Despite what the media portray, workers’ comp fraud is extremely rare.
Today’s post comes from guest author Charlie Domer, from The Domer Law Firm.
Workers are not “getting rich” from worker’s compensation! Accordingly, fraudulent behavior in work comp is very rare—like the one bad apple spoiling the bunch—but often highly publicized. (Because, let’s face it, seeing a surveillance video of someone bowling or water-skiing is far more memorable than a thousand images of an injured worker struggling to get out of bed in the morning or walk a city block).
Under Wisconsin’s nationally-recognized model, a worker who suffers an on-the-job-injury receives workers’ compensation benefits without regard to fault. By virtue of the work comp system, injured workers cannot sue their employers or receive jury awards. Instead, injured workers are eligible for lower, defined benefits, like lost wages and medical expenses—again, we’re not talking about “pie in the sky” numbers that would incentivize bad behavior!
“Fraud” is minimal to non-existent
In the last published study, Dept. of Workforce Development (DWD) concluded that public perception of workers’ compensation fraud is exaggerated. In a six year span, the amount of prosecuted fraud was less than one in 20,000 work injuries…or 0.0001%.1
Industry insiders don’t think this is a big deal
Rick Parks, the President/CEO of Society Insurance: “From the view of thousands of claims over decades, fraud is minimal in Wisconsin”2
Chris Reader of Wisconsin Manufacturers & Commerce: despite the “sensational stories,” fraud is “few and far between” in the system.3
Current law already allows criminal prosecution for alleged “fraud”
Worker’s Compensation Division already has an existing fraud hotline for the public. Also, a carrier can report an alleged fraudulent claim to the DWD. After an investigation, DWD can refer to district attorney for prosecution of criminal insurance fraud. Thus, if there is fraudulent behavior, under current law, there can be a crime found.
Independent Medical Examinations provide protection against “fraud”
Insurance carriers can require an injured worker to be seen by a handpicked independent medical examiner, or IME. If questions exist about a worker’s injury, symptoms, or disability, the IME can provide an opinion—allowing a carrier to deny the worker’s claim.
“Fraud” goes both ways
We want fair competition in the marketplace and in business. Misclassifying employees or workplaces results in “stolen” premium dollars and an unfair business advantage. Likewise, limiting or under-reporting work injuries undermines the fairness and credibility of our efficient work comp ratings process and system.
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1 Department of Workforce Development, Annual Report for Calendar Year 1999 Allegations of Worker’s Compensation Fraud (annual average of 3 prosecuted cases out of 60,000 injuries).
2 Senate and Assembly Committees on Labor, Informational Meeting, 7/31/13: WisconsinEye at 3:18:30.
3 Senate and Assembly Committees on Labor, Informational Meeting, 7/31/13: WisconsinEye at 2:13:00.
I recently had the opportunity to tour Seattle’s Terminal 18 and BNSF’s intermodal rail yard as part of the Port 101 educational series offered by the Port of Seattle. The Cargo 101 class is provided in partnership with: SSA Terminals, BNSF Railway Company, International Longshore and Warehouse Union, and Puget Sound Pilots. During the 2-hour bus tour of the facilities, speakers representative of their fields described their roles in the movement of cargo from ship to truck to train.
The Ports of Seattle and Tacoma have joined forces to form The Northwest Seaport Alliance. Together, the ports form the third-largest container gateway in North America, provide significant revenue for the state, and support (directly or indirectly) nearly 50,000 jobs. These jobs include those in surface transportation (with trucking companies and railroads), warehouse work, longshore and dock work, and Port administration jobs.
Our first stop was Terminal 18, located southwest of Downtown Seattle, on the east side of Harbor Island. The largest container facility in the Pacific Northwest, Terminal 18 covers 196 acres and includes four vessel berths totaling 4,460 feet in length. It is operated by SSA Marine. Top trading partners include China/Hong Kong, Japan, Republic of Korea, Canada, and Australia. The top imports (by dollar value) are industrial machinery and computers, electronics, and vehicles and parts. Our Ports’ top exports (by dollar value) include oil seeds and grains; industrial machinery and computers; prepared vegetables, fruits and nuts; meat and meat products; and seafood.
