Category Archives: Workers’ Compensation

Cries of High Costs and Fraud – Watch for Reforms

There is always discussion, in every state, about the expense of workers’ compensation insurance to employers. It is common to hear stories of corruption and fraud when employer costs run high. This discussion can lead to cries of fraud, usually with fingers pointed towards claimants and often tied into efforts to reduce benefits to injured workers. As a recent example, take a look at the article published on July 23rd in the Fresno Bee, written by Dan Walters of CALmatters, titled “California workers’ compensation system plagued by high costs and fraud.” In the article, Mr. Walters points to Southern California as an area particularly afflicted by fraud, inserting the hot-button phrase “immigrant workers,” as follows:

“Why Southern California? Its large numbers of immigrant workers are easily persuaded by recruitment agents, called “cappers,” to file claims that allow unscrupulous lawyers and medical providers to milk inflated payments for nonexistent injuries.”

Mr. Walter’s statement is misleading and inflammatory. The link provided by Mr. Walters to support his claim of fraud leads to a news piece – not a study – released by the Center for Investigative Reporting on their “Reveal” radio and web platform.  

The story on Reveal, titled “Profiteering masquerades as medical care for injured California workers,” published in March of 2016, focuses on fraud within the medical component of the workers’ compensation system.  It makes no mention of “immigrant workers” although there is discussion of Spanish-language service providers within the article. The conclusion of the Reveal piece describes injured workers as the real victims of the scams they investigated.

From our experience representing injured workers in Washington State, we see very little in the way of fraudulent acts, by medical providers, injured workers, insurance carriers or employers. In our cases, the fraud we encounter most, on both small and large scales, is committed by employers. We see misclassification of workers to reduce premium rates paid or the failure to provide coverage of a worker by stating they are independent contractors.  We see inaccurate data about earnings and overtime provided by employers in an effort to reduce compensation paid to injured workers and even outright lies about the circumstances of an injury to try to keep a claim rejected.

We do, however, see inefficiencies, on a daily basis, usually under the guise of cost management. Claims managers spend an incredible amount of time and energy micromanaging claims, segregating medical conditions from claim coverage, delaying or denying medical treatment authorizations, sometimes leading to litigation with months, or even years, involved and no relief from legal fees or costs for the claimant, even if successful at trial. In most cases, private insurance policies will not authorize treatment or surgery when a workers’ compensation claim is involved until the litigation has been concluded and the responsibility for coverage is clearly under their policy.

Fraud is a problem whenever it occurs, whomever is committing the fraudulent acts. To hear the cry of “fraud!” – especially when peppered with phrases like “immigrant workers” –  is a good warning bell. These cries often indicate another round of injured worker benefit cuts will soon be on the table. Watch for more news stories, videos of an injured worker riding a jet ski, and you’ll know there’s soon to be “reforms” proposed.

“The “grand compromise” is just as valid today as it was in 1914, but it could collapse if costs – and the fraud and other unseemly aspects of work comp that drive them – are not tamed. The next overhaul should be systemic, not just another backroom deal.” – Dan Walters

An efficiently run system run with fairness and respect and a focus on a speedy, full recovery after an injury and limiting lost wage earning capacity for workers permanently injured on the job should be the goal of all of the players within a workers’ compensation system. Cost savings and improved outcomes can both be achieved. These goals are best met through broad-based efforts to work together on the full spectrum of issues rather than singling out one or more of the segments – doctors, lawyers, claimants, carriers or government agencies – as the primary culprit. There’s room for improvement in all of these segments.

Photo credit: Kit Case

Seeking Balance and Value – Workers’ Comp Expenses and Benefits

Employer Rate Expenses and Injured Worker Compensation, by State

The Oregon Department of Consumer and Business Services issues their Workers’ Compensation Premium Rate Ranking Summary annually. In it, the Department quantifies the cost of workers’ compensation premiums in each state and ranks the states numerically based on the cost to employers for providing workers’ compensation benefits to the workforce.

The Oregon study is focused on the dollar-cost of coverage from the viewpoint of employers.  But, the employer is only one of the parties involved in the workers’ compensation world.  There are also medical professionals, vocational counselors, and the injured workers.  I was interested in how the ranked states would stack up from the injured worker’s perspective, so I looked up the maximum weekly benefit rates for each state, based on information maintained by the Social Security Administration – and made a comparison of my own. 

Understand that workers’ compensation claims have many facets that go beyond weekly benefit rates, and that every state has their own system with it’s own set of benefits and criteria for receiving those benefits.  This includes variations across the states that affect allowance of claims, compensability of claims, allowance of medical treatment and procedures, provision of vocational retraining benefits, conclusions about ability to return to work or placement on total disability pensions, caps on weeks of compensation paid and a variety of compensation structures for final settlements or awards for permanent partial disability.

My comparison is only of two data points: the ranking of cost per the Oregon study and each state’s maximum compensation rate paid to injured workers. It does not factor in the cost of living or average salaries in each state. It does not begin to touch on the issue of the quality of medical care available to workers in each state nor on claim outcomes, restoration of physical function or loss of wage-earning capacity for injured workers. It is a simplistic look at a complicated dataset.

To see an interactive map charting the results, click here.

To see my tally of the maximum compensation rates against the rankings of employer expense, click here.

In the most-recent Oregon summary, issued in October 2016, Washington State ranks 15th out of the 50 states and the District of Columbia, with a cost rate of 107% of the median.  The highest-cost state was California, at 176% of the median cost. The lowest was North Dakota, ranked at 51st with 48% of the median expense rate. But, the highest-cost states do not have the highest level of benefits paid to injured workers.

