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Medical drives everything

The “claim-centric” approach to handling workers’ comp claims is misguided.

Hear me out.

You’re a parent of a sick child. Her pediatrician wants her to get ear tubes and an antibiotic. The insurance company’s claims rep denies the request, instead requesting an X-Ray and Tylenol, telling you to call back in a few days if that doesn’t work.

Of course, the claim rep thinks she’s doing the right thing and has decades of experience – but no medical training, no RN or any other designation.  You appeal to your daughter’s case manager, who agrees with the pediatrician.

And the claims rep rejects the case manager’s recommendation.

24 hours later, your baby daughter has a fever and is hoarse from screaming and you are at the local ER, about to lose your mind.

This is how almost every workers’ comp payer “manages” medical treatment.

Claims reps/adjusters/examiners with zero formal medical training decide what medical care your claimants get.

They approve opioids and spinal cord stimulators because they don’t want to hear from an attorney.

They deny surgeries because, well, because they don’t think they are necessary.

They refuse to pay for behavioral health because they don’t want to “own the psych.”

They “certify” 24 visits of PT because, well, because…

Medical drives claim outcomes. Medical drives claim costs.  Medical drives recovery and return to work. Medical drives litigation. Medical drives everything.

What does this mean for you?

Would you let a claims rep determine the care your baby or grandbaby gets?

Then why do you have claims reps determining the care your claimants receive?

(shout out to an anonymous good friend who got me thinking more about this)

20 thoughts on “Medical drives everything”

  1. Not agreeing with you. Large portions of medical care are decided in the pre-authorization arena. Some initial care is up to the rep, but the majority has to undergo the request for permission protocols.

    1. Thanks for the note Donald.

      Your comment is incorrect. Many states don’t require PAs, and many PAs are rudimentary at best. Moreover, this is one small piece of medical management, and far from the most important. You fail to note the importance of the quality of care delivered, where it is delivered, and who is delivering it.

      The “protocols” are often ignored by adjusters, are often sketchy…24 PT visits is “medical management”? what is done during these visits? what modalities are used, how often, to what effect?

      Few states have formularies, and the ones that do are often poorly designed and – again – often ignored by adjusters.

      Be well – Joe

  2. Joe, as usual, you are so right, it is scary! Medical drives everything in work comp! So why haven’t payers figured that out and done something about it? Why haven’t self-insureds, TPAs, and insurers built medical teams to evaluate every medical claim or issue? Why haven’t judicial bodies created medical review boards to decide medical issues and litigation? Seems like such a much more efficient way to handle the one of component of claims that drives every other aspect of workers compensation cases.

    1. Thanks for the note and kind words Rafael.

      Until and unless employers demand better treatment for their workers this won’t change.

      Brokers and consultants are also at fault.

      And regulators, as you accurately note – are also to blame.

      We all caused this and we all need to do our part to fix it.

      cheers joe

  3. Thank you for this Joe. Having managed nurse case managers for years, I can tell you story after story about better patient outcomes because of nurse intervention. There are the normal processes that nurses do on every file: Explaining treatment protocols to ensure better adherence, expediting scheduling so treatment is not delayed, describing symptoms the patient should watch for to avoid major complications, weaning off narcotics in the post op course, discussing current symptoms and informing the provider of anything new or unusual that needs to be addressed. Then there are those nurse interventions that make huge differences: walking a patient through dressing changes to avoid possible amputation, alerting the employer that their new carts have caused multiple back and knee injuries, pulling in the medical director to discuss an urgent surgery need. The number one thing I think the nurse does is to give the patient support. Nurses advocate for the patient and they then feel more confident in their treatment and that someone has their back. Patients with less fear recover faster and get back to work faster. Its a win for everyone.

    1. Thanks for the note Bonnie.
      I agree that Rns can be quite helpful, however there is far too much abuse of the CM role by unscrupulous TPAs and managed care companies that overutilize CM services.

      Be well Joe

  4. I agree with both sides of this “argument.” Properly trained and not overworked claims professionals can and should control medical including the choice of what medically trained help they may need to use when/if necessary. However, improperly trained and overworked claims adjusters ought to get some help – in the form of better training and fewer claims. Managed care companies are NOT the place to put that authority. Their profit motive overwhelms the their judgement and state laws often cannot hold them accountable. State laws should catch up with the trend that shoves everything off onto managed care outfits by making those entities as accountable in law for outcomes (financial and medical) as the claims administrator/employer itself. And….take the managed care outfits out of the cash flow of provider reimbursement. Pay them separately for what they do. Don’t let them pay themselves.

    1. Hello Steve – thanks as always for weighing in.

      I will disagree with your statement that “Properly trained and not overworked claims professionals can and should control medical…”

      Who decides what “properly trained” is? What defines “not overworked”?

      And that ignores the reality that very few claims adjusters have substantive medical education or experience, nor are they required to keep up with changes to the extent needed.

