Public Risk July/August 2020 Issue

PUBLISHED BY THE PUBLIC RISK MANAGEMENT ASSOCIATION JULY/AUGUST 2020

JESSICA LYONS NAMED 2020’S PUBLIC RISK MANAGER OF THE YEAR PAGE 6

ALSO IN THIS ISSUE

REIMAGINING WORKERS’ COMPENSATION: TENNESSEE’S JOURNEY PAGE 11

USING COVID-19 TO SPUR PANDEMIC PLANNING FOR THE FUTURE

PAGE 16

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JULY/AUGUST 2020 | Volume 36, No. 4 | www.primacentral.org

CONTENTS

The Public Risk Management Association promotes effective risk management in the public interest as an essential component of public administration.

PRESIDENT Sheri D. Swain Director, Enterprise Risk Management Maricopa County Community College Tempe, AZ PAST PRESIDENT Scott J. Kramer, MBA, ARM County Administrator Autauga County Commission Prattville, AL PRESIDENT-ELECT Melissa R. Steger, MBA, CRM Asst. Dir., WCI & Unemployment Ins. University of Texas System Austin, TX DIRECTORS Forestine W. Carroll Manager of Risk Management Memphis Housing Authority Memphis, TN

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Jessica Lyons Named 2020’s Public Risk Manager of the Year MEET THE CITY OF HENDERSON'S RISK MANAGER

By Teal Griffey, MBA

Eric Hallerud Olathe, KS JamiAnn N. Hannah, RMPE Risk Manager City of Gallatin Gallatin, TN Laurie T. Kemper Sr. Risk Management Consultant City/County Insurance Services Salem, OR Adam Maxwell Director of Admin Services City of Westerville Westerville, OH Michael S. Payne, ARM, HEM Risk Manager City of Fresno Fresno, CA NON-VOTING DIRECTOR Jennifer Ackerman, CAE Chief Executive Officer Public Risk Management Association Alexandria, VA EDITOR Teal Griffey, MBA Manager of Marketing and Communications 703.253.1262 • tgriffey@primacentral.org ADVERTISING Teal Griffey, MBA 703.253.1262 • tgriffey@primacentral.org

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Reimagining Workers’ Compensation: Tennessee’s Journey

By Rodney Escobar and Shellie Evans

IN EVERY ISSUE

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Using COVID-19 to Spur Pandemic Planning for the Future

By Kenny Smith

Public Risk is published 6 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 2020 Public Risk Management Association

| 4 NEWS BRIEFS | 20 ADVERTISER INDEX

JULY/AUGUST 2020 | PUBLIC RISK

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COMING AUGUS T 2020

Diversity & Inclusion Series PRESENTED BY MAURICIO VEL A SQUEZ , PRESIDENT AND CEO OF DIVERSIT Y TR AINING GROUP PRIMA’s next members-only education series is a vital and timely look at workplace diversity and inclusion, taught by a subject matter expert and presented over five weeks.

• • • • •

WEEK 1: Diversity & Inclusion, Being a D&I Change Agent Week 2: Age Diversity - Multiple Generations in the Workplace Week 3: Sexual and General Harassment Prevention Week 4: Toxic Employee -Toxic Workplaces, How to Deal with Them Week 5: Emotional Intelligence - The New Interpersonal Frontier

L O G I N AT P R I M A C E N T R A L . O R G

MESSAGE FROM PRIMA PRESIDENT SHERI D. SWAIN

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Gratitude

s I begin my journey as the new PRIMA President, I find myself reflecting on how I got here and looking forward to what I hope to accomplish in the coming year.

I am truly grateful for our members! I have always been impressed at how information is shared, how members volunteer for committees, but also are at the ready to form a task force to address an emerging trend or a relevant topic we are all trying to navigate. Recently, I experienced firsthand how members rallied to form the COVID-19 task force and provide an informative white paper for members in a very short time. Due to our member’s expertise I am grateful that we are open to sharing ideas and no one has to recreate the wheel. We would not be the successful organization that PRIMA is without our members, our corporate partners and sponsors, and I never lose sight of that.

I am forever grateful for all the great experiences, opportunities to build my knowledge base, forming lifetime friendships and much more with PRIMA. As I look forward, I am filled with gratitude that I been given opportunity to lead the organization, especially through the COVID-19 crisis.

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We would not be the successful

organization that PRIMA is without our members, our corporate partners and sponsors, and I never lose sight of that.

As everyone continues to work hard to protect their entities, please remember to protect yourselves because although these are challenging times, you as public risk management professionals are the glue that holds your entities together. Please stay healthy and safe.

I leave you with a quote from Zig Ziglar, “Gratitude is the healthiest of all human emotions. The more you express gratitude for what you have, the more likely you will have even more to express gratitude for.”

“

Typically, I would be writing to talk about the conference in Nashville and commenting on all the great memories I would be taking away.

Although, I am saddened that we were not able to hold the conference in person, I am grateful that through the Board and our PRIMA staff that we can continue to bring educational opportunities to you, albeit virtually via the Summer Education Series. Risk professionals navigate change better than any other profession and we will come through this challenging time stronger. I am grateful and proud to be a risk professional.

