Call to Order and Roll Call
The 3rd meeting of the 2016 Kentucky Workers' Compensation Task Force was held on Friday, October 21, 2016, at 10:00 AM, in Room 171 of the Capitol Annex. Senator Alice Forgy Kerr, Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Senator Alice Forgy Kerr, Co-Chair; Representative Chris Harris, Co-Chair; Senator Dennis Parrett, Representative Adam Koenig; Steve Barger, Chris Bartley, John Bolton, Carl Breeding, JD Chaney, Joe Dawahare, Rick Fouts, Ched Jennings, Michelle Landers, Bill Londrigan, Commissioner Dwight Lovan (ex-officio), Deputy Secretary Mike Nemes as representative for Secretary Derrick Ramsey (ex-officio), Jeff Roberts, Melissa Stevens, Lori Sullivan, and Tim Wilson.
Guests: General Reuben Jones, Executive Director, Kentucky Workers’ Compensation Funding Commission; Renee Haddix, Director of Audit and Collections, Kentucky Workers’ Compensation Funding Commission; Louie Hord, Director of Fiscal Operations, Kentucky Workers’ Compensation Funding Commission; Dr. John J. Guarnaschelli, M.D., F.A.C.S., FAANS (L); Dr. Russell L. Travis, M.D., F.A.C.S., FAADEP; and Dr. James R. Bean, M.D.
LRC Staff: Carla Montgomery, Andrew Manno, and Sasche Allen.
Approval of Minutes
A motion to approve the minutes of the September 16, 2016 meeting was made by Representative Adam Koenig, seconded by Senator Dennis Parrett, and approved by voice vote.
2017 Assessment Rates Update
General Reuben Jones, Executive Director, Kentucky Workers’ Compensation Funding Commission, gave an update of the 2017 assessment rates with some of the background behind the results and legal requirements. The purpose of the Funding Commission is to manage, invest, and control the resources that are collected to pay workers’ compensation. General Jones’ presentation focused on the control aspect, which requires that assessment rates be set yearly.
The special fund is required to be fully funded by 2029 and the fund is on track to meet that deadline. When setting the rates, the board of directors was presented with calculations by actuary staff that included an optimistic estimate and a point estimate. In 2015 the optimistic figure was chosen of 5.51 percent, however, for 2016 the point figure of 6.29 percent was adopted.
The legal basis of the coal workers’ pneumoconiosis fund differs from the special fund. It requires the Funding Commission to fully fund and prefund all claim liabilities and administrative expenses through December 31 of the next year of operations. The assessment rate must be set as to receive 50 percent of the needed revenue from each assessment. In 2014 an optimistic scenario was chosen of 5.18 percent, and again in 2015 with a nearly tripled increase to 14.82 percent. The recommended rates for 2016 ranged from a pessimistic scenario of 172.81 percent down to an optimistic scenario of 62.12 percent.
The funding commission researched the causes of the significant impact on the assessment rates of the coal workers’ pneumoconiosis fund. One factor driving the increase was the assessment history. For a period of 16 years the assessment rates ranged from zero to one percent. There have been decreases in the number of coal employers, coal severance tonnage, and coal employees. As a result, there has been an increase in the number of claims and awards with an increase in the severity of the claims. Other factors include investment returns, Environmental Protection Agency regulations, a decrease in coal purchases, the Chinese influence in the coal market, and political impacts.
General Jones reviewed several charts and graphs that illustrated the changes in the coal industry and the coal workers’ pneumoconiosis fund over the years. There has been a 46.83 percent decrease in active coal companies and a 43.78 percent decrease in severed coal tonnage since 2010. Since 2010 the number of coal employees has declined by 44.53 percent. Also since that time, coal workers’ pneumoconiosis claims filed have increase by 302 percent, while the increase in actual awards has increased by 6500 percent. He pointed out that from 2013 to 2016 the known liability has increased from 12.3 million to 26.9 million. A primary concern for the Funding Commission is the return on investment that is used for the payment of workers’ compensation and the administration of the program. In 2011 there was a 16.41 percent return on investment, however, 2016 shows a return on investment of 1.46 percent.
After considering the options, the board of directors adopted the alternative optimistic rate for the coal workers’ pneumoconiosis fund of 49.50 percent. This was the lowest rate that would meet the legal requirement for funding the coal workers’ pneumoconiosis fund. The board also adopted an alternative optimistic assessment on coal tonnage of $0.4174.