      I also find your desire to make managed care entities “accountable” in conflict with your position re adjusters controlling medical. Simply put, you can’t have both – either adjusters control medical and own the legal responsibilities attached thereto, or they don’t.

      be well – Joe

  5. Love the conversation. In Ohio, we passed a rule that allows for the payment of ‘first fill’ medications even if the claim is eventually denied. Over my 28-year career at BWC, I have frequently pleaded for an expansion of that concept to cover all medical services, not just drugs. We typically make the initial allowance decision within 7-10 days of claim receipt, so our ‘exposure’ would be fairly limited. But think about the goodwill that would be generated if the injured worker’s first exposure to the comp system was the message: “We’re so sorry you were injured. We want to get you back to work as quickly and safely as possible. Until and unless we say otherwise, any medical care your provider recommends will be approved.”

    1. Thanks for the note and observations Arnold. Totally agree – with one caveat.

      States must have “pay without prejudice” laws that allow WC payers to pay for care WITHOUT that becoming a de facto claim acceptance, we’d be in a better place.

      be well – Joe

  6. Hi Joe,
    I enjoy reading your blog and your opinions are always quite clear, but I am a little confused as to what you think could make this situation better? As far as the workers’ comp system overall, you will be hard-pressed to find someone who thinks it works well, so I am not arguing that, but based on what i am reading here: adjusters aren’t equipped to make the medical decisions because of lack of training, NCMs shouldn’t be doing this work as they are often overutilized by unscrupulous companies, the regulators should not be making blanket medical regulations that don’t impact quality of care (i.e. 24 PT visits). What I think that leaves is letting the medical provider treat as they see fit, but as you have certainly made the case in prior posts, our medical providers are also often motivated by the almighty dollar and not always looking out for the best interest of the patient (despite their professional oath). So, would you mind clarifying what you think is the best course here? Who should be in charge of approving medical treatment??? (Also to debate your parallel example, and as a mother of littles who has “been through it,” I have found that as the desperate parent, I certainly am in no position to make serious medical decisions about my children’s care, as long-term illnesses leave any parent desperate for a solution- operations, dangerous medication- that might not actually be the best course). In this area, and I think in workers’ compensation as a whole, we are often left with just trying to get out there and do the least bad thing!

    1. Hello Erin = thanks for the note.

      Medical people should make medical decisions. If care is to be approved or denied, that decision should be based on evidence-based clinical guidelines applied to the individual’s unique situation by someone with training and experience. So yes, NCMs supported by physicians can and should be doing this work – while NCM has been and continues to be abused by some payers, that does not mean the NCM/MD approach is wrong.

      I absolutely don’t believe treaters should have carte blanche to do whatever they want; two decades ago we tried that in California and it was a clustermess. HOWEVER, payers should identify high-performing providers and “manage” them with a very light hand, relying on analytics to monitor and measure performance against those guidelines, rewarding high performers and penalizing poor performers.

      Re your parental decisions, we’ve all been there, and again we have to rely on medically-trained experts using evidence-based treatment guidelines to guide us through those decisions.

      be well Joe

  7. In California, a physician with the proper specialty is the only one that can deny care. Adjusters can authorize anything but cannot deny. And the UR company must be URAQ certified to deny or modify care prescribed by the treating physician. Treatment decisions are supposed to be based upon ACOEM guidelines.

    1. Thanks for weighing in Theresa.

      Of course you are correct, although I’m not a fan of URAQ which does nothing to measure actual outcomes but just documents processes – making huge dollars in the process.

      This can result in the “sure the patient died, but, well…we followed the process.”

      be well Joe

  8. As a claims professional in a jurisdiction that has all the things you say are needed– regulatory Adjuster Certification requirements that mandate 160 hours of training of which 120 must be in the class room with ongoing continuing education requirements to maintain that certification, a separate self-insured claims administrator certification with exam, regulatory utilization review based on evidence based medicine treatment guidelines and regulatory Medical Treatment Utilization Schedule by injury type, treatment type or body part, a formal regulatory Independent Medical Review appeal process for utilization review denials, a formal regulatory Independent Bill Review appeal process for bill payment processing disputes, a drug formulary, a formal Medical Provider Network which must be filed with and approved by our regulating agency, a regulatory Medical-Legal claims dispute resolution process, a regulatory auditing of claims administrators by the Division’s Office of Benefit Enforcement to ensure claims are handled and benefits delivered appropriately or risk regulatory administrative penalties as well as the obligation to pay for up to $10,000 for medical treatment during the investigation period of a pending claim– these things all have frictional costs that affect rates and must be borne by my state’s employers. As claims handling turns to technology solutions like AI and machine learning, there can never be any replacement for the ‘art’ of adjusting–we just need to be able to lure enough millenials and Gen-Z’s into the industry so that the necessary knowledge and skills can be passed on by those of us who understand that outcomes are driven only partly by all those frictional costs and more by the marriage of the injured worker, his employer, his doctor, the claims adjuster and his attorney working together to help him return to suitable gainful employment as a wage earning, tax paying member of society.

    1. Hello Sue – thanks for the note. Alas most of those programs/regulations were put in place to halt the abuse of the system by seeking providers. yes they add frictional cost – no question about that.

      Also agree that good adjusting is certainly an art, an art which requires adequate time, training, experience, and the ability to access other experts when one’s own expertise is insufficient.