One player in the supply chain is the marine pilot. During the tour, we heard from one of the 54 current members of Puget Sound Pilots. The pilots are highly skilled, specialized ship captains, thoroughly familiar with local waters, who help guide commercial vessels safely in and out of harbors, while protecting the local marine environment. When the pilot boards the ship, he or she becomes (as our speaker described) “the ultimate backseat driver,” directing the ship’s captain and crew through our local waters. Becoming a Puget Sound Pilot requires at least two to four years of captain experience, followed by passage of a written examination, and evaluation by pilots and other experts in order to be invited into the training program. The program lasts between one and three years. In addition, a pilot must earn a federal pilotage endorsement – which requires many months of local bridge experience and the ability to replicate local waterways navigational charts from memory.
From Terminal 18, we headed to BNSF Railway’s SIG (Seattle International Gateway) intermodal facility. Here, cargo containers are loaded onto railcars for delivery throughout the country. Containers are loaded and unloaded using fully-electric wide-span cranes. BNSF was the first North American railway to utilize these zero-emission cranes, and SIG was the cranes’ testing site. Installed as part of the yard’s expansion in 2008, the cranes nearly doubled the yard’s capacity for cargo, making it an important part of the Port’s operations.
The last player in the supply chain we heard from was a member of the Longshore Division of the International Longshore and Warehouse Workers Union’s Local 19. Put simply, a longshoreman loads and unloads ships’ cargo. Of course, the job is not simple, nor is building sufficient experience to make a living doing it. The work is highly skilled and can involve intense physical labor, heavy equipment operation, and working from heights. Beginners need to be prepared to go long stretches without available work, and almost certainly work another job until they can move up the union ranks. During our speaker’s first year, he worked one longshore shift. The Union’s website has a wealth of information on the history of the industry and the challenges these workers face (ILWU).
Photo credit: Kristen Wolf (I actually took it on our sailing trip, much better than anything I could get through a bus window).
Today’s post comes from guest author Catherine Stanton, from Pasternack Tilker Ziegler Walsh Stanton & Romano.
This week I attended the 20th anniversary of the Workers’ Injury Law and Advocacy Group (WILG) in Chicago. I am a proud past president of this group – the only national Workers’ Compensation bar association dedicated to representing injured workers.
As an attorney who has represented injured workers for more than 25 years, I have seen their rights and benefits shrink under the guise of “reform”. After the tragic Triangle Shirtwaist Factory fire in 1911, which killed almost 150 women and girls, workplace safety and Workers’ Compensation laws were enacted. For the next half century or so, many protections and safeguards were implemented. However, many of these reforms were not sufficient, and in 1972, the National Commission on State Workmen’s Compensation Laws, appointed by then-President Nixon, issued a report noting that state Workers’ Compensation laws were neither adequate nor equitable. This led to a decade when most states significantly improved their laws.
Unfortunately, there has once more been a steady decline in benefits to injured workers, again under the guise of reform. One major argument is that many workers are faking their injuries or they just want to take time off from work. There was even a recent ad campaign in which a young girl was crying because her father was going to jail for faking an injury. Workers’ Compensation fraud does exist, but the high cost of insurance fraud is not as a result of workers committing fraud.
A colleague of mine compiled a list of the top 10 Workers’ Compensation fraud cases in 2014 in which he noted that the top 10 claims of fraud cost taxpayers well more than $75 million dollars with $450,000 of the total amount resulting from a worker committing insurance fraud. That leaves $74.8 million as a result of non-employee fraud, including overbilling and misclassification of workers. We are told that insurance costs are too high; yet, according to the National Council on Compensation Insurance (NCCI) in 2014, estimates show that private Workers’ Compensation carriers will have pulled in $39.3 billion in written premiums, the highest since they began keeping data in 1990. More premiums result in higher net profits. Despite this, many states have implemented changes in their Workers’ Compensation systems aimed at reducing costs to the employer. The end results, however, is that fewer benefits are given to the injured worker and more profits go to the insurance companies.
