Public Risk January 2016 by Moire Marketing Partners

Published by the Public Risk Management Association

www.primacentral.org

JANUARY 2016

JUST ANOTHER DAY AT THE OFFICE:

CLAIMS MANAGEMENT IN THE

PLUS

IMPROVING HUMAN PERFORMANCE: How to Maximize Your Team’s Contributions

WHEN NEUTRAL IS A FORWARD GEAR: Data for a Successful Workers’ Compensation Program

Going Above and Beyond “Sometimes I have to go above and beyond—literally. “Traveling the Alaskan bush to over 150 cities, boroughs and school districts is daunting, but I love what I do. Helping our members is hugely rewarding. They aren’t just risk partners, they’ve become personal friends. “To protect them from risk and losses, we rely on Genesis for reinsurance. When we encounter a little turbulence — or worse— it’s comforting to know we can trust their specialized expertise and top notch security. “With Genesis, we can always count on safe landings no matter what risks cross our path.”

Visit our website at www.GenesisInsurance.com

— Kevin Smith, Executive Director Alaska Municipal League Joint Insurance Association

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Volume 32, No. 1 | January 2016 | www.primacentral.org

The Public Risk Management Association promotes effective risk management in the public interest as an essential component of public administration. PRESIDENT Dean Coughenour, ARM Risk Manager City of Flagstaff Flagstaff, AZ

CONTENTS

PAST PRESIDENT Regan Rychetsky, ABCP Director, HHS Enterprise Risk Management and Safety Texas Health and Human Services Commission Austin, TX PRESIDENT-ELECT Terri Evans Risk Manager City of Kingsport Kingsport, TN

6 Just Another Day at the Office: CLAIMS MANAGEMENT IN THE FRONTIER STATE

By Julie Cisco

DIRECTORS Lori J. Gray Risk Manager County of Prince William Woodbridge, VA Jani J. Jennings, ARM Insurance & Safety Coordinator City of Bellevue Bellevue, NE Scott Kramer Risk Manager Montgomery County Commission Montgomery, AL Amy Larson, Esq. Risk and Litigation Manager City of Bloomington Bloomington, MN

10 IMPROVING HUMAN PERFORMANCE:

How to Maximize Your Team’s Contributions

By Randy Anderson

Scott Moss, MPA, CPCU, ARM-E, ALCM P/C Trust Director CIS Salem, OR Tracy Seiler, ARM-P Director of Risk Management Services Texas Association of Counties Austin, TX NON-VOTING DIRECTOR Marshall Davies, PhD Executive Director Public Risk Management Association Alexandria, VA

15 WHEN NEUTRAL IS A FORWARD GEAR:

Data for a Successful Workers’ Compensation Program

By Robin Gelburd

EDITOR Jennifer Ackerman, CAE Deputy Executive Director 703.253.1267 • jackerman@primacentral.org ADVERTISING Donna Stigler 888.814.0022 • donna@ahi-services.com

15 IN EVERY ISSUE 4 News Briefs | 19 Advertiser Index

Public Risk is published 10 times per year by the Public Risk Management Association, 700 S. Washington St., #218, Alexandria, VA 22314 tel: 703.528.7701 • fax: 703.739.0200 email: info@primacentral.org • Web site: www.primacentral.org Opinions and ideas expressed are not necessarily representative of the policies of PRIMA. Subscription rate: $140 per year. Back issue copies for members available for $7 each ($13 each for non-PRIMA members). All back issues are subject to availability. Apply to the editor for permission to reprint any part of the magazine. POSTMASTER: Send address changes to PRIMA, 700 S. Washington St., #218, Alexandria, VA 22314. Copyright 2016 Public Risk Management Association Reprints: Contact the Reprint Outsource at 717.394.7350.

JANUARY 2016 | PUBLIC RISK

Further your public sector risk management education without leaving the office! This Webinar series features top presenters delivering risk knowledge to your desktop!

PRIMA’S 2016 RISK MANAGEMENT

WEBINAR SERIES PRIMA WEBINARS ARE FREE FOR MEMBERS! Visit www.primacentral.org today to register for individual Webinars or for the entire program!

JA N UA RY 1 3 | 1 2 : 0 0 P M – 1 : 3 0 P M E ST LAW ENFORCEMENT: COVERAGE & EXCLUSIONS SPEAKERS: Janet Hayes, Operational Risk Manager, Orange County Sheriff’s Department, CA Marilyn Rivers, CPCU, ARM, AIC, Director of Risk and Safety, City of Saratoga Springs, NY DESCRIPTION: This Webinar will explore the challenges associated with managing your entity’s law enforcement teams. The presenters will explore successful strategies for communicating with your agency, hierarchical systems and how to integrate risk management practices into your agency. Additionally, the presenters will discuss the unique risks associated with jail management. AT T E N D E E TA K E AWAYS :  Discuss current events and trends faced by law enforcement  Review best practices to integrate risk management into a law enforcement agency  Learn ways to manage law enforcement risk prior to a catastrophic event W H O S H O U L D AT T E N D :  Risk managers  Law enforcement officers  Operations and administrative staff  Elected/appointed officials

For more information, or to register, visit primacentral.org/webinars.