Sincerely,

Sheri D. Swain PRIMA President 2020–2021 Director, Enterprise Risk Management Maricopa County Community College Tempe, AZ

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NEWS BRIEFS

NEWS Briefs

HOW INCLUSION AND DIVERSITY PLAYS A CRITICAL ROLE IN RISK MANAGEMENT

Just as you should periodically review your risk management plan to determine whether changes should be made, you should also periodically reassess the composition of your team. Those responsible for enterprise risk management (ERM) know that diversification is a key tenet of managing any portfolio of risks.

Four Ways to Build Create a Diverse ERM Team Make regular and gradual changes. Regularly re-evaluate your risk management leadership team. For each role, ensure that you are considering multiple candidates, including diverse candidates in your interview slate and diverse colleagues in your interviewing team.

Ask for outside opinions or recommendations on who might be a good fit for each role. Simply increasing diversity within your search process will help you see results over time.

Consider a bottom-up approach. You may find it difficult to populate your ERM leadership roles with a diverse group of colleagues at the right level of seniority so, start looking one or two levels down and grooming the next round of ERM leaders. Ensure diversity in middle-management roles for each of your individual areas of risk, and work to develop these managers into more senior roles. Expose diverse candidates to the ERM process earlier, allowing them to take on more responsibility and establish feedback channels. This will be an important skill for them in their leadership roles and is crucial to an inclusive team environment.

Look outside your ERM team. Consider whether colleagues from outside teams could benefit your ERM program as part of your leadership team. Companies have had success

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PUBLIC RISK | JULY/AUGUST 2020

with implementation of a rotation program for employees just below the management level, which can expose them to a variety of business areas, including risk management. This creates a constant flow in your talent pipeline from which to fill risk management roles.

finding candidates with ERM experience from the banking industry or other financial sectors.

Diverse candidates also have different industry perspectives, which may help your organization identify new risks and opportunities or prioritize your current portfolio of risks differently.

Look outside your organization. When an internal search fails to identify qualified diverse candidates, don’t just give up. Search outside of the organization, or even outside of your industry, for diverse candidates who could fit the role. For example, an insurance company looking for diverse ERM professionals may have luck

Employ these tactics to diversify your team— just like you’ve diversified your risk portfolio— and you’ll ensure the long-term success of your risk management strategy.

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Read the full story at willistowerswatson.com > Insights

Ensure diversity in middle-management roles for each

of your individual areas of risk, and work to develop these managers into more senior roles. Expose diverse candidates to the ERM process earlier, allowing them to take on more responsibility and establish feedback channels. This will

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Mallika Bender | August 28, 2019 | WillisTowersWatson Blog

be an important skill for them in their leadership roles and is crucial to an inclusive team environment.

COVID-19: NEXT STEPS FOR YOUR CYBER INSURANCE

WILL COVID-19 EXACERBATE ECOMMERCE FRAUD?

June 2020 | Marsh Research & Briefings

Julius Weyman & David Lott | April 6, 2020 | Federal Reserve Bank of Atlanta Blog

Organizations face increased cyber challenges as COVID-19 continues to spread, with core activities often disrupted or needing to be adapted.

One aspect of this is understanding the pandemic’s implications for cyber insurance. Risk professionals should work with their insurance advisors to review cyber insurance policy language. They should also refresh their awareness of all incident-response services available under their policies and how to make best use of them should an incident occur.

Policy Response With many organizations already operating in crisis mode, incidentresponse services are more vital than ever. You should work with your cyber insurance advisor to ensure you understand: • How to access your incident response coverage—do you need to call a hotline or report through your advisor?

• Is a pre-approved panel of forensic experts available to help investigate an incident? Is your information security team aware of this benefit?

• If you have a ransomware event, does your cyber policy include coverage for resolving it? Does your insurer provide access to a third party that can facilitate payment of a ransom quickly if required?

• Are there policy conditions you need to comply with to ensure coverage will apply? For example, is pre-approval required before you incur forensic costs?

Renewal Preparation Insurers across all lines of business are concerned about the pandemic’s impact on the risks they insure and the losses they may face. Organizations should anticipate questions from insurers on some or all of the following issues: • Any expected financial impairment due to the pandemic that may affect investment in cybersecurity or technology.

• Working from home policies—be prepared to explain any relaxation of usual cybersecurity and privacy policies during these unprecedented times.

• Deployment and management of bring-your-own device versus company-owned devices, in particular mobile device management solutions.

• Activation and mandates for employees and other users to utilize multi-factor authentication to access the organization’s systems.

• Methods of securing access via virtual private networks and other secure remote-access protocols, including: • Employee/user training on the use of public and home WiFi for business communications.

Read the full story at coronavirus.marsh.com > Insights > Research & Briefings

Ecommerce sales in the United States continue to gain a greater share of overall retail sales each year, and there is no question that with the current COVID-19 environment, our daily habits have undergone tremendous change. TransUnion reports that in the week from March 11 to 17, when WHO classified COVID-19 as a global pandemic, ecommerce transaction volume increased 23 percent over the previous week. As part of that change, we can expect that ecommerce sales will increase at a greater rate in 2020 than 2019.

This spike in ecommerce traffic will likely bring with it a parallel spike in criminal activity, possibly adding to the increasing fraud levels in ecommerce. This shouldn't come as any surprise. It will be important for the good guys not only to be expecting this but also to be prepared for it by making swift adjustments that match the challenge.

