INDUSTRY TRENDS REPORT
2023
Outlook
INDUSTRY TRENDS REPORT
2023
Outlook
The Impact of Age and Mental Health on Claims
It’s well-established that physical, psychological and social factors can impact injury recovery. We’re currently seeing an aging employee population and a higher prevalence of depression and anxiety reported by claimants since the start of the COVID-19 health pandemic. During this time, we’ve also seen lower rates of surgery and a decrease of opioid utilization.
These trends typically result in higher use of physical therapy, thus increasing physical medicine’s share of the work comp medical dollar, but contributing to lower claims costs and better claims outcomes. We expect conservative care initiatives, which include the use of physical therapy, to continue in the future to have a long-term positive impact on claims.
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Conventional wisdom tells us that the body takes longer to heal the older we are, and so it may not come as a surprise that the injured employee’s age has an impact on physical recovery. While older employees get injured less frequently, they often suffer more severe injuries and have longer recovery times. With an aging workplace, it becomes increasingly more important for employers to take necessary measures to prevent injuries among the older workforce.
Across all injury types, MedRisk found that the number of PT visits attended by injured employees increases by about one full visit with each age group up through the 55-65 age bracket where average visits per episode of care remains consistent through the older population.
Total PT Visits by Age – All Claims
Key Takeaway:
Average PT Days Duration by Age – All Claims
Key Takeaway:
In workers’ compensation claims, mental health conditions can delay a worker’s recovery and return to work and increase medical costs. Stress, anxiety and depression are among the most prevalent for injured workers. While an unexpected injury can manifest behavioral health concerns, so too can outside factors unrelated to the injury. Across the United States and the rest of the world, rates of anxiety and depression have increased because of the COVID-19 health pandemic. With mental health conditions rising, it’s important for claims organizations to take proactive steps to identify and manage psychosocial health conditions to help improve recovery outcomes for injured employees.
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Americans suffer from a mental health condition that impacts their daily life at any given time2
or more injured employees experience clinically-related depressive symptoms at some point, especially during the first month after the injury3
Increase in the prevalence of anxiety and depression worldwide as a result of COVID-19 pandemic4
Consistent with the increased prevalence of anxiety and depression in the general population, MedRisk found that injured employees self-reporting anxiety and depression also increased since the start of the COVID-19 health pandemic. Injured employees reporting anxiety and/or depression jumped significantly between 2019 and 2020 and has not returned to pre-pandemic rates even in 2022.
% of Cases with Anxiety | % of Cases with Depression | % of Cases with Anxiety & Depression | |
---|---|---|---|
2019 | 24.4% | 19.8% | 14.8% |
2020 | 32.2% | 22.7% | 19.4% |
2021 | 30.1% | 20.5% | 17.6% |
2022 | 30.0% | 23.5% | 20.5% |
Injured employees reporting anxiety and depression have
higher utilization than those who did not report these conditions
Biopsychosocial medical models suggest that an injured employee’s recovery is not just impacted by their physical condition but by additional factors, including psychiatric illnesses. To determine the impact of claims with reported anxiety and/or depression, MedRisk compared those claims against cases where these conditions were not reported. Perhaps not surprisingly, claims with reported anxiety and depression have a seven percent higher rate of utilization for PT services.
Research has demonstrated that conservative care initiatives, such as the use of physical exercise, improves back and joint pain far more effectively than expensive surgeries. Similarly, use of injections can lead to short-term pain relief but mask the problem rather than addressing it. Physical therapy has become a widely accepted critical conservative care recommendation, reducing the need for more invasive procedures and opioid prescriptions. In 2022, MedRisk continued to see a lower rate of surgery on claims involving PT, a positive trend for claim costs and outcomes.
According to the National Safety Council, overexertion and bodily reaction is the second leading nonfatal injury or illness event involving days away from work, ranking only behind exposure to harmful substances or environment. Overexertion injuries, which commonly involve PT, include those stemming from lifting, pushing, pulling, holding, carrying or throwing an object.
MedRisk has seen little variation in the distribution of diagnosis codes with PT involvement over the years.
ICD Code | Distribution |
---|---|
Low back pain | 7.35% |
Pain in right shoulder | 6.18% |
Pain in left shoulder | 4.67% |
Cervicalgia | 3.88% |
Pain in right knee | 3.57% |
Click on diagram to see Percentage of Total Claims by body part.