All assessments for 2017 meet legal requirements and were approved on September 30, 2016 and become effective January 1, 2017. The first payments are due April 30, 2017.
Addressing a question from Mr. Joe Dawahare, General Jones said the payments are based on this year’s payroll.
In response to Mr. Ched Jennings, General Jones stated that his presentation mainly focused on the coal workers’ pneumoconiosis fund because it has the most substantial changes. He reiterated that the liability of the special fund should be fully funded by 2029. General Jones also confirmed that the current liability of the coal workers’ pneumoconiosis fund is roughly $55 million. General Jones said there have not been recent discussions about getting rid of the liability by moving it to the private sector, however, Deputy Secretary Mike Nemes added that he was aware of discussions, and the Labor Cabinet is always open to suggestions. Mr. Jennings said he did have some suggestions for recommendations for this matter. He had several other questions about the special fund and General Jones and his staff will be following up with Mr. Jennings and the task force with that information.
Responding to Mr. Bill Londrigan, Mr. Louie Hord confirmed that the present value of the coal workers’ pneumoconiosis fund is approximately $14 million and is primarily funded by coal employers and the assessment in severed coal.
Answering a question from Mr. Joe Dawahare, General Jones stated that 23 coal operating companies have gone out of business since 2015, but the responsible amount for the remaining operators does not increase because the rates are set for each year.
Dr. John J. Guarnaschelli, M.D., F.A.C.S., FAANS (L)
Dr. Guarnaschelli is a neurosurgeon who has been practicing in Louisville for 43 years. Approximately 10 percent of his patients have workers’ compensation claims or potential claims. He explained that a neurosurgeon is a subspecialist that deals with lesions of the brain, spine, and peripheral nerves. There are two training programs in the state for neurological surgery, which are housed at the University of Louisville and the University of Kentucky. The minimum length of training for a neurosurgeon after medical school is seven years. Dr. Guarnaschelli said the existing training programs are very well monitored by the resident review board to ensure each trainee has adequate surgical experience in all areas including vascular and functional.
Most of the workers’ compensation patients that Dr. Guarnaschelli sees are those who have trauma to the head, neck, or peripheral nerves. These patients have experienced injuries that involved lifting, bending, twisting, falling, hits to the head or neck, and even motor vehicle accidents. Patients are eventually referred to a neurosurgeon after seeing other medical providers for a surgical evaluation.
Dr. Guarnaschelli noted that workers’ compensation injuries are different than other injuries in several ways. First, issues like causation have to be addressed. The main difficulty with causation is deciding whether the injury at work is the primary cause of the symptoms that have led to medical treatment or if there is a preexisting issue. Another issue that has to be addressed is appropriateness of imaging such as X-rays, computed tomography (CT) scans, and magnetic resonance imaging (MRI). At a certain age, all of these scans will show normal formations of abnormalities, but it must be determined if the patient has an active or passive preexisting disease.
A third issue is determining if the treatment is appropriate and necessary. A patient may see the neurosurgeon, a primary care physician, a physical therapist, a chiropractor, a pain management specialist, or even a yoga instructor. The question is whether seeing these different providers is reasonable. Also involved with this issue is deciding if surgery is absolutely necessary. Dr. Guarnaschelli explained a fourth issue that makes workers’ compensation patients different from his normal patients, which is the maximum medical improvement status. He said that according to the American Medical Association (AMA) guidelines, maximum medical improvement is the time at which an injured worker’s medical condition has stabilized and further functional improvement is unlikely, despite continued medical treatment and physical rehabilitation.
Once a maximum medical improvement rate is obtained, then it is determined if there is an impairment rating that is appropriate. In Kentucky doctors depend on a series of textbooks and guidelines provided by the AMA. They make a quantitative decision based on those guidelines. Dr. Guarnaschelli pointed out that states such as Indiana and Tennessee are use other guidelines to make determinations. Another issue at this point that is of concern is prescribing medications and determining which medications are appropriate. Finally, the doctor is also asked to determine any restrictions that the worker may have after returning to work.