In New York, one of the reform measures increased the amount of money per week to injured workers but limited the amount of weeks they can receive these benefits with the idea that they will return to work once their benefits run out. Additionally, limitations have been placed on the amount and types of treatment that injured workers may receive. Again, this is with the notion that once treatment ends, injured workers miraculously are healed and will not need additional treatment. In reality, those injured who can’t return to work receive benefits from other sources from state and federal governments at the taxpayer’s expense. This is what is known as cost shifting, as those really responsible to pay for benefits – the insurance companies who collect the premiums from the employers – have no further liability. The reformers of 100 years ago would be appalled at what is happening to injured workers and their families today. It is time that those who are generating profits at the expense of injured workers do what is fair and just – provide prompt medical care and wage replacement to injured workers for as long as they are unable to work.
Catherine M. Stanton is a senior partner in the law firm of Pasternack Tilker Ziegler Walsh Stanton & Romano, LLP. She focuses on the area of Workers’ Compensation, having helped thousands of injured workers navigate a highly complex system and obtain all the benefits to which they were entitled. Ms. Stanton has been honored as a New York Super Lawyer, is the past president of the New York Workers’ Compensation Bar Association, the immediate past president of the Workers’ Injury Law and Advocacy Group, and is an officer in several organizations dedicated to injured workers and their families. She can be reached at 800.692.3717.
Most people who become involved in the workers’ compensation system due to injury or illness are only aware of a few common players: themselves, as the claimant; the Department of Labor & Industries (DLI) or self-insurer; their attending doctor; and, if necessary, a vocational counselor. However, in Washington State there is another major player working the sidelines in a big way. An entity that, over the past few years, has taken on a much larger role in the administration of workers’ compensation claims: the retro program.
The Retrospective Rating program was initiated by DLI as a “safety incentive program” and was designed with the objective of reducing workplace injuries and helping control claim costs. Somewhere along the way, the concept of the retro program functioning as a safety incentive program seems to have fallen to the wayside with the primary focus now being squarely on controlling claims costs.
Preventing injuries? Sounds great! Wait, what was that…? Controlling losses? How does that work exactly? What is considered a loss? You mean the cost of a workers’ compensation claim? YES!
So, how does this system work exactly? And what ever happened to the whole safety idea? Let’s take a look. DLI’s selling point of their program is that any time an employer has a worker that gets injured, it costs the business money (this includes many factors including but not limited to: loss of production at the jobsite, potential for loss of business, hiring and training a new employee, etc.). Oh, and let’s not forget an increase in workers comp premiums. Through the retro program, employers are given the opportunity to be rewarded for their safety program by turning their positive rating into a refund from DLI by preventing injuries and controlling losses. Preventing injuries? Sounds great! Wait, what was that…? Controlling losses? How does that work exactly? What is considered a loss? You mean the cost of a workers’ compensation claim? YES!
Let’s reward employers for safety. I’m all for it. Like most things of this nature, the devil is in the details and in this case, the details lie in the concept of keeping the cost of a claim lower.
A Retro Group’s annual coverage period lasts 12 months and can begin any calendar quarter. On or around 10 months after a coverage period ends, DLI will review an employer or groups actual experience and will calculate a “retrospective premium” for that 12-month coverage year. If claim costs for the coverage year are below what is expected, the employer or group could earn a partial refund of the difference between the Retro premiums and the standard premiums. If claim costs are higher than the amount of standard premium paid, it could result in an employer being assessed and having to pay an additional amount. So the incentive lies in keeping the cost of the claim lower.
I can appreciate the spirit behind this initiative. Taken at face value it sounds too good to be true. Let’s reward employers for safety. I’m all for it. Like most things of this nature, the devil is in the details and in this case, the details lie in the concept of keeping the cost of a claim lower. How is that done? By limiting the amount of money paid on a claim – counting every penny – and by getting the claim closed as quickly as possible – preferably within the 12 month coverage period.
