The Escalation of Opioid Use – A Three-Fold Issue →
The Escalation of Opioid Use – A Three-Fold Issue
Thoughts by
Jeffrey J. Post CRIS ACI
The escalation of Opioid use is a three-fold problem with each problem having many layers and causes that can be discussed at length. However, from my observation as insurance and risk management professional helping businesses over many years begin with Doctors and their efforts to retain patients and to relieve pain so that the patient can recover. I think a Physician’s willingness to prescribe opioid medication might involve Civil Courts awarding judgments for “pain and suffering” in a Medical Mal-practice suits. Their solutions is relieving the pain first and continue to relieve pain.
I must disclose that I am a lobbyist for and an administrator of drug free workplace policy and testing programs. As an insurance professional, Workers Compensation is one of my core capabilities and I have always recommended drug testing. When it came to the “tire meeting the road” the old school drug testing industry has little understanding of risk management and loss control and why drug testing is important. That is the reason I am now a lobbyist for and administrator of drug free workplace programs to support the value of a complete program and how it impacts claim result as well as productivity and employee moral. But, that story is for another segment.
A well-constructed drug-testing program will require testing of an employee who wants to, or is released to return to work. The employees provide a sample in a traditional drug testing process then the sample is sent to lab for analyses. The analyses report goes to the Medial Review Officer (MRO). The MRO must review the lab analysis and evaluate if the opioid concentration is above the cut off level. If the concentration is above the drug test cut off then it is a positive test and the MRO would have to contact the employee for a discussion of the prescription of opioids. Based on that conversation the “return to work employee” may test positive for drugs in excess of the drug prescription protocol. If the concentration is above the rate that is within a prescribed protocol then the MRO must confirm the positive test. A positive test with a drug free workplace policy determines that the employee is not ready to return to work and other steps must be taken to deal with the “higher than reasonable” (forgive the pun) test results.
The third issue is that most underwriters of workers compensation insurance don’t offer discounts to insureds who implement a drug free workplace policy through a qualified drug free workplace administration company managing it to a minimum of Federal regulation standard (above the legal challenge). The statistics are irrefutable that employers with drug free workplace policies and follow testing procedures have fewer worker injuries (frequency) and lower costs per claim (severity) and almost no work related deaths. This means better profitability for the underwriter and lower premiums for the employer.
The escalation of opioid use is both a medical industry issue treating pain and suffering and an employer issue for not having a drug free workplace policy. It is also is a workers compensation industry issue because underwriters don’t incentivize the insured to have a drug free workplace policy, through premium discounts, unless the State laws require them. The first two steps to reduce the escalation of opioid abuse are to prevent the injuries in the first place and to implement a drug free workplace policy that includes a return to work testing procedure.
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06/01/2012
Insurance Thought Leadership - jpost@tridentstrategy.com - Tridentstrategy.com Mail →
Stressful conditions and times, regardless whether they are work-related or personal, always lead to a higher likelihood of injury and/or illness. This will become the problem of the employer even if the illness or injury is not a Workers’ Compensation claim.
The intersection that is made up of protected leave, voluntarily granted leave, financial support products and disability protection is the nightmare of many a business owner and Human Resources department. This is where business owners must expand their consideration of what is “risk management” to include these types of concerns.
There are ways employers can help to mitigate this potentially dangerous confluence of events, but many employers wait until too late to take those steps:
1. Educate your managers, supervisors and HR representatives about how to handle any potential or actual claim for leave or disability. This may seem like a “well, duh,” but it is frequently put off or completely overlooked. It is usually the frontline supervisor who has the first inkling that a problem may be arising and she/he should be very clear on what to listen/look for as well as what to do with the information once she/he has it. The supervisor/manager should be provided with appropriate response language to inquiries, statements and threats related to such concerns.
2. Be certain your HR representative has all the tools necessary to manage these overlapping issues and is getting regular information on changes. Professional societies, legal firms, insurance brokers, consultants and various websites have a wealth of information to assist with updating on this changing landscape. Business owners should proactively ask how their HR department is keeping abreast of such items and invest, if necessary, in support services and products.
3. Insert yourself into the process where necessary. Frequently, the employee is reassured when the owner or executive of the company gets involved in a caring way. Express concern and assuring the employee that the company wants her/his situation to be handled as compassionately as possible. It is important, however, to remember not to make promises that are specific about outcomes. Things like “We are going to make everything work out for you” can be very problematic when the situation gets more complicated, and it would be a problem for the business if you attempted to do that.