One of the key adjustments to consider and apply quickly is properly tuning algorithms for detecting ecommerce fraud. In normal times, anomalous-pattern detection schemes are relied on to expose fraudsters.

Elements such as the type of stores commonly used, frequency of usage, average or range of transaction values, and more go into making up an overall usage pattern for a given customer. While these transaction risk models have become very sophisticated over the years, they are challenged by abrupt changes in usage patterns, especially at an individual account level. They need to be smartly and quickly adjusted. Issuers and merchants need to balance the decision of denying transactions—which brings with it the risk of disgruntled legitimate customers and lost revenues—against approving fraudulent transactions and taking financial losses.

Working collaboratively with merchants, consumers can help to surprise the criminals as fraud fighting evolves. The good guys win if we exercise patience with one another and remain mindful of the balance between purchase friction and fraud avoidance as fraud-fighting tools and methods adjust. Both sides being considerate of the needs on both sides of the transaction—working together, again, with patience and willingness to engage, perhaps differently than we've been willing to in the past, could yield results that everyone (except the crooks) is happier with, in both the short run and long run.

Fraud management teams will be busy managing their fraud-detection tools and processes, and we expect that consumers are ready and willing to assist in ways that are helpful as well.

Read the full story at frbatlanta.org/blogs

JULY/AUGUST 2020 | PUBLIC RISK

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PUBLIC RISK | JULY/AUGUST 2020

JESSICA LYONS

NAMED 2020’S PUBLIC RISK MANAGER OF THE YEAR

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MEET THE CITY OF HENDERSON'S RISK MANAGER

BY TEAL GRIFFEY, MBA

ESSICA LYONS, CRM, IS THE RISK MANAGER FOR NEVADA'S LARGEST FULL-SERVICE CITY with more than 15 years' experience in public and private risk management. In Henderson, Lyons established and promoted city-wide Total Cost of Risk reporting and communication through a new information system. She also identified and fixed areas that left the city exposed in liability coverage while introducing new risk programs. With Lyons, the City of Henderson has dedicated itself to taking proactive steps to increase safety and reduce money spent on preventable losses, claims, and more.

CITY OF HENDERSON, NEVADA

The City of Henderson is the largest full-service city in Nevada and the second-largest by population. These services include police, fire, water and utility services. The Henderson Fire Department was the first triple-accredited fire department in the country, with the police, public works, parks and recreation, and building and fire safety departments also earning national accreditations. Each city department has its own distinctive exposures, media/ reputation and loss control risks. The city is also responsible for a landfill and railroad systems, creating additional unique exposures.

Public safety, public works, parks and recreation, utilities, building permits, inspections and office administration are the broad range of services the City of Henderson provides. With such a variety of services and classifications of workers, the risk exposures are equally extensive.

The highest level of risk involves contact with the public, followed by the hours/miles driven by employees raising the potential for motor vehicle accidents. Recent cyber-attacks on the public sector has heightened awareness of the potential disruption of public services and shutdowns the City could face. As a result, improving cybersecurity and defending against cyber-attacks has also become a priority.

INCREASING RISK MANAGEMENT

As the risk manager for one of Nevada's premier cities, Jessica Lyons is responsible for evaluating the city's insurance program and self-insurance fund to determine financial, compliance and security risk. Since she began with the City of Henderson in 2016, Lyons has been tasked with a variety of responsibilities, including a comprehensive review of the insurance program, contractual agreements and restructuring the claims processes.

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JESSICA LYONS NAMED 2020’S PUBLIC RISK MANAGER OF THE YEAR

Inclusive Insurance Program A primary concern for Lyons was the lack of an inclusive insurance program. Within the first two years and after building a relationship with a “broker that understood the unique exposures to public entities,” Lyons identified several areas of exposure. With the indispensable help of the broker, Lyons was able to close those gaps and ensure proper coverage was in place. Some of the coverage gaps were: • Environmental Site Liability policy • Stand-alone Terrorism with Active Shooter coverage • sUAV (drone) coverage • Out-of-State Travel coverage for fire and police vehicles • Special Event Insurance (SELIP) While several new policies were incorporated into the insurance program, Lyons raised deductibles on other policies where loss history was nominal and resulted in lowered premiums across the board.

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Restructuring the Process of Claims Handling “With a severely antiquated Risk Management Information System (RMIS) and only one employee handling claims for the city, a solution was paramount,” Lyons says. The objective was to start fresh, with accurate data, create effective processes to eliminate noise while maintaining quality of input.

To update the information system, all data migrating from the old RMIS to the new cloud-based system was subjected to exhaustive analysis, reporting and cleanup to prevent data from being converted incorrectly. The risk management team included the safety, environmental, legal and human resources departments in various phases of implementation to ensure they were committed to the new processes, and their needs were met.

“The results of migrating to a new RMIS has been astounding,” Lyons says. The city is now able to transmit data and standardize

PRIMA membership has been invaluable to me,

particularly the ability to network with a community of public sector risk management peers. The education

“

component has also proven very beneficial through webinars, seminars, and the Annual Conference.

the information for easy analysis efficiently.

Fewer communication silos occur between departments since the launch in 2018, and they are now able to share pertinent information as well as accurately evaluate the city's Total Cost of Risk (TCOR). Lyons intends to harness the full power of the city's risk, insurance and claims data to prevent losses, control claim costs, inform decisions and improve processes to reduce the city's TCOR. It is a future goal to expand the RMIS to include enterprise risk management versus simple risk oversight.

