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Catastrophic Workers’ Comp Claims During the Pandemic

The COVID-19 pandemic surprised all of us in January 2020, with its speed of viral infection transmission causing high mortality and morbidity among those afflicted in the United States. This newly formed mutant coronavirus, now known as Severe Acute Respiratory Syndrome Coronavirus 2 or SARS-CoV-2, took the world by storm and many in this country succumbed to severe acute hypoxemic respiratory failures that overwhelmed medical providers, hospitals, communities, and public health organizations in the locales most impacted by the pandemic.

People infected with COVID-19 ordinarily develop fever, cough, and fatigue that progresses quickly to shortness of breath from lung complications like pneumonias and ARDS (acute respiratory distress syndrome) causing severe hypoxia (i.e., low oxygen levels) and organ failures. Many of those stricken became severely and critically ill, necessitating prolonged hospitalizations in intensive care units (ICUs).

Unfortunately, the initial death toll was very high, up to 65.7% for those being placed on mechanical ventilators, and even higher for some who were so critical that they needed cardiopulmonary bypass or extracorporeal membrane oxygenation. Adding to the challenge was the fact that our medical community neither had any knowledge about COVID-19 nor access to any known treatments or cure; hence, our medical providers improvised and relied on their past experience with other severe respiratory infections to keep severely ill COVID-19 patients alive.

What has been learned

Since March 2020, we have become more knowledgeable about COVID-19 and the SARS-CoV-2 virus. We have also become more familiar with the underlying mechanisms for COVID-19 viral transmission, infection virulence, organ damage, and complications. Even more importantly, the medical community now knows which treatments are more effective during acute phases of the illness and how to better intervene to mitigate and prevent severe complications and death. Examples include medical providers utilizing more noninvasive ventilation techniques and avoiding invasive mechanical ventilators altogether, while proactively administering medications like steroids and anticoagulants to limit the degree of systemic complications.

We have identified some promising new therapies for hospitalized COVID-19 patients, such as Remdesivir, and other promising new therapies, like monoclonal antibodies that can effectively treat early COVID-19 infections. Furthermore, our experience in the U.S. supports the premise that the majority of people getting COVID-19 infections will experience mild to moderate symptoms and not require hospitalization. This has been reinforced by a recent report published by Health Strategy Associates, LLC, whereby a survey of workers’ compensation payers and insurers revealed that a majority of COVID-19 claims to date were generally “not expensive,” with many incurring minimal to no expenses.

The potential impact on workers’ compensation

The United States is starting to see significant reductions in the overall mortality of critically ill patients from an earlier high of 66% to around a 30.9% COVID-19 death rate. All of this is reassuring news to the workers’ compensation industry, but it is important to keep in mind that a small percentage, up to 5%, of people infected with COVID-19 become critically ill with severe complications requiring significant acute care interventions, as well as post-infection sequela, requiring greater and prolonged medical costs due to extended recovery needs.

In response to the initial medical devastation from COVID-19, Paradigm expanded our catastrophic and complex care solutions to include Paradigm Contagion Care, an outcome-based continuum of care service to facilitate injured workers’ best functional level of recovery from COVID-19 infections.

As the COVID-19 survival rate improved, our experience at Paradigm led to one important epiphany — that high numbers of COVID-19 referrals to our program had very similar characteristics and challenges extant with our traditional catastrophic injury claim referrals involving traumatic brain injuries, spinal cord injuries, multiple trauma, burn injuries, and amputations. What is clear to us about our COVID-19 referrals is the high prevalence of complex organ injuries that would typically be associated with “outlier” claims having very expensive acute medical costs, compounded by long-term medical and rehabilitation costs arising from residual damages/injuries related to lungs, heart, brain, spinal cord, kidneys, and even limbs.

Conclusion

The aforementioned cases represent the uncommon, yet harsh reality of COVID-19’s potential to become a catastrophic claim. Paradigm’s current experience with care managing complex COVID-19 claims to the highest functional level confirms the varying degrees of challenges caused by COVID-19 on neurological and cardiovascular systems, where complications like ischemic brain injuries from strokes, spinal cord infarcts, Guillain-Barré syndrome like polyneuropathies, heart attacks, and even limb loss from arterial blood clots and sepsis, clearly exist. Such COVID-19-related devastations require medical care to address the prolonged and/or permanent residual physical impairments.

Although there are workers without any obvious medical risk factors for severe complications, as noted in the first case study, many of these complex COVID-19 cases involve injured workers with premorbid chronic medical conditions, including obesity, heart disease, and diabetes. For now, these types of complications are primarily seen in COVID-19 claims involving hospitalized injured workers with severe and critically ill COVID-19 conditions where published literature indicates complication rates of up to 30%.

In addition, the medical community is keeping vigilance for other costly infection-related long-term sequelae like virus-related diabetes mellitus, dysfunction of autonomic nervous system, and persistent symptoms from myalgic encephalomyelitis or chronic fatigue syndrome that is associated with other well-known viral infections such as infectious mononucleosis and enteroviruses.

As more claims data becomes available to NCCI, it will be both interesting and helpful to learn more about the medical cost impacts of COVID-19 claims on the workers’ compensation system. So, for now, despite some casual observers thinking this may be “inconsequential” in response to many asymptomatic and mild cases involving COVID-19 claims, it would be prudent to acknowledge COVID’s true outlier potential as catastrophes with long-term disabilities and high medical costs.

Source- PropertyCasualty360.com

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