24 Apr 2020

Workers’ Compensation Industry Continuity in the COVID-19 Era: Businesses Battling a Global Pandemic

The first in a series of Out Front Ideas webinars highlighting a variety of COVID-19 challenges which currently confront the workers’ compensation community, focuses on different sectors of the industry and surveys how each is navigating a rapidly evolving landscape. The COVID-19 pandemic has forced many businesses, large and small, into uncharted territory when it comes to strategizing a continuity plan. Workers’ compensation experts Kimberly George and Mark Walls discuss with industry-leading CEOs how they are overcoming the various and unique obstacles their companies are encountering both in the operational context and in the way they deliver services to employers and injured workers. Interested readers can listen to the full webinar here: https://goto.webcasts.com/viewer/event.jsp?ei=1298632&tp_key=eff143b287

Insurance carriers face an uncertain future as they respond to a multitude of new regulations and an unanticipated expansion of coverage and compensability.

CEO Mark Wilhelm of Safety National says that right now insurance providers are being inundated by COVID-19 data requests and widespread directives/bulletins from regulators focused mainly on tracking reported COVID-19 cases. An immediate issue facing insurers is the collection of premiums. So far, more than 30 states have issued premium leniency bulletins, and some have issued moratoria on policy cancellation for premium non-payment. Colorado, for one, has mandated that carriers clearly delineate on their websites how requests for premium leniency will be treated.

Additionally, legislators are seeking to expand coverage and compensability beyond what was contemplated in policy underwriting and pricing, in essence creating coverage expansion with no ability to charge for it. Some legislators seek to broaden the presumption of industrial causation to include healthcare workers and first responders who contract COVID-19 and, potentially, to encompass all workers deemed “essential.” In terms of guidance, the ICD loosely defines COVID-19 and its sequalae, effectively providing that when causation is in doubt, an injury or death should be attributed to COVID-19.

Wilhelm states that it is difficult to know, at this stage, what the long-range impact of COVID-19 will be on workers’ compensation insurers, as some industries will experience increased claims due to the disease, while others will see a decrease stemming from shelter-in-place orders and a home-based workforce. In the short-term, carriers will be impacted by premium reductions due to declining employer payrolls, premium leniency, and cancellation policies currently being put into effect.

Third-party claims administrators see new workers’ compensation claims plummet, injured workers delay medical care, and paid/unpaid leave claims surge.

Third-party administrator Sedgwick CMS has a very diversified customer base with some customers growing significantly despite the global pandemic and others almost shut down, says CEO Dave North. New workers’ compensation claims have dropped nearly 40%, whereas pending claims are down only about 4.5%. However, there is an upward trend in claims by “essential workers” who have greater exposure to COVID-19. North shares that Sedgwick is currently handling over 10,000 COVID-19 related claims.

According to North, many injured workers with pending claims are having difficulty accessing medical care as the medical system is overtaxed with seriously ill COVD-19 patients, creating longer wait times for medical appointments and, in some cases, an inability to receive proper treatment. Even after the healthcare system rebounds from COVID-19, North believes there will likely be an increased demand for healthcare by non-COVID-19 patients and, in turn, the prospect of continued treatment delays for injured workers.

In the meantime, leave and unpaid leave claims have surged sharply upward due to voluntary or government mandated programs instituted by employers. North indicates that it is yet unclear how government programs surrounding COVID-19 will affect injured workers in terms of paid and unpaid leaves from work. For instance, will it be more economically beneficial for an employee off work due to an injury to forgo workers’ compensation and instead collect benefits under one of the new federally funded programs related to COVID-19? Going forward, the industry will have to evaluate how the new leave programs interact with workers’ compensation insurance.

North stated that an additional concern driving future plans by claims administrators is the potential of other catastrophic events, for example severe hurricanes or tornados, occurring during the COVID-19 era, which could further impact employers and disabled workers.

Industry providers witness drops in the demand for some ancillary workers’ compensation services but note a huge uptick in telemedicine.

Workers’ compensation service providers are noticing a significant decrease in the frequency of work injuries, which CEO Tom Warsop of One Call attributes to the work-from-home dynamic driven by COVID-19. Consequently, referrals of injured workers to One Call for healthcare services has decreased by 40%. For transportation services, referrals are down 65%.

According to Warsop, although most medical providers are able to continue seeing patients, and access to provider networks remains high, workers are not seeking treatment due to COVID-19 fears. This is generally driving the demand for services down and may ultimately lead to decreased availability of services in some areas.

On the flip side, One Call has seen a dramatic rise in both supply and utilization of telemedicine, with a 2500% increase in a three-week period. To prevent their conditions from deteriorating, Warsop would like injured workers to be aware that there are safe alternatives that allow them to continue receiving medical treatment during the shelter-in-place orders. He expects the use of telemedicine to continue growing, even after the current crisis subsides.

On a positive note, Warsop views a myriad of opportunities for improvement emerging from the crisis that can be carried into the future. For instance, the scheduling and re-scheduling of medical appointments by One Call, historically accomplished telephonically, was recently switched to a text-based model, which has been much better in terms of provider responsiveness and injured worker satisfaction. One call is also looking at a new operating model with a remote workforce, which Warsop sees as the future trend for many employers.

Occupational medicine providers balance new CDC and WHO guidelines with patient care, employee safety and evolving operational protocols in a fluid environment.

CEO Keith Newton of Concentra says the industry’s biggest challenge is navigating the changing federal, state, and local regulatory directives and necessary protocol shifts driven by COVID-19. Concentra has undergone its biggest drop in patient volume since the 2008-2009 recession, when volume dropped 20% over several months. By contrast, volume has already plunged about 30% to 40% since COVID-19, although Concentra is still serving over 30,000 patients per day.

Concentra has moved its centralized support staff to a home-based setting to continue providing crucial support to its patient-facing personnel. Concentra is also providing on-site services to support some large employers, especially those that provide “essential services,” in their daily COVID-19 screening efforts. To deliver these services, Concentra has temporarily re-purposed a portion of its downsized staff to do temperature checks and distribute questionnaires to employees, among other things. Concentra is also helping non-Concentra medical personnel who work at drive-through COVID-19 testing sites by providing appropriate protective equipment.

With respect to telemedicine, Newton says while those services were becoming more prevalent even before COVID-19, they have skyrocketed over the past weeks. According to Newton, telemedicine had traditionally been utilized more by payers, triage units and large national employers, but now it is being used by a much broader population and will likely continue to be in high demand as practitioners adapt to the changing infrastructure.