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COVID-19 a Game Changer for Workers’ Comp

COVID-19 has dramatically changed the workers’ compensation landscape, with declining payrolls, delayed return to work, more death claims among healthcare workers and first responders, and an inability of workers’ comp patients to access needed care, according to a new survey by Health Strategy Associates LLC.

However, the normally change-averse industry has promptly responded to the crisis, rapidly shifting from a centralized system to work-from-home arrangements, and utilizing “tele-everything,” says Joseph Paduda, principal at HSA. “This is a completely new situation, one that will favor organizations and individuals that are open, collaborative, and flexible.”

HSA conducted a survey of 15 payers’ views on various aspects of COVID-19 over a seven-day period ending on April 6. Respondents included large state funds and private carriers, regional insurers, national third-party administrators, large employers, and government entities.

The survey was prompted by conversations Paduda had with payers in mid-March, and is an attempt to “help payers learn from each other and accelerate efforts to adapt to a very fluid and entirely unforeseen event.”

When asked whether they had encountered COVID-19-related claims yet, half said they had “many,” and around a quarter said “several,” while two had yet to see any claims filed.

Resistance to change

Unlike group health, Medicare and Medicaid, workers’ compensation has been traditionally resistant to changes including remote work and telemedicine. “This is entirely in line with the industry’s long history of resistance to innovation and any substantive change,” Paduda says.

But COVID-19 is forcing them to reconsider the old paradigms, especially in the areas of remote work and telemedicine.

Remote work

While the workers’ comp industry has been traditional resistant to remote work, the COVID-19 crisis has made it mandatory – and workers’ comp payers are embracing it. Some payers that had carefully planned incremental, modest “testing” approaches to WFH “turned on a dime,” Paduda says. For example, one large payer successfully moved thousands of front-line workers – and their work equipment -- out of multiple offices to their home offices.

Telemedicine

While many workers’ comp payers have nibbled around the edges of telemedicine, the virus quarantine is accelerating its adoption. “Payers that had previously embraced telemedicine were able to quickly ramp up access to care for patients, while those that paid lip service to telemedicine find themselves ill-prepared to help patients who are unable to continue treatment due to providers closing offices and clinics or fears of contracting or spreading the virus,” Paduda says.

Respondents predicted the potential impact of COVID-19 on the industry, including:

  • Increases in death claims
  • Delayed return to work due to delayed procedures, physicians not signing off, and no job to return to
  • Decline in premiums due to declining payroll and cash flow problems
  • Uncertainty over COVID-19 testing
  • Disproportionate COVID-19 claims in public entities and healthcare
  • Shutdown of the legal side of workers’ comp – no hearings, appeals courts, etc. – and how it will affect decisions or claims over the near term.

Lastly, HSA asked respondents for their single biggest concern related to COVID-19. These varied widely, ranging from personal concerns to industry-specific thoughts and the overall impact on the economy. Boiling it down, however, respondents were gravely concerned about the uncertainty surrounding COVID-19 -- how long the pandemic will last, or what will be the ultimate impact on jobs and employment. One comment says: "As an industry and organization we have to be careful about applying 'industry rules' in a situation that is unique and has never happened before...we need to re-engineer ourselves for this time and make sure we don't do anything that ultimately could tarnish your brand because you didn't do the right thing."

 


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