On December 19, 2015, Ed Hiller, President of Smart Claims Solutions LLC and former Director of Claims and Medical Operations of the New York State Insurance Fund, travelled to Albany, NY to testify before the NY State Standing Committees on Labor and Insurance. The hearing was called to examine the proposal to transition the workers' compensation fee schedule to a
CMS resource-based relative value scale ("RBRVS") fee schedule. The committee was co-chaired by Hon. Carl Heastie and Hon. Kevin Cahill.

Mr. Hiller testified as part of a panel with Robert Caruso, Principal, Atlantic Imaging Group and Dr. Frank Mascaro, partner/radiologist with Western New York MRI. Mr. Hiller concentrated his testimony on the proposal to drastically cut reimbursement rates for radiology testing. Mr. Hiller emphasized that his comments and opinions were his alone and in no way reflective of the views of his former employer, NYSIF, from where he retired in 2012, and were made with the utmost respect for the good people at the NYS WCB.

Mr. Hiller's testimony can be summarized as follows:

-The Proposed Fee Schedule Reductions for Radiology Testing are Premature: The rates have survived in the Medicare system due to the immense size of that system, where they serve as a loss-leader. The radiology facilities accept Medicare patients as they do not want to lose referrals on profitable work from the treating physicians. Critically, Medicare billing and payments are completely electronic, ensuring timely and accurate payments to the providers. The NYS WCB is only in the very early stages of conversion to a paperless billing environment. This would unduly burden providers in the workers' comp and No-Fault systems.

-MRI Fees Are Not the Problem: NY is unique among states in that the main cost driver there is the weekly indemnity costs, not the medical. In one of his last years at NYSIF, they paid approximately $350 million in medical while paying over $900 million in indemnity. The system is imperiled by the more than 100% increase in the weekly indemnity rate payable to injured workers, from $400 in 2007 to $808.65 now. To reduce the reimbursement rate for MRI's by a few hundred dollars will have a devastating effect on the facilities, but amount to little more than a rounding error to the payers.

-Reduced Fees will Lead to Reduced Quality: Loss of profitability will prevent facilities from investing in the newest and best technology, leading to sub-optimal diagnosis and treatment for injured workers.

-Reduced Fees will Hurt the NYS Economy: The workers' compensation system does not exist in a vacuum. Facilities that close or move out-of-state will cost jobs and hurt the neighborhood economies where they operate.

Noteworthy witnesses came from the WCB itself, the NYS AFL-CIO, PEF, and the NYS Trial Lawyers.

The hearing was streamed live over the internet, but the link is no longer available.

Using the Internet to Fight W.C. Fraud

By Ed Hiller

Claimant carelessness, foolishness and narcissism can undo their claim in the internet age, where privacy is an outdated concept. Claimants have been known to post online proof of conduct and physical activities inconsistent with their medical claim. Cookies and other tracking mechanisms give Google and shopping websites broad and intimate knowledge of personal information and activity of users. Even physical locations can be tracked. Finding this information can aide carriers in defending fraudulent or questionable claims. Sites to consider as resources-some of which require registration-include Vine, Tumblr, Reddit and Partbin.

Other tools for investigation include the obvious: the social networks like Facebook, eCommerce sites such as Craigslist, blogs, twitter and photo-sharing sites. Carriers should ask claimant for their email addresses which can lead to finding them on LinkedIn and MyLife, dating sites and social location sites such as FourSquare. In addition to the email address, having the claimant's cell phone number is a great asset.

Much information, such as divorces, are public. Try googleguide.com for help in searching. Happy hunting!

The source of this article was a presentation to NYCA given by Michael Petrie, VP of National Accounts/Social Media Investigations for ISG, on May 6, 2014.

EDI, Data Analytics and Workers' Compensation

By Ed Hiller

ISO is uniquely positioned to provide data analytics in the W.C. world with 17.3 billion records in their database including a fraud database containing more than 925 million claims that is used by more than 90% of the property casualty industry. ISO processes over 67 million claims per day and over 2 billion member claims per month.

Electronic Data Interchange and the IAIABC: The IAIABC is a not-for-profit trade association representing government agencies charged with the administration of W.C. systems in the United States and worldwide. IAIABC'S mission is to advance the efficiency and effectiveness of workers' comp systems throughout the world. Along these lines, NY State is in the process of adopting the IAIABC standards for EDI which is expected to yield significant benefits and increased efficiencies in the system. This ongoing process which is overseen by the NYS Workers' Compensation Board.

Basics of Common Back Injuries

By Ed Hiller, Esq.
President
Smart Claims Solutions LLC

The spine has three sections, known from the neck down as the Cervical, Thoracic and Lumbar spine. The bony sections of the spine are cushioned by discs, the "shock absorbers" of the spinal column. The spine is also surrounded by many muscles. Indeed, most spinal injuries are to these muscles and most patients should recover quickly with rest and medication. 