Currently, five departments are represented in the new RMIS. The goal is to develop, implement and maintain a risk analytics initiative to maximize the use of data, analytics and automation to enhance the monitoring and reporting of risks across departments.

Due to the number of employees using the system, a steering committee was established to safeguard its efficient and operative use through the city. Its purpose is to align the City of Henderson's use of the RMIS with its strategic goals and to encourage industry best practices and standards.

Now risk management is capable of accurately reporting loss trends for frequency and severity to departments and city management, as well as allow the safety department to be more proactive in its loss control and safety initiatives. Lyons’ division is responsible for presenting and training all departments on the principles and practices of risk management to establish a safe, communicative and cohesive work culture.

Loss Control Program The risk management and safety departments use the city's loss control program as a technique to reduce the possibility that a loss will occur and reduce the severity of those that do occur.

The goal is to minimize claims both to the public and to city employees.

Each city department conducts monthly risk and safety committee meetings, reporting to a city-wide committee their findings.

The committee's mission is to provide a safe environment for employees and visitors through collaborative planning and continual promotion of a premier safety culture.

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In 2019, Lyons was a founding member of the newly established Nevada chapter. During its establishment, she assisted in the creation of the chapter by-laws and acted as secretary.

WINNING PUBLIC RISK MANAGER OF THE YEAR

“I am humbled by this award. It was a team effort and I’m so grateful to work for the City of Henderson and my amazing team.”

Employee incentive programs, like the city's "Henderson High Fives" program, aid in reporting potentially unsafe conditions, allow peer-to-peer recognition and promotes an accident-free workplace.

With the recent implementation of the RMIS, the risk management department has identified and analyzed exposures and trends to make a concerted effort to be proactive versus reactive in its approach to risk reduction. Based on the findings, the City of Henderson implemented programs throughout the departments and quickly saw positive results. These programs include: • Increased employee drivers' ability to see behind their vehicles by adding backup cameras • Increased visibility of maintenance and work vehicles while parked or operating on the roadways by requiring brightly painted chevrons • Reduced hand injuries for police officers via a glove program • Reduced back injuries for firefighters by expanding the fire department's lift program with additional patient lifts

Lyons and her team believe losses can be prevented with commitment and by working as a team to make sure employees and the community stay safe.

INVOLVEMENT IN THE RISK MANAGEMENT COMMUNITY

Lyons finds pleasure in learning each aspect of risk management, and has done so through a variety of positions; administration, data analysis, and claims adjusting to her current position as the risk manager for the City of Henderson. Her 15 years' experience in risk management took place in various industries; hotel/casinos, construction, hospitality, property management, non-profit, and others.

Division Head of Emergency Management, Safety & Environmental for the City of Henderson, Ryan Turner praised his colleague saying, “The emergency management division requires a strong relationship with our risk manager because we attempt to mitigate and reduce risks across the city…Jessica developed strong professional relationships while remaining focused on what’s best for the citizens and the city overall. She has been consistently someone our division can depend upon.” With the continuing threat of COVID-19 their teams strong relationship will be a key element in keeping the city safe.

Normally, the public risk management community would have already celebrated Jessica Lyons win at PRIMA2020, PRIMA’s Annual Conference this year. However, due to health reasons the event was canceled and we missed out on all the fun and education. As risk management professionals though, we know how to pivot to meet new challenges.

Lyons sums up her feelings beautifully, “While I’m sad we can’t all get together to celebrate in person, I’m glad the organization is keeping everyone safe. I am humbled by this award. It was a team effort and I’m so grateful to work for the City of Henderson and my amazing team.”

Congratulations Jessica Lyons!

Teal Griffey, MBA, is the Manager of Marketing and Communications for PRIMA.

Since 2004, Jessica Lyons has been intimately involved in the risk management community, beginning her career as a Western Regional Claims & Risk Analyst for an entertainment company. In 2008, Lyons earned her Certified Risk Manager (CRM) designation through the National Alliance for Insurance Education and Research.

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Meet PRIMA’s New Members from April – May 2020!

T H A N K YO U F O R J O I N I N G T H E P R I M A C O M M U N I T Y !

Cheryl Cochet City & County of James

Jeffrey Green, ARM-P County of Larimer

Jesse Oswald City of Council Bluffs

Heather Fleming City of Clarksville

Vivian Howell Los Angeles World Airports

Jami Watts

REIM AGINING WORK ERS’ COMPENSATION:

TENNESSEE’S JOURNEY

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BY RODNEY ESCOBAR AND SHELLIE EVANS

V EN B EF O R E COV I D -19 T U R N ED O U R WO R L D U P SI D E D OW N , the State of Tennessee embarked on a journey to re-invent its workers' compensation program. Lessons learned from the current pandemic show they chose the right direction. For other public entities, their experience serves as a roadmap to automated, integrated systems that save money and deliver better customer service to all stakeholders.

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REIMAGINING WORKERS’ COMPENSATION: TENNESSEE’S JOURNEY

At the heart of the challenge lay technology.

Without an integrated platform, there was no way to achieve the efficiencies leadership projected and to bring in collaboration amongst the different parties. Tennessee decided to adopt an advanced technology platform and integrated risk management system to begin its transformation.