Message from PRIMA President Dean Coughenour, ARM

CONNECTED AND PLUGGED IN

hope you have had a wonderful holiday season and made many wonderful memories. I also trust that you find yourself rejuvenated and ready to jump on the year with new opportunities to be explored, new goals to achieve and relationships, both old and new to rekindle and enjoy. I think of YOUR National PRIMA like that. Some recent enhancements to your PRIMA are a rejuvenated PRIMA Institute led by an exhilarating team, the updated web site with multiple opportunities to interact, the new “speaker bureau” to assist with education, small tweaks to enhance the Annual Conference experience, timely and effective ISO 31000 training and so much more as we move through 2016. With all our recent improvements I believe you will find that 2016 will be an exciting time for PRIMA. In thinking about sharing with you this month, I thought of the importance of being plugged in and connected. How do we stay integrated and still get those things and still manage to accomplish all our required duties? Cloning has been suggested but then that would be another risk . Each day we have an opportunity to be a little more plugged in and connected through the interactions that we have with our clients/ employees and build a stronger risk management culture.

and Motivation,” “ How and why to report accidents & incidents,” “Who really is the Risk Manager?”, “No place like Team Flagstaff ” and the like. These are designed and built by our risk management department, bought into by senior management and rolled out to our employee base to promote integrated risk management solutions. I get pumped up just thinking about the next opportunity. I recognize that paying bills, setting up files, subrogation and safety compliance are all a part of the job, but they are not the parts that get me fired up to come to work. So we must rediscover what our passion is about risk management and PLAN to integrate those things into our weekly tasks. Each morning, we have a choice of being “plugged in and connected,” or passively disengaged. But it is our decision of how to approach the day and the attitude we will have and share with our team. For example, when I think of coming to the office and opening my e mails, I think of them as presents. Oh sure, some are presents you would rather re-gift or send back after opening, but it is our choice of attitude toward the job task at hand, that makes the difference.

One thought that may help is to ask yourself a few questions and do a quick self-assessment.

So rekindle your passion for risk management. Understand that you truly make a difference in people’s lives as you move the needle of the predictable to the preventable and always be sure to take time to enjoy the ride.

 What is it that I love about my job?  When and where was the time and place where you felt particularly motivated at work? Why did I feel so motivated? How do I feel that way again?

Thank you for what you do each and every day to make a positive impact for your organization and yourself.

Each of us will have varied answers to what truly motivates us at work. For me, I can think of two things: the challenge of being slightly overwhelmed from time to time, which increases my efficiency and job satisfaction and the other motivation is training. WHAT KIND OF TRAINING?—No not ARMY training, like from the movie Stripes, but rather newly designed training from risk management on topics like “Saving our Assets,” “Leadership

Each morning, we have a choice of being “plugged in and connected,” or passively disengaged. But it is our decision of how to approach the day and the attitude we will have and share with our team.

Dean Coughenour, ARM 2015–2016 PRIMA President Risk Manager City of Flagstaff Flagstaff, AZ

JANUARY 2016 | PUBLIC RISK

News Briefs

NEWS

BRIEFS NEW YORK WILL BE 1ST STATE TO SET A $15 MINIMUM WAGE FOR PUBLIC EMPLOYEES Low-wage state workers in New York—from lifeguards to groundskeepers, cleaning staff to office assistants—are getting a raise, reports the Times Union. That decree came down from Gov. Andrew Cuomo, who said New York would “lead by example” as he uses his executive authority to increase the minimum wage for roughly 10,000 state workers to $15 per hour over the next three to six years. The announcement comes as the Cuomo administration conducts contract talks with the Public Employees Federation and gears up to negotiate with CSEA, whose current contract is up in the spring. “We fight for fairness. We fight for justice. We act first,” the governor said at a Manhattan rally that was part of a national day of action by proponents of a $15 minimum wage for all workers. His voice rising to a shout, Cuomo promised to “raise up this nation to a higher level than it has ever been.”

government employees languish earn $8.75 hourly—a sum that Cuomo, discussing fast food pay, has called a poverty wage.

In New York, the boost will take some time: Workers in New York City would earn $15 per hour by the end of 2018; workers outside the five boroughs—who make up about 90 percent of those currently making less than $15—would reach that level by the middle of 2021, increasing about a dollar per year.

