COST CONTAINMENT IN Catastrophic CASES

1. COST CONTAINMENT IN Catastrophic CASES James Stabler, J.D. Timothy Wahlin, J.D. Kevin Braun, J.D. Beth Giebel Mandel, J.D.

2. Catastrophic Claims Legal Issues and Obstacles to Cost Containment in Arizona James Stabler, J.D.

3. What is a catastrophic claim? – Statutory Presumptions • ARS Section 23-1045 creates presumptions for total permanent disability: • Loss of sight both eyes • Loss of both feet • Loss of both hands • Spinal cord injuries resulting in complete paralysis of both legs, arms or one leg and one arm • Head injuries resulting in “incurable imbecility or insanity” • Loss of one hand and one foot

4. Catastrophic defined by cost • Spinal Cord Injuries • Closed Head Injuries • Burns • Combination

5. Cost Drivers • Attendant Care • Durable Medical Equipment • Home modifications • Vehicle modifications or acquisitions • Narcotics

6. Arizona statutory obligation for provision of medical care • ARS Section 23-1062. Medical, surgical, hospital benefits; commencement of compensation; method of compensation • A. Promptly, upon notice to the employer, every injured employee shall receive medical, surgical and hospital benefits or other treatment, nursing, medicine, surgical supplies, crutches and other apparatus, including artificial members, reasonably required at the time of the injury, and during the period of disability. Such benefits shall be termed "medical, surgical and hospital benefits."

7. Arizona Case Law On Medical Care Issues • Medical benefits do not extend to child care. Hughes v. Industrial Comm'n, 188 Ariz. 150, 933 P.2d 1218 (App. 1996). • Housekeeping services not covered. Patches v. Industrial Comm'n, 220 Ariz. 179, 204 P.3d 437 (App.2009). • Quadriplegic's specially modified van was a reasonably required "other apparatus." Terry Grantham Co. v. Industrial Comm'n, 154 Ariz. 180, 741 P.2d 313 (App. 1987). • “Experimental” medical procedures may be covered, including procreation procedures. Regnier v. Industrial Comm'n, 146 Ariz. 535, 707 P.2d 333 (App. 1985).

8. Case law • Marriage counseling compensable for services provided to family (anger management) if counseling also necessary to treat industrial injury. Mace v. Industrial Comm'n, 204 Ariz. 207, 62 P.3d 133 (App. 2003). • Spouse must be paid for services provided to injured spouse if the spouse is performing same services as paid attendants (bathing worker, changing soiled diapers, checking oxygen levels on sleep apnea mask). Carbajal v. Industrial Comm'n, 223 Ariz. 1, 219 P.3d 211 (2009).

9. Catastrophic Claims North Dakota’s Statutory Approach Timothy Wahlin, J.D.

10. ND’s Definition of Catastrophic Catastrophic injury includes: (1) Paraplegia; quadriplegia; severe closed head injury; total blindness in both eyes; or amputation of an arm proximal to the wrist or a leg proximal to the ankle, caused by the compensable injury, which renders an employee permanently and totally disabled without further vocational retraining assistance; or (2) Those employees the organization so designates, in its sole discretion, provided that the organization finds the employee to be permanently and totally disabled without further vocational retraining assistance. There is no appeal from an organization decision to designate, or fail to designate, an employee as catastrophically injured under this subsection.

11. ND’s Catastrophic benefits 5. Under this section, the organization may modify real estate and may provide for adaptations and modifications to motor vehicles as follows: a. In the case of an injured employee who sustained a catastrophic injury, as defined in chapter 65-05.1, the organization may pay an amount not to exceed fifty thousand dollars to provide permanent additions, remodeling, or adaptations to real estate it determines necessary. The dollar limit is for the life of the injured employee, regardless of any subsequent claim. This subdivision does not allow the organization to purchase any real estate.

12. ND’s Catastrophic Benefits b. In the case of an injured employee who sustained a catastrophic injury, as defined in chapter 65-05.1, the organization may pay an amount not to exceed one hundred thousand dollars to provide the most cost-effective, specially equipped motor vehicle or vehicle adaptations the organization determines medically necessary. The organization may establish factors to be used in determining whether a specially equipped motor vehicle or adaptation is necessary. Under this subdivision, the organization may not pay for insurance of or maintenance of the motor vehicle. Within the dollar limit and under this subdivision, the organization may pay for vehicle or adaptation replacement purchases. The dollar limit is for the life of the injured employee, regardless of any subsequent claim.

13. ND’s Catastrophic Benefits However, the organization shall pay to an injured employee who has been determined to be catastrophically injured as defined by subdivision c of subsection 2 of section 65-05.1-06.1 an additional benefit, until the death of the employee, equal to one hundred percent of the final payment of the disability benefit that was discontinued under subsection 2 or 3 of section 65-05-09.3.