MODERNIZING A LEGACY SYSTEM

The State of Tennessee workers' compensation program is administered by the Tennessee Department of Treasury Division of Claims and Risk Management and provides coverage for approximately 90,000 employees who work for 41 state government agencies, 49 institutions of higher learning, and more. These public employees vary from those working in a university hospital to the Tennessee Highway Patrol, the Department of Corrections, and the Tennessee National Guard. For two decades, these programs remained relatively static until Treasury leadership assessed the situation and determined the program needed a strategic plan for improvement. Here's what they found: • Information was silo-ed in various departments, making it very difficult to coordinate, communicate, and manage cases efficiently.

• The State had no formal return-to-work program, which made it impossible to coordinate efforts and get people back to work in a timely manner, if at all.

• Problem areas like pain management and opioid use could not be monitored and managed well.

• Systems and tracking used "old school" manual methods—mountains of data that had to be reviewed and interpreted by very busy human beings.

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It was clear that improved technology and better management of big data could change this picture. While machine learning, artificial intelligence, and virtual medicine were transforming other industries, why not leverage these technologies in workers' compensation?

The Division of Claims and Risk Management took these concerns and their initial plan for improvement to Treasury leadership and to the Tennessee Board of Claims, the commission with general oversight over Tennessee's Workers' Compensation and Risk Management programs. While the Commission and Treasury leadership gave the division its full support, some individuals in State government did not believe it was possible to reduce the State's workers' compensation expenditure from nearly $29 million to $15 million.

The risk management team knew to gain buy-in throughout the entire Tennessee State government system; they had to demonstrate that the State needed to invest more to save more. They could achieve this by moving away from the budgeting strategy of keeping administration costs low, instead of increasing funds to develop controls, financial strategies, and implementing technology to reduce losses from the actual expenses that are inclusive within all claims. The team knew that by increasing administrative funds for the purpose of an integrated claims management platform

and a partner known for innovative solutions, it would change how claims are managed.

Efficiencies, transparent communication, and coordination in claims management would lead to significant savings.

At the heart of the challenge lay technology.

Without an integrated platform, there was no way to achieve the efficiencies leadership projected and to bring in collaboration amongst the different parties. Tennessee decided to adopt an advanced technology platform and integrated risk management system to begin its transformation.

STEP ONE: SETTING THE GOALS

Together, the Treasury Division of Claims and Risk Management defined the criteria for success: • Integrate systems and data to improve communications and claims management • Identify cost drivers and modify them for better cost control • Use new technologies and solutions to improve service, lower costs, and enhance efficiencies • Start a return-to-work program so that injured workers who could contribute had opportunities, instead of sitting at home becoming increasingly dissatisfied and disconnected

STEP TWO: THE INTEGRATION OF DATA AND LAUNCH OF NEW TECHNOLOGIES

With the new integrated technology, the State was able to link its data in ways that connected and interpreted multiple data streams holistically. Machine learning captured the implications of data into actionable recommendations and immediately alerted the right people. Previously, it would have taken a busy adjuster or case manager hours or days to reach these conclusions. The lapse of time meant that claims were much more likely to go off the rails, resulting in delays and unnecessary treatment.

Providing nurses in a first-report-of-injury triage program also helped get injured workers on the right treatment program from the start and immediate access to care. Immediate evaluation by a health care professional provided a significant benefit to the injured workers, eliminating unnecessary trips to the emergency room, time off if the injury was not serious, and ensuring prompt, professional treatment.

By implementing a bundled integrated system aligned with changes in the States workers' compensation statute, overall costs were reduced while employee satisfaction improved.

The 2014 State of Tennessee Workers' Compensation Reform, headed by the Bureau of Workers' Compensation, coupled with the new system, significantly reduced litigation.

Tennessee went from 20 litigated claims in 2014 to just three in 2019, reducing costs from $12.6 million to $3.5 million in total paid on litigated files. Data and systems improvements also allowed for a more proactive bill review model, which generated $9.4 million in bill-review savings in just two years.

The Treasury Department also implemented annuities when settling claims, which allows a medical manager to assist injured employees navigating medical treatment and Medicare requirements. The implementation of pensions allowed the State to transfer the control of future medical claims and settlement payments to injured workers. They can choose their doctor and set up college funds or death benefits for their listed beneficiary. Transferring legacy claims into an annuity reduced

case reserves from $111 million in 2014 to $72 million in 2019.

The new programs were proving successful.

STEP THREE: IMPLEMENTING RETURN TO WORK (RTW)

At the time this initiative began, there was no statewide RTW program or formal procedures for how to report a work-related injury. This gap led to disconnects between managers, employees, the TPA, and the Department of Treasury, and increases the likelihood of long-term disability for injured workers or never returning to the job.

In September 2013, the Division of Claims and Risk Management proposed a pilot program with the Tennessee Department of Corrections, which historically had a high rate of workplace injuries. They worked with human resources directors to develop the first Return-to-Work policy for the State of Tennessee, and reduced Temporary Total Disability (TTD), medical expenses, and overall losses. All while improving productivity and employee morale by getting people back to work in some capacity as soon as possible. The pilot program began in December 2013. Within six months, the program showed a 15 to 20 percent reduction in overall costs for the Department of Corrections.

With the pilot program's success, the Department implemented the program statewide on July 1, 2015, and achieved 100 percent compliance within a year.

