Chapter 15 Workers’ Compensation Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc.

2 Workers’ Compensation History  First workers’ compensation laws were enacted in  Today, all states have workers’ compensation laws.  Workers’ compensation is the most important coverage written to insure industrial accidents.

3Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Workers’ Compensation Statutes  Federal compensation laws apply to miners, maritime workers, and government workers.  State compensation laws apply to employers and employees within each state.

4Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Workers’ Compensation Reform  Laws address systematic abuse and fraud.  Laws vary from state to state.  Issues include:  proof of medical necessity  preauthorization for treatment  medical bill review  caps on vocational rehabilitation  use of mediators

5Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Workers’ Compensation Laws and Insurance Purposes  Provide best available medical care to injured  Ensure maximum recovery  Provide income to injured regardless of fault  Reduce overall expenses, resolution time, and litigation  Encourage employer workplace safety  Promote study of workplace accidents and hazards and facilitate improvements

6Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Self-Insurance  Company pays for medical expenses instead of insurance premiums.  Employee is covered by ERISA.  Stop-loss provisions may be included  Program may involve reinsurance on large claims.  Captive insurance plans usually serve smaller companies; outside firms may administer claims processing.

7Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Eligibility  Private business, state, and federal employees are entitled to workers’ compensation coverage.  A workplace accident that results in injury is covered.  Illness or disease that results from environmental factors in the workplace is covered.

8Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Coverage Federal Laws  Government employees such as postal workers and FBI agents  Workers in Washington, D.C.  Coal miners  Maritime workers such as longshoremen and harbor workers

9Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Coverage (cont’d.) State Laws  Provisions cover workers not covered by federal laws.  Employer must purchase workers’ compensation insurance from private company or be self-insured with adequate cash reserves.  Employer must also have employers’ liability insurance.

10Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Coverage (cont’d.) State Laws (cont’d.)  Provide coverage for minors  Most are effective outside the state  Provide coverage for civil defense and other volunteer workers  Employer and physician requirements for filing injury reports vary by state/territory

11Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Coverage (cont’d.) Coverage (cont’d.) Second-injury Fund  Covers employee with previous injury or condition who is injured on the job  Encourages hiring of the physically handicapped  Allocates benefit costs more equitably

12Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Coverage (cont’d.) Coverage (cont’d.) Minimum Number of Employees  varies by state/territory  some occupations exempted Waiting Period  required time period must elapse before income benefits are payable

13Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Benefits Types of state compensation:  Medical treatment  Temporary disability indemnity  Permanent disability indemnity  Death benefits for survivors  Rehabilitation benefits

14Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Types of State Claims Nondisability (ND): minor injury that requires medical attention but employee still able to work Temporary disability (TD): unable to perform work duties for a specific time period Permanent disability (PD): unable to return to previous occupation due to residual disability

15Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Fraud and Abuse  Physicians are responsible for determining legitimacy of work injuries and accurately reporting findings.  All individuals who deal with workers’ compensation cases must report suspicious situations to the insurance carrier.

16Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Occupational Safety and Health Administration Act of 1970  Act protects employees against workplace health and safety hazards.  Complaint procedure enables individuals to pursue enforcement measures in their workplace.  Noncompliance with work standards by employers can result in fines.  Applies to most businesses.

17Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Legal Situations Medical Evaluator  Physician who conducts medical/legal evaluations of injured workers  Must first pass a special medical exam for certification by the Industrial Medical Council  Hired by insurance company or appointed by appeals board  Conducts unbiased assessment of disability

18Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Depositions and Medical Testimony  Discover additional facts from the physician, patient, or other party about a case.  Proceedings take place under oath but not in open court.  Findings may be used to impeach (challenge credibility) a witness on cross-examination.  Findings may be used when case comes to trial.  Physician should be compensated for time spent preparing to be an expert witness.  All agreements should be signed by the physician and a lawyer.

19Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Lien  Legal claim on the property of another for the payment of debt  Null and void at the end of a specified time limit  Subsequent or amended lien can be filed  Should be signed by patient/employee and patient’s attorney

20Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Lien (cont’d.) Advantages  Court recognizes written agreement  Provides protection in event of litigation  Ensures payment for medical services  Provides inexpensive means to collect full fees  Judge determines if fees are reasonable when amount billed is more than amount allowed  Helps avoid problems with collections

21Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Third-Party Subrogation  Transfers claims from workers’ compensation insurance carrier to third-party liability carrier  Used in events such as auto accidents where another party may be liable for the claims  Subrogated carrier has legal claim to reimbursement of expenses

22Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Medical Reports HIPAA–Health Insurance Portability and Accountability Act  Details specific rules for disclosure of personal health information  Goal is to facilitate payment on claims for injured or ill worker, but still limit the amount of information disclosed under the Privacy Rule

23Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Health Information Record Keeping  Maintain a separate medical record.  Maintain a separate financial ledger.  Keep appointments for occupational injury or illness separate from unrelated matters.  Keep documentation or dictation for each appointment separate.

24Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Terminology  Most workers’ compensation cases involve accidents causing bodily injury.  Become familiar with anatomic terms, directional and ROM words, types of fractures, body activity terms, and words that describe pain and symptoms.

25Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Reporting Requirements Employer’s Report  Employer must file report within a specified time limit Medical Service Order  Authorizes a physician to treat the injured employee Doctor’s First Report  Physician must complete standard form or narrative letter after first exam of the employee

26Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Physician’s First Report (cont’d.)  Original to insurance carrier  Copies to  state agency  patient’s employer  physician’s file

27Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Narrative Medical Report Issues  History  Present complaints  Past history  Examination findings  Diagnostic impression  Disability/Prognosis  Work Limitations  Causation

28Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Reporting Requirements (cont’d) Supplemental Report  Sent to the insurance carrier after 2 to 4 weeks of treatment to note current status Progress Report  Sent to the insurance carrier if there is significant change in prognosis or status

29Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Final Report  Physician sends to insurance carrier when patient is discharged or treatment is complete  Signals the end of temporary disability benefits

30Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Doctor’s Final Report and Bill  Indicates any impairment or permanent disability  Accompanied by a statement listing total expenses incurred

31Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Claim Submission Financial Responsibility  Workers’ compensation insurance is billed for all expenses.  Physician agrees to accept payment according to carrier’s fee schedule.  Patient’s health insurance information should also be obtained and filed in case of non- related medical expenses.

32Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Claim Submission (cont’d.) Fee Schedules  May follow special workers’ compensation or Medicare fee schedule  Some include maximum reimbursement amounts  Employer, state agency, insurance carrier, or payer may audit or review fees

33Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Claim Submission (cont’d.) Electronic Claims Submission & Reports  Carriers may have separate claim for workers’ comp (not CMS-1500 [08-05])  Electronic system or telephone submission Out-of-State Claims  Follow regulations for state in which injured worker was hired  Obtain and follow out-of-state fee schedule for billing purposes

34Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Delinquent or Slow Pay Claims  Phone patient’s employer to verify information.  Send copy of claim form and itemized account statement to carrier.  Phone insurance carrier after 45 days and request expected date of payment.  Send employer copy of financial account statement with outstanding balance.  Contact state board if employer fails to file Employer’s Report of Work Injury.