Dr. Russell L. Travis, M.D., F.A.C.S., FAADEP
Dr. Travis has been a neurosurgeon for over 40 years and also performs independent medical evaluations (IMEs). He said his goal is determining what is best for the patients and basing his advice on facts. He describes himself as a conservative surgeon. According to Dr. Travis, there are several problems with the workers’ compensation system. One problem is the frequency of drug screenings for opioids. It is unnecessary to do drug screenings at every appointment; they should only be given at random as long as the patient is reliable. Another issue with the workers’ compensation system is the lack of evidence-based guidelines. Specific guidelines would allow for doctors to know with certainty the appropriate time to start treatment, how much treatment is appropriate, and when to stop that treatment.
Dr. Travis said that there is an opioid epidemic in the United States. Pain has become a sixth vital sign; however, pain is an emotional response. Prescribing opioids should be centered on evidence based medicine and set guidelines. A study has concluded that epidural steroid injections are inappropriate and do not give permanent relief. Pain management centers and others prescribing opioids are benefiting instead of the patient, similarly to the doctors that administer epidural steroid injections. Other forms of treatment that need to have some guidelines include lumbar spine fusions and sacroiliac (SI) joint fusions.
Dr. Travis stated that there should be a medical director within the Department of Workers’ Claims to assist in making determinations between competing medical opinions. Although Dr. Travis has great respect for administrative law judges (ALJs), he said that there should be someone with a medical background to advise the ALJs. Overall, there are numerous sets of guidelines that the system could use to make determinations that already exist. Dr. Travis said that too many lumbar fusions are performed, and surgical guidelines would be helpful.
Reasoning was provided for adopting the sixth edition of the AMA guidelines. Each chapter of the sixth edition has the same methodology, unlike the fifth edition. There is also a difference in determining impairment ratings. The Workers’ Compensation Research Institute (WCRI) research should be used in reference to the system. Dr. Travis thinks that its comparative research amongst various states can be helpful in making beneficial changes to the system.
Dr. Travis indicated that SI joint injections are mostly unnecessary unless a patient has arthritis. In addition, evidence-based guidelines would assist in determinations of causation in workers' compensation claims and in cases involving cumulative trauma.
Dr. James R. Bean, M.D.
Dr. Bean had a differing opinion of the use of guidelines. He said that the implementation of set guidelines would prevent him from providing proper care to the patient. Usually with set guidelines there are no exceptions even if the guidelines do not apply to all situations. Also, adopting a statewide legislatively recognized set of guidelines would mean they would be the law and presumptively correct. Exceptions to guidelines must be acknowledged.
He addressed a case study as an example of the problems he faces in attempting to obtain approval for medical treatment such as surgery. Utilization review cites Official Disability Guidelines (ODG) and issues a report based upon the review of the surgical recommendation. There is no room for variation or appeal which handicaps the physician. The ODG guidelines have recently been disqualified. Treating doctors are not irrelevant in the decision making process. He noted why guidelines are used but urged caution in adopting them. There must be flexibility.
Dr. Travis said that the ODG guidelines are based on literature. California, Tennessee, and Texas adopted a combination of guidelines instead of just one. This allows a state to choose different aspects of each set. There are appeals if surgery is denied. A state cannot afford to develop its own guidelines. However, there must be guidelines to reduce unnecessary surgeries.
In response to a question from Representative Adam Koenig, Dr. Travis explained the basis of the ODG guidelines, which are evidence-based written guidelines for medical treatment. Representative Koenig said there have been many disagreements about which edition of the AMA Guides should be used. He assumed the guidelines are updated for a reason and asked for the opinion of each speaker on the AMA Guidelines. Dr. Bean noted that he was astounded that the fifth edition increased the impairment for cervical surgeries. Dr. Guarnaschelli noted similarities between the fifth and sixth editions. Dr. Travis stated that most states have now adopted the sixth edition, which is a mixture of the fifth and fourth editions and is an attempt to go back to reasonable impairment ratings. The fifth edition included a huge increase in impairment to the spine. The sixth edition gives an impairment based upon the result.
After a question from Mr. Joe Dawahare, Dr. Bean spoke about unnecessary surgeries and the need for guidelines. Dr. Bean said that there may be a way to pre-screen treatment decisions. He would like to see a more expedited process for approval of treatment. It is wrong that professional judgement is not acknowledged when a simple back surgery is recommended. The denials come from a doctor who has never seen the patient. The doctor must be trusted, but he knows that is not entirely possible. Dr. Travis noted many doctors perform unnecessary back fusions.
