One TPA Says it Has the Secret to Reining in Comp’s Transition Costs

At first glance, Jeffrey McDaniel does not seem disabled. He is built like a football player, and in his mesh green and gold jersey he looks like one too. A pat on the back reveals his muscled frame, the one that helped him excel for 13 years as a dock worker for a leading commercial trucking firm in Northwest Indiana. It was work he did with pride and for which he earned a good wage, $17 an hour.

“I only overloaded twice in 13 years,” McDaniel told Insurance Journal. “Stack it high and tight. You have to know what you’re doing.”

But one day in July 1998, McDaniel was lifting a 70-pound box when his hand went right through the bottom of it. The box fell apart and McDaniel tore a tendon in his wrist. After surgery to repair the tendon and a year in physical therapy, McDaniel was cleared to return to work. He worked without incident for a year before he reinjured himself while flipping a box. A second surgery, this one on his elbow, followed.

McDaniel’s doctor told him his injuries meant he could never return to dock work or any similarly demanding physical labor. He has the scars to prove it.

A solution to the severity crisis?
The case of Jeffrey McDaniel — a pseudonym; his employer didn’t allow IJ to use his real name — illustrates a great deal about the challenges faced by the workers’ compensation system. While the frequency of comp claims is down, the severity of those claims has gone up, according to estimates from the National Council of Compensation Insurance. And in the long-tail cases like McDaniel’s, employers and insurers are on the hook for the medical and indemnity costs.

A host of third-party administrators have tried to tackle the problem using techniques such as case management by nurses, but one Deerfield, Ill.-based claims consulting and management company says it has the secret to helping injured workers return to work faster or settle their cases, saving everyone time, money and grief.
It is the Workers Transition Network (WTN), a division of the LewisCo Group, and its re-employment program targets workers like McDaniel by offering them an opportunity to return to work for nonprofit charitable organizations, which can accommodate workers’ medical restrictions while boasting a nonthreatening working environment that can help build self-esteem.
WTN vice president James Kremer said that 90 percent of the claims the group accepts are resolved, and the return-on-investment runs between four- and five-to-one. The re-employment services program, which targets workers whose permanent medical restrictions make it impossible for them to return their old line of work, is really only practical in 15 states across the country, Kremer said.

Mandatory vs. voluntary rehab
It’s those states — Maryland, Michigan, Pennsylvania, Virginia, Alabama, Delaware, District of Columbia, Illinois, Louisiana, Maine, New Hampshire, North Carolina, Ohio, Oregon and Rhode Island — that mandate vocational rehabilitation and force injured workers to choose between WTN’s program and continued benefits. Even when claimants decide to take the matter to court, they are rarely successful, according to Kremer.

“Less than 1 percent of all of our cases have ever gone before a judge, and our clients have won 100 percent of those cases,” he said. “This is almost a velvet hammer for individuals who want to milk the system, who may be perfectly happy at home sitting on their couch and cashing a check. If the doctor approves nonprofit placements close to where they live, it’s hard to go in front of a law judge or arbitrator and explain why the program is not doable.”

WTN’s interim employment services program, on the other hand, is available nationwide, and simply provides an injured worker a place to get back in the flow of work as soon as possible in an effort to speed up the return-to-work process. At the same time, employers and insurers can exploit the public relations value of the program, though that appears to be only a secondary benefit judging by McDaniel’s employer’s refusal to participate in this story.

It is easy for injured workers to malinger after an injury and become discouraged about future prospects, Kremer said, “which is why our service is so important. The nonprofit work is really meant to reawaken the work ethic,” he said. “They can fill in that hole in the resume. It makes them less risky to future employers.”

Leading experts in the field agree. “Study after study has indicated the longer someone is out of the work cycle the less likely it is they’ll return to employment,” according to Len Strazewski, former co-chair of the National Workers’ Compensation & Disability Conference. “Work is learned behavior. If you’re not used to getting up, preparing for work, taking a shower, getting enthusiastic about accomplishing something, you lose your commitment to work. The work ethic is undermined by a process that keeps people out of the work site because of injury or occupational disease.”