MedRisk is the leading provider of managed physical medicine for the workers’ compensation industry and related market sectors. The patients we serve are never just a number – each person has a care path tailored to their exact needs.
While we provide individual care to over half a million patients each year, we also measure our outcomes in aggregate so we can report on our results and trends. Here’s a closer look at MedRisk based on 2022 data:
Texas WC Network Regulation: In January 2022, the Texas Division of Workers’ Compensation proposed revisions to existing WCN regulations, explaining that changes were needed to clarify the provisions and to implement legislative amendments to the Insurance Code. These proposed changes are extensive and bear attention of workers’ compensation system participants. Among the prominent proposed provisions are the following:
Implications: Payers, certified WCNs and specialty networks should review their policies and procedures in preparation for TDI’s enforcement efforts based on these proposed regulations.
California MPN Legislation: A once-onerous bill has been brought back to life, but in a much-diminished form. As originally proposed, Assembly Bill 399 would have mandated that MPNs pay participating providers at California’s Official Medical Fee Schedule and would have prohibited negotiated rates below the regulatory fee. The measure would also have restricted MPNs’ ability to review provider bills for mistakes, fraud and abuse. Through intense opposition by WC payers and employers, the bill was held in the Assembly Insurance Committee without being voted on and, consequently, is ineligible for further consideration until the next legislative session. In January 2022, a revised AB 399 was unanimously passed by the Assembly and sent to the Senate. In its current state, the measure merely requires payers to provide employees, within five business days of their request, with the MPN’s name and identification number. The payer may satisfy this requirement by providing the information in writing or an explanation of benefits or by posting the information on a website.
Implications: This legislation can be seen as part of a continuing discussion in California regarding the function and value of registered Medical Provider Networks (MPNs) in delivering timely and accessible health care to injured workers. It is generally recognized in the workers’ compensation community that prompt delivery of health care services improves work-related injury outcomes and independent research has shown this to be the case.
Maryland Cybersecurity Law: In June, Maryland enacted legislation that sets cybersecurity standards for insurers, TPAs and their third-party service providers. According to the National Association of Insurance Commissioners, Maryland becomes the 18th state to adopt a version of the NAIC Insurance Data Security Model Law (#668). Along with the New York regulation “Cybersecurity Requirements for Financial Services Companies” (addressing the same issues but following a different model), the legislation establishes generally accepted data security standards for workers’ compensation payers and their trading partners.
Implications: The provisions of the model act offer a guidepost for payers’ internally developed cybersecurity standards since they are now broadly required by state law. Fortunately, they are reasonable, requiring payers to develop and implement a data security program to identify and protect against risks, respond to data incidents and investigate and disclose cybersecurity events to regulatory authorities and affected consumers and trading partners. Payers are also required to oversee compliance of their third-party service providers using or accessing the payer’s confidential information.
Telehealth Compliance with HIPAA: The Office of Civil Rights (OCR) within the US Department of Health and Services has recently issued guidance broadly endorsing the use of audio-only telehealth services to increase access to health services by patients who have limited financial resources or who live in rural areas with limited broadband availability. The guidance can be found here: https://www.hhs.gov/hipaa/for-professionals/privacy/guidance/hipaa-audio-telehealth/index.html.
Implications: OCR enforces federal privacy regulations (e.g., HIPAA) that generally don’t apply to WC payers, but health care providers and payers’ third-party service providers don’t enjoy those same exemptions, so this clarification comes as a welcome relaxation of regulatory constraints. On a related telehealth topic, a new study from physical therapy quality analytics firm Focus on Therapeutic Outcomes (FOTO) found that, for telerehabilitation for low back pain, telerehab (a) was equally effective in improving functional status outcomes for patients with low back pain compared to traditional in-person office visits, (b) usually involved significantly fewer visits, and (c) had roughly equal patient satisfaction ratings (82% for telerehab versus 86% for in-person office visits.
Ohio Statute Defining Compensability of Work-From-Home Injuries: Ohio has enacted HB 447, which sets standards for WC compensability for injuries incurred by work-from-home employees. Three criteria must be met:
Implications: With a substantial proportion of the workforce working remotely and likely not returning to the office fulltime, legislatures are grappling with work-relatedness issues that at one time were self-evident, or at least settled law. WC stakeholders can expect lawmakers, regulators and jurists to continue to address these questions for the foreseeable future. The Ohio statute became effective on September 23, 2022.
