Mega Natural Disasters Require WC Crisis Planning, Coventry Says

Sarasota, FL (WorkersCompensation.com) - The typical ‘run-of-the-mill’ natural disasters that have created challenges for the workers’ compensation system for years are being replaced by more devastating events. Major hurricanes, deadly wildfires and severe flooding are recent examples of catastrophes that can wreak havoc on injured workers, stakeholders and entire systems.

To better protect injured workers and minimize system disruptions, stakeholders are advised to develop robust backup plans. Several states that have already implemented crisis planning strategies can serve as models for planning.

Challenges Facing WC

Surges in claims, inability to get payments and treatments to injured workers, and interferences in managing claims are among the myriad results from natural disasters. Winds, floods and flames can have far reaching effects on the workers’ compensation system.

“These events underscore the need for proper disaster recovery planning in workers’ compensation, which can be overlooked given its small size compared with group health,” says a new white paper from Coventry. “Too few states have adopted specific operational and regulatory plans relating to how workers’ compensation systems would respond following a disaster.”

Among those that have implemented procedures are Florida and Texas.

“The Sunshine State’s 8,400 miles of coastline, flat topography, and porous limestone foundation leave it susceptible to rising sea levels, storm surges, and massive sinkholes,” wrote Lisa Anne Bickford, director of Government Affairs at Coventry and the author of the white paper. “In response, Florida has devised a regulatory mechanism that kicks in automatically when the governor’s office declares an emergency. Florida’s Office of Insurance Regulation is then empowered to issue specific administrative orders without delay.”

Included are pharmacy-related provisions; such as the suspension of ‘refill-too-soon’ flags that are generated when a patient tries to replace a medication.

In Texas, injured workers were among the hundreds of thousands affected by Hurricane Harvey in August 2017. Medical providers were forced to close or lost their offices; field offices suffered flood damage; and communication problems persisted due to downed phone lines.

The Texas Department of Insurance “issued a benchmark regulatory response highlighting a number of emergency measures,” that were in effect until January 2018. Among them were: 

• Requiring carriers to continue benefit delivery in affected counties
• Waiving penalties/restrictions for emergency and non-emergency care with non-networked providers and payment for those services
• Extending deadlines for medical examinations
• Authorizing payments to pharmacies for up to a 90-day supply of prescriptions regardless of the most recent refill date
• Providing for expedited change-of-address processing
• Temporarily suspending a number of regulatory cutoff points, including claim notification and filing deadlines, medical billing deadlines, medical and income benefit payment deadlines.

The department also sent staff to affected areas to respond to questions and provide information about contacting insurers and rescheduling medical appointments. It also extended its customer-service hotline hours, and gave staff time off to volunteer with cleanup efforts. Finally, the department coordinated its efforts with other relevant government agency.

Crisis Planning

Jurisdictions that have sustained natural disasters can provide lessons learned that can help other jurisdictions establish their own crisis response plans.

Maintaining communication among injured workers, medical providers, claims handlers and others, for example, is critical during a disaster. Bickford suggests jurisdictions act as a conduit to facilitate this.

To ensure injured workers continue receiving their medical care and benefit checks, large payers or third party administrators might be able to reroute their claims-handling to offices outside the disaster areas.

Technology can help payers make “speedy changes to claim information” such as updating mailing addresses. Waivers can be used to lift restrictions for prescriptions that must be replaced or to allow for out-of-network providers to be used. Payers can also adjust their own operations and work with vendors to suspend certain deadlines.

“Taking such steps can ensure that injured workers and providers, who are likely already traumatized by a disaster, don’t face unnecessary bureaucratic blows as well,” the paper says. “It is imperative to remember that most individuals exposed to a traumatic event likely will require some level of crisis intervention. The goal of any crisis intervention is to mitigate the harmful effect of traumatic stress, to provide support, and to offer encouragement in order to accelerate recovery.”

Bickford also recommends making necessary preparations for out-of-state medical providers and/or claims adjusters that might be brought in. Adjusters must be properly licensed for the jurisdiction and trained in its laws and regulations. Likewise, medical personnel may need to be provided with emergency licenses.

Legal implications should also be addressed in a crisis plan. Court dockets may be delayed, venues could change, and jurisdictional issues may arise. Out-of-state workers brought in to help with recovery efforts may be injured, possibly resulting in temporary job reclassifications. Bickford suggests seeking advice from legal counsel.

The increase in the frequency and severity of natural disaster will create more challenges for the workers’ compensation system. Having a well thought out plan is key.

“Regulators, clinicians, and other players in workers’ comp will need to craft strong backup plans, resilient systems, and flexible rules that can be deployed in an emergency,” Bickford wrote. “The risks to injured workers following a disaster can be great. Failing to prepare for calamity only makes those risks greater.”

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