Posts Tagged ‘doctors’

Racketeering and Comp: When the Denial of an Injury is an Injury

Wednesday, December 9th, 2009

Imagine you work as a commercial driver for a long-established trucking firm that self-insures for workers comp. You are injured on the job. You seek benefits under the comp statute. The TPA handling the claim refers you to a company doctor. The doctor determines that the injury is not work related. The adjuster for the TPA denies the claim. End of story?
Not quite. What if you shared your story with five other employees, all of whom filed comp claims, all of whom saw the same doctor (a family practitioner), with the same result: claim denied by the same adjuster at the TPA? A coincidence or a conspiracy?
Five employees of Cassens Transport in Michigan concluded that there was a conspiracy to deny their claims. They filed suit in federal court, alleging a violation of the Racketeer Influenced and Corrupt Organizations Act (“RICO”). A district court dismissed their claims, finding that their individual claims did not constitute a “pattern” of activity and that invocation of the RICO statute would violate the McCarren-Ferguson Act by interfering with state regulation of insurance.
The U.S. Court of Appeals for the 6th Circuit reviewed the case and overturned the district court’s ruling. Now the U.S. Supreme Court, by declining to get involved, has upheld the Appeals Court. The Appeals ruling is a fascinating document which explores the nature and definition of racketeering, the relationship of workers comp benefits to insurance and the roles of state and federal governments. It’s required reading for attorneys and highly recommended for all others.
Criminal Acts?
The district court has been ordered to reconsider the allegations. The five Cassens drivers allege that Cassens, their self-insured employer, Tina Litwiller, a claims adjuster for the TPA Crawford and Co., and Dr. Saul Margules conspired to deny their comp claims. (While you might expect Dr. Margules to be board certified in occupational medicine, he appears to be a family practitioner.) The Appeals Court does not address the substance of the allegations: it simply rules that denial of the workers comp claims might involve a violation of the RICO statute and thus is appropriate fodder for the federal courts.
Some folks are alarmed that the feds are getting involved in what is usually a state issue. That might be a problem, but let’s not lose sight of the delicious prospect before us. During the course of the new hearings, plaintiff attorneys will seek access to some fascinating communication records: between Cassen and Crawford, detailing the status of individual claims; Ms. Litwiller’s claim notes; and communications between Crawford and Dr. Margules, who had so much difficulty finding a connection between a given injury and work. As much as I enjoyed the Appeals Court’s discussion, I am really looking forward to the nitty-gritty details of the proceedings in the district court. (You don’t suppose that some of the written and electronic communications have disappeared, do you?)
At heart, this is a very serious matter. The five employees allege that they have been unlawfully denied the protection of Michigan’s workers comp law through a conspiracy of company, TPA and doctor. If the allegations are proven, if the accused violated the RICO statute, they will face the consequences of a criminal conspiracy. In the Insider’s burgeoning annals of fraud – employee, employer, attorney, doctor, agent, insurer – this case will surely offer one of the more compelling narratives.

Taking the cookie-cutter to workers’ comp medical networks – Why that doesn’t work

Thursday, August 28th, 2008

Yesterday, at Managed Care Matters, our good friend Joe Paduda published an excellent “how-to primer” for starting a workers’ compensation medical network. Essentially, Joe’s advice for would-be network creators is:

  • Bring the right physicians into the network – board-certified occupational health specialists, for example, as well as primary care and specialist physicians who understand workers’ compensation;
  • Exclude physicians who don’t know anything about the subject;
  • Pay the physicians a reasonable rate; and,
  • Support the network physicians by sending them patients.