MRI's are the gold standard for diagnosing soft tissue spinal injuries. For bony related injuries, CAT scans or X-rays are preferable. Physical symptoms of disc problems present as diminished range of motion, most typically as a positive straight leg raise test in cases of herniated discs. Three out of five positive results of Waddel's Criteria indicate non-organic back pain: Tenderness, Stimulation, Distraction, Regional (weakness or sensory) or Overreaction to any stimulation related to the back. 

Disc problems on MRI's can present as discolored (darkened.) This is indicative of a dehydrated or desiccated disc. When disc material is protruding from its normal location, this is known as a disc herniation. Although 80-90% of disc herniations resolve within six months to one year without surgery, herniated discs can be the focus of surgical intervention. Often an epidural injection of an anti-inflammatory steroid can resolve the disc problem short of open surgery. A last resort, discectomy is the operative procedure to remove a portion of a damaged disc. The procedure can be done with or without spinal fusion. In cases where there was no prior surgery to the area, fusion is usually not necessary.

Advances in surgical techniques now require smaller incisions. As spinal discs are very close together along the length of the spine, surgeons must use special care to avoid a "wrong level surgery," or operation on the wrong disc. 

Recovery from a discectomy usually takes 6 weeks without fusion and up to 6 months with fusion. There is usually some degree of residual dysfunction with fusion, much less without. 

No artificial discs have been developed as yet. In some cases, a metal or plastic ball hinge can be inserted into the spinal column to alleviate symptoms. In cases of desiccation, surgeons may attempt to hydrate the area using a patient's own stem cells. 

Recovery from back injuries is strongly linked to the patient's motivation. Sad to say, in litigated workers' compensation cases the desire for a disability award can "flow" inexorably toward surgical intervention. 

The source of this article was a lecture given by the noted spinal surgeon Jonathan D. Lewin of North Shore Hospital and The Center for Spinal Disorders at a NYCA workshop on March 18, 2014. 

Office Based Surgeries ("OBS") are the future of outpatient health care. Hospital operating rooms are a valuable, scarce and expensive resource. They are notoriously inefficient as complex procedures may take longer than expected. Emergencies take priority over scheduled routine procedures. Surgeons may waste hours while waiting for a room to become available.  

The OBS Advantage™
Office based surgeries have many advantages over hospitals and ambulatory surgery centers:  -Cost containment without compromise of quality.

• OBS have very low overhead making them less expensive to run
• Decreased risk of infection -Personal attention to patients
• Ease and efficiency in scheduling
• Greater privacy
• Consistency in nursing personnel

Medicare Leading the Way
Medicare, always seeking to cut soaring costs for an aging population, has recognized the benefits of care outside a hospital and ASC setting, by providing a significantly increased reimbursement to a surgeon that performs certain procedures in an OBS.

Back Pain – Alternative Treatment
Low back cases are the bane of the workers' compensation world. Our Epidural Alternative™ could be the answer. Chronic back pain is often caused by compression of the nerves in the spinal column. This condition may require costly and often expensive open back surgery. However, in many cases the pain is caused only by inflammation surrounding the nerve and if the inflammation is decreased then you may be able to achieve significant pain relief and avoid surgery altogether. A course of epidural injection can often achieve this desired outcome. 

Ed Hiller is a founding member of Quality Office Based Alliance LLC, dedicated to demonstrating how Office Based Surgery can be a quality, efficient, and cost saving experience. Please visit www.qobsa.com

 

Network Security & Privacy Liability: The Legal and Financial Consequences

Reported by Ed Hiller

Cyber liability and cyber security are hot topics in all industries in this Age of the Internet (exemplified most dramatically by the Target stores credit card fiasco) and the fIeld of workers' compensation is no exception.

High risk industries include schools, healthcare, banks and finance, retail, commerce, data processing, credit card companies and public entities, indeed any industry that collects personal data that, if compromised, can lead to identity theft and related crimes. At risk are personally identifiable information such as social security numbers, credit card numbers, personal health data and trade secrets and other intellectual property.

The legal and financial consequences of a data breaches can be severe, with fines and penalties to go along with a public relations black eye.

Data breaches can be caused by decentralized IT operations, hacking, lost laptops, lost back-up tapes, mistakes by staffers, and vendor and other business partner breaches. These breaches are rather common, but fortunately all breaches have not led to identity theft or other catastrophic consequences (in one study, over 69% of companies studied had a "data incident" in the pertinent 12 month period.)

All merchants who are storing, processing, transmitting payment card data must comply with PCI Security Standards or face fines. Nationally, over 60 laws and regulations apply to cyber security.

The good news is that steps can be taken to mitigate against data breaches. Organizations can and should:

• Use credit monitoring firms
• Conduct a risk assessment
• Establish data breach best practices
• Establish a breach response team
• Quickly deploy IT forensics after a breach
• Notify law enforcement in a timely manner
• Conduct training for employees and vendors

Also, companies and other organizations should review their insurance coverages and consider purchasing a Network Security & Privacy Policy which cover security breaches, invasion of privacy, enterprise privacy, identity theft, cyber extortion, defamation, business interruption and data assets.

Key practice point:  Any organization that deals with personally identifiable data has an ongoing duty to protect, preserve and defend the same.