4. Communication is essential. Be sure someone has been assigned as the primary contact with the employee for the duration of the time off. Generally, this is someone in Human Resources who coordinates all of the leave rights, insurance products and communication with supervisors and other appropriate persons. How and what is communicated can make or break the situation. There are many time limitations, for example, on protected leave categories like the Family Medical Leave Act (FMLA) time away. The deadlines that must be monitored must be the responsibility of a specific person who is calendaring and recording. The specific types of communications are also very important and should be standardized as much as possible.
5. Managing the Interactive Process. Frequently, when that person has been off for the period that was approved, there comes a time when the restrictions with which they can return are very difficult to manage. When you face the need to talk with an employee regarding returning under restrictions, it should be approached with caution. Hit the pause button before speaking. You need some professional help. This process is not so very complicated, but it can be time consuming going back and forth between what the employee needs and what you can provide. Resist the impulse to say, “I’m done with this. Get back to work or don’t.” You must exhaust all possibilities in an appropriate way — no matter how frustrating it might be for you.
Best practices for mitigating the risk around such potentially damaging situations would be to institute the following:
1. Basic Employee Relations and HR Compliance Training for Supervisors and Managers. While these individuals do not need to know the nitty-gritty information like exactly what forms must be completed for each phase of a protected leave, they do need to have training on when to “raise your hand” — that is, about what to listen and watch for and when to give a heads-up to the HR representative. This training would also, ideally, allow them to practice on how to talk with employees on sensitive subjects that might come up as well as when to not talk to employees about something because they lack the necessary information to fully answer appropriately. This training can be done by the HR representative or by an outside consulting firm/broker affiliate who is an expert on compliance.
2. Development of Policy and Procedure Manual. Although these are frequently given short shrift by companies who think that everyone knows how to do things, it is important that they exist since many times it may have been years since the manager/supervisor has taken the training class and the guidelines found here can help with remembering the right process. This also provides written evidence of how the employer does business in the case of any litigation. A standard policy can help defend against a discrimination claim if it is followed. Many organizations provide a briefer “Management Survival Guide” for front line use. Electronic versions are excellent if access is easy since it is much more easily maintained.
3. Training for HR Professionals. If you have individuals who manage your HR processes, they need regular professional development. Just as your managers must keep up to date with the industry standards and innovations, your support employees need to keep up to date with changing expectations. Human Resources is one of your biggest investments — as much as 40% of total expenditures for service organizations. It is also one of the highest potentials for loss &mdash through litigation. The median employment lawsuit typically awards over $450,000 and this number has been climbing steadily for the last three years. The ROI on a couple of thousand dollars of professional development is pretty clear.
4. Being a good risk assessor. Upper management has to get good at making risk assessments. If the professionals employed come forward with suggestions, an executive must determine what the likelihood of loss is and what the loss is potentially. Outside professional assistance can be called in — brokers, attorneys, consultants — to assist with the consideration. After all of this input, however, it still comes down to how much risk the company and those running it are willing to take. That amount may even vary by type of risk. For example, a company may be very willing to risk millions on a specific marketing strategy while choosing not to risk a discrimination claim — or vice versa. All of the professional and employee input and research can only inform. Ultimately, the owner or upper level management must make the decision.
So, every organization should first determine the amount of risk in each area it is willing to take. Then the actions above can help mitigate the risk and provide the best opportunity for avoiding loss.
http://www.amwins.com/Pages/Client Advisories/residential-property-marketplace-02.2012.aspx#.T7VnD4o4rM0.tumblr →
Good strategy on residential insurance
Workers compensation market 'conflicted' despite economy's rebound: NCCI | Business Insurance →
Workers Compensation premium from 2006 through 2010 decreased 27%. From the new base number the industry has seen a 7% increase. It is unclear what industry sectors have shown expansion to account for the increases. It is important that there are increases.
The worrisome issue is that the cost of worker injuries is increasing. Comp underwriters are less profitable today because of escalating combined rations. Underwriters are under pressure to show profits. Interest income is down, cost per claim is up and the comp industry is slow to embrace cost saving strategies within the operations and management of programs.
At Trident we have been reinventing operational software for workers compensation. We think that savings come from better information that gets to underwriters faster and integrates with loss and safety providers for a single language data. This data base can be used for analytics to drive better business intelligence and be seen in real time through a dashboard appearance.
Transactional efficiency is a key factor for program savings. It is well documented that there are “tons” of companies that will screen medical utilization and other nifty ideas to save on a per claim basis. Our strategy is eliminate traditional billing and audit processes with our transactional concept of Report&Pay.
Report&Pay takes any payroll reporting software and allows the insured to upload into the system. The system translates the data, matches the data to the underwriters expectation, calculates the premium and drafts the premium due for that pay period from the insureds bank account. If there are deviations between the underwriters expectation when the account was issued, or premium is below expected or above expected it sends a message to account managers to access the causes. Audits aren’t as costly because the actual payroll reports are within the system.
