The impact of COVID-19 on a number of industries — from health care to retail and food service — has been widely publicized and examined at every angle. The impact on the claims industry has received some analysis, but there are segments of it that are going unexplored. One of these sectors is workers’ compensation. Normally a relatively straightforward process, the onset of the coronavirus pandemic has thrown workers’ compensation claims and the return to work process into uncertainty.
The chaos surrounding the pandemic has wreaked havoc on the health care system, in turn, impacting access to medical treatment for everyone, including those with existing workers’ compensation claims and treatment plans. Due to guidance issued by the Centers for Disease Control earlier this year, health care facilities have been canceling or rescheduling non-urgent outpatient visits and elective surgeries in order to focus on testing and treatment of COVID-19. This has thrown things into disarray for many currently injured or recovering workers who were previously working toward recovery and return to work goals. These employees face some unique challenges in their path to recovery and their return to work efforts.
Even when access to medical treatment is available, injured workers may be wary about entering a medical facility in fear of coming into contact with an infected person. This apprehension around potentially contracting or carrying an infection is leading them to abandon their continued care appointments, complicating the claims process.
Under most normal circumstances, appointment abandonment in a workers’ compensation setting is of little concern. Workers’ compensation is structured in such a way that ensures the continuity of medical treatment and validation of disability, both leading to a streamlined and appropriate payment of benefits. However, in the current environment, appointment abandonment by injured employees is not only a potential concern but more likely a reality that claims professionals will have to learn to adapt to.
The big picture
The immediate impact of these fears and this increased appointment abandonment will be a prolonged medical treatment cycle for injured workers, which, in turn, will delay the recovery period and duration of the time away from a return to gainful employment. The all-consuming fear of COVID-19 exposure pushes injured workers to consider and weigh the risks of continued treatment against the possibility of contracting a virus that has killed thousands. This alone creates greater stress in their lives, which can compound the overall anxiety associated with their already-stressful work injury.
We must then look at the even bigger picture — the overall impact of delayed medical treatment combined with the stress and fear they are experiencing provides no benefit to the injured employee, but in fact, greatly hinders their recovery process.
Claims professionals would do well to remember that these are uncharted waters for everyone, including these injured workers. Fear can have a real impact on not only mental but physical health and should be considered when reevaluating a treatment plan. Never forget that human connection and compassion are critical to making a full recovery — neglect to treat the person you are working with as a human being and you ultimately slow their path to recovery.
Appointment abandonment as it relates to workers’ compensation impacts the employer as well. The disruption in the continuity of medical treatment will lead to the lengthening of the claim duration. This has a direct and corresponding impact on the financials of the individual claim and the loss trends associated with the overall body of claims. From a financial standpoint, the employer may owe additional disability benefits to the claimant for the period of delay. The longer the delay goes on, the more likely the injured worker’s treatment is to get off track. This may end up causing the need for an entirely new return to work plan and treatment regime in order to get the recovery process back on track, lengthening the overall recovery process and the duration of the claim. If a body of claims acts in this fashion, you have developed a new trend line for your losses that will directly impact your loss pick, most likely unfavorably, which could be felt in your future coverage determinations.
Claims professionals have been left to adapt to this new environment as they look to assist injured workers in their continued recovery while also looking to serve their clients. Recent advancements in telemedicine have helped tremendously, allowing injured workers to get the treatment they need even from afar. This outbreak is bound to spur even higher levels of tech adoption among the claims industry.
For some semblance of control from a financial aspect, risk managers must ensure a degree of predictability within the risk environment. The current situation we find ourselves in has thrown all sense of predictability out the window, making the lives of risk managers much more complicated. The ones who will find the most success now and in the future are those who are able to think critically about the current state of claims and adapt to a constantly changing environment.
We can only hope that the pandemic and related environment we are experiencing is a temporary hurdle. However, anyone who is not learning from this situation is missing a key opportunity to gather insights that could help immensely in the future.
Max Koonce is the chief claims officer of the casualty division at Sedgwick. The opinions expressed here are the author’s own.