Thursday, November 2, 2017

Adequacy, Complexity, and Delays (2)

People are talking about workers' compensation, perhaps more today than ever. This is the second in an 11-post series (the first is here), that attempts to overview various perspectives heard from system observers and participants. The point is that discussion is good, and if this series generates debate and interaction, all the better. 

Benefit adequacy

There is some perception that workers' compensation benefits are inadequate. Adequacy is a label, and must be defined before it can be appropriately analyzed. It may be more easily definable in certain contexts, and remain a more ambiguous challenge in others. For example, the “adequate” volume of caloric intake for a human could be (has been) scientifically determined. But, the resulting "recommended" caloric intake might nonetheless not be sufficient or appropriate for a particular individual. Furthermore, the adequacy definition in workers’ compensation, and other social programs, may be less amenable to scientific definition. 

In workers’ compensation systems, two major benefits are delivered to those injured through, or ill because of, work: medical care/treatment and replacement of wages. A recurrent theme of workers’ compensation systems is that benefits should be employed toward the goal of returning the injured worker to gainful employment. The broad topic of “benefit adequacy” might therefore refer to any portion of these individually, or to the collective of all sought or required by a particular worker. What is required, in definition and duration, will depend in large part upon the individual, the nature f injury, and the medical science available for the particular injury(ies). 

This topic may be further complicated in its application. In considering whether “benefits” are or are not adequate, there is debate as to whether they must be adequate for each individual injured worker or whether the goal is more generalized adequacy of a system for the broad spectrum of individual injured workers served. These distinctions between micro (individual) and macro (system) adequacy have been commented upon in a significant volume of conversations. Though this topic has various questions, there appears to be notable interest in the specifics of permanent partial disability.

Lost wage, or “indemnity” benefits in workers’ compensation systems are often described with adjectives directed toward extent of disability (“partial” or “total”) and the actual or predicted duration (“temporary” or “permanent”). Thus, benefits for a worker excused from work during recovery might be “temporary total”; a worker restricted in activity or function but working within such limitation during recovery might be “temporary partial."

A worker whose recovery is complete (whether optimum or sub-optimum) is usually considered to have achieved “maximum medical improvement” (“MMI”) and any impairment (diminution in body function) or disability (diminution in economic opportunity) related to the work injury/illness is determined. A worker returning to the workforce after MMI might be “permanent partial,” while one unable to return to work therefore might be “permanent total.” These are generalities, and each system defines and delineates the standards and definitions upon which a particular worker may be entitled to some category(ies) of such benefits.

In the context of lost wage benefits (“indemnity”), there are various perspectives on the purpose and efficacy of benefits. In that context, it is perhaps natural to discuss similarities and distinctions between workers’ compensation programs and other disability programs. There is a perception that systems, to varied degrees, have lost focus upon the underlying theme of rehabilitation and return to work. 

In this context, there are those who believe that indemnity may currently be inappropriately structured. This is not unanimous, and is in fact a divisive issue. Some contend that current definitions are acceptable, but that systems provide inadequate compensation (in volume or duration, or both). In other words, they feel that the amount of indemnity paid weekly (though other period might be employed, e.g. biweekly or monthly) is insufficient. Likewise, some feel that limitations or caps on the duration of benefits are too short or too absolute. Others contend that indemnity is inappropriately structured, providing disincentive to the theme objective of return to work. 

The “group disability,” a private insurance product context was discussed repeatedly. Some advocate transitioning workers’ compensation to a model more consistent with those programs. They note that such programs are rarely “permanent” in duration, with a contractual focus on two alternatives, a return to function and employment, or an acceptance that such will not result and a commensurate adjustment of quality of living to accommodate that eventuality. Others find any suggestion of less than full and lifetime indemnity unconscionable. In the end, this disagreement is likely more fundamental than the limited environment of workers’ compensation.

Regulatory complexity 

All bureaucracy involves friction and the costs associated therewith. There are those who perceive workers’ compensation as over-regulated generally. The volume of independent systems dictates individualized and specialized regulation by each. This process is logical for states and their respective agencies. However, it is perceived as creating and perpetuating obstacles to efficiency for organizations that service the systems. Organizations such as insurance carriers, rating agencies, service providers, and others are said to struggle with the variety of regulation and compliance from jurisdiction to jurisdiction

Each workers’ compensation system includes an underlying theme that it will operate in a self-executing manner. That is, that injury or illness will result in administrative delivery of benefits to the injured worker, without the intervention of a formal litigation process. There is a perception that systems have devolved from this theme, becoming more complex and thereby less accessible to those without formal training. This is perceived by some as increasing system cost through decreased efficiency and speed. 

While this is unquestionably a criticism that involves legal professionals, the scope is not so limited. Examples have been proffered regarding perceptions of cyclical evolution in which problems or failings result in legislation or regulation. Those requirements burden providers of services, and lacking specific expertise some providers may delegate compliance to more specialized entities. Each instance of this delegation is seen as potentially adding a “layer” to the bureaucracy, and therefore cost to the system. Summit participants expressed consternation that such system costs divert resources from the appropriate primary focus: care for the injured or ill worker. 

Delays in treatment even if compensable 

There is a perception that medical treatment for workers’ compensation injuries is too often delayed. This is raised in a number of contexts. In one context, there can be disputes regarding whether a particular illness or injury is work-related, that is "compensable." That dispute and its determination can result in delays in the delivery of medical care. Despite federally "mandatory" health insurance participation, there is a perception that some portion of America's workers remain without health insurance, or the financial wherewithal to otherwise obtain medical care without resort to programs like workers' compensation. 

Causation is a critical question in workers’ compensation. If an injury or illness is related to work, i.e. “compensable,” then the cost of care is borne by the employer or some insuring entity that contractually substitutes therefore. In the event that the injury or illness is not compensable, then the cost of care and treatment is borne elsewhere, by the worker, a health plan, a social medicine program (Medicare or Medicaid), government benefits (Veteran’s Administration), facilities or providers. Critically, when injury occurs, Someone has to Pay

Because the resources of any payer will be limited, there will be tendencies to resist provision of benefits that are not due. In this context, it is possible that any suggestion of work-relatedness might result in delay of care. That is, a health insurer may deny coverage based on its perception that the responsibility may be more appropriately upon the workers' compensation provider. Perceiving the potential that some care might be the responsibility of workers’ compensation (claimed as such or not), another program like health insurance might decline to provide care. Such a declination might last only until entitlement to workers’ compensation care is adjudicated. However, this “temporary” delay in some systems might last for months or longer, during which time a worker may receive no care pending that outcome. 

In a more defined construct, there may be delays in care after an illness or injury is accepted or adjudicated as compensable, and is thus more clearly the responsibility of workers’ compensation. Care providers may be institutional (hospitals, clinics, etc.) or individual (medical doctor, chiropractor, therapist, etc.). These entities are binary in nature, professional and business. The professional interest seeks to render care, but the business interest is concerned about the occurrence, timing and amount of payment. 

The business interest has therefore evolved to a practice of seeking “authorization,” or pre-approval from payers prior to rendering care. System participants complain that “authorization” at times conveys diminished confidence because some payers fail to pay even after providing assurance of “authorization.” As such, some providers have evolved to require pre-payment before delivery of services. Each such process involves some volume of overhead expense (seeking and documenting pre-authorization or payment telephonically) and some measure of delay in delivery of care. Some contend that some portion of this is tied to jurisdictional regulation (see above) that either encourages or requires a pre-authorization process and its inherent costs and delay.