If the network is formed in that way it should be of gold standard caliber. But that’s easier said than done.
We’re all familiar with the super-large networks that include anyone with a medical degree – as long as “anyone” agrees to see network patients for a discounted fee, which the network can then tout as “savings” for employers regardless of the quality of care. Most of these networks and the doctors in them came from the group health arena where modified duty, transitional duty, early return to work, the buzzwords of workers’ compensation professionals, are foreign concepts. And why should that be surprising? After all, workers’ compensation is only one, tiny room in the American health care house that Jack built.
What workers’ compensation professionals sometimes forget is that most doctors, whether in or out of these networks, went to medical school because they wanted to devote their lives to healing the sick, not to becoming some company’s external medical personnel director. Many, perhaps most, physicians in networks that have physician directories the size of New York City’s phone book understand “injuries,” but not workers’ compensation, and that is not their fault. It is ours. We have not educated them sufficiently regarding workers’ compensation, nor have we cohesively partnered with them to help injured workers transition at the right pace back to full duty, which, in my 25-year Lynch Ryan experience, is where injured workers really want to be.
Consider this. Most doctors have small practices that turn them into small business owners. I’ve never met one who liked that, the business end of medicine. Most are not technologically facile, and workers’ compensation injuries comprise a minor share of their “business.” Their responsibility focuses totally on their patients and what’s wrong with them. They don’t see a real need to be overly interested in the workplace; in fact, they most often don’t even know what or where that is. On the assembly line that has become American health care, where insurers force physicians to cycle through patients in fifteen minute intervals, who has time to probe deeply about the workplace and what goes on there? When some claims adjuster or nurse case manager wants to pin them down about physical restrictions or a date when their patient can return to work, they err on the side of humongous caution in order, in their minds, to “do no harm.” This leaves workers’ compensation professionals and employers befuddled, scratching their heads and wondering what is wrong with the doctor. They think, “Why can’t the doctor see what’s really going on here?” They don’t understand the doctors and the doctors don’t understand them.
That’s the scenario in which workers’ compensation professionals very often find themselves. At Lynch Ryan, the only way we have ever found to deal with it successfully is one doctor at a time, sitting face to face and finding common ground. Occupational health specialist or not, an educated physician is a powerful weapon for good in the little world of workers’ compensation.
In my next post I’ll describe the step-by-step process my colleagues and I went through to build the first workers’ compensation medical network in Massachusetts once upon a time. Here’s a teaser: It was a thing of beauty, profoundly successful for everyone involved, and would not be legal today.

News Roundup” Cavalcade of Risk, networks, docs & drugs, scandal watch & more

Friday, May 11th, 2007

Carnival timeCavalcade of Risk #25 is posted at Getting Green. Among other fine entries, we note there are two posts about data security. In one case, the Transportion Security Office lost the records of 100,000 workers – great, that speaks well to their ability to protect us! And in another item, we learn that Chase is careless in disposing of sensitive client materials – and they are obviously not the only ones. Not good. Is your agent, insurer or TPA properly disposing of any claim-related data and records for your organization? You may want to add this item to things you check for in renewals or RFPs.
WC networks – Joe Paduda has some thoughts on the future of workers compensation networks. After meeting with several network executives at the recent RIMS meeting, he sees a definite continuation of the trend away from the national broad-based, discount-oriented networks to regional hybrid networks. Not sure what a Hybrid network is? Joe offers a good explanation in his post. His expert analysis on these matters is worth your attention.
Docs & Drugs – Those free drug samples that physicians hand out may not be such a good idea after all, or so says a recent article in the New York Times. Critics see these as just another example of the close ties between physicians and drug companies, and say that ” … they may actually drive up the cost of health care in the long run, because the drugs being promoted are the most expensive brand-name medications.” We’ve talked about docs and drugs a few times before. (Thanks to HealthLawProf Blog for the pointer to the article)
Scandal watch – We’ve written quite a bit about the Ohio Bureau of Workers Compensation Coingate scandal. Today we learn that the BWC’s former CFO faces 5 years in prison. His sentence was reduced based on cooperation with authorities, so there is the potential for further shoes to drop. There have been 16 public officials and money managers convicted of various offenses thus far. In other state news, trouble is brewing in the North Dakota workers comp system too.
Geek safety25 Free health Tips for Computer nerds This blog may focus on work-related risks, but play can be dangerous too – In 2005, a 28-year-old South Korean man who played computer games for straight 50 hours died of heart failure. Pass this article on to your IT folks and the bloggers in your life. Via Ergonomics In the News
Notes from the Blogosphere – Congratulations to Michael Fitzgibbon at Thoughts from a Management Lawyer ob his 4-year Blogiversary. Michael is a Toronto-base attorney and professor who keeps us informed about the employment-related goings on in our neighbor to the North. And speaking of Canadian bloggers, we told you that rawblogXport had announced the blog was winding down, but we are happy to note that items are still being posted daily.