14. Catastrophic Claims Benefits Available, Cost Containment Kevin Braun, J.D.

15. Catastrophic Claims Defined • Defined (internal definition) to include: • Fatalities • Multiple injured workers from a single accident • Loss of extremity or vision • Severe spinal cord injuries • Head injury, open or closed • Multiple serious injuries to a single individual • Severe burns (2nd or 3rd degree) • Traumatic hearing loss • Heart attack • Diagnosed asbestosis and/or toxic exposure claims • Traumatic incident with physical injury and PTSD • HIV, blood borne pathogen, air borne pathogen and/or infectious disease diagnosis • Rape or serious personal assault • Claims with >250K in incurred reserves

16. Benefits Available • All of the usual benefits, TTD, PPD, TPD, Medical Benefits, Vocational Rehabilitation Benefits • Permanent total disability benefits • Defined as not having a reasonable prospect of performing regular employment • Regular employment is work on a recurring basis • May be less than full time work, rule of thumb is earning at the federal poverty level or greater • Benefit level is 66-2/3 of AWW capped at the State’s AWW • Payable until the claimant begins drawing SS Retirement benefits or until the claimant is eligible to begin drawing full SS Retirement benefits • Travel for family members • Payable if the claimant needs inpatient care for at least 21 days in an area more than 100 miles from work or residence • Requires matching funds from a community based organization • Limited to $2,500

17. Statutory Domiciliary Care Benefits • Domiciliary Care Benefits - Triggered by the insurer’s knowledge of the worker’s need for home medical services as a result of the injury - Services performed under the direction of the TP following a nursing analysis - Services are beyond the scope of normal household duties - Can be provided by a family member - Family member reimbursement limited to the daily statewide average Medicare reimbursement for a nursing home when 24 hr care is required otherwise limited to 8 hrs day at the mean hourly wage for home health aides

18. Case Law Preceding Statute • Case law results should drive a statutory response • Quick v. Montana State Fund, 2008 MTWCC 27 • Absence of statutory guidance for older claims results in spouse being paid $20/hr 24-7 plus 1/3 attorney fee for an annual cost of $233K for domiciliary care. • Physician testimony that skills of an RN are needed as the claimant has a brain injury and is prone to certain outbursts and other inappropriate behavior • Wife is an RN and the Court used the low end RN wage • Claimant is largely self sufficient but is unpredictable as to when he needs assistance so 24-7 care is necessary • Under the current statute, the care would be approximately $60K per year.

19. Cost Containment • Medical management is often the key as a cost driver and a disability driver • Early intervention occurs with a CAT meeting with the claims examiner, team leader, QA, nurse case manager and legal within 5 days of receipt of the claim • Where appropriate, early intervention with vocational rehabilitation occurs • Annual large loss meetings occur • MSF uses strategic nurse consultants on Cat Claims to conduct a thorough file review, collaborate and to make recommendations and provide other assistance to the claims examiners • Cannot direct medical, but use IMEs and the Medical Advisor to assist in answering questions and managing the claim

20. Catastrophic Claims Minnesota Beth Giebel Mandel, J.D.

21. What is considered ‘catastrophic’? • Spinal cord injury resulting in paraplegia or quadriplegia • Traumatic brain injury (TBI) causing impaired cognitive function or permanent disorientation conditions • Amputation of a significant portion of one extremity or multiple amputations • Third-degree burns covering 10% of body or second-degree burns covering 30% of body • Fatality with dependents

22. Benefits Management • Determine compensability • Issue death benefits timely, if appropriate • Temporarily totally disabled (TPD) benefits • Statutory limits: • Permanently totally disabled (PTD) benefits • Statutory limits: • Permanency ratings • Rate body parts affected • Utilize internal physicians and medical expertise

23. Medical Management • Varies by type of catastrophic claim, but may include: • Household remodeling (spinal cord) • Group home or permanent housing placement (both) • Transportation/vehicle modification (spinal cord) • Personal care attendant – nursing, PCA (both) • Medication (both) • Emotion and communication issues (TBI) • Bed sores and urinary tract infections (spinal cord)

24. Communication • Within 48 hours: • Contact employer • Contact employee’s family • Medical staff (nurses, physicians, etc.) • Contact CAT team (internal) • Contact DOLI as required by law • Report claim to WCRA (for reinsurance, expert advice and obtaining reimbursement) • Legal counsel

25. Cost Containment • Assign experienced nurse case manager right away. • WCRA – monopolistic reinsure in Minnesota. They see/know it all. • Team of internal expertise (i.e. nurses, doctors, attorneys, QRC) meet at important junctures.

26. QUESTIONS??