Although induvial businesses can be part of the retro program, most commonly we see and deal with Retro Groups, businesses independent of the employer of injury but contracted by them to represent their financial interests in the claim. As a plaintiff firm specializing in workplace injuries, we have certainly not seen a decrease in client intakes since the initiation of these groups. Workers are still getting injured at a steady rate. What we have seen is a substantial and alarming uptick in Retro Group involvement in the claims administration process to the point where we are actually getting business as a result of the Retro Groups interference in claims management. It is not uncommon for me or my colleagues to review a claim file online and see that a Retro Group claims manager has protested nearly every favorable decision that an injured worker has received from DLI. From claim allowance to general medical allowance orders, time loss payments or treatment authorizations – there is typically a response from the Retro Group – even if the decision by DLI appears entirely appropriate.
A little known fact outside of the workers’ comp world is that many of the representatives of these groups are former employees of the Department of Labor and Industries, some previously in claims manager or claims unit supervisor roles. Their employment history at DLI provides them with a unique knowledge base of the DLI system and its policies, the life cycle of a claim, as well as access to employees at the DLI level, many of whom they have a personal working relationship with already. We have seen Retro Group claims managers bypass normal chain of command channels due to their relationships with individuals at DLI.
The Retro Group is NOT the employer. But they like to act like it. Just recently I had a Retro Group create a light duty, modified return to work position for my client without checking with the actual employer if such a position could even be offered. Their goal: to get time loss payments terminated, and keep claim costs down. They created a light duty job specifically aligned with the restrictions outlined by the attending physician, which was medically approved. Time-loss was terminated and the claimant appeared for the first day of the job with the work restrictions in hand and was told that no such job existed within those restrictions. Our firm had previously tried to get the Retro Group to address our inquiries about the questionable modified job, but we were ignored. We requested that DLI intervene, and a vocational counselor was assigned. We insisted that a standalone, onsite job analysis be done of the modified job. As we suspected, no such job existed and the claimant is now eligible for vocational retraining.
A website for a popular Retro Group advertises their results in order to attract business, boasting of more than 28 percent in premium refunds for one employer, 37 perfect for another and over $452 million in premium refunds for their clients over a 20 year span. The list of clients that they represent is alarming to me only in that I wonder if the employers who hire them to represent their interests fully understand the scope and lengths that the Retro Groups go to in order to post such returns. Do the employers have any idea what is happening to their employees who have filed claims?
The unwarranted roadblocks caused by aggressive Retro Group interference can cause severe instability for injured workers who are simply trying to access the benefits that they paid into through their employment in the hopes of returning to their former lives.
This brings me back to the injured worker and the issue of safety: the founding idea of this program and the concept that DLI actually has to create incentives for employers in order to keep work environments safe. Couldn’t the Department offer similar rewards to employers for simply limiting the amount of actual claims that are filed? Instead, our current system rewards employers after the fact, after the injury has already happened, which places the emphasis on saving costs, nor preventing the injury in the first place. In the Retro Group’s effort to save their clients’ money, the result to the injured worker is that they are often cheated out of medical treatment and benefits, both monetary and vocational, that they are most likely entitled too, or in delays of these rightful benefits that are so extreme that the end result is catastrophic and detrimental to their health and livelihood.
The unwarranted roadblocks caused by aggressive Retro Group interference can cause severe instability for injured workers who are simply trying to access the benefits that they paid into through their employment in the hopes of returning to their former lives. The result is that many face an inability to pay mortgages or rent on time, pay their bills, put food on the table, pay child support, or even put gas in a car to get to doctors’ appointments for treatment, causing a delay in recovery and potentially even more injury or worsening of their condition. The list goes on.
Unfortunately, we do not simply see this type of thing happening in one or two cases where a Retro Group is involved. We see it in EVERY case where a Retro Group is involved. And we are only one law firm. And our client list is growing.
The Department of Labor & Industries (L&I) has cited and fined four construction contractors for workplace safety hazards on a Bonney Lake bridge project last April that turned fatal.
Part of the structure being demolished fell onto traffic below, killing Josh and Vanessa Ellis and their eight-month-old son, Hudson, when their vehicle passed under the overpass. See the KIRO-TV story about this tragic event here.
L&I has jurisdiction over worker safety, which is what the agency investigation focused on.