A Few Thoughts on Comp Medical Networks

Tuesday, May 24th, 2005

Workers comp is about injuries and injuries require medical attention. Our colleague Joe Paduda blogs the problem of finding good medical care under the comp system. Back in the 90’s, there seemed to be a proliferation of occupation medical practices: from hospital based occ clinics to the “doc in a box” walk-in clinics, there were a lot of options for treating injured workers. These options have diminished dramatically over the past few years. Why? It’s pretty simple: a combination of not enough volume (injury rates are declining) and suppressed rates of reimbursement (rate schedules for medical services under comp tend to be low). In addition, you need to consider the context: total health care in this country costs $1.4 trillion, while the comp portion of this is only $30 billion. Comp, in other words, is chump change in comparison to medical care in general.
Paduda’s blog shows that the prevalent trend is away from networks specializing in work related injury and toward bringing injured workers into conventional health networks — in other words, family practices. This is far from an ideal situation. Occupational medicine brings a unique and essential focus to work injury: the goal is always to keep people as productive as possible; to help them heal faster by returning them to work as soon as possible, often through the prudent use of temporary modified duty. I’m not sure that traditional family practices view injuries the same way. Family doctors are perhaps more sensitive to the pressures and issues outside of work. I suspect they are more inclined to give the injured work time away from work, especially when they know that any lost wages will be covered by indemnity payments. They are not used to communicating directly with their patient’s employer. Indeed, if the patient doesn’t like his or her job, the doctor may be inclined to separate the goal of getting the patient better from returning him or her to work.
Paduda highlights one exception to this trend: the recently announced merging of The Hartford’s workers comp business with Aetna’s workers comp specialty network, which is available in Pennsylvania, New Jersey, Connecticut, Texas and Virginia. Aetna’s network includes 130,000 physicians, hospitals and other health care providers. Aetna, along with Corvel, HealthFirst, Concentra and Focus, and a few others, continue to offer occupational services for injured workers.
Preferred Provider Networks that Really Work
I have long been intrigued with the issue of medical care in the workers comp system. I’m not sure that anyone has got it quite right. In the ideal system, doctors explicitly buy into the notion that a rapid return to work is the optimum result. They are committed to a “sports medicine” approach. They limit office visits and therapy to what is truly needed. They prescribe the necessary medications, but are careful to use generics where appropriate (even though the patient doesn’t really care, because there is no co-pay). These doctors are able to resist the raucous pitch of drug companies to experiment with off-line use of branded medications. And they communicate readily with their patients, the employer and the insurance carrier.
In exchange for all this good work, occupational doctors should be paid reasonable rates — which in many states means paying well above scheduled rates. Too often, the established rates (and the rates within many of the formal medical provider networks) are ferociously suppressed, which can lead doctors to make up the difference by over-utilization; in other words, suppressed rates do not necessarily produce lower costs. In addition to paying occ docs above rate schedules, they should also be reimbursed for certain key activities that usually are provided for free — such as filling out return-to-work status reports. If you don’t pay for such reports, the message to the doctor is that the reports are not important. In the comp system, there is no more important communication than the doctor’s take on medically necessary restrictions — what the employee can and cannot do.
We recommend that employers with any significant volume of injuries develop a relationship with their local providers, whether or not they are in a formal provider network. Make sure that the provider understands your commitment to modified duty. And let your carrier or TPA know that you are not interested in saving a few pennies by forcing your medical provider into a punitive rate schedule. Rather, you want to pay a little extra, in order to secure the level and quality of service that ensures success in workers comp cost control.

