Speakers Outline Free Ways to ID Creeping Catastrophic Claims Before They Go South

21 Aug, 2019 Nancy Grover


Sarasota, FL (WorkersCompensation.com) – A handful of claims consume most of the costs in the workers’ compensation system. Whether it’s 10 percent of claims cost 90 percent, or 5 percent cost 80 percent, it’s a small fraction that account for most of the expense.

While true catastrophic claims – traumatic brain injuries, severe burns, or spinal chord injuries – are obviously among the most expensive, there are many that appear to be fairly simple. Until they are not.

Often called ‘creeping catastrophic’ claims, these are the ones that should resolve within a short timeframe according to medical experts. A shoulder injury. Low back pain. Neck ache. A knee injury.

“These are the claims that keep us up at night,” says Michael Stack, CEO of Amaxx. “They are the most frustrating claims.”

There are many reasons seemingly simple claims deteriorate. The ability to flag these claims early in the process can save workers unnecessary pain and employers/payers needless expense. Experts say there are informal and formal screening tools available to do this – and cost nothing.

The Costs

A reverse pyramid of workers’ compensation claims would show the small percentage of claims that are the most expensive at the top, with the vast majority of claims at the bottom; those that close quickly and do not incur exorbitant costs.

“The trick is to figure out which [ones] will be at the top,” Stack said during a recent training session on How to Identify Early Indicators of Expensive & Problematic Workers’ Comp Claims. “A year or two later we know. If you knew it was that one [particular claim] in the beginning, you would have managed it differently.”

As Stack explained it, breaking down each cost percentage of the most expensive claims corresponds to a certain amount – and potential savings. For example, assuming the top 5 percent of claims consume 80 percent of costs, the percentages within that would be: 

Percent of claims impacted               Cost savings 

  • 1%                                                  16%
  • 2%                                                  32%
  • 3%                                                  48%
  • 4%                                                  64%

“Each percentage represents a lot of costs,” Stack said. “So, if you want, say a 32 percent reduction in costs, reduce that percentage of claims.”

When there is no medical reason for pain – and a claim – to continue, there may be psychosocial reasons. Screening for these issues early is key to keeping them on track.

Screening Tools

One way to detect which workers might be more inclined to have delayed recoveries is thmrogh informal screening, where those who work closely with them identify certain trends. In his book, Living Abled, Christopher Brigham, MD, outlines certain characteristics among workers who are low or high risk of long-term disability durations.

An employee who is generally grateful would be considered low risk, while one who is easily  angered might be high risk. The employee who gets his work done on time would be a lower risk than one who constantly gives excuses for unfinished and/or poor quality work. A positive attitude is associated with low risk, while a negative outlook may portend higher risk.

“It’s the way the employee acts before they get an injury,” Stack said. “How they deal with challenges, conflicts and hard projects – that’s a great indication of how they are going to deal with a physical injury.”

More formal screening tools can accurately identify which injured workers are more likely to have psychosocial issues that could impede their recoveries. The Orebro test, for example, is widely used in the workers’ compensation system. This free resource consists of 12 questions about a person’s pain, thoughts and feelings. The short form 12, or SF12, is available to the public.

“Based on [the person’s] responses, there is a rating methodology that identifies whether the person is at high risk for psychosocial issues,” said Jacob Lazarovic, MD, medical advisor for Amaxx and chief medical officer for My’Abilities. “It tells the adjuster, employer, nurse case manager and others ‘you ought to consider some intervention that would reduce these psychosocial factors and expedite recovery.’”

Formal psychosocial screening tools such as the SF12 are not recommended for all workers’ compensation claims, however. Lazarovic said triggers that warrant the screening include: 

  • Lost time claims
  • Those that exceed defined durations for medical recovery
  •  When the injured worker has expressed anxiety or depression 

Stack pointed to a case study done by Albertson’s Safeway, where the SF12 was used. It found the average cost of claims for workers who were deemed ‘low risk’ on the screening was $2,600, while the average cost for high risk injured workers was $36,000.

When interventions were used, such as cognitive behavioral therapy, the cost of claims for the high-risk workers averaged 50 percent less than for those who did not receive intervention.


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    About The Author

    • Nancy Grover

      Nancy Grover is a freelance writer having recently retired as the Director, Media Services for WorkersCompensation.com. She comes to our company with more than 35 years as a broadcast journalist and communications consultant. Grover’s specialties include insurance, workers’ compensation, financial services, substance abuse, healthcare and disability. For 12 years she served as the Program Chair of the National Workers’ Compensation and Disability Conference® & Expo. A journalism/speech graduate of Ohio Wesleyan University, Grover also holds an MBA from Palm Beach Atlantic University.

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