CompPLETE is our software, written in Apex on a dedicated web based server network also considered the cloud. We believe that CompPLETE is a transformative software and platform to bring cost savings to underwriters and insured alike.
Bank's Director and Officer exposure as a result of bank failure →
As seen in the chart below, the number of bank failures in 2011 dropped from the highs of 2010 and 2009.
But the number of bank failures in 2011 is still significantly greater than the relatively low numbers prior to 2008. In recent years, the Federal Deposit Insurance Corporation (FDIC) has authorized suits in connection with 54 failed institutions, naming 469 individuals for Directors and Officers (D&O) liability with damage claims of at least $8 billion. This includes 27 filed D&O lawsuits naming 222 former directors and officers. However, the FDIC doesn’t file an action against the directors and officers of a bank just because the bank fails. In fact, the FDIC only brought claims against the directors and officers of 24% of the bank failures from 1985 to 1992.
Statute Of Limitations
When they act as a receiver, the FDIC has three years from the time a bank is closed to file suits for tort claims and six years to file breach-of-contract claims. If there is a longer statute of limitations permitted in a specific state, the longer statute is followed. Prior to bringing an action, the FDIC conducts an investigation into the causes of the failure. The investigations are generally completed within the first 18 months following the closure of the institution.
The FDIC will often seek a settlement prior to filing the claim in order to manage expenses. Available assets and potential insurance proceeds are considered when the FDIC contemplates filing suit and seeking damages.
FDIC Suits Authorized D&O Defendants Damage Claims ($ millions)* Authorized in 2009 11 $366 Authorized in 2010 98 $2,123 Authorized in 2011 264 $5,110 Authorized in Q1 2012 96 $401.1 Totals 469$8,000.1
* Losses typically exceed these amounts and may result in higher damage claims in filed lawsuits. Recovery on these claims is dependent upon available recovery sources, such as insurance and personal assets, and competing claims. http://www.fdic.gov/bank/individual/failed/pls/index.html
Personal Liability
According to the Federal Deposit Insurance Act 11(k) (FDIA): “Liability Of Directors And Officers. A director or officer of an insured depository institution may be held personally liable for monetary damages in any civil action by, on behalf of, or at the request or direction of the Corporation, which action is prosecuted wholly or partially for the benefit of the Corporation (FDIC) … for gross negligence, including any similar conduct or conduct that demonstrates a greater disregard of a duty of care (than gross negligence) including intentional tortious conduct, as such terms are defined and determined under applicable State law.”
What Does This All Mean?
As discussed above, bank failures frequently lead to suits brought by the FDIC against the directors and officers of a failed bank. The potential for damages is substantial, and the individuals can be held personally liable per section 11(k) of the Federal Deposit Insurance Act.
Further, litigation brought by the FDIC does not preclude actions brought by other creditors or shareholders of the bank. Since merger activity is one of the leading causes of litigation against directors and officers, and 94% of banks are acquired rather than fail, the risk of litigation against the directors and officers of financial institutions is meaningfully higher than in other industries.
Because the underwriters of Directors and Officers insurance are acutely aware of these factors, their underwriting guidelines will be extremely stringent — if they will even consider this class of business. Typical D&O policies, including Side A D&O policies, can respond to actions brought by the FDIC. It is important to watch out for regulatory exclusions that could preclude coverage. It is also important to negotiate a waiver of the bankruptcy stay on a primary D&O policy so the policy proceeds do not get frozen by a bankruptcy trustee in order to pay liabilities of the corporation ahead of the interests of insured individuals.
Capitol Weekly: Opinion: Injured workers benefit most from recovery →
It seems at every level government is retrenching itself into the functions of day to day business. Can politicians provide thoughtful reform when they have no concept of how workers compensation affects a company’s productivity and profitability? Let’s get back to the citizen politician in a citizen represented government.
MedMetrics: Survey: Employers Want WC Cost Control. Really? →
This is an excellent review of a recent survey by employers that indicates that the comp industry lacks innovation in methods to reduce costs.
Trident’s CompIntellisys (C-Intellisys) is a platform to better manage comp costs through the transactional Report& Pay system. The cost saving for an employer to manage the comp premium based on payroll reporting can not be denied but more importantly managing the functions for loss control, site safety and claim tracking integrated into a single language would be huge. Help Trident get the message to underwriters that it is time to transform comp policy management and lets do it through CompIntellisys and Report&Pay. Please visit our websites (www.CompIntellisys.com, www.ReportandPay.com or TridentStrategy.com)
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