But CSEA and PEF, unions that have had rocky relationships with Cuomo, were all smiles after the news broke.

The change covers all of state government, including state agencies as well as authorities, an administration official said. It’s expected to cost the state about $20.6 million annually, including affected benefits. The move addresses criticism leveled at Cuomo in the wake of his recent unilateral action to raise the wages of fast food workers while some

PUBLIC RISK | JANUARY 2016

Cuomo “has demonstrated bold leadership that will benefit undervalued working people and send a clear message that this issue cannot be ignored,” CSEA President Danny Donohue said in a statement. “The governor’s action will have positive practical impact and will be good for New York’s economy as a whole.” Public Employees Federation President Wayne Spence said, “In an era of outsized executive compensation and a robust stock market, this is a basic step toward fairness in society.”

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TOURNIQUET USE URGED IN PUBLIC-SAFETY PUSH The White House is pushing to make tourniquets as commonplace as heart defibrillators in U.S. schools, stadiums, airports, malls and other public places, to reduce fatalities from mass shootings and terror bombings, reports The Wall Street Journal. Applying lessons learned on the battlefields of Afghanistan and Iraq, the Obama administration wants ordinary citizens armed with both the will and ability to grab a tourniquet and stop the wounded from bleeding to death before trained medics arrive. In November, Charlotte Douglas International Airport in North Carolina placed more than 150 bleeding-control kits, including tourniquets, around the terminals, baggage claim and checkpoints. Schools in Wisconsin, Illinois and New York have put tourniquets in classrooms and school offices, and have taught teachers and nurses how to apply them. The White House convened emergency managers, medical groups, health-care companies and school administrators to urge civilians with little or no medical training to intervene to stem hemorrhaging. “Someone needs to ask the question: ‘With all of the shootings going on, why doesn’t every school in the country have hemorrhage-control devices?’” asked former Army surgeon John Holcomb, professor of surgery at the University of Texas in Houston and a national advocate for widespread tourniquet use. Last year’s attack in Paris, which killed 129 people, is precisely the kind of tragedy advocates believe calls for the ready availability of tourniquets, for use when manual pressure isn’t enough to stanch bleeding. “It’s not a question of if it will happen on our own soil; it’s a matter of when,” Dr. Holcomb said. The campaign signals a turnaround for tourniquets, straps that cut off blood flow to extremities. The devices were commonly used through World War II, and then fell out of favor, with doctors warning that they could cause nerve damage or permanently ruin the injured arm or leg.

PUBLIC WANTS POLICE BODY CAMERAS, STUDY SAYS As city officials continue to scrutinize the Houston Police Department’s plans to outfit their officers with body cameras, a national study has found a majority of Americans believe widespread implementation of the devices would improve relations between law enforcement and the public, reports the Houston Chronicle. The 2015 Policing Perspectives Research Report, commissioned by Reveal, a body camera developer, found that 60 percent of Americans believed use of the devices would help soothe community-police relations. Law enforcement agencies across the country are weighing using the devices or have already begun to equip their officers with them following a series of shootings of civilians by police over the last year that sparked protests and civil unrest. Civil-rights groups and criminal justice reformers—and current law enforcement—say the devices would bring greater transparency to interactions between the police and the public, even as they have warned of logistical issues like data storage or privacy concerns. Support for the devices cut across age groups. A majority of millennials, (57 percent,) and 66 percent of those 55 or older believed tensions would be reduced if body worn camera technology were implemented. The report also found that about 16 percent of Americans incorrectly believe body cameras record for police officers’ entire shifts and can’t be switched off. In Houston, city officials voted to fund body-camera implementation among the city’s police officers. City Council members will weigh whether footage from the cameras should be stored in-house or with a third party, which would cost more, but which proponents say would alleviate concerns about video tampering. Thus far, HPD has equipped about 100 officers with the devices in a pilot program. Harris County District Attorney Devon Anderson pledged about $1.9 million to help HPD and the Harris County Sheriff’s Office equip their departments with the devices.

JANUARY 2016 | PUBLIC RISK

JUST ANOTHER DAY AT THE OFFICE:

CLAIMS MANAGEMENT IN THE By Julie Cisco

PUBLIC RISK | JANUARY 2016

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anaging claims in Alaska can be challenging. It can also be downright scary, hilarious and educational. Prior to settling down to work for a public entity, I was an independent adjustor and as such got to travel all over the state handling claims, including property, auto, heavy equipment, aviation, marine and liability. Many of the claims were

underwritten by Lower 48–based insurers so even the initial assignments had the potential to get interesting.