WHH Nisqually Federal Services, of Tacoma, was the general contractor for pedestrian improvements on the SR 410 overpass. WHH Nisqually contracted with HighMark Concrete Contractors of Buckley to do the concrete work. HighMark Concrete contracted with Staton Companies of Eugene, Ore., to remove a portion of the existing bridge. Staton hired Hamilton Construction of Springfield, Ore., to cut the concrete barrier. All four companies had workers on site.
“Demolition is one of the most hazardous operations in construction,” said Anne Soiza, assistant director for the L&I Division of Occupational Safety & Health. “Preparing and following a specific safety plan that anticipates the worst case conditions is critical. Unfortunately, that didn’t happen in this case.”
Staton was fined $58,800 for one “willful” and two “serious” violations for exposing workers to danger while demolishing the concrete barrier on the overpass. Staton oversaw the cutting of the concrete barrier by its subcontractor, but failed to provide a demolition plan to the subcontractor. The investigation found that Staton had concerns about the possibility of the barrier falling down during cutting, yet still continued with the work.
Staton was cited for a willful violation for not ensuring a workplace free from recognized hazards. The company demolished the concrete barrier without following procedures in the demolition plan it developed. It was also cited for a serious violation for exposing workers on a lower level to the possibility of an unplanned collapse, and another serious violation for not ensuring the concrete barrier was secured or braced to prevent collapse during cutting.
Hamilton Construction was fined $14,700 for three serious violations for exposing workers to essentially the same hazards as Staton Companies. However, none of the violations was found to be willful.
WHH Nisqually was fined $8,400 for two serious violations for not ensuring a workplace free from recognized hazards and for exposing workers on the lower level to the possibility of an unplanned collapse.
Highmark Concrete Contractors was fined $4,900 for one serious violation, also for not ensuring a workplace free from recognized hazards.
A willful violation can be issued when L&I has evidence of plain indifference, a substitution of judgment or an intentional disregard of a hazard or rule. A serious violation exists in a workplace if there is a substantial probability that worker death or serious physical harm could result from a hazardous condition.
The employers have 15 business days from receipt of the citation to appeal.
Washington state’s minimum wage will stay the same in 2016 — $9.47 per hour — because the national Consumer Price Index did not increase.
Changes to the minimum wage are based on the nationwide Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for the 12 months ending each Aug. 31. The index represents a shopping basket of goods needed for everyday living, including groceries, gas and clothing. According to the federal Bureau of Labor Statistics, the CPI-W decreased 0.3 percent between August 2014 and August 2015.
The Department of Labor & Industries (L&I) announces the state’s minimum wage each year in September as required under Initiative 688, which Washington voters approved in 1998. Under the law, the minimum wage can’t be decreased.
It’s the second time the state minimum wage has remained flat since passage of the initiative. The last time was in 2010.
An estimated 67,000 full-time equivalent wage jobs are affected, according to the state Employment Security Department.
For years, Washington’s minimum wage has been the highest in the country. That will change Jan. 1, 2016, when minimum wage in California and Massachusetts will reach $10 per hour.
Washington’s minimum wage applies to workers in both agricultural and non-agricultural jobs. Youth ages 14-15 may be paid 85 percent of the adult wage, $8.05 per hour.
L&I provides a minimum wage poster for employers to post if they wish. Employers are required to post the “Your Rights as a Worker” poster, which provides general information about employment issues. The posters are available from L&I free of charge.
L&I enforces the state’s wage-and-hour laws. The agency investigates all wage-payment complaints it receives, as required by state law. More information on Washington’s minimum wage is available at Wages.lni.wa.gov. Employers and workers also may call 360-902-5316 or 1-866-219-7321.
Today’s post was shared by Jon L Gelman and comes from thehill.com
Sen. Bernie Sanders (I-Vt.) is sounding the alarm over what he sees as crumbling protections for workers who are injured on the job.
In a letter to Labor Secretary Thomas Perez, Sanders and nine other Democrats complain about the “erosion” of state laws set up to pay workers while they are injured and cannot work.
The federal government often foots the bill for workers who fall through the cracks of state workers’ compensation laws, the lawmakers argue.
Sanders called on the Obama administration to “strengthen the safety net for workers injured on the job" and urged Perez to investigate what he sees as a decline in state workers’ compensation laws.
