Integrated disability plans streamline benefits, reduce employer costs

Without gaps in coverage, employees return to work faster

Managed workers’ comp plans have proven to have the formula to reduce costs and return employees to the workplace safely and quickly. Now employers are looking for a one-stop shopping approach that integrates workers’ comp and short- and long-term disability products, say two professionals currently developing and implementing integrated disability products with promising results.

"Much of what goes on in workers’ comp and disability today involves overlapping services. Employers are frustrated by having to work with one carrier for their workers’ comp and another for their disability," says Cheryl Jez, director of CIGNA Integrated Disability Services in Irving, TX.

"When I worked with Ellis & Associates, a regional case management company in Chicago, we had a workers’ comp customer who approached us with a request to develop a return-to-work plan for their short- and long-term disability," says Frances Snowden, RN, CRRN, CCM, with Case Management Horizons in Chicago. "The customer was a health care corporation with a self-funded plan administered by a third-party administrator. At this time, their costs were increasing, their claim duration was lengthening, and their total disability costs were on the rise."

Reducing liability costs

Ellis & Associates’ first step was to conduct a thorough file review of all the customers’ open disability claims, Snowden says. Problems the review team noted and documented in the open claims included:

• lack of communication among employee, employer, and physician;

• lack of a coordinated treatment plan;

• noncompliance with the treatment plan;

• failure to accommodate modified duty or modify the workplace.

The steps Ellis & Associates proposed to reduce the customer’s disability costs were not revolutionary, but they proved very effective, Snowden says. "We focused on earlier intervention on any claim that looked like it might go into long-term disability. We also improved the corporation’s tracking and reporting systems," she says.

Other program components included:

• injury prevention programs;

• safety, health, and wellness programs;

• employee education;

• supervisor training with emphasis on modified duty;

• compliance with the Americans with Disability Act.

Another important step was to write an early return-to-work initiative into the disability policy. "Employees now knew upfront that rehabilitation was part of the process," Snowden says.

Ellis & Associates’ case managers worked closely with the human resources staff to promote early intervention. "We contacted the employee and introduced the case management program. Then we contacted the physician and requested a copy of the treatment plan. We then compared the treatment plan with national treatment guidelines," she says.

Case managers relied on disability guidelines from the Work Loss Data Institute in Riverside, CT, the Centers for Disease Control and Preven-tion in Atlanta, and the Reed Group in Denver.

Both Jez and Snowden agree that claims management works best when the intervention is focused on disability type rather than claim type. "It doesn’t matter if the employee strained his back on the tennis court or the warehouse floor. What’s important from a disability management standpoint is that it’s a strained back," Jez notes.

The CIGNA Integrated Disability Services product uses a team approach to manage all claims, Jez notes. The employee’s first point of contact is with an intake specialist who takes all the claim information. The intake specialist also explains the claims management system to the employee, files the state workers’ comp report for occupational claims, and assigns the case to a disability specialist.

The disability specialist contacts the employer and employee within 24 hours. Together, the disability specialist, the nurse case manager, the vocational rehabilitation specialist, and the employer develop a return-to-work strategy.

Benefits begin at ground zero

From the employee’s standpoint, perhaps the most important part of integrated disability plans is that benefits begin on day one of any disability claim. "There’s no waiting until it’s determined that a claim is compensable. If the claim is compensable, the funding is simply switched from disability to workers’ comp," Snowden says. "This really enhances the ability of the patient to cooperate, comply with treatment plans, and return to work."

Combining plan integration with early case management yielded great outcomes for Ellis & Associate’s health care customer. Some first-year results of the new program included the following:

• Before managed disability, there were 143 open claims, of which 80 were not expected to return to work.

• After managed disability, there were 119 open claims, of which 71 were not expected to return to work.

• Before managed disability, the monthly benefit paid was $114,646.

• After managed disability, the monthly benefit paid was reduced by 23% to $88,780.

• The total closure rate on new claims was 56%, and the total reserved savings was roughly $1.9 million.

CIGNA has found that integrated products are less confusing for both providers and employees. "Providers in the past may have dealt with both a workers’ comp case manager and a disability case manager on the same claim. In our model, there is only one case manager using one set of protocols," Jez notes. Employees benefit from having only one set of communications, as well. "If there is overlap on a claim, if it’s a workers’ comp claim with some disability benefits, the employee only gets one communication that explains the entire claim."

An unexpected dividend of this more streamlined, less confusing claims management system has been a decrease in litigation. "Workers’ comp representation has been at about 165 of all claims for CIGNA," Jez notes. "Under the integrated plan, legal representation has dropped to less than 1%." Both patient and provider satisfaction with CIGNA’s integrated product have been so high that CIGNA plans to launch a fully integrated 24-hour group health/workers’ comp product in 1998, she says.