A Texas-based insurer called our Anchorage office and in a lovely Southern accent the woman asked if we could handle a claim in a small village in the Aleutian Islands. I assured her we could, but explained the costs: round trip airfare in excess of $1,000, at least one overnight stay due to the scarcity of flights, the possibility of more delays due to weather and asked if we could do a ‘desk audit’ instead (have the insured send in photos) as it was a fairly minor claim. The underwriter was taken aback and asked me to wait a moment. She retrieved her Rand-McNally Road Atlas, which has Alaska squeezed on to one page …. I walked her through where we were located and then helped her find the very teeny approximate spot 600 miles west of Anchorage where the claim was. There was a long pause and then the underwriter said ‘But, honey, what

do they DO out there?’ My response was in the summer, they commercial fish and in the winter, the wind blows. We did a desk audit. The Yukon River freezes in the winter and like most other Alaskan rivers, is used as a highway, including moving heavy equipment. What could possibly go wrong with walking a 20,000 pound piece of equipment across ice? One of many claims I handled involving ice mishaps was a D-6 bulldozer which went through the ice; fortunately the operator made it out. The assignment came through to do a scene inspection and provide a damage report on the bulldozer. My recommendation to the

JANUARY 2016 | PUBLIC RISK

Just Another Day at the Office: Claims Management in the Frontier State underwriter was to not waste their money on investigation and damage estimates, just pay the total loss, which I would be happy to adjust. They were not amused and insisted a full investigation must be done.

Frozen plumbing claims are obviously very common and can cause massive damage, especially if not discovered before they thaw out. It’s much easier to deal with stillfrozen plumbing than water damage!

There is no scene. The river has frozen back over.

House and cabin fires as a result of woodstoves are also very common; if I’ve learned anything it’s how to manage a wood stove properly!

There is no bulldozer. It will wash up several miles downriver at spring breakup. If we’re lucky, it will get reported. If we’re not, it will be cannibalized by whoever finds it of any usable parts left. I’ve traveled to the Prudhoe Bay oil fields to inspect rolled over equipment at minus-57 degrees ambient; ridden ATVs to get to aircraft wreckage in the tundra; flown in many a small plane and been on many a boat to get to accident scenes and/or survey damaged property or equipment. Claims have included airplane crashes, boat fires, logging equipment accidents, mining accidents, heavy equipment mishaps and tractor-trailer accidents—including a double tanker hauling jet fuel that ran off the road, rolled over and caught on fire. The driver was not injured, but literally all that remained of the tractor and trailers was an engine block, the wires that had once been steel-belted radial tires and two puddles of melted aluminum that had been the tankers.

CELEBRATING 25 YEARS OF BEING YOUR TRUSTED PARTNER IN INSURANCE

I have investigated vehicle accidents of all shapes and sizes due to snow and ice and moose collisions. Don’t ever assume a moose is just a big whitetail deer—they weigh upwards of 1,000 pounds and stand over 7’ high at the shoulders. Alaska averages more than 600 per year killed by vehicles and normally one-to-two humans per year die as well. Travel flexibility comes in handy; there are often no hotels, per se, in the smaller communities, particularly in the winter. An overnight stay either due to plane schedules or weather delays often means asking around for a room or heading to the school to ask permission to camp in the gym. I always travel with a backpack I can live out of for at least a couple days. I make it a practice to take far more photos and measurements than I think I’ll need, as a return trip may be impossible. Same with witness, owners or claimant interviews; more is better because you won’t get the chance again. Claims estimates become challenging when using commercial estimating programs. While many have regional factors, they simply can’t adjust for remote locations requiring barge, snow machine or air shipment of materials. A rule of thumb is to add a 10 percent increase for each ‘stop’ materials have to make within Alaska; i.e. initial arrival, usually Anchorage, next stop by truck to a barge port or airport, next stop the nearest ‘hub’ community, (Bethel, Dillingham) then the final stop at the claim site. Shipping costs can be as much as 50 percent of a claim. Finding contractors to do repairs in the remote areas can also be a challenge, so frequently the insured or claimant wants to do the work themselves. This has to be negotiated with the insurer and may require a final site visit by the adjuster to inspect the work, which ads more travel costs and time. The hardest claims for me were always fatalities; I’m sure that’s true for every adjuster.

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PUBLIC RISK | JANUARY 2016

I have thoroughly enjoyed everything I’ve learned along the way adjusting in Alaska. While it may be different than the lower 48, in Alaska, it’s just another day at the office! Julie Cisco is the director of planning and operations for the Kenai Peninsula Borough (AK) School District.