“This raises serious concerns,” the lawmakers wrote.
“State workers’ compensation laws are no longer providing adequate levels of support and compensation for workers injured on the job,” they added. “Instead, costs are increasingly being shifted to the American taxpayers to foot the bill.”
Today’s post was shared by Workers Compensation and comes from www.propertycasualty360.com
Today’s Workers’ Compensation market is generally favorable, but several emerging medical and demographic challenges have the potential to upset the current balance. By better understanding the possible impact of these new variables on the market, buyers and brokers will be able to continue to protect employees—and their bottom lines.
MEDICAL CHALLENGES
1. The Affordable Care Act may well increase WC costs by increasing demand for medical services from a fixed number of providers. If more Americans can buy medical services, the cost of those services will rise. Beyond higher prices, greater demand will also lead to longer treatment and recovery times as claimants wait to get appointments, potentially impacting indemnity costs.
2. The growing use of—and cost for—physical therapy causes challenges. Fee schedules for physical therapy have increased over the past two years in nine states that have the greatest use of PT in WC claims. California increased its fee schedule for all physical therapy billing codes by 5% to 6% in March, while New Jersey upped its schedule by 3.6% last fall. Managing the utilization and cost of physical therapy is becoming a key issue, so much so that clients, prospects and brokers are asking TPAs more questions about their strategies in this area.
3. The variability of WC costs and treatments among states threatens the market. There is no reason why the cost for treating the same type of work-related injury should differ…
Today’s post was shared by Workers Compensation and comes from www.businessinsurance.com
A Texas appeals court has ruled that a workers compensation nonsubscriber is not liable for negligence, despite failing to perform a criminal background check on a worker who assaulted another employee.
Ramiro Najera worked at American Rice Inc. in Freeport, Texas, through staffing company Recana Solutions L.L.C., court records show. Mr. Najera and his team were responsible for fumigating packaged rice and picking up garbage and dead pests, among other things,
Recana also placed James Prodoehl, who reported to Mr. Najera, at American Rice, records show.
In June 2012, after the two men had worked together for about three months, Mr. Najera told his team that they would have to work late one day, according to records. Some of the team got upset, and Mr. Prodoehl said he wouldn’t stay to work.
In response, Mr. Najera said he would tell the team’s leader, records show. Mr. Prodoehl then began hitting Mr. Najera with a hard hat.
According to records, Recana immediately terminated Mr. Prodoehl for fighting. As a Texas nonsubscriber, the company did not carry workers comp insurance at the time of the incident.
Mr. Najera, who sustained injuries to his teeth and shoulder, filed suit against Recana and American Rice. He alleged negligence, gross negligence and respondeat superior, which states that an employer is responsible for its employees’ actions in the course of employment.
He and American Rice settled, filing an agreed motion to dismiss American Rice with prejudice, records show.
Today’s post comes from guest author Hayes Jernigan, from The Jernigan Law Firm.
The New York Times recently published an op-ed claiming that the amount of people who seek or maintain friendships in the workplace has dropped in recent decades. Where people once looked to the workplace as a main source of long-term friendships, by 2004 only 30% of Americans said they had a close friend at work. The article cites several studies that show we communicate better and are more productive when we work with friends.
In workers’ compensation, we represent employees who have been injured on the job. More often than not when an injured worker calls our office they are upset by how they have been treated by their employer once they were injured, especially if they have worked there for a long time. If an employee develops a close relationship with their coworkers and their boss, when they get hurt on the job, they suddenly feel like those relationships were one-sided because they feel they are tossed aside as soon as they get hurt (oftentimes for no fault of their own).
Injuries at work can change workplace relationships. The employer often must hire a replacement, which requires additional expenses, and co-workers might feel they are caught in the middle. We often ask workers who call our office whether they are on good terms with their employer because when they are, things tend to go a lot easier. If you have friends at work and get injured, will that make the process better or worse? Would you feel that your employer and co-workers will go to bat for you or will you feel more hurt because people might distance themselves from you? I like to think the former. Either way it’s a safe bet for all parties to be open and honest with each other and most of all, be kind to each other- no one wants to get hurt.