In my non-scientific analysis, Washington State ranked 5th out of the 50 states and the District of Columbia in terms of maximum weekly compensation rates, at $1,313.06 per week or $5,689.93 as a monthly amount. The state with the highest maximum weekly rate was Iowa at $1,688.00 per week or $7,314.67 monthly. At the bottom of the list was Mississippi with a weekly rate of $468.63 or $2030.73 per month.

The most expensive state, California per the Oregon study, came in at #14 in monetary benefits to workers at a maximum of $1,128.43 per week or $4,889.86 per month. The least expensive state, North Dakota, came in at #10 based on maximum weekly compensation of $1,214.00 or $5,260.67 per month.

It is important for each state’s workers’ compensation system to be run efficiently, fairly, and provide the most “bang for the buck” to improve claim outcomes. For injured workers, on a personal scale, this means quick decisions on medical treatment authorizations to allow a speedy and full recovery after an injury. It also means providing meaningful vocational services when a full recovery is not possible to limit the decrease in earning capacity. On a bigger scale, injured workers need to know that quality medical care is available to them. This requires that doctors receive the payment and support they need to efficiently be able to treat injured workers without drowning in red tape and delays.

A well-run system can result in better outcomes for injured workers and lower costs to employers, all the while avoiding doctor flight. It would appear from the numbers that some states are doing better than others at achieving this goal with several that have lower employer costs and higher maximum weekly benefits to injured workers. This is a goal we can all work towards.

Photo credit: jimmiehomeschoolmom via Foter.com / CC BY

 

Opioids And Doctor Choice

Today’s post comes from guest author Jon Rehm, from Rehm, Bennett & Moore.

Chicago Mayor Rahm Emmanuel said in 2008 that “You never let a serious crisis go to waste.” In the context of opioids and workers compensation this could mean reforms to workers compensation systems beyond drug formularies If solving the opioid crisis means limiting the number of doctors who can prescribe opioids, then there will be fewer doctors who will treat workers compensation cases.

Additional licensure and certifications aren’t unheard of in the world of occupational health. In 2016, the Federal Motor Carrier Safety Administration implemented a new rule that only doctors on their registry can perform DOT Physical Examinations for truckers and other professional drivers. This reduced the number of doctors who can perform those examinations. 

When I testified on LB 408, a bill that would have implemented drug formularies for opioids under the Nebraska Workers’ Compensation Act, some doctors were testifying that there was little training in regards to prescribing opioids. Though an opioid prescription registry like the DOT examination registry wasn’t proposed, you could certainly see it proposed as a solution to the opioid problem.

By limiting the numbers of doctor who handle workers’ compensation claims through additional licensing requirements, injured employees will have fewer choices for medical treatment and are more likely to have their employer control their care.

Evidence shows that the workers compensation system has made some contribution to the opioid crisis. According to a 2015 report by the Bureau of Labor Statistics over 3.5 million employees were injured at work. Half of those injuries required the employee to miss sometime from work. A study of employees in 25 states done by the Workers Compensation Research Institute revealed that 55 to 85 percent of employees who missed at least one week of work were prescribed at least one opioid prescription.

When I testified on LB 408 the consensus among the doctors testifying on the legislation was that injured workers were more vulnerable to narcotic addiction than other patients who are prescribed narcotic pain medication. Scientific studies give some credence to these conclusions. Workers compensation claims can cause economic insecurity. According to an article in Scientific America, Addiction rates for opioids are 3.4 times higher for those with incomes under $20,000 per year than they are for employees making more than 50,000 per year.

But that article also shared studies that state that pain pill prescriptions are not driving the opioid epidemic. Patients with pre-existing addiction issues are more likely to become addicted to opioids and 75 percent of those who develop opioids start taking opioids in a non-prescribed manner. Furthermore, only 12 to 13 percent of ER patients who are treated for opioid overdoses are chronic pain patients.

Workers’ Compensation is traditionally an area of the law that is controlled by the states. Regulation of drugs is generally an area reserved for the federal government. Any laws imposing additional hurdles or requirements upon doctors who prescribe opioid drugs may have to come from the federal government.

Proposed changes to Iowa workers compensation cruelly target elderly employees

Today’s post comes from guest author Jon Rehm, from Rehm, Bennett & Moore.

Anti-worker changes could be coming to Iowa workers compensation. To me the cruelest reform would be the proposal to end permanent total disability benefits at age 67 and limit workers who are over 67 who become permanently and totally disabled to 150 weeks of benefits. One memorable client of mine demonstrates the callousness of the proposed Iowa reforms.

My client Doris Newkirk was 83 years old when she was injured working as a hostess at Lone Star Steakhouse in west Omaha in June 2006. She was near a bathroom door when a large male co-worker came barreling into the bathroom and caused Doris to fall back and injure multiple parts of her body. Like many retirees, Doris worked because she needed the money. After her injury she was unable to work. Fortunately Doris was able to receive permanent total disability benefits to make up for the income she lost because she wasn’t able to work. Those permanent benefits started in September 2007 and continued for five years and 10 ½ months until her death on July 21, 2013.

If Nebraska law limited those injured over the age of 67 to 150 weeks of permanent total disability benefits, Doris wouldn’t have been paid anything for the last three years of her life. To her credit, Doris travelled from Omaha to Lincoln in her late 80s to testify against similar legislation when it was proposed in Nebraska. According the Business and Labor committee clerk at the time, the state Senator who introduced the bill at the behest of insurance interests