Docs and Jocks: Exclusive Remedy for a Pro Football Player

Wednesday, April 13th, 2005

I set out this morning to blog the general status of “exclusive remedy” in the workers comp system, but I’ve been distracted by a specific case which involves an injury to a professional athlete. I will return to the more general ramifications of “exclusive remedy” in a few days.
Greg Lotysz was a lineman for the New York Jets. In July of 2000 he sustained an injury to the anterior ligament of his left knee while blocking another player during pre-season practice . Pursuant to his NFL Player contract and the players’s Collective Bargaining Agreement, he received care from the Jets’ Medical Department. Lotysz underwent surgery and post-surgery rehabilitation under the care of the Jets’ physicians. A post-surgical infection resulted in permanent damage to his knee, which in turn brought a premature end to his football career.
No Malpractice Here
Lotysz tried to sue the team doctors for $10 million in damages, but in December of 2002 an appeals court in New York ruled against him. The court found that the doctors were employees of the Jets, that their medical services were made available to plaintiff as a consequence of his employment and that their services were not available to members of the general public. In other words, the court viewed the team doctors as co-workers of the same employer, so tort liability was not available as a remedy. You cannot sue your employer and you cannot sue co-workers for work-related injuries. Comp was the “exclusive remedy” for the injured player. It’s interesting to note that the unions for all the major pro-sports leagues (NFL, NBA, NHL and MLB) filed a friends-of-the-court brief in Lotysz’s behalf, arguing that team doctors are actually independent contractors. (You can view a detailed case study of Lotysz’s story here.)
The fact that Lotysz’s claim falls under the workers compensation system is not all bad. While he cannot sue the doctors for malpractice, he is eligible for indemnity benefits (admittedly chump change compared to a professional lineman’s salary) and for lifetime medical benefits for any treatments related to the injury (given the apparent permanency of his disability, this could turn out to be a significant benefit).
It is important to note that hospitals and similar medical facilities that treat both the public and their own employees may not find the courts so receptive to the “exclusive remedy” approach. For the most part, when hospitals treat their own employees for work related injuries, they become a third party vendor. If employees are unhappy with the treatment, they usually have the option of pursuing tort remedies. The main difference, I would guess, is that the hospitals routinely treat the public, while the “team doctors” have a more limited practice.
Docs and Jocks
The Lotysz opinion is binding only in New York. It’s possible that under similar circumstances other states will conclude that team doctors are indeed third parties and thus liable to lawsuits for malpractice. In the world of professional athletics, the medical profession is intricately involved in what from time to time may be ambiguous circumstances. With such enormous sums of money at stake, owners may pressure doctors to rush star athletes back onto the field. Permanent damage may result. Under these circumstances the player will certainly want to pursue a tort remedy. Whether this option is available to the athlete remains a state by state situation.

What is Disability Management?

Thursday, March 24th, 2005

At the heart of workers compensation is — or should be — the concerted effort to treat workplace injury and illness and get people back to productive employment. Sounds reasonable, but how do you do it? What exactly is “disability management?”
Our esteemed colleague, Dr. Jennifer Christian, host of the informative WebilityMD website, takes a shot at defining disability management, in response to a simple question from someone new to the field. Just click on her link for the February Q & A. We think her casual outline deserves wider notice.
Comp Benefits
Dr. Christian’s list begins with the effort to control indemnity losses. Over the past two decades, this effort has centered in state legislatures across the country. Once workers comp came onto the national radar screen, legislatures tried a variety of strategies to lower costs. These ranged from the highly successful Qualified Loss Management Program (QLMP) in Massachusetts, to Governor Schwarzenegger’s recent efforts in California (where a 10% rate reduction is finally in the offing). In the ongoing effort to cut costs, it’s always tempting to cut benefits, which many states have done. (We happen to believe that you control the costs of comp without cutting benefits — but that is fodder for another blog.)
Workers Comp and Medical Care
Dr. Christian looks at three areas related to medical care, not surprisingly, as she is Board Certified in occupational medicine. First, she thinks that vocational rehabilitation programs represent a missed opportunity in many instances. We agree. The problem may be in the current disconnect between the employer where the injury occurred and future employment. There should be a better way to tie voc rehab to real employment opportunities.
Dr. Christian next examines the need to speed up medical care, specifically, through the prudent use of nurse case managers. While recognizing the utility of nurse case management, she believes strongly that these services require more than just a conventional nursing background. The key is developing a strategy for every open claim — a strategy that maximizes the return-to-work probabilities.
In addition, Dr. Christian takes a very interesting look at her own profession. I especially enjoyed her laundry list of the ways doctors can be the problem: they can be incompetent, disorganized, enabling, erratic, inattentive, neglectful, inappropriate, corrupt, greedy and unethical. She singles out the “predatory physicians” who provide serial, unnecessary services to unsuspecting and often innocent workers. (This has been a huge problem in California.) Needless to add, she has much to say about the positive role of doctors in solving the disability problem.
“Delayed Recovery”
Finally, Dr. Christian focuses on what may be the single greatest cost driver in the entire workers compensation system: we often use the word “malingering,” — injured workers staying out of work longer than is medically necessary — but Dr. Christian has coined a more neutral and more compelling terminology: “delayed recovery.” Under delayed recovery, even though there is no medically necessary reason for people to be out of work, they do not return to work. These delays may stem from actions (or inactions) of the employee, the doctor, the employer or even the insurance carrier. And as injured workers drift on their own through the medical maze, they begin to lose their identity as workers. They often succumb to a “disability syndrome” and begin to believe that they are never going to be able to work again. Dr. Christian sees the need for a multi-disciplinary assessment, one that looks at more than just an injured body part. Through such an assessment, we can identify the people most at risk for delayed recovery and plan effective interventions so that the delays are minimized.
The Employer Role
Dr. Christian recognizes the importance of employer involvement, without which success in controlling losses will remain a distant goal. Educated employers know how to respond to injured workers. They secure first rate medical treatment and use temporary modified duty to accommodate medically necessary restrictions. Educated employers treat every injury with a sense of urgency, because they care about their people and because they understand the risks involved in a “delayed” recovery process.
Even though Dr. Christian’s brief paper is just the beginning of a working definition of disability management, there is plenty of food for thought for all of us. Every once in a while, we need to step back and refocus on the big picture. We need to redefine what we are trying to do in managing disabilities and the best ways for accomplishing our goals. Dr. Christian’s paper is an excellent starting point in this effort.