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IMPROVING

HUMAN PERFORMANCE: HOW TO MAXIMIZE YOUR TEAM’S CONTRIBUTIONS BY RANDY ANDERSON

PUBLIC RISK | JANUARY 2016

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S A RISK MANAGER, do you ever struggle with finding a balance between fostering productivity, allowing people to self-manage, keeping people safe and mitigating exposure? In many organizations, the pressure of managing tasks often overrides the desire to lead people. Even more challenging is the fact that each team member has a different matrix of personality, learning style, communication preference, skills, and methodology. So how can you produce results AND create atmosphere that inspires people to do and give their best, all while minimizing risks? Finding that balance is what separates leaders from managers, and creates an environment that champions both safety and productivity.

There are three keys factors necessary to maximize the contribution of your team members, regardless of someone’s position, education, age, or other station in life. In order to exploit the collective effort of all team members, everyone must be fully engaged, equipped, and empowered to do their job to the best of their ability. Unfortunately, that is easier to say than do. Here is a strategy for making sure all three E’s happen.

ENGAGE Recent studies show that as many as 70 percent of American workers are disengaged or actively disengaged in their work. This can lead to safety issues as well as lost productivity. At a minimum, disengagement may show up as negative talk, poor customer service, missed deadlines, or poor workmanship. However, it may take on more significant consequences if it results in absenteeism, lack of attention to safety protocol, or exposing people to high-risk situations. Engaging your team members will require more than a pep talk. It is going to require that you identify their three key drivers. First, what are their core values? Core values are the things for which a person will sacrifice in order to have, and they’ll fight to keep. This is the fabric of a person’s being. Key decisions a person makes in their life will reflect or prove what a their core values are. Whether it is faith, family, finances, health, wealth, fulfillment, or something else; core values are just that…the things that a person VALUES most. Second, what are their primary motivators? People are driven by a combination of factors, but those factors will fall into one of five categories. Some people are driven by accumulation. Whether it is an accumulation of money, degrees/certifications, or something else they can possess, these people are working to create a “bigger pile.” Some people are driven by recognition/appreciation. They crave a pat on the back, a word of commendation, or some

other form of acknowledgment that they are valuable and appreciated. Still others are motivated by competition. They always seem to be able to push themselves further if it means outperforming someone else or surpassing a difficult goal. Fourth, some people are motivated by self-satisfaction/fulfillment. Regardless of how they are measured, rated, or graded by someone else, they experience contentment in simply knowing that they did their very best and gave 100 percent effort, energy, and personal resources. Finally, some of your team members are driven to preserve and promote relationships. Their main goal is to work in a way to make their manager look good, or to help co-workers be successful. While everyone is wired differently, they’re all driven by some combination of these five motivators. These are the things a person NEEDS most. Lastly, to fully engage your people, you need to know their aspirations. Everyone has something in life that they want to achieve, attain, acquire, or experience. These are the things people want their life to count for, the things for which they want to be remembered, or the legacy they want to leave. Whether it is to live in a certain place or travel during retirement, to be remembered as a great person, or to have started something that carries on after they’ve passed, these are the things people HOPE FOR most. By observing where someone spends their time, efforts, energy, and resources, you’ll begin to realize what is truly important to them. By building a relationship with them, you’ll hear them talk about what matters most. And by asking strategic questions, you’ll get to know them as a person (not just as a co-worker or subordinate), and you’ll unlock the secret code to making sure their heart is in their work. Additionally, people will become more engaged in their work when they see how they fit into the bigger picture. Share the history of your organization. No one wants to be

JANUARY 2016 | PUBLIC RISK

Improving Human Performance: How to Maximize Your Team’s Contributions

Once you’ve engaged and equipped your people, you arrive at a very difficult point for many managers. The real test of leadership is a willingness to empower people. Simply having a car and sitting in the front left seat of a car does not make someone a driver. Empowering people means that you allow them to determine methodology, make mistakes, and hold them responsible for the ultimate results that they produce.

the one who “let the torch go out.” If they know the origins and milestones that came along the way, they’ll work to continue the progress. Talk about the “WHY’s” of their job and the expectations that are placed on them. Most people will rise to meet the expectations you place on them, provided those expectations are reasonable. Along the way, give them timely feedback, coach rather than criticizing people, and partner with them in their personal/professional growth.

EMPOWER

EQUIP

As we explore how to empower people, I am going to focus on two popular leadership styles that are common in the American-workplace. The first is Situational Leadership. This was first outlined and formalized by Ken Blanchard and Paul Hersey in the early 1970’s. This approach somewhat limits how much empowerment you actually turn over to someone, but is an efficient approach for short-term projects.