State Privacy Laws
Major State Privacy Legislation: On January 2, 2023, the Wall Street Journal reported that many new state laws in the coming year would focus on consumer data privacy. Nearly two years ago we noted that California and Virginia had enacted new and comprehensive privacy statutes, both becoming effective on January 1, 2023. The California Privacy Rights and Enforcement Act (CPRA) expands upon the current California privacy statute, the California Consumer Privacy Act (CCPA), by regulating not only the buying and selling of consumer information, but also its “sharing.” This term, while appearing to be broad, actually is narrowly defined as targeted advertising based on the consumer’s personal information. The focus of California’s privacy protection measures was and continues to be on commercial use of consumers’ personal information for sales and marketing purposes. The Virginia Consumer Data Protection Act (CDPA) takes a different approach to consumer privacy, following many of the concepts found in the European Union’s General Data Protection Regulation (GDPR). A business that determines the purpose and means of processing personal data (a “controller”) may collect and use this information for only specific purposes, must allow a consumer to access and in many cases to delete the data, and is responsible for compliance of third party “processors” acting on its behalf. There are a number of thresholds and exemptions that will relieve most workers’ compensation payers and their service providers from CDPA compliance obligations. Of more relevance to the workers’ compensation industry is the NAIC Insurance Data Security Model Law, which has now been enacted, in whole or part, in 21 jurisdictions. Similar in many ways to the New York’s Cybersecurity Requirements for Financial Services Companies (NYCCR §500), the Model Law establishes a comprehensive regulatory framework applying to claim payers and protecting the non-public data of insurance “consumers,” including claimants. Key features of the Model Law include the following:
Implications: All business entities participating in adopting states’ workers’ compensation systems are either directly or indirectly subject to the Model Law, so it is important that payers and their trading partners establish a comprehensive information security program complying with the Model Law. Further, because the Model Law has not been enacted in every jurisdiction and has been enacted with important revisions in others, it is important to review the relevant statute for key variances. For example, the Maryland statute, effective October 1, 2022, applies specifically to third party administrators as well as insurers, but this clarifying provision does not appear in the NAIC Model Law.
Texas WC Network Regulation: In January 2022, the Texas Division of Workers’ Compensation proposed revisions to existing WCN regulations, explaining that changes were needed to clarify the provisions and to implement legislative amendments to the Insurance Code. These proposed changes are extensive and bear attention of workers’ compensation system participants. Among the prominent proposed provisions are the following:
Implications: Payers, certified WCNs and specialty networks should review their policies and procedures in preparation for TDI’s enforcement efforts based on these proposed regulations.
California MPN Legislation: A once-onerous bill has been brought back to life, but in a much-diminished form. As originally proposed, Assembly Bill 399 would have mandated that MPNs pay participating providers at California’s Official Medical Fee Schedule and would have prohibited negotiated rates below the regulatory fee. The measure would also have restricted MPNs’ ability to review provider bills for mistakes, fraud and abuse. Through intense opposition by WC payers and employers, the bill was held in the Assembly Insurance Committee without being voted on and, consequently, is ineligible for further consideration until the next legislative session. In January 2022, a revised AB 399 was unanimously passed by the Assembly and sent to the Senate. In its current state, the measure merely requires payers to provide employees, within five business days of their request, with the MPN’s name and identification number. The payer may satisfy this requirement by providing the information in writing or an explanation of benefits or by posting the information on a website.
Implications: This legislation can be seen as part of a continuing discussion in California regarding the function and value of registered Medical Provider Networks (MPNs) in delivering timely and accessible health care to injured workers. It is generally recognized in the workers’ compensation community that prompt delivery of health care services improves work-related injury outcomes and independent research has shown this to be the case.
Maryland Cybersecurity Law: In June, Maryland enacted legislation that sets cybersecurity standards for insurers, TPAs and their third-party service providers. According to the National Association of Insurance Commissioners, Maryland becomes the 18th state to adopt a version of the NAIC Insurance Data Security Model Law (#668). Along with the New York regulation “Cybersecurity Requirements for Financial Services Companies” (addressing the same issues but following a different model), the legislation establishes generally accepted data security standards for workers’ compensation payers and their trading partners.