      Be well – Joe

  9. Joe, Let me respond as best I can:
    (1) “Who decides what “properly trained” is?” State law and performance (compliance and financial accountability) evaluations – just like many other businesses. To propose that a managed care entity with absolutely no legal or medical accountability for outcomes will make better decisions is historically incorrect. To point to outliers as proof of your point about overworked and undertrained, is to ignore the state mandated training already required and the hard work that claims professionals put in day after day.
    (2) “What defines “not overworked”?” This is a slippery slope. We’re talking about insurance which by definition puts bean counters (not medical or legal experts) and a version of “through-put” in control. You have bean counters who watch claim reserve and closure rates deciding that more claims handled by fewer adjusters makes sense. Paying a managed care outfit to mind the store simply shifts that burden to the managed care outfit and the “at risk” bean counters are happy. But the managed care outfit has bean counters of its own. They exercise the same control over their own processes. Not one free-standing managed care outfit has the kind of direct responsibility for the medical or indemnity outcome as the employer/insurer itself. If state law made them truly accountable, or where those means already exist, state regulators vigorously exercised their authority over managed care company performance (as they do the adjusters and medical providers themselves), things might be different.
    The MC business plan is to simply pass through less and less to the care provider so that the MC outfit can maintain and grow its own bottom line and outcomes be damned.
    Please do not point out that the managed care company can simply be replaced as if it was a true threat. Your own column has pointed out the problems created by the inertia of ever-growing monolith managed care companies. Changing “vendors” is a huge undertaking that any estimate of ROI usually misses badly.
    I do not mean medical folks performing in the managed care arena are not qualified and doing the best they can. They are and they do. But this system plays with other peoples’ money and that’s where the devil lives. Physicians and others with hands-on responsibility for the care of injured workers need to be paid what they are worth – paid based on the effectiveness and results – the true value – delivered. Nurse case managers regardless of who they work for, licensed medical professionals and all the others who see patients face-to-face daily should be paid for the value delivered. Here I am referring to value defined not by the spread between topline medical reimbursement and the lowest-priced contract…contracts that have been leased and re-leased without the approval of the provider…but by patient outcomes. Therefore, pay the performers for what they do, not what they get someone else to do for them. The at-risk entity must pay the hands-on professionals directly.
    Don’t pay a managed care outfit to pay them for you and NEVER let a managed care outfit pay itself. Now, if the managed care outfits are willing to go fully on the risk for their performance, that might be a different story…..

    1. thanks for the thoughtful note Steve.

      I’ll address your points in order.

      1. I don’t follow your logic here. I didn’t claim “managed care entities” should be the ones making medical decisions. I said “NCMs supported by physicians can and should be doing this work”. This staff could be contracted or employed directly.
      I also don’t know where you came up with “outliers” as something I “pointed to.” If you can point me to that I’d be grateful.
      I never said adjusters don’t work hard nor am I ignoring that. You miss my entire point – which is medical people should be making medical decisions.
      Finally, regulations are part of the problem, and need to be updated to reflect the reality that is healthcare today.

      2. You make assertions about the managed care business model, failing to address the realities that led to managed care – especially in California where providers ran wild until legislation stopped them from living off the gravy train that was workers’ comp. I find it encouraging that you want providers to be paid what they are worth, as you define it “paid based on the effectiveness and results – the true value – delivered.” By definition this isn’t based on a fee schedule which in no way considers outcomes.

      I have yet to see a model that delivers on that – would love to if you have one to share.

      Finally, I don’t understand the “at-risk entity must pay the hands-on professionals directly.” statement. Almost all payers use bill review technology from third parties, and use MPNs in CA. Are you suggesting we go back to the seventies when there wasn’t ‘any bill review at all?

      be well Joe

  10. Appreciate these thoughts, Joe. I have deep respect for claims professionals that are able to navigate the medical seas as well as they do, considering their background is not medical training. Many good decisions are made on a regular basis! I also respect the balancing act that has to be done, taking things such as legal concerns into account. That said, when a physician, whether IME, SMO, UR physicians or an insurance medical director, is asked a medical question, and gives their best medical advice…how much weight should the claims professional give that professional opinion? Is it possible that a physician may have medical knowledge that is beyond the immediate issue at hand…perhaps, an understanding that saying “yes” may also have a subsequent adverse consequence? Maybe what we should shoot for in this industry is a “patient-centric” approach, where providing the best evidence based medical care for patients and improving their outcomes is how everyone wins. Sure, there will probably be a battle or two that needs to be fought that was previously avoided, but maybe, in the end, we will find that doing the right thing is a bigger win.

    1. Hello Dr Martin and thanks for joining the conversation.

      I agree – a patient-centric approach is the best approach, wherein the whole patient is considered and decisions made in their best interest.

      My sense is this starts with identifying providers who treat that way, dealing with them respectfully, and monitoring performance.

      At the same time, monitor and watch over other providers where performance is not known to be exemplary.

      Be well, Joe

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Joe Paduda is the principal of Health Strategy Associates



A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.



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