Now that you’ve got their heart in it, you need to give them the tools, training and resources to do their job effectively and efficiently. In most organizations, it is a lot easier to gain approval for new computers, software, iPads, vehicles, or facilities, than it is to make ongoing training a part of the culture. We expect people to produce more every year, but is your organization investing in helping them become better equipped to do that. An easy example lies in technology. We are usually more willing to purchase a new computer for someone, than to pay for the person who will use the computer to learn how to fully utilize that computer to its full capacity. Similarly, it is much easier to talk about better customer service than to sell the idea of communication, customer service, or time management training. At times, I see people who are given a considerable amount of training, but don’t seem to try very hard to master what they learn, and incorporate the strategies. You have to decide if this is the result of an attitude problem or an aptitude limitation. Unfortunately, some people end up being promoted or hired into a position that is beyond their ability. That is very different than someone who isn’t engaged enough to give sufficient effort to successfully meet the requirements of a higher position. Thus, it is necessary to start with engagement, THEN move to equipping them. If you find that to be the problem, back up and start over reengaging them.

PUBLIC RISK | JANUARY 2016

Situational Leadership starts by assessing two very important determining factors for how you can most effectively interact with and lead an individual. Are they competent to successfully undertake the ownership of the task, and are they committed enough to see it to its completion? The answer to these two questions will dictate the best way to respond. Think of a seesaw…when one side is up (high), the other side is down (low). If they are highly competent, they need a low amount of direction. If they have a low level of competence, they need significant direction. If they are highly committed, they need little support. But if their commitment level is low, you’ll need to give them high support. High Commitment and High Contentment requires Low Support and Low Direction…In leadership terms, that means we can delegate tasks to them, trust that they will do it correctly, and see it through to the end. Conversely, if they are Low Commitment and Low Contentment (which,

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by the way is either a bad hire or an employee that is on their way out), you’ll need to give them High Support and High Direction. As their manager, you’ll put a significant amount of time, effort, and energy into keeping them on track and moving forward. There are positives and negatives to this style of leadership. On the plus side, this approach is efficient, practical, and straightforward. It allows (or requires) the leader to remain flexible and treat each situation differently. It can also be used in an infinite number of scenarios, which is good, because not only do people differ in competence and commitment, but the same person may be more confident in certain roles of their job than others, but their level of commitment may vary depending on how much they like certain aspects of their position.

CALENDAR OF EVENTS PRIMA’s calendar of events is current at time of publication. For the most up-to-date schedule, visit www.primacentral.org.

WEBINARS 2016

On the downside, this may not be ideal for all situations. It doesn’t take into account certain demographics. For instance, if you have an older employee that DOES embrace and is proficient with technology. That doesn’t fit the normal stereotypes and therefore requires an agile managerial response. It is further complicated by the fact that there is no direct correlation between commitment and competence. Finally, and probably the biggest negatives are that it is much more management than leadership, and it can’t sustain a long-term plan. Every situation will be a “starting over” point.

• • • • •

Situational leadership is a good way to manage projects and tasks, but won’t contribute to your team members taking personal ownership of progress and growth. They will become focused on their “stack” or their to-do list. If you want them to develop a “small business owner’s mentality,” and create an atmosphere that requires less hands-on management, consider incorporating a Transformational Leadership style.

• •

While Situational Leadership is a series of events, Transformational Leadership is a process that leaders and followers walk through together. Transformational leaders help people improve their performance and actually grow into their full potential. This leadership style causes people to focus on organizational goals rather than their own agenda. It also requires that everyone, take part of the responsibility of leadership, not just the manager.

•

One of the main challenges of Transformational Leadership is that it requires at least some amount of charisma. If a person is not naturally charismatic, they may not think they can be this kind of leader. Also, the atmosphere that is created by this kind of leader can become dependent on that individual. Once they leave, it may be difficult for a new leader to maintain it. The other most common and significant criticism is that, when used in the wrong way or for wrong motives, this type of leadership can be very destructive. David Koresh, Jim Jones, and Adolph Hitler are all examples of Transformational Leaders that caused societal deterioration. As you can see, both of these leadership styles have their merits, and both bring challenges. They aren’t mutually exclusive, so don’t try to pick one and strictly do that. As you work with your team, and begin to observe how they work best, you’ll see which one will work best depending on specific factors, personalities, and desired outcomes. By cultivating an atmosphere where all team members are more fully engaged in their work, adequately equipped to do their job, and feel empowered to create their own success, they will then help create a better mitigate many of the risks inherent in today’s workplace.

