In Florida, School’s in Session on Workers’ Comp Risk Management

"For every dollar we're not spending on managing a Workers' Compensation claim, that's a dollar that can be put back into the classroom through teachers' pay and school supplies," says Scott Clark, Risk and Benefits Officer at the Office of Risk and Benefit Management for Miami-Dade County Public Schools (M-DCPS).

It's a philosophy that the former RIMS president employs in every decision made in managing the risks for the fourth-largest school district in the U.S., comprised of 392 schools and more than 50,000 full- and part-time employees. In addition to educators, the district employs food-service workers, janitors, painters and carpenters, bus drivers and mechanics, its own police force and medical professionals.

The Workers' Compensation exposures among these personnel are vast and varied, and when accidents do happen, he says, "the ultimate goal is to bring everyone back in some capacity."

Slips, trips and falls and exertion (as in lifting) account for about 68% of the school district's claim frequency. When an employee is injured on the job, they can receive up to 13 weeks of employer-paid salary continuation, while they are eligible for temporary total disability benefits. But the goal is to help the employee return to their pre-injury position.

However, if the employee is unable to return to their pre-injury job, but can work in some capacity, they continue to receive a portion of their pre-injury salary while going through its Workers' Education Rehabilitation and Compensation (WERC) program.

"We think it's important for employees to not have to worry about being able to pay their bills," says Clark. "We want them to focus on getting better."

The focus of the M-DCPS Workers' Comp program is focus is threefold, including loss prevention; medical management of employee claims; and indemnity functions, including returning/keeping the injured employee at work.

As part of its Loss Prevention Program, M-DCPS contracts for a full-time medical professional who educates employees in safety, awareness, and prevention. The Loss Prevention Program also promotes changes in workplace conditions through health and safety education, and analysis of individual incident reports and collateral data.

The hope is that through this education, employees themselves can prevent illnesses and avoid situations that can cause injury, as well as thwart employees from abusing the Workers' Compensation system.

After MDCPS lost its three-person loss control/prevention unit in 2008 due to budget cuts, Clark worked with his broker and carrier partners to secure on-site staff dedicated to loss control and safety training. Additionally, the Risk Management Office created a web-based loss control library that houses safety newsletters, policies and procedures and training videos.

A variety of changes were also implemented to the program to improve loss experience, including:

• Implementing benchmarking procedures to compare results by regional centers comprised of schools across the county

• Implementing risk-treatment strategies to address high-frequency claim causes and locations

• Providing Workers' Compensation loss trending to each department and the top 15 loss-cost locations

• Assigning a full-time loss control rep to risk management for the purposes of loss analysis, accident investigation and safety training

• Implementing a comprehensive Safety Awareness Campaign

• Customizing CD Training Modules for schools

• Running Management Claims Analytics

Although programs managed and directed by Clark have effectively reduced lost-time days and associated costs, in the few years prior to 2007 claims expenditures had been averaging about $30 million per year. Clark and his team launched additional initiatives to manage workplace safety, setting a course to re-engage physicians to take ownership of the treatment of injured workers while charging the Workers' Comp adjuster with the responsibility for all aspects of the injured worker's file.

Reconfiguring the M-DCPS system has enabled injured workers to receive care more quickly and with less red tape, thus improving their chances of faster return to work. As a result, lost time days have dropped over the past five years. The significance of these reductions is critical to the District's goal of providing first-class educational opportunities to the children of Miami-Dade County, as a large percentage of injured workers who miss work must be replaced by paid substitutes. In addition, Clark points out, the continuity of not interrupting the learning process with substitutes enhances the learning process.

M-DCPS has also been able to lower its medical costs attributable to Workers' Comp in the last five years through such methods as using the Florida Workers' Compensation Fee schedule as a benchmark for medical care reimbursement, and its partnership, through direct Letters of Agreement, with area physicians and hospitals which focus on medical outcomes. This is particularly impressive when considering that medical inflation in South Florida has been running at double digits over that period, with South Florida being the highest-cost area in the country for health care based upon the 2012 Millman Medical Index.

Another major issue Clark has tackled in trying to contain WC costs is dealing with physicians' expenses for prepackaged pharmaceuticals.

"In 2008 and 2009 I realized how expensive prepackaged prescriptions were," Clark says—and he knew he had to do something about it.

Third-party vendors will supply physicians with prepackaged medications that doctors, in turn, can dispense to patients in their care—those who may be of low income or have no transportation to a pharmacy. But billing these as medical rather than pharmaceutical expenses translated to an extreme markup.

"We felt paying 300, 400, up to 500 percent markups on these prescriptions was not in the taxpayer's best interest," says Clark, "but we didn't want to necessarily stop the process of having physicians dispense the medicines for those who need it."

Third-party administrator Gallagher Bassett and M-DCPS contacted the physicians with which it had relationships to let them know how these third-party prepackaged vendors were hurting that relationship; the TPA also informed partner physicians that the reimbursement for the prepackaged prescriptions would be at the same reimbursement levels as pharmaceuticals dispensed at a retail establishment.

The district and its TPA then supported state legislation to close this loophole and prevent the fee-schedule switch from occurring in the first place. On July 1, a bill went into effect that caps the reimbursement of pre-packed pharmaceuticals at 113.5 percent of the manufacturer's average wholesale price.

Adds Clark, "As of the end of 2012, we have $3 million in documented savings of changing the way we reimburse for those pharmaceuticals."  "We believe the new legislation will provide an effective means to partner with physicians and third party billers to provide a valuable service of supplying pre-packed pharmaceuticals to injured workers at a cost structure which make sense for all involved."