When a workplace injury results in paralysis or other life-altering conditions, the related workers compensation claim often extends far beyond medical care and indemnity, increasingly encompassing the cost and complexity of modifying, or even rebuilding, the injured worker’s home.
What was once a relatively rare component of catastrophic claims is becoming more common as advances in medicine result in more workers surviving severe injuries that would have been fatal in the past. That shift is pushing insurers, employers and claims professionals into unfamiliar territory that blends medical management with construction, accessibility design and long-term housing considerations.
“We’re seeing more of the catastrophic injuries; there’s been an uptick over the last several years,” said Jaysen Eldridge, Nashville, Tennessee-based vice president of managed care for Sedgwick.
The increase is largely due to improved survival rates, particularly among workers with severe burns, traumatic brain injuries and spinal cord injuries, who now live longer but require permanent accommodations to remain independent.
“Medical technology today is so far advanced,” said Gus Gonnella, Philadelphia-based vice president of claims for workers comp mutual MEMIC. “Individuals are living longer and surviving catastrophic injuries at an increasing rate.”
Consequently, home modification projects have become more visible and complex elements of catastrophic claims. These projects can range from simple adjustments, such as wheelchair ramps or grab bars, to extensive structural changes, such as widening doorways, relocating bedrooms to the first floor, lowering kitchen countertops, redesigning bathrooms or adding new living space.
Experts say successfully managing home modification claims requires early planning, clear communication and a disciplined focus on medical necessity, while recognizing that each case involves not just a construction project but a fundamental shift in how an injured worker lives.
While the scope of work varies widely, the process requires a careful and coordinated approach because of the physical, emotional and financial stakes involved, said Missy Roffler, Fernandina Beach, Florida-based CEO of CorHome, which specializes in accessibility renovations for injured workers.
“These are life-changing accidents, and they’re traumatic for the family. They’re traumatic for the injured worker,” she said.
Managing those dynamics requires coordination among adjusters, nurse case managers, occupational therapists, contractors and, critically, the injured worker and their family — all of whom may have different priorities and expectations about what the final result should look like.
Concerns often center on balancing independence with cost control.
“We want to give them as much functional independence as we can, but yet staying within the confines (of) the insurer paying the bill,” said Sid Glover, Newnan, Georgia-based chief financial officer and chief operating officer of ATF Medical, a medical equipment company. “This is not unlimited funding, and it’s not a dream home makeover.”
Because of those competing pressures, experts say timing and process discipline are critical, starting with early identification of cases that will likely require home modifications.
“If you know you have a situation where home modifications are likely going to be necessary, say, like a spinal cord injury, say a paraplegic, ideally, you want to start planning for it during the hospital discharge discussions or just before, so you can prevent delays,” Mr. Gonnella said.
From there, the process typically begins with a clinical evaluation, often led by an occupational therapist, to determine what changes are medically necessary to support the injured worker’s daily functioning, according to experts.
“Once we get that request, we are going to reach out and hire an occupational therapist to do an assessment of either the home or the vehicle to determine what is medically necessary,” Mr. Eldridge said.
An occupational therapist can assess the home and the worker’s abilities, and help craft a plan, Ms. Roffler said. A strong focus on medical necessity is a key guardrail in what can otherwise become an open-ended and potentially contentious process, she said.
“At the end of the day, we want to make sure that we’re being ADA compliant, we’re looking at the safety needs of the injured worker, but also we’re not doing general upgrades,” Mr. Eldridge said. “We’re more focused on doing what is medically necessary and appropriate for that injured worker to get back to their daily living routine.”
At the same time, giving injured workers some input into the project can help improve outcomes and ease the transition back home, especially after a traumatic injury.
“If there is opportunity to pick your paint color, your tile choices, if you have an option of putting the door here versus there, empower them with the ability to make some of those choices and regain some control back in their life,” Ms. Roffler said.
Even with best practices in place, these claims are prone to missteps, particularly when expectations are not carefully managed from the outset.
“One of the first things when you’re going in to do the assessment is to actually not tell the family and the injured worker a whole lot on the front end and setting up our carriers for a disaster,” said Downey Hinrichs, Annapolis, Maryland-based clinical specialist at Paradigm.
At the same time, underestimating long-term needs can create problems, especially as injured workers age and require continued accessibility.
“Don’t under-modify the house, because people are going to be aging with a disability,” Ms. Hinrichs said, adding that failing to consider future needs is a common pitfall. “Maybe 10 years down the road, that home is not going to work for them anymore,” she said.
Beyond planning and expectations, practical challenges often emerge once construction begins, especially when pre-existing issues in the home are uncovered.
“You don’t know what’s behind those walls,” Ms. Roffler said, pointing to problems such as mold, structural damage or outdated electrical systems that can arise during renovations (see story below).
Those problems can complicate claims by raising questions about what the insurer is responsible for addressing versus what constitutes a pre-existing condition of the home.
Consultants should be cautious in their recommendations and in how they advise insurers, as unknown structural issues can create uncertainty, and once the work is done, responsibility ultimately rests with the insurers, Ms. Hinrichs said.
Cost considerations can further complicate decision-making, particularly when the cost of modifications exceeds the home’s value, forcing parties involved to weigh renovation against relocation or alternative housing options.
Even when a plan is clear, execution can be slowed by the need to coordinate among multiple parties, navigate permitting requirements and align medical recommendations with construction timelines.
“Getting everybody in alignment is what takes time,” Ms. Hinrichs said.
Layered onto practical issues are the emotional dynamics that accompany catastrophic injuries, which can influence decision-making and complicate negotiations over scope and cost.
“While home modifications are often essential, they can also be expensive and complex depending on the unique home life of the individual and family,” Mr. Gonnella said. “Determining what is medically necessary for an injured worker can sometimes lead to difficult conversations.”
For many employers and risk managers, these claims remain unfamiliar territory, requiring coordination and expertise beyond traditional workers compensation management.
Home modifications can uncover hidden issues
Home modification claims present a variety of risks well beyond traditional workers compensation exposures, forcing insurers and employers to navigate construction, liability and long-term planning issues that are part of a traditional claim.
One of the most immediate concerns is construction-related risk, particularly when pre-existing problems in a home are uncovered during the renovation process.
“If they open up a wall and they see mold, first they’re going to be able to recognize it and know what to do to mitigate any problems,” said Lance Malcolm, Jacksonville, Florida-based president of network solutions for Crawford & Co.
Without proper management and clear delineation of responsibility, those discoveries can expand the project’s scope and lead to disputes over whether the insurer is responsible for addressing underlying conditions that predate the injury.
Scope creep presents another significant challenge, because families and injured workers may view the project as an opportunity to improve or modernize their home beyond what is medically necessary.
“We’re here to modify the home, but based on medical necessity and not home improvements,” said Donita Stacker, San Diego-based director of operations at Enlyte.
Managing those expectations requires clear communication early in the process, along with firm boundaries around what is covered under the claim and what falls outside of it, especially as upgrades in finishes or layout can quickly add to costs.
Beyond scope and construction issues, process-related risks can also complicate claims, because projects are subject to factors such as permitting requirements, contractor availability, supply chain delays and even weather-related disruptions. Those delays can have significant financial consequences, as injured workers may need to remain in rehabilitation facilities, temporary housing or assisted living arrangements longer than anticipated while waiting for their homes to be completed.
“It is fraught with speed bumps at every stretch and every turn,” said Sid Glover, Newnan, Georgia-based chief financial officer and chief operating officer of ATF Medical.
This article was first published in Business Insurance
