover 66 2/3% of the full salary of many occupations, according to a BLS Report as of May 2021. For example:

But they won’t cover the 66 2/3% of employees’ salaries who have higher salaries:

Most states set the maximum benefit to 100% of the state average weekly wage. Seventeen in the WCRI report listed a multiple greater than 100%; eleven states set the maximum lower.

Pundits offer two reasons for why temporary total benefits are less than 100% of pre-injury wages.

(1) Taxes generally are not paid on TTD benefits, which is supposed to bring the amount closer to a worker’s take home pay. However, the taxes paid on injured workers’ wages are usually far less than 33 1/3%, so the TTD benefit is not likely to compare favorably to a worker’s take home pay.

(2) Total wage replacement would provide a moral hazard for the injured worker if the worker could earn just as much on injured pay as when working full time. It’s reasonable to avoid providing an incentive to stay at off work. But the double reduction from first the benefit percentage and the limitation on a weekly benefit may result in an inability to survive financially while unable to work.

One of the central objectives of the 1972 National Commission on Workmen’s Compensation Laws was to protect injured workers from substantial loss of income. They recommended that this protection include a maximum weekly benefit of 100% of the state’s average weekly wage in 1975 and that the maximum increase until it was 200% of the average weekly wage by 1981. Today the highest percentage in the states is 150%.

Workers’ compensation has been described as a fragile balance. What is the optimal balance for temporary total disability benefits?

A 2021 Harvard Business School newsletter encouraged business leaders to take the long -term view rather than concentrating on quick returns. This is sound advice for several aspects of the medical component of workers’ compensation, three of which are discussed below.

First. Medical care is a major component of the total cost of workers’ compensation. Policymakers have accepted that medical fee schedules help reduce medical costs in workers’ compensation and are necessary to be good stewards of workers’ compensation dollars. Fee schedules usually include language that limits the liability of the employer to the maximum allowable fee in the state’s medical fee schedule. They may also allow an employer to pay less than the maximum allowable amount if they are able to negotiate lower fees, typically through PPOs and silent PPOs. But it is the rare state that allows for payments greater than the maximum allowable fee.

For most claims, medical fee schedule maximums do not impair access to quality medical care. But for injured workers who need medical care in certain specialties such as neurology, pulmonology, or psychiatry, the maximum fee can pose a hurdle to the care they need. Lack of access to an appropriate specialist can result in longer recoveries, increased impairment and permanent benefits, longer periods of temporary total disability, and higher legal fees when the injured worker goes to court to obtain the appropriate medical care.

The long view would provide some type of mechanism, such as a waiver to the state fee schedule. This could ensure that patients can access physicians who can help them attain recovery as quickly and successfully as possible, offsetting the increased cost of the higher physician fees.

Second. Every state in the continental United States shares at least one boundary with another state. Maine only shares one border, and at the other extreme Tennessee shares a border with eight states. Most states require physicians who provide medical care to workers’ compensation claimants to be licensed to practice medicine in their state.

These provisions are understandable from one perspective, but they can impede rapid access to quality medical care. The long view would allow for greater flexibility, if significant numbers of their citizens are closer to medical care in another state, and they experience access problems if the right medical provider is across the state line and no close medical providers are available in their own state.

Third. Another aspect of this issue has emerged in the wake of COVID-19. Telemedicine has grown exponentially in the past two years. Telemedicine not only made medical care available without exposure to the virus, but it also made experts in medical care available to patients without consideration of borders, unless the state requires the telemedicine provider to be licensed in the state. Again, the long view would look to use telemedicine more often in appropriate cases and with adequate safeguards.

Looking Ahead. These are but three “little things” that could improve the care of workers’ compensation patients and reduce costs through more complete recoveries and shorter periods of incapacity.

They are not the only changes that could be made without a major reform. Among the other possibilities are:

• Return-to-work coaches/coordinators
• Drug formularies
• Increased use physician extenders such as physician assistants and nurse practitioners
• Increased involvement of the patient in the selection of physicians
• Use of alternative treatment such as acupuncture, yoga, or massage therapy.

Let’s get the conversation going on improving medical care outcomes and the workers’ compensation system. What changes would you recommend to improve medical care?