• •

January 13 – Law Enforcement: Coverage & Exclusions February 17 – Checking In With Your ERM Program March 16 – Mastering the Art of Communication April 13 – ERM: A Project Plan for Implementation May 18 – Recreation and Risk: It’s All Fun and Games Until… June 15 – ERM: Risk Maps and Registers July 13 – Risk, HR and Legal Interactions for the New Risk Professional August 17 – ERM & Pools September 14 – Implementing an Effective Return to Work Program October 19 – Cyber Threats Faced by Public Entities November 2 – ERM: Mandate & Commitment in 60 Minutes December 14 – Communicating ERM Progress

PRIMA ANNUAL CONFERENCES June 5–8, 2016 PRIMA 2016 Annual Conference Atlanta, GA Hyatt Regency Atlanta June 4–7, 2017 PRIMA 2017 Annual Conference Phoenix, AZ Phoenix Convention Center June 3–6, 2018 PRIMA 2018 Annual Conference Indianapolis, IN Indiana Convention Center

PRIMA INSTITUTE 2016 October 24–28, 2016 Pittsburgh, PA

Randy Anderson is a principle with E2 Professional Trainers.

JANUARY 2016 | PUBLIC RISK

JUNE 5–8 , 2016 // ATL ANTA , G A REGISTR ATION OPENS IN JANUARY!

PRIMA’ S 2016 ANNUAL CO NFERENCE

RISK MANAGEMENT

ON MY MIND

When NEUTRAL is a FORWARD GEAR DATA FOR A SUCCESSFUL WORKERS’ COMPENSATION PROGRAM By Robin Gelburd

JANUARY 2016 | PUBLIC RISK

When Neutral Is a Forward Gear

TAKE A ROAD TRIP

through today’s national health care landscape. No matter what your organization’s destination may be, the fuel that will keep you moving forward is transparent, reliable information about charges for health care services in each area of the country you traverse. A key to a successful program can be finding common ground among stakeholders—providers, payers, employers and the third-party administrators (TPAs) and state agencies overseeing the program. Health care cost information that is widely accepted as neutral and fair can be the starting point for reasoned, multi-lateral discussions, producing consensus on a macro policy level and providing case-specific assistance on the “micro” level that can prove satisfactory to all involved.

When considering the importance of cost transparency relative to the needs of health care stakeholders with competing interests, the adjudication of workers’ compensation claims provides a particularly clear and compelling case. A commonly-held perception of the fairness and impartiality of a fee schedule governing a workers’ comp program—the officially sanctioned list of procedures covered by a state’s program that prescribes the payment due for each of the services covered by the program—is essential to the success of the adjudication process. For a workers’ compensation fee schedule to be effective, it must achieve acceptance by parties whose interests are, in some cases, diametrically opposed. A successful workers’ compensation program—the vehicle that can deliver all passengers to their desired destinations—will work best when powered by a fee schedule built with consideration of an unquestionably neutral, independent source of reliable, up-to-date and comprehensive data tied to specific geographic markets. Generally, state workers’ compensation programs can be divided into three categories:  Fee schedules based on Medicare  Fee schedules based on commercial data  States without a fee schedule

ROADBLOCKS ON THE WORKERS’ COMPENSATION HIGHWAY Since their inception, workers’ compensation programs have been beset by contentious disputes related to appropriate fee levels. Those disputes almost inevitably result in dissatisfied stakeholders, and often lead to legal challenges. For this reason, many states have established fee schedules that set the fees for care provided in connection with a workers’

PUBLIC RISK | JANUARY 2016

compensation claim. However, each of the three types of programs may encounter different roadblocks. States with Fee Schedules Based on Medicare Many states employ fee schedules based on Medicare rates. After all, Medicare is a well-established basis for reimbursement for medical services for the elderly and is updated yearly. The determination of Medicare rates, however, has been subject to governmental policy directives and budget decisions; for example, in updating its fee schedule for 2016, CMS has again declined to value codes related to testing for drugs that are frequently abused—procedures that are utilized with frequency in the workers’ compensation arena. Understanding these issues and addressing them up front—or providing alternatives if considered appropriate —can help ensure a worker’s compensation program’s success. Fee Schedules Based on Commercial Claims Data States that use commercial data as a basis for reimbursing workers’ compensation claims must ensure that the data source they are using is independent and neutral in order to gain acceptance by providers, payers and employers. The data should be reported consistently with the coding—e.g., CPT®1, HCPCS, DRG—that is standard usage for billing health care charges. Additionally, it is important to update these fee schedules on a regular basis not only to keep pace with the market, but also to ensure the schedule incorporates new codes and eliminates codes no longer in use. States Without a Fee Schedule States with no fee schedule have employed a variety of ways for determining fees. In some cases, private databases are

