Sarasota, FL (WorkersCompensation.com) – Dramatic drops in claim frequency along with reductions in premium are among the new realities facing workers’ compensation companies. At the same time, the adoption rate of telemedicine has been “on steroids the last few weeks,” said Keith Newton, Chairman, President and CEO of Concentra. Newton’s comment came during the first of a month-long series of weekly webinars on the impact of COVID-19 on the workers’ compensation system by Out Front Ideas with Kimberly George and Mark Walls.
The heads of four major workers’ compensation organizations spoke of the myriad challenges they’re addressing to keep things moving. From companies being besieged by regulators seeking vast amounts of information and states issuing bulletins and directives on a nearly daily basis, to finding ways to best protect injured workers and their own employees, the leaders said they’ve had to make wide ranging and, in some cases, extremely difficult changes.
“I made the very difficult decision to furlough a chunk of our workforce,” said Thomas Warsop, CEO of One Call. “That was hard but I wanted to make sure we were positioned at the end. We told people, ‘we’ll help you as much as possible.’”
To that end, OneCall is paying the costs of furloughed employees’ health benefits – including the employee portion; helping workers handle their living expenses through a disaster relief fund the company established; and has advanced much of the paid time off “that would normally take time to accrue,” Warsop said.
The company has seen an overall decrease of about 40 percent in the number of referrals for its various ancillary services. One such service, transportation to take injured workers to their medical appointments, has dropped more than 65 percent. “It’s not unexpected,” Warsop said. “Home health is down much less.”
Claim frequency for new claims is also down about 40 percent, the speakers said. The major driver of that is employees now working from home, Warsop said. Claims related to COVID-19, however, have spiked, especially in certain industries. Of the 10,000 such claims received by Sedgwick, the majority relate to disability and leaves, with workers’ compensation second.
“We’re seeing them across the gamut of companies that are still operating,” said Dave North, Sedgwick’s President & CEO. “Think about the vast number of retailers, from the online, to the pharmacies to grocery stores that have adopted new techniques of pickup or delivery; they are exposed to the virus so we are seeing fairly significant trends of workers’ compensation claims in retailers.”
There are also upticks in COVID-19 related workers compensation claims among trucking lines and home delivery services.
One of the concerns expressed by panelists were the financial ramifications of the current situation. Many states, for example have or are seeking to expand coverage and compensability to certain workers who contract the virus.
“We’re seeing a pretty big expansion of coverage with no ability to really charge for it,” said Mark Wilhelm, CEO of Safety National. “The financial impact to carriers, [there’s] a decrease in premium due to payrolls going down. Expenses are still the same.”
Where states are requiring carriers not to cancel policies there’s a potential credit risk element, Wilhelm said.
“We’ve talked about the impact of lower interest rates. Well they just got lower,” Wilhelm said. “In the 2nd quarter we’ll start seeing portfolio devaluations because of it.”
A major concern for the speakers is what is happening to injured workers who had been receiving treatment. “Never forget that all the injured workers we cared about before are still there and are still injured,” North said. “What’s not happening is they are not getting their healthcare, their physical therapy, etc. … you have to assume they are getting worse.”
While provider access has not necessarily been a problem, many injured workers are wary of going to their offices for fear of exposure to the virus. In response, many organizations are encouraging injured workers and providers to meet via telemedicine.
“On telemedicine, our network has seen a 2,005 percent increase in both supply and utilization in the last three weeks,” Warsop said. “That will continue to go up.”