As part of the program, the State began utilizing a designated coordinator to help find light-duty jobs for injured workers; some agencies even adopted their own RTW coordinator. Departments that previously considered the chore of finding these light-duty options too much trouble changed their minds when faced with a fine of 50 percent of all TTD payments for the year or per employee.

Employees are now returning to work promptly whenever possible. For example, an employee from the Department of Corrections was worried about losing her job after suffering a workplace injury. Before the RTW program, this was often the case when there

was an extended period of lost time. However, because of the procedures put in place, she was able to return to work in the central office months before she could return to her previous position. Being able to contribute gave her the drive to get back to work and alleviated her concerns.

Combining data from across departments helped drive initiatives to unify the RTW programs. This integrated, transparent communication helped employers, employees, the Treasury Department, adjusters, and even physicians understand the status of a claim and what was needed to get the injured worker back to work. The implementation of a statewide RTW program helped reduce indemnity costs by 64 percent within two years, TTD payments decreased by nearly $3 million, and total paid decreased 17 percent, resulting in significant savings for the State.

STEP FOUR: TELEMEDICINE AND PHARMACY MANAGEMENT

Two years into the program, Tennessee was ready for a new challenge and began to overhaul its pharmacy platform and deploy telemedicine to provide faster, more convenient care to workers.

Telemedicine was first integrated into the nurse triage program so that if an injured worker needed to be evaluated by a physician, that observation took place immediately. The telehealth options were a boon for state employees, especially those who worked remotely, worked off-hours, or were located far from existing medical facilities. Now they can get faster evaluations and advice from anywhere through a smartphone. Nearly 90 percent of claims now utilize 24/7 nurse triage, and up to 25 percent of claims used telehealth services.

Adding medical notes and RTW information to claim files in real-time through the new telehealth platform allowed the State to immediately address RTW status, providing better outcomes and improved patient satisfaction. And an average savings of $414 per claim over those using traditional brick and mortar treatment. Also, medical expenses have been reduced by nearly $4 million.

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REIMAGINING WORKERS’ COMPENSATION: TENNESSEE’S JOURNEY

A DEEP DIVE INTO PHARMACY As the opioid epidemic continued to grow within workers' compensations claims, and the cost of prescription drugs steadily rising, the State needed a program that could track medication usage. It also needed to provide real-time alerts to potential dependent drug levels and manage pharmacy costs while ensuring that injured workers received the required prescriptions.

A high-touch pharmacy solution system was adopted to manage the State's formulary and streamlined point-of-sale processing more

the State's opioid cases declined, and the average opioid day supply was reduced by 43 percent.

The AI capabilities of the technology also make it possible to assess the morphine equivalency of an individual, notifying case managers, and adjusters when this level approaches potentially dangerous or dependent levels. An immediate intervention follows, including the option of bringing in the patient's physician by telehealth to counsel the patient on alternative pain management and prescription drug options that are safe and effective.

Six years after its inception, the Tennessee Department of

Treasury can look back on the original goals and show that they are all met, or in progress… Tennessee has achieved significant results by moving to an integrated system that leverages innovative technology, and proactively identifies and addresses cost drivers. effectively. The system uses machine learning to identify and flag potentially problematic claims and inappropriate prescribing patterns. With a point-of-sale review of prescribed medications, adjusters and clinical staff receive information required to make safe and cost-effective medication decisions. These improvements resulted in savings of over $480,000 for the State within the first year, while ensuring employee safety.

The formulary, which is reviewed quarterly, detects all brand medications at the point-ofsale. This allows the pharmacy team to convert brand medications to generic equivalents or alternatives—an important conversion for pharmacy expenditure, as brand medications can cost three to five times more than their equivalent generics. With these set protocols and utilization review, we achieved a 98 percent generic efficiency rate.

Perhaps even more importantly, the integrated pharmacy and bill review systems provide visibility of all prescribed medications and opioid usage. By putting controls and procedures in place, clearly communicating guidelines to prescribers, and stopping all first fill opioids exceeding a five-day supply for review,

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THE PANDEMIC

With the outbreak of the coronavirus pandemic, the State was concerned not only about employees who may be infected and those around them, but about injured workers now "sheltering in place" during recovery were especially vulnerable to infection.

Fortunately, with the basics of the telehealth program in place, it was easy to extend its scope into a virtual treatment "center" with the provider network's cooperation. Workers who needed to be protected could receive prescriptions by mail, tele-rehabilitation, virtual cognitive behavioral therapy services, and video visits with their medical practitioners.

RESULTS

Six years after its inception, the Tennessee Department of Treasury can look back on the original goals and show that they are all met, or in progress. The compliance from agency to agency, as well as the overall savings, show that the skeptics are convinced. The projected savings were realized not by cutting services or quality, but by re-engineering how the system was managed, by introducing incentives to improve return-to-work, and by combining information

and teams across siloes to empower solutions.

Tennessee has achieved significant results by moving to an integrated system that leverages innovative technology, and proactively identifies and addresses cost drivers.

• 88 percent of claims utilized 24/7 nurse triage program • TTD payments reduced by $2.9 million • 67 percent savings in medical bill review • Total incurred costs reduced by 38 percent • Total reserves reduced by $40 million • Open claims reduced by 61 percent

FIVE STEPS TO SUCCESS

How can other public entities achieve similar results? Here are the five factors of success: 1. An integrated program is key. Implementing a single-source solution with sophisticated technological capabilities allowed Tennessee to address a variety of needs across the claims and risk management program.

