Tag Archives: Claims

Trends in Workers’ Compensation Claims: Some Things to Think About for Medical Travel

It is rare that I post articles from the National Council on Compensation Insurance (NCCI) on this blog, and it has been some time since I discussed workers’ comp and medical travel in the same post, so I thought that this would be a good time to do so.

NCCI is the premier source for data collection in the workers’ compensation industry. Their focus is more involved with the factors that drive the cost of workers’ comp insurance, rather than specific issues in workers’ comp that one might find from reading the reports of the Workers’ Compensation Research Institute (WCRI).

As the article will note, there has been a decrease in frequency of claims, but an increase in severity. Claim frequency is defined by NCCI as the number of claims involving lost wage benefits paid, divided by earned premium. For those of you in the health care and medical travel worlds, just know that it means there are more claims reported to insurance carriers.

Claim severity, on the other hand, is defined as losses incurred, divided by the number of claims, for lost wage benefits paid. This will be of importance to the medical travel industry, as they have found a +16% increase in medical severity from 2011 to 2016.

I will let you read the rest of the article here.

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Immigrants in construction — key facts « Working Immigrants

Peter Rousmaniere posted the following fact sheet about immigrants working in construction. While this has no bearing on health care at present, it does have some bearing on workers’ comp, especially in light of the current regime’s draconian policy towards immigrants from Central America.

As this “crisis” progresses, it may be harder for construction companies to find workers to employ on construction sites.

This, in turn would mean that they may be less construction work, and for the insurance industry, less risk and less profit to be made from insuring these projects.

In workers’ comp, that would translate into less frequency of losses, but it would also cut off revenue from carriers covering such risks.

And he promised to create jobs? Hardly.

Source: Immigrants in construction — key facts « Working Immigrants

State of the Line Report — 2018 Edition

It’s May, and you know what that means. It means NCCI has held its Annual Issues Symposium, and the State of the Line Report, presented by Chief Actuary Kathy Antonello.

But this year I am going to do something a little different. I am going to compare the data presented this year with some of the data from last year and the year prior, so that the reader can see how much change there has been year over year from the 2017 and 2018 reports. Last year’s data and the year before was presented in my post, “Slight Increase in Average Medical Costs for Lost-Time Claims, Part 2.”

First up, this year’s WC Average Medical Lost-Time Claim Severity in Chart 1.

Chart 1.

As you can see, there has been another slight increase in the lost-time claim severity from the 2016 to 2017 preliminary data. In 2016, the average medical lost-time claim severity was $28,800 and the preliminary 2017 severity was $29,900, an increase of nearly $1,000.

The key takeaway here is that NCCI estimates that the AY 2017 average medical lost-time claim severity is 4% higher than the corresponding AY 2016 value.

Looking back at the data from last year’s report, we can compare the preliminary 2016 data with the actual 2016 data reported above. Chart 2 exhibits last year’s data.

Chart 2.

Source: NCCI’s Financial Call Data; p Preliminary based on data valued as of 12/31/2016.

In chart 2, the preliminary medical lost-time claim severity was $29,100 and represented a 5.0% change from 2015. In 2015, it was $27,700 and saw a -1.4% change from the prior year.

This is borne out in the next chart, Chart 3, where the 2015 average medical lost-time claim severity was estimated at $28,500, or a 1.0% change from 2014.

Chart 3.

 

Next, we look at the cumulative change in medical lost-time claim severity (1997-2017p), as highlighted in chart 4.

Chart 4.

In this chart, the cumulative change in medical lost-time claim severity is contrasted with the cumulative change in the Personal Health Care Chain-Weighted Price Index (1997-2017p). The PHC is a proxy for medical care price inflation that responds to changes in the blend of different medical services over time.

From the chart, the cumulative change in medical lost-time claim severity has strongly outpaced the change in the PHC index in that same period, indicating that while the PHC index is nearly flat, the medical lost-time claim severity is rising and will continue to do so.

According to NCCI, the medical lost-time claim costs have risen faster, +175% , than the PHC index of +61%, over the period from 1997-2017, with most of the gap occurring in the years before the recession.

However, looking at the data from last year’s report, as shown in chart 5, the cumulative change in medical lost-time claim severity was much higher, as estimated by NCCI, which was +227%.

Chart 5.

Sources: NCCI’s Financial Call Data; Centers for Medicare & Medicaid Services ; p Preliminary based on data valued as of 12/31/2016.

The next chart, chart 6, compares the relative growth rates between medical severity and price inflation.

Chart 6.

On the left-hand side, the medical lost-time claim severity grew approximately 4.5% per year faster than the medical care prices for the same period.

On the right-hand side however, the change in the medical lost-time claim severity and the medical care price tracked one another in the same ten-year period. Yet, there is a slight rise in the medical lost-time claim severity after 2015 continuing into 2017.

The key takeaways as NCCI reported were that much of the gap between the cumulative changes in medical lost-time claim severity and the PHC index since 1997 arose from the years prior to 2007. And that both the severity and care prices have grown at approximately the same rate, as indicated above.

Lastly, the next chart, chart 7, indicates the average annual change from 2012 to 2016 for all NCCI states. Note: all states in grey are either monopolistic states or are intrastate-rated states that do not report data to NCCI.

Chart 7.

The state with the highest average annual change was Nevada, and the states with the lowest average annual change, were Maine, Massachusetts, North Carolina, Oregon, and Rhode Island.

The key takeaways here are that the average annual change in medical lost-time claim severity was +2.3% from the four years between 2012 and 2016. The increase in Nevada, NCCI stated, was due to a very large claim that occurred in 2016. The decrease in North Carolina was due to a combination of large claim activity in 2012 and a change in the medical fee schedule in 2013 and 2015.

