A Healthesystems publication

Fall 2015

Public Opinion vs Data: Which One Drives Change in Regulation?

By Sandy Shtab, Director of Regulatory and Legislative Affairs

The workers’ compensation industry is constantly evolving due in part to politics, policy, and public opinion. As healthcare costs continue to escalate, insurers and regulators are becoming increasingly sensitive to the quality, duration, and cost associated with delivering medical benefits to injured workers. Those costs translate to real premium dollars for employers and detract from the bottom line; for some employers the impact can make or break a business. In rare instances, public entities can be so loss-sensitive that they are driven to bankruptcy.1 Some say regulation changes can make a difference in costs and outcomes. We agree, but it is important to first understand what drives this change. While public opinion has traditionally been a strong influence, there must be a greater effort to rely more upon objective medical cost and outcomes data.

 First we look at the body of data that is amassed in the workers’ compensation system and how this data is used. The National Council on Compensation Insurance (NCCI) estimates that approximately one-third of all legislation during the first part of this decade was related to medical services.2 Proposals on issues including fee schedules, choice of medical provider, medical networks and prescription drugs were then – and remain now – hot topics for the industry. Policymakers needed credible information to help them make good decisions instead of relying on anecdotal evidence and unsubstantiated opinions. Enter the NCCI Medical Data Call.  



State and federal agencies have been collecting medical data for years, but rarely were these data specific to workers’ compensation claims. Starting in 2010, state workers’ compensation agencies supported a national effort to begin collecting workers’ compensation– specific medical billing and payment data through the NCCI Medical Data Call. Most insurers in the majority of states were already reporting Unit Statistical Data with lost time claim costs to either NCCI or to their local rating bureau. With the addition of the Medical Data Call, NCCI was able to compile a massive body of information from which to analyze medical trends, project outcomes, and estimate future costs as a result of proposed legislative changes. Nearly 5 years into the data collection effort, NCCI has been able to use these data to support policy decisions in many states; previously, NCCI had to rely upon voluntary data submission from carriers, which may have been incomplete or inconsistent from one carrier to the next.

The data are made available to legislators on request and to member companies on demand. Carriers can use this information to submit legislative proposals to state regulators or directly to the legislature through their trade organizations. Some issues which have been addressed using these data include the movement away from state-developed or charge-based fee schedules to Medicare-based fee schedules, as well as physician dispensing of medications. Both of these have seen ample regulatory impact since the NCCI Medical Data Call began.


Another effort in flight by states is to implement treatment guidelines as a standard of care to ensure appropriate utilization of medical services. In many states, there are physicians who balk at the concept of using evidence-based medicine, referring to it as “cookbook medicine.” Recent discussions in states like Florida and Kentucky have produced strong opinions from physicians who vehemently oppose the concept. Many physicians indicated that they would consider this approach if they were personally involved in the development of a “consensus-based” treatment guideline. In Florida, one occupational medicine specialist proclaimed that East coast medicine is practiced differently than West coast medicine, arguing that guidelines developed by a company in California, Ohio or Texas, for example, would not be applicable in Florida. This public opinion is difficult to overcome absent any data to the contrary. Although research organizations are working on studies that measure the impact of treatment guidelines on claims outcomes, until such data are available, public opinion will continue to table the concept of evidence-based medical guidelines for many states.


Another hot issue in workers’ compensation is the long-standing opioid crisis, which has been widely covered in both industry publications and by the mainstream media. The majority of studies indicate that opioids are inappropriate for long-term use in chronic non-cancer pain; however, the effort to wean patients off these medications remains challenging. Complicating the issue is the fact that more than half the states have now either decriminalized or approved medical marijuana use for specific medical conditions. Physicians in a number of states are recommending marijuana for relief of chronic pain or related conditions such as anxiety, depression, or insomnia. Due to the many legal and political barriers, sufficient research on the efficacy of marijuana for these conditions has not been conducted; while there is some moderate evidence for the effectiveness in treating chronic pain, additional studies are needed. Despite the need for more evidence, some judges are now ordering carriers to reimburse injured workers for medical cannabis. The rationale behind these decisions was expressed at a recent regulator roundtable, when one judge asked a packed room of regulators and industry leaders, “Why shouldn’t carriers pay for cannabis, when it is less expensive and less dangerous than opioids?”

This speaks to the impact of public opinion on policy decisions. One survey by CBS News found that 80% of Americans supported medical marijuana.3 While marijuana may currently demonstrate a narrow application for terminally ill patients, treatment of epileptic seizures, and children with rare diseases, regulators must respond to court orders in states like New Mexico, where a carrier was recently ordered to reimburse an injured worker for marijuana he used to relieve back pain. However, until the FDA revives its efforts to study the drug, and the Drug Enforcement Administration (DEA) reschedules marijuana to Schedule II, carriers’ hands are tied. They simply cannot issue payments through any banking system to pay for an illicit substance, regardless of public opinion. Even a judge’s order can not compel them to do so. All of this puts all stakeholders – carriers, regulators, employers, and injured workers – in a difficult position. Without sufficient studies or data to support medical marijuana as a treatment option for work-related injuries, there is no solution on the horizon.


Public opinion can be a powerful impetus for change. However we are learning as an industry to rely more on facts and data and less on anecdotal evidence. For this reason the use of data is an increasingly important tool for our industry. We collectively produce billions of lines of information each year in claims information, medical billing and payment data, electronic medical records, employment, and statistical data. Organizations like NCCI and the Workers Compensation Research Institute (WCRI) are listening to their members and working to address existing gaps. With the implementation of ICD-10, the coming years will bring us a new, more granular data and a fresh look at outcomes in workers’ compensation claims. Access to such detailed information on the diagnosis and cause of injuries will allow us not only to produce better claim outcomes, but to potentially prevent and reduce workplace injuries. It is certain that public opinion will continue to influence how public policy is made, but we will be better armed with tools to either support or refute the unsubstantiated arguments that are so prevalent today.




1 -Workers’ Compensation Institute. Bankrupt Detroit’s obligations include $86.5M in workers’ compensation liabilities. http://www.wci360.com/ news/article/bankrupt-detroits-obligations-include-86.5m-workers-compensation-liabilitie. Accessed September 16, 2015.
2 -National Council on Compensation Insurance. Medical Data Call Reporting Rules and Requirements. https://www.ncci.com/documents/Medical-Data-Call-Reporting-Rules-Requirements. pdf. Accessed September 16, 2015.
3 -CBS News. Majority of Americans now support legal pot, poll says. http://www.cbsnews.com/news/majority-of-americans-now-support-legalpot-poll-says/. Accessed September 16, 2015.
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