New research illuminates a serious problem for injured workers: secondary psychological injuries resulting from the sheer hardship of navigating workers’ comp systems.

Catherine Montgomery

A report from Australia's Monash University examines the mental health impact of workers’ compensation systems that impose bureaucratic complexity. Drawing on injured worker surveys, stakeholder interviews and claims data, the report finds that workers facing delays in claim approval were roughly four times more likely to report a persistently negative claims experience, which the researchers associate with elevated mental health risks.

In simpler terms, not knowing whether you’ll receive the treatment or other benefits you need can harm mental health, potentially inducing another injury and increasing costs. 

This report should deeply concern every workers’ comp stakeholder in California. Through byzantine processes like utilization review and indefensible systems like medical provider networks, California excels at imposing delay, uncertainty and excessive claim durations on injured workers by dictating which physicians may treat injured workers and which treatments physicians may render. 

As workers’ comp insurers reportedly seek to identify mental health risks early and mitigate their costs, a hard look at the strain that injured California workers endure may be in order. 

Red tape harms mental health

The Monash University report draws a clear line between the administrative hoops injured workers must jump through and the risk of secondary psychological injury. In particular, facing an injury while at the mercy of distant claims administrators is a direct threat to mental health:

... [For injured workers], loss of control over their financial and health care decisions when engaged in compensation processes where decision-making is undertaken by others (e.g., insurers), elevates the risk of secondary psychological harm.

More specifically, delays in “claims processes” and “approvals” where injured workers feel powerless may be a direct driver of psychological symptoms:

Workers reported psychological distress, fear and exacerbation of anxiety and depression due to the complexities of navigating compensation systems, as well as anger and worry over delays in claims processes and approvals. A lack of support and a power imbalance between the worker and the system were also noted.

The conclusion is inescapable: Not knowing whether, or when, you’ll get the benefits you need takes its toll, to the point of potentially adding injury to injury (to say nothing of insult).

A recipe for secondary psych injuries

Take the report’s findings in the context of California workers’ comp, where:

• An MPN restricts a worker’s care to a designated group of physicians (often those willing to accept the steepest PPO reimbursement discounts).
• The worker’s treating doctor, even if an MPN member, must submit a request for authorization from the claims administrator for every treatment, from a splint to an X-ray to a specialist referral.
• Distant physicians (potentially out of state), paid by the claims administrator, can take weeks to conduct UR and approve only about 70% of requested treatments, according to daisyData. 

The Monash University report analyzes the Australian system, but the issues it identifies are painfully familiar to California's. Uncertainty about treatment approval, loss of control over health care decisions, and extended claim durations are hallmarks of California’s system. When questions linger, whether about medical treatment or disability benefits, health can suffer.

It is inconceivable that conclusions from the report, like the one below, wouldn’t resonate with injured California workers:

Decisions with substantial ramifications for [workers’] health care and personal finances are made by an unfamiliar third party (i.e., the insurer) within a system that imposes obligations on them that they most likely have not experienced previously.

In one of its most straightforward assertions, the report states that claim duration is “directly proportional to secondary psychological injury risk.” California's claim duration is roughly double that of the median U.S. state. Injured workers, providers and employers can do the math. Systemic inefficiency is likely increasing the cost of returning an injured worker to health, even as employers pay higher premiums. 

Data prove what basic empathy, so often lacking in the workers’ comp system, suggests: Waiting for treatment that may never come, or come too late, from a faceless claims administrator and its vendors would cause anyone to struggle with mental health.

Catherine Montgomery is the co-founder and CEO of daisyBill, a provider of workers' comp end-to-end revenue cycle management software. This post appears with permission.