2. Demonstrate the value of an integrated program to leadership by illustrating the cost savings of claims management rather than administrative or medical costs that can't be controlled—this is what convinced the State to take action.

3. Making changes now can prepare you for the future. When the pandemic hit, Tennessee was in a strong position to ensure its injured workers were protected and safely received care they needed, because it was an early adopter of telehealth and nurse triage.

4. Improvements in return-to-work, pharmacy management, and faster and more informed automated interventions, all strengthened the State's program, improving results and lowering expenses.

5. Finding the right partner with the same vision is critical. Innovative technology, tailored solutions, open communication and collaboration, and a focus on employee well-being enable the success of any workers' compensation program.

Rodney Escobar is the Director of Claims and Risk Management for the Tennessee Department of Treasury.

Shellie Evans is an Account Manager at CorVel Corporation, a national provider of risk management solutions.

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USING COVID-19 TO SPUR PANDEMIC PLANNING FOR THE FUTURE

M

BY KENNY SMITH

ARK TWAIN ONCE OBSERVED THAT "HISTORY NEVER REPEATS ITSELF, BUT IT RHYMES.” While the COVID-19 pandemic is worse than anything we can remember, it does bear similarities to other outbreaks throughout recent history. SARS/MERS, swine flu, bird/avian flu, outbreaks of Ebola, measles, hepatitis C and others all affected localized areas across the globe, but these outbreaks ultimately did not affect preparation and training nationally or internationally.

For years, risk management experts have talked about pandemic planning and training but have failed to convince leadership of the potential impact of a lack of planning. Now, we’ve found ourselves gravely unprepared for the worst-case scenario.

Previously, to prevent the spread of infectious diseases, local governments guided citizens on how to protect themselves and those around them. Each of the most recent outbreaks before COVID-19 provided specific lessons on how to cope and respond locally. Unfortunately, these “lessons learned” were not eagerly explored or adapted within our communities and their various services.

Looking back to early March, when cities and states across the country were issuing “safer-in-place” pandemic orders, how many law enforcement, jail, and fire departments were fully prepared and ready to jump into emergency action? Did every front line employee know what steps to take to protect themselves and the citizens they serve? Did they have the necessary Personal Protective Equipment (PPE) available and easily accessible?

While previous outbreaks may have been relatively small, the COVID-19 pandemic truly is history repeating itself on a much larger scale, and it’s something for which we should have been, but were not, prepared.

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THE IMPACT ON LAW ENFORCEMENT

The daily work of a law enforcement officer doesn't stop for any reason, but the high-risk profession has quickly become even higher risk with the added complexity brought on by COVID-19. Duties now include imposing social distancing and "safer-in-place" orders while enduring circumstances that make it hard to practice them. Law enforcement agencies should review and consider expert and federal, state, and local authority guidance in formulating and implementing preparedness plans in the post-COVID-19 environment. While at this time it may be hard to predict exactly what steps will be recommended by authorities and experts for dealing with pandemics in the future, some commentators speculate that a change in policing practices during the time of an outbreak may be necessary. Such changes may require law enforcement agencies to avoid using resources on policing trivial offenses, such as jaywalking, panhandling, turnstile jumping and marijuana possession.

Additionally, officers are keenly aware of protecting their health and well-being as their risk of exposure potentially increases. According to the Centers for Disease Control (CDC), the minimum PPE recommended for law enforcement is: • A single pair of disposable examination gloves; • Disposable isolation gown or single-use/ disposable coveralls*; • Any NIOSH-approved particulate respirator (i.e., N-95 or higher-level respirator), though face masks are an acceptable alternative until the supply chain is restored; and, • Eye protection (i.e., goggles or disposable face shield that fully covers the front and sides of the face) * If unable to wear a disposable gown or coveralls because it limits access to duty belt and gear, ensure duty belt and gear are disinfected after contact with an individual.

Note that the CDC’s guidance is updated continuously, and law enforcement departments should consult all federal, state, and local guidelines to ensure they are taking the most up-to-date official guidance into account in designing their policies and practices.

THE IMPACT ON PUBLIC SAFETY: FIRE DEPARTMENTS

Fire departments are also not immune to the wide-reaching impacts of COVID-19.

Nearly 1,000 fire department employees across the country have lost their jobs due to the pandemic, and projections from the International Association of Fire Chiefs (IAFC) estimate another 30,000 jobs will be lost through 2021. The impact of this affects not only these individuals and their families but also the communities they serve. The loss of staff leaves fire departments less prepared to deal with COVID-19 and other emergencies, as citizens will wait longer for help when calling 911. Some volunteer fire departments will shutter their doors permanently due to a lack of monetary donations.

For years, risk management experts have talked about pandemic planning and training but have failed to convince leadership of the potential impact of a lack of planning. Now, we’ve found ourselves gravely unprepared for the worstcase scenario.

Fire chiefs should regularly review and consider the latest guidance from experts regarding the maintenance of team morale, overall well-being, and the potential benefit of breaks and vacations as people continue to operate in overdrive for months. Additionally, departments should consult and follow local, state, and federal guidance regarding best practices for monitoring potential COVID-19 cases and minimizing its spread. This may include temperature checks and the use of masks.