Company Docs in the 21st Century

Friday, February 11th, 2005

Frustrated with the high cost of providing medical insurance for its 12,000 employees, Quad/Graphics decided to set up its own health care system. In an article in the Wall Street Journal (available by subscription only), staff writer Vanessa Fuhrmans describes a fast growing company that was able to think way out of the box to solve an intractable problem. Quad/Graphics spends about $6,000 per employee on medical costs, fully 30% less than the average company in its home state of Wisconsin.
This is certainly not a model that most companies could replicate. You need a large concentration of employees in just a few locations. Perhaps even more important, you need a high level of trust between management and workers. Fuhrmans points out that Quad has a long history of harmonious relations between management and workers. If the workers distrusted management, they would not entertain the idea of going to management’s own doctors — not just for their own medical services, but for their entire families as well.
Quad employs its own internists, pediatricians and family practitioners. It operates its own labs, pharmacies, and rehab centers. They contract directly with local hospitals and specialists for advanced care. It is also important to note that doctors’s bonuses are tied to patient evaluations and health outcomes — unlike our mainstream medicine which values the number of contacts above all. Quad doctors have a full half hour to spend with patients, which leads, naturally enough, to a highly effective disease prevention program.
Workplace Injury
The article did not address how workplace injuries were handled, so I sent Ms. Fuhrmans an email inquiry. She responded within minutes, explaining that Quad does indeed handle many of its own workers’ compensation cases. “This is where they see a lot of their savings.” It makes perfect sense that workers would trust the same physicians who treat their families to manage workplace injury and illness. I would surmise that their in-house rehab facilities are quite capable of managing workplace injuries. Even though “occupational medicine” was not listed in the article as an available specialty, a progressive company with an inhouse medical capacity would naturally keep a strong focus on returning injured employees to full duty as quickly as possible.
The Quad model has been so effective, other employers have contracted with QuadMed LLC to provide in-house services. The article cites Briggs & Stratton and Rockwell Automation, both of which have asked QuadMed to operate full-service clinics for their employees in Wisconsin.
Confidentiality Conundrum
Fuhrmans points out that employees do have some concerns about privacy issues. They obviously don’t want personal details about their health (or the health of family members) to end up in a supervisor’s hands. Quad medical staff sign confidentiality agreements, promising to keep patient information within the clinic. Their computer systems are separate from those of the factories.
This is all well and good. But there certainly is an opportunity for ethical tensions. Here’s just one example. A worker comes to the clinic with a knee injury suffered while playing hockey on the weekend. He cannot afford to miss any time from work. Should the doctor release him to regular duty? Let’s assume the worker does continue at his job. What if he comes in the next day claiming that work has aggravated (or even caused) his knee problem? How should the doctor respond?
It is not difficult to envision doctors getting caught in the middle of some very challenging issues. Workers’ compensation places tremendous leverage in the doctor’s hands. The assumption is always that the doctor is a disinterested party. But when the doctor is in effect an employee of the same company, this may create the potential for a conflict of interest.
Finally, I wonder about the separation between Quad and QuadMed. Is the latter a “third pary medical provider” and thereby subject to lawsuits for malpractice? Federal confidentiality standards are very strict on the personal health side (and more flexible on the workers’ comp side). Once again, it is not hard to imagine circumstances where the doctors are truly caught in the middle.
Quad/Graphics deserves a lot of credit for tackling the health care dilemma directly. In many respects, it’s the classic American story. Faced with a huge national problem, creative managers figure out a way to solve it on the local level. From our perspective, the roots of the solution lay in the fundamental trust that existed between management and workers. There is simply no substitute for that kind of trust, which may be the most powerful collateral for change in the ever-challenging world of business.