Co-Chair Chris Harris asked the panel whether the problem with obtaining requested treatment extends beyond the workers' compensation system to the entire medical community. Dr. Bean agreed that it extends beyond workers' compensation. Dr. Travis noted other states have guidelines to assist with the problem while Kentucky does not have guidelines.
Following a questions from Mr. Ched Jennings, Dr. Travis elaborated on the number of unnecessary surgeries performed in workers' compensation. Dr. Travis explained studies regarding unnecessary surgeries. Mr. Jennings asked if the push for guidelines is an attempt to control costs. Dr. Travis stated the purpose of guidelines is to ensure proper treatment of patients. Dr. Guarnaschelli was asked if he is frustrated by utilization review denials of treatment. He stated that most denials are due to lack of documentation that eventually get resolved. He has never had a patient physically affected by a delay in treatment but the delay can frustrate the patient. Dr. Bean indicated that it is very frustrating to have treatment delayed by a denial. He noted that delays in treatment can be months and in such cases the ability of the patient to return to work is affected. Dr. Bean and Dr. Travis debated the credibility of studies and literature regarding the effect of delay in medical treatment.
Ms. Melissa Stevens asked about expediting treatment requests and implementing treatment guidelines in coordination with creation of a medical director within the Department of Workers' Claims. Dr. Bean indicated such a set up could work if there was a trustworthy director that could assist with treatment recommendations or forward that request to and expert panel of doctors for an opinion.
Mr. Tim Wilson asked how delays in treatment in workers' compensation compare to those outside of workers' compensation. Dr. Bean noted the delay is the same. Mr. Wilson asked if guidelines are taught in medical school. Dr. Bean stated that physicians often are not familiar with the guidelines until in practice. Dr. Travis said that he speaks to neurosurgical residents at the University of Kentucky, but there is no strict training on guidelines. In response to a question from Mr. Wilson regarding ethical consideration of guidelines, Dr. Bean noted his ethical obligation is to the patient, not the guideline. He must pursue treatment that will help his patient. Dr. Travis stated that guidelines must have language that indicates that a doctor is not subject to a malpractice lawsuit if guidelines are followed. Mr. Wilson asked Dr. Bean if it is possible to pigeon-hole patients into guidelines. Dr. Bean said that all cases cannot be pigeon-holed. Individual judgements must be considered. There are exceptions to all guidelines. Dr. Travis noted that reviews should be done by specialists and Dr. Bean indicated that surgical review should not be undertaken without peer to peer review with the requesting surgeon and the reviewing specialist.
Mr. Jeff Roberts asked if specialists have treatment guidelines. Dr. Bean noted that the orthopedists have treatment guidelines that are credible. Dr. Guarnaschelli was asked if the sixth edition of the AMA Guides considers the occupation of the injured worker and he noted it does not. He stated that occupational disability differs from permanent impairment rating. Mr. Roberts and Dr. Travis discussed a case in which surgery was turned down based upon a reviewing doctor even though the defense evaluator approved the surgery. Dr. Travis noted he requests all past records and diagnostic tests before reviewing a case for surgery.
Mr. Steve Barger asked the panel what steps can be taken to make sure injured workers receive appropriate medical care and make the system more user friendly. Dr. Bean stated that guidelines are helpful for initial treatment. Specialists need to review various guidelines and address what treatment is necessary beyond initial treatment in each specialty. Dr. Guarnaschelli indicated that most workers' compensation patients receive good care, sometimes too much care in certain instances. He would not be opposed to a selected group of medical providers that provide quality medical care. Dr. Travis indicated that system becomes adversarial when care exceeds necessary levels or a surgery is unnecessary. A medical director could help steer care to proper facilities. Bad care is worse than no care. There needs to be a way to determine where good care can be found and get the patients to those providers. Another problem to address is why many good doctors will not take workers' compensation patients.
Ms. Melissa Stevens asked if there was a way to get the medical community to approve treatment guidelines. Dr. Travis noted all specialties must review the guidelines and see what combination of guidelines would work. Dr. Bean noted there must be a dedicated multidisciplinary panel to go through all of the guidelines and reach a consensus.
There being no further business, the meeting was adjourned at 12:17 p.m.