But it is apparent that most states experienced a change at, or below 10% from 2012 to 2016. And if we are to believe that claim frequency is decreasing, then we must ask ourselves, why is the medical lost-time claim severity rising, as seen in chart 1, one hundred dollars short of $30,000.

One answer we have already examined is the cumulative change in medical lost-time claim severity from 1997 to 2017, although preliminary as of this week’s report.

However, what is not shown is what lies behind those numbers, i.e., what is happening in each claim to cause the severity to rise, or not rise. There is no indication, as there never is, as to what amount of the rise is due to the cost of surgery or to other claim factors such as hospital bills, ancillary services such as medical equipment, anesthesia services, any testing performed, etc. In short, we don’t know if what is causing health care costs generally to rise also is affecting the medical lost-time claim severity.

As I have stated before in this blog, workers’ compensation must look to other alternatives to help bring down the medical lost-time claim severity. This cannot be achieved by looking between all three coasts. It must include looking at less expensive, but equally advanced medical care elsewhere. Otherwise, the gap will only get wider over time.

 

 

 

 

WA State Considering Telemedicine Legislation for WC

Legislators in Washington State are considering a bill, S. B. 5355, that would require the state’s Department of Labor & Industries to pay for telemedicine sert d require the department to provide access to telemedicine and reimburse providers for health care services provided to injured workers through such services.

The bill defines telemedicine as follows, according to the article, “the use of interactive audio and video technology, permitting real-time communication between the patient and the provider. ” It would exclude audio-only telephone calls (my White Paper mentioned this as a legal barrier to implementing medical travel into workers’ comp), fax messages, or emails.

Should this become legal, telemedicine services provided by hospitals, rural health clinics, physician offices, community mental health centers, and skilled nursing facilities would be covered.

This would have a profound impact on implementing medical travel into workers’ comp in Washington State, as this is one of two states that allows patients to travel outside the state or outside the country for medical treatment.

The Department of Labor & Industries has a page on their website called “Find A Doctor” where they list physicians in both Canada and Mexico, as well as the rest of the US, and when I began my research for my paper back in 2011, had a list of physicians in the following countries:  England, Germany, Honduras, New Zealand, the Philippines, Spain, Thailand and Ukraine.

As more states allow telemedicine services to be covered under workers’ comp, the day will come that getting surgery abroad, especially in the Western Hemisphere countries, will become reality, and will go a long way to lower costs and speed workers back to work, and relieve the stress to the health care system that repeal of the ACA will have on health care in the US.

NCCI’s 2017 Data Educational Program: A Personal View

Many of you have probably read my blog and notice that I sometimes refer to an organization called the National Council on Compensation Insurance or NCCI.

Back in the mid 1990’s, I worked there briefly, and also did a stint with a software vendor company reporting data to NCCI and independent state bureaus for workers’ compensation claims and policy data.

One of my blog readers told me about this year’s conference held in West Palm Beach and that we could me there. He came down from North Carolina yesterday, but left after the last class.

The program began on Tuesday, but I attended sessions starting on Wednesday. These are the classes I took:

  • Unit Statistical Data Editing and Correction
  • Medical Data Call Validation
  • Medical Data Collection Tool
  • Introduction to Unit Statistical Data Reporting (refresher course for me)
  • DCI Data Validation and Quality Issues
  • WCSTAT (Unit) Data File Submission and Processing
  • Unit Statistical Data-Premium Rating Programs and Exposures
  • Unit Statistical Data-Loss and Claim Conditions

Most of the classes were two hours long, with a fifteen minute break in between.

The classes were given by two presenters who rotated during the sessions, so that you did not get just one person’s knowledge and experience.

The participants ranged in age, but many were considerably younger than your humble writer. I had missed the 2oth anniversary reception Tuesday evening, but this was not really a social event, so it did not matter.

The technology I saw displayed this week was a far cry from what I worked with back in the 90’s, and is all web-based and very easy to learn. My impression from the information presented in all classes was that NCCI is taking a more customer-friendly approach to workers’ comp data reporting, which was something I found lacking back in the 90’s.

I know there are still areas of contention with some aspects of NCCI’s ratemaking role, as someone recently pointed out on LinkedIn regarding higher premiums for certain classification codes that are forcing small businesses out of business, but that is the exception and not the rule.

Overall, I felt it was worth it to attend, and I have gained a better appreciation for data reporting.

 

Dear Reader, con’t.

Last month, I told you that I was planning to shut down my blog because of my acceptance of a new position.

Unfortunately, some things were not meant to be, and while I was waiting until the new year to end the blog, I have decided to reverse course and keep it up and running, so those of you who have enjoyed my writing will have more to enjoy, I hope.

This still leaves me back where I was in October when I accepted the position, so if any of you have something in mind, let me know.

I am open to consulting with anyone. Resume furnished upon request.

Higher Work Comp Claims Costs for Older Workers

Before this site goes dark, here is a post I could not ignore from my friend, Maria Todd.

Those of you in work comp who sneered at my idea because I did not have any “credibility”, I dare you to challenge Maria. She has more experience in these matters than many of you put together, and a PhD to boot.

And if you find my comments disturbing, too bad! I’ve had to put up with your lousy treatment of me for four years.

Here’s the link:

https://www.linkedin.com/pulse/aon-workers-compensation-claim-costs-increase-mature-k-todd-mha-phd?trk=hb_ntf_MEGAPHONE_ARTICLE_POST