The source of this article was a presentation given to the New York Claims Association on November 12, 2013 by John Farley, Vice President for Insurance Service at Wells Fargo.

Elements of Workers' Compensation Fraud in New York

By Ed Hiller, Esq.
President
Smart Claims Solutions LLC

Sec. 114 of the WC Law is the main statute for fraud-related matters. It covers fraud committed by claimants (for example, faking an accident), policyholders (underreporting payroll), employers  and carriers (lying to prevent an employee from establishing a valid claim), insurance agent or broker fraud (filing a false application), providers (false billing, duplicate billing),and attorneys (participation in lying to win case.) Violation of Sec. 114, formerly a misdemeanor, is now a Class E felony. Also felonies since 2007 are failure of employers to carry WC insurance and repeat offenses of no insurance, premium and application fraud.

All types of WC fraud contain the same major components. There must be a knowingly made false statement as to a material fact. Some prosecuors will not accept a referral for prosecution unless the intentional, material lie had an adverse financial impact.

The source of this article was a lecture given to NYCA on March 18, 2014 by David Regazzi, Assistant Inspector General at the NYS Workers' Compensation Board.

The NYS Workers' Compensation Board's Future State

Reported by Ed Hiller

The future of worker's comp in New York as seen through the eyes of the Workers' Compensation Board was expressed by then Executive Director Jeffrey Fenster at a presentation to the New York Claims Association on September 10, 2013.

Mr. Fenster described the Board's strategic plan as "aggressive and transformative." The plans key touch points are:

• Continue to improve the beneficial aspects of the 2007 reform
• Implement the beneficial aspects of the enacted Business Relief Act of 2013
• Rolling implement IAIABC standards into the Board's eClaims system through 2014
• WCB Business Process Re-Engineering; The Board has contracted with an outside consultant to conduct a thorough Business Process Review. This is a 7 month project. Interested stakeholders with comments or suggestions concerning the systemic issues confronting the Board on a daily basis may send them to mailto:BPR@wcb.ny.gov
• Draft Non-Acute Pain Medical Treatment Guidelines
• Promulgate a new WC Provider Fee Schedule
• Improve Regulatory Oversight
• Debut first iteration of an Enterprise Data Warehouse in early 2014.

Mr. Fenster also reported that the Board's increased social media presence is yielding about 600 Facebook hits per day, up from 30-40; that Sec. 32 settlements before classification are up from pre-2007 reform days; and, intriguingly, that the upcoming implementation of the federal Affordable Care Act ("Obamacare") could someday lead to a  comp-only workers' compensation system, with health carriers paying the medical. That, however, is only food-for-thought at this time as the ACA, as currenty written, does not directly affect workers compensation claims.

In a subsequent presentation to NYCA on November 12, 2013,  Tim Purcell and Hashim Bello from the WCB provided an update on the Board's eClaims and Business Process Re-engineering initiatives.

Mr. Purcell noted that many forms, including the iconic C-2 first report of injury, will no longer be used to report claims events and developments to the Board. Well known forms such as the C-669, C-7 and C-8 and C-8.6 will be phased out. Instead, data will be transmitted to the Board electronically  ("EDI") pursuant to IAIABC standards. The Board is establishing a procedure to deal with "legacy'" or pre-EDI compliance claims. Check the Board's website for details:

http://www.wcb.ny.gov

Behind The Scenes: Legislative Maneuvering In N.Y. Workers' Comp

By Edward Hiller, Esq.
President, Smart Claims Solutions LLC

With the specter of surprise attack always in the air, the federal Terrorism Risk Insurance Act ("TRIA"), is about to expire at the end of 2014, with its future unclear. TRIA provides a crucial backstop to many forms of insurance, including W.C. and this is a major issue to keep an eye on for all of the insurance industry.

There are ongoing efforts to undo the landmark 2007 NYS workers' compensation reform legislation. With schedule loss of use awards now routinely running into the six figures, one proposal would return the system to the pre-1996 formula for calculating schedules. Another would call for a total revisit of the SLU guidelines themselves, in light of seemingly ridiculous examples of a six-figure awards in a no-lost time cases. This could result in significant savings to employers and carriers. Another proposal would seek to reduce costs by cutting by half benefits to claimants who refuse to participate in a certified return-to-work program.

On the courthouse front, efforts continue to reform NY's notorious Scaffold Law, which provides for strict tort liability against owners and general contractors in certain construction accidents without regard to any contributory fault of the injured worker. This could result in tens of millions of dollars in savings in premiums (although mostly on the general liability side as W.C. exposure has been dramatically reduced under the Grave Injury provision of the 2007 W.C. reform legislation.)

With the GOP takeover of the NYS Senate, the assessment rate could continue to trend down, as it has for the last two years.

No changes are seen for the Aggregate Trust Fund.

Medical Treatment Guidelines for chronic pain, drug testing for opioids, and a new medical fee schedule are all due from the WCB by the end of 2014. This bears careful watching as well.

The source of this article was a presentation given by Lev Ginsberg of the NYS Business Council and David Wehner of Ostroff Associates to the NY Claims Association on November 4, 2014 in New York City.