Before being approached by a vocational counselor from WTN, McDaniel admitted to letting his situation get him down.

A struggle for respect
“It was hard,” he said. “As a man, you can’t do things you could normally do. I felt bad when it snowed and I couldn’t shovel the sidewalk. I took pride in having the cleanest walk. I was kind of depressed. Here I am, built like a football player, and I got took out by a 70-pound box.”

A previous TPA had pushed him to find a new job immediately, McDaniel said, before he even had a chance to completely heal. For over a year, he said, he drove for more than 50 miles from his home in Linwood, Ill., to the Deerfield area on job leads provided by the firm. It was a waste of time, he insisted, because the moment employers looked at his resume his seniority made him too expensive for the work he could perform. McDaniel asked for tuition money to attend a job training program at a local community college, and the TPA wouldn’t provide it. He became disillusioned.
“I was just sitting at home,” McDaniel said. “I didn’t care. Treat me like a man — if you want to keep your money, keep it!”
It was this skepticism which greeted vocational counselor Larry Kahan in his first attempt to interest McDaniel in its program. After an initial physical assessment and personal meeting with McDaniel, Kahan went to work on finding him a place to work. He wound up placing McDaniel at the Hammond, Ind., YMCA.
“Clients develop a relationship with the not-for-profit,” Kahan said. “They’re different because of a more compassionate approach. As a vocational counselor, I work on behalf of the clients. My primary goal is to understand their vocational goals. There’s a less threatening environment when working with a nonprofit. He sees it’s not like what he had before.”

‘A problem-solver’
The Hammond YMCA’s executive director, Bruce Lindner, said he was very pleased with McDaniel’s performance since he started working there in mid-December 2003.

“I’m extremely happy with him,” Lindner said. “The YMCA doesn’t exist just for programs. Our goal is more holistic. There’s outreach on our part. I talked with Larry and we kind of brainstormed about what he could do here. That’s the great thing about the YMCA — there’s all sorts of different things to help out with.”
McDaniel’s duties have included answering phones and greeting members, custodial work and helping other employees on errands such as picking up children for after-school programs.
“[Jeff] was less than jumping on board” at the beginning, Lindner admitted. “But we let him know we have options. And he jumped in as a problem-solver. He didn’t just sit back. He taught other employees how to mop and clean properly, for example. He helped fill a niche.”

This process of empowering the client is crucial, according to Strazewski. “This is clearly superior to more traditional work-hardening programs in that the work is productive. It’s not make work; it’s not boot camp.”

Lindner said that if he had the budget he would hire McDaniel on as a custodial supervisor, and said he would be glad to provide him with a strong reference. McDaniel, 40, is now looking for custodial work and Kahan has provided him with leads. Most WTN clients work at the nonprofits for six to nine months.

“Not everyone’s like [Jeff],” Kahan said. “There’s a tendency to bring baggage. There are perceptions that make it difficult for me to help. But as soon as clients get into the environment, the window comes down — that window of suspicion. It can be hard to convey that we care. They have to see it for themselves.”

McDaniel, who is married and has two children, said the YMCA is “an awesome place.” And one benefit of matching workers with groups like the YMCA, according to Kremer, is that they’re everywhere. For employers such as long-haul trucking firms, they may not have an office near where the employee actually resides. How do you provide interim work or re-employment opportunities when there’s no office to go to?

WTN also partners with Goodwill Industries and Big Brothers Big Sisters of America. Nonprofit job placements are usually made within 48 to 72 hours, according to Kremer. Additionally, the valuable work that could be done by a recovering worker is not available for reasons of seniority or collective bargaining agreements.

“This kind of work is a lot more productive and helps morale a lot more than just sticking someone in a room counting paper clips,” said Kremer, who has been with LewisCo for four years and previously worked as a claims adjuster for ACE and Cigna.
Whatever happens from here on out, McDaniel for one seemed to be convinced. “He’s the best boss I ever had,” he said of Lindner. “Nobody here is standing over your back with an axe or a 2-by-4,” he said with a chuckle.