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certified for use in paying workers’ compensation claims in the state; in others, laws or regulations require that fees be “commercially reasonable” or “usual and customary” fees for the community where services are provided. In the former case, the certified fee schedules provide a clear standard amount but sometimes may lack the requisite transparency to engender trust by the relevant parties. A “commercially reasonable” or “usual and customary” standard is vague, subject to interpretation and likely will be more open to challenge. Generally states that do not employ fee schedules experience a greater proportion of disputes than do “fee schedule” states. How can the number of disputes related to fee schedulebased reimbursement be minimized? An effective workers’ compensation fee schedule must compensate providers fairly in order to assure injured workers adequate and timely access to all necessary services. Payment levels need to be reasonable if they are to protect employers’ and insurers’ economic interests. A fee schedule that is accepted as neutral and fair by patients, providers and payers will minimize fee disputes and legal proceedings, saving both public and private resources. Workers’ compensation programs are best served by a fee schedule that is specific to the medical markets within the state it represents, designates procedures in accordance with standard billing codes, is current and routinely refreshed and is developed using underlying data that have been validated and organized by an independent, neutral party applying recognized methodologies. A fee schedule based on objective, sound data and methodologies and employing standard procedural designations serves the interests of

all stakeholders. It can create a “win-win” scenario that builds consensus around the program and improves overall satisfaction with its administration.

HOW CAN THE EXPERT APPLICATION OF NEUTRAL, RELIABLE CLAIMS DATA MAKE FOR A SMOOTH TRIP? Identifying the right data to use in establishing a fair fee schedule is just the first leg of a trip. The next leg is to establish a strategy for the continual evaluation, updating and ongoing maintenance of a workers’ compensation fee schedule to ensure that it continues to be representative of all the services relevant to workplace injury in the state. For that, expert guidance may be needed. Whether a fee schedule is based on commercial or Medicare data, working in collaboration with an independent organization unaffiliated with any stakeholder group that stands behind a statistically credible source of rigorously validated and aggregated health care claims cost data can help to ensure the fee schedule meets all of the essential criteria--completeness, neutrality, balance and reliability. This approach also can design a program that is tailored to a state’s specific workers’ compensation program needs and regulations. Be sure that the following tasks are included in the strategy for the ongoing maintenance and enhancement of a workers’ compensation fee schedule: • Include new codes. Keep fee-schedules clinically up-todate. Use data sources that can provide benchmarks for new codes which are just coming into use. • Fill gaps. Obtain data to help establish payments for codes which Medicare does not value in the case of those states using the Medicare Fee Schedule to help guide its own schedule.

JANUARY 2016 | PUBLIC RISK

When Neutral Is a Forward Gear

Workers’ compensation programs are best served by a fee schedule that is specific to the medical markets within the state it represents, designates procedures in accordance with standard billing codes, is current and routinely refreshed and is developed using underlying data that have been validated and organized by an independent, neutral party applying recognized methodologies. A fee schedule based on objective, sound data and methodologies and employing standard procedural designations serves the interests of all stakeholders. It can create a “win-win” scenario that builds consensus around the program and improves overall satisfaction with its administration.

• Remove obsolete procedures. Remove codes that are no longer used from the fee schedule so payments are not made for obsolete codes. In addition, confirm that any applicable replacement codes are added to the schedule. • Calibrate the fee schedule. Consult data that provide the range of charges in a market that can be used directly or subjected to a formula to create fee schedule values. • Review trending. Consider data sources that can provide market trends over time to help to design state formulas to apply to Medicare fees or other systems in the development of the fee schedule. • Update the fee schedule regularly. Technologies change and so can the costs of procedures that now use new techniques or devices. • Review highly utilized procedures. Maintain stakeholder support for frequently performed procedures. Provider satisfaction is important to preserve patients’ access to care for work-related illnesses and injuries. • Consider where the service was provided. Calibrate the fee schedule according to whether a service was performed in a hospital outpatient setting, urgent care center, ambulatory surgery center or a physician’s office.

PUBLIC RISK | JANUARY 2016

• Compare fee schedules to external sources. How does the fee schedule compare to other states’ schedules and to reimbursement through a group health plan? • Evaluate new categories of procedures. Make sure the fee schedule accounts for all relevant charges and include fees for procedures for dental services, drugs, devices, durable medical equipment and air and ground ambulance transportation.

ON THE ROAD TO A WORKERS’ COMPENSATION PROGRAM THAT MEETS ALL STAKEHOLDERS’ NEEDS Automotive buffs may point out that “neutral” is not a forward gear. But the neutral gear cuts off the connection between the wheels and engine, thereby reducing friction and allowing the vehicle to coast. A neutral, objective source of reliable claims data, on the other hand, can greatly advance a workers’ compensation program. At the same time, it can reduce the friction among parties with divergent interests, minimize challenges and disputes and provide a smooth road that allows a workers’ compensation program to coast along to the desired destination. Robin Gelburd is president of FAIR Health, an independent nonprofit organization founded to make transparent health care cost information available to all health care stakeholders.

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