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Pandemic-related shutdowns in early 2020 had widespread impacts on the workers compensation system, with delayed medical procedures halting claim progression and layoffs and furloughs eliminating return-to-work opportunities in some industries, experts say.
While the re-opening of medical clinics and the quick adoption of telemedicine have helped get most comp claims back on track, a second wave of shutdowns hitting much of the country is likely to create more issues in coming months, they say.
Experts predicted earlier this year that delays of non-emergency and elective surgeries in the U.S. health system could lead to as much as 45 weeks of surgical backlogs, according to a report released in November by King of Prussia, Pennsylvania-based MedRisk LLC.
This trend could continue and adversely affect workers compensation as COVID-19 cases spike again, forcing state closures, the managed care organization said. Delays in physical therapy, for instance, in soft-tissue injury claims may result in higher medical and indemnity costs than similar claims without delays in treatment, MedRisk said in its report.
“Obviously, when the pandemic first hit, there were many delays (in workers compensation),” said Dennis Tierney, Norwalk, Connecticut-based national director of workers compensation claims for Marsh LLC. “It did present a huge challenge to the industry — probably one we’ve never seen before. All of the things needed to help move claims along just weren’t functioning.”
“In the second quarter, when things really were shut down at their tightest as far as medical treatment goes, we definitely had workers experiencing delays and cancellations in their ability to move through treatment,” said Kathy Gehring, vice president of claims for nonprofit State Accident Insurance Fund of Oregon, known as SAIF, in Salem, Oregon.
New workers compensation claims and those with non-critical surgeries were the most significantly impacted by the COVID-19 restrictions, said Max Koonce, Fayetteville, Arkansas-based chief claims officer at Sedgwick Claim Management Services Inc.
“It wasn’t just the fact that (surgeries) were postponed for six weeks,” he said. “Then we had to try to reschedule them again. … It was very disruptive for those individuals, and during the time off, you’re continuing to pay disability benefits.”
Embracing telemedicine early on helped Sedgwick ensure workers who had to delay surgeries were ready when they were rescheduled, said Mr. Koonce, who noted that the use of telemedicine by TPA claimants increased by 1,000% since the start of the pandemic.
“With older claims, it really helped them keep on that pace,” he said.
CorVel Corp., which had already been managing claims via telemedicine, took the same approach, and claimants have since embraced the option of virtual care, said Michele Tucker, Sacramento, California-based vice president of enterprise operations at CorVel.
“We had to restructure and move (to telemedicine) those patients where their brick-and-mortar providers were no longer available or elective surgeries were delayed so we could ensure continuity of care,” she said.
The quick shift to telemedicine and virtual hearings helped Ohio avoid many common comp delays, said Meghan Delaney, of counsel in Fisher Phillips LLP’s Cleveland and Columbus, Ohio, offices.
“In terms of settling claims, we’ve been very successful in wrapping up new and older claims,” she said. “We’ve been able to aggressively pursue some of these settlements … and employers were looking at opportunities to close out some problem claims.”
Mr. Tierney at Marsh also focused on early claim closure, using data analytics to identify claims that in ordinary circumstances may seem too early to close but that, in 2020, may be ripe for settlement.
“Obviously, if you have injured workers on the tail end of their careers or close to hitting the point of (maximum medical improvement), there’s more of a tendency to want to settle a lot sooner,” he said. And closure rates did spike early on in the pandemic, though they’ve since leveled out, he said.
Return-to-work challenges in the COVID-19 economy have also made claim resolution more crucial “for the benefit of the injured worker, as well as our clients’ benefit,” Mr. Koonce said.
“We did an analysis early on to see what each state said with regard to continuation of disability benefits. … By and large, you continue those benefits if there’s no job for them to go back to,” he said. “At that point, you’re looking at how can you resolve those claims, how can you get them to maximum medical improvement.”
More insurance and workers compensation news on the coronavirus crisis here.
The stress of the coronavirus pandemic may cause mental health-related workers compensation claims to rise, particularly among health care workers and first responders, experts say.