THE IMPACT TO JAILS

In the first quarter of 2020, some jails appeared to act as if they had never seen an infectious disease before, doing little to identify symptoms during the intake process and struggling to ramp-up controls. Once testing became more widely available in mid-April, jail facilities tested those inmates who were symptomatic, as guided by the CDC. Unfortunately, the lack of planning and preparation on the part of the jail system has led to several lawsuits claiming jails failed to take reasonable steps to protect their employees, arrestees, and vendors. Many of these lawsuits seek the mass release of inmates or other significant measures to reduce overcrowding and infections within the system.

In addition to the release of non-violent offenders, jails were advised by the CDC

JULY/AUGUST 2020 | PUBLIC RISK

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USING COVID-19 TO SPUR PANDEMIC PL ANNING FOR THE FUTURE

to work with their law enforcement patrol counterparts to reduce admissions. Reducing admissions allows the facility's total population to decline quickly and thus, officials believed, may ultimately decrease the risk of virus transmission. For instance, the Colorado Department of Corrections, in collaboration with law enforcement, temporarily suspended arrests for "low-level technical parole violations” such as missing a curfew.

Even with the COVID-19 release of inmates, the United States still maintains the highest population of incarcerated individuals.

Therefore, even with the releases, jails must accommodate a high number of individuals in accordance with best practices for COVID-19 monitoring and mitigation. Many states have suspended medical co-pays for inmates

exhibiting respiratory, flu-related, or COVID-19 symptoms. With in-person visitations all but suspended, jails may be exploring options to reduce costs of phone and video calls.

Ultimately, however, jails and detention centers should follow any applicable federal, state, and local guidance to mitigate the risk of, claims of deliberate indifference or similar allegations.

CONCLUSION

Armed with what we now know after several months of facing COVID-19, we must evaluate what worked and what didn’t, and prepare accordingly while these lessons are fresh in our minds. For instance, local governments should update or create an infectious control or pandemic plan now, so that we are more prepared in the future. The same measures that have worked in mitigating COVID-19 seem

likely to help when we face other diseases in the future.

Planning for an emergency is very similar to purchasing insurance. The hope is that it is never needed, but it’s a relief to have it when it's time to place a claim. As risk managers, our challenge is to convince key stakeholders to buy into the planning and preparation for future emergencies. Our lack of a safety net when COVID-19 emerged should be our warning, and, hopefully, the catalyst to change our future.

Kenny Smith is the Risk Control Manager for OneBeacon Government Risks.

Armed with what we now know after several months of facing COVID-19, we must evaluate what worked

and what didn’t, and prepare accordingly while these lessons are fresh in our minds. For instance, local

governments should update or create an infectious control or pandemic plan now, so that we are more

prepared in the future. The same measures that have worked in mitigating COVID-19 seem likely to help when we face other diseases in the future.

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PUBLIC RISK | JULY/AUGUST 2020

IS YOUR ENTITY READY FOR COVID-19?

Count on PRIMA for ongoing COVID-19 education, including return-to-work planning, for the public risk management community.

COVID-19 education includes webinars, podcasts, blogs, and more!

Check out the latest at primacentral.org

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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.

VIRTUAL EDUCATION SERIES June–July 2020 SUMMER EDUCATION SERIES August 2020 DIVERSITY & INCLUSION

PRIMA ANNUAL CONFERENCES June 13–16, 2021 PRIMA 2021 ANNUAL CONFERENCE Milwaukee, WI Wisconsin Center June 5–8, 2022 PRIMA 2022 ANNUAL CONFERENCE San Antonio, Texas Henry B. Gonzalez Convention Center

PRIMA WEBINARS July 22 • ERM Beyond the Risk Assessment—Framework, Principles and Integration August 19 • Weather Disaster: Emergency Response Plan September 16 • Leveraging Telehealth to Redefine Intake and Proactively Manage Care October 16 • Building a Peer Support Program November 4 • Emerging Risk and Insurance December 16 • Occupational Physicals and Employee Wellness: Redirecting Costs

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PUBLIC RISK | JULY/AUGUST 2020

Register for PRIMA’s AUGUST WEBINAR FREE TO MEMBERS

Effective Risk Management Planning and Claim Response to Natural Disasters AUGUST 19 | 12:00 – 1:30 PM EST SPEAKERS: Frank Russo, MBA, ARM, CRIS, Founder and Principal, Procor Solutions + Consulting, LLC Tracy Saxe, President/CEO, SDV Law Joseph Poliafico, CSP, Director, Risk Management & Global Insurance, Interstate Restoration DESCRIPTION: Natural disasters are on the rise around the world. This presentation will focus on key strategies for preparing for such events to ensure that your organization can be in position to resume operations quickly and recover insurance or FEMA proceeds in an effective manner. This panel of experts includes perspectives from risk management, disaster restoration, insurance, claims and law. Attendees will learn about the best practices to recover from all these crucial aspects following a major disaster and submission of a claim.

ATTENDEE TAKEAWAYS: 1. Pre-disaster strategies for preparing for property losses and business interruption 2. Immediate post-disaster mitigation strategies 3. Best practices for preparing and presenting a detailed insurance claim 4. Common claim disputes/coverage issues faced and strategies to navigate

Register at primacentral.org/webinars

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