Implications: The provisions of the model act offer a guidepost for payers’ internally developed cybersecurity standards since they are now broadly required by state law. Fortunately, they are reasonable, requiring payers to develop and implement a data security program to identify and protect against risks, respond to data incidents and investigate and disclose cybersecurity events to regulatory authorities and affected consumers and trading partners. Payers are also required to oversee compliance of their third-party service providers using or accessing the payer’s confidential information.
Telehealth Compliance with HIPAA: The Office of Civil Rights (OCR) within the US Department of Health and Services has recently issued guidance broadly endorsing the use of audio-only telehealth services to increase access to health services by patients who have limited financial resources or who live in rural areas with limited broadband availability. The guidance can be found here: https://www.hhs.gov/hipaa/for-professionals/privacy/guidance/hipaa-audio-telehealth/index.html.
Implications: OCR enforces federal privacy regulations (e.g., HIPAA) that generally don’t apply to WC payers, but health care providers and payers’ third-party service providers don’t enjoy those same exemptions, so this clarification comes as a welcome relaxation of regulatory constraints. On a related telehealth topic, a new study from physical therapy quality analytics firm Focus on Therapeutic Outcomes (FOTO) found that, for telerehabilitation for low back pain, telerehab (a) was equally effective in improving functional status outcomes for patients with low back pain compared to traditional in-person office visits, (b) usually involved significantly fewer visits, and (c) had roughly equal patient satisfaction ratings (82% for telerehab versus 86% for in-person office visits.
Ohio Statute Defining Compensability of Work-From-Home Injuries: Ohio has enacted HB 447, which sets standards for WC compensability for injuries incurred by work-from-home employees. Three criteria must be met:
Implications: With a substantial proportion of the workforce working remotely and likely not returning to the office fulltime, legislatures are grappling with work-relatedness issues that at one time were self-evident, or at least settled law. WC stakeholders can expect lawmakers, regulators and jurists to continue to address these questions for the foreseeable future. The Ohio statute became effective on September 23, 2022.
State Privacy Laws
Major State Privacy Legislation: On January 2, 2023, the Wall Street Journal reported that many new state laws in the coming year would focus on consumer data privacy. Nearly two years ago we noted that California and Virginia had enacted new and comprehensive privacy statutes, both becoming effective on January 1, 2023. The California Privacy Rights and Enforcement Act (CPRA) expands upon the current California privacy statute, the California Consumer Privacy Act (CCPA), by regulating not only the buying and selling of consumer information, but also its “sharing.” This term, while appearing to be broad, actually is narrowly defined as targeted advertising based on the consumer’s personal information. The focus of California’s privacy protection measures was and continues to be on commercial use of consumers’ personal information for sales and marketing purposes. The Virginia Consumer Data Protection Act (CDPA) takes a different approach to consumer privacy, following many of the concepts found in the European Union’s General Data Protection Regulation (GDPR). A business that determines the purpose and means of processing personal data (a “controller”) may collect and use this information for only specific purposes, must allow a consumer to access and in many cases to delete the data, and is responsible for compliance of third party “processors” acting on its behalf. There are a number of thresholds and exemptions that will relieve most workers’ compensation payers and their service providers from CDPA compliance obligations. Of more relevance to the workers’ compensation industry is the NAIC Insurance Data Security Model Law, which has now been enacted, in whole or part, in 21 jurisdictions. Similar in many ways to the New York’s Cybersecurity Requirements for Financial Services Companies (NYCCR §500), the Model Law establishes a comprehensive regulatory framework applying to claim payers and protecting the non-public data of insurance “consumers,” including claimants. Key features of the Model Law include the following:
Implications: All business entities participating in adopting states’ workers’ compensation systems are either directly or indirectly subject to the Model Law, so it is important that payers and their trading partners establish a comprehensive information security program complying with the Model Law. Further, because the Model Law has not been enacted in every jurisdiction and has been enacted with important revisions in others, it is important to review the relevant statute for key variances. For example, the Maryland statute, effective October 1, 2022, applies specifically to third party administrators as well as insurers, but this clarifying provision does not appear in the NAIC Model Law.
1U.S. Bureau of Labor Statistics. Monthly Labor Review.
2Centers for Disease Control and Prevention. About Mental Health.
3Kim, Jaeyoung. Depression as Psychosocial Consequence of Occupational Injury in the US Working Population: Findings from the Medical Expenditure Panel Survey. National Library of Medicine. 2013 Apr 5.
4COVID-19 Pandemic Triggers 25% Increase in Prevalence of Anxiety and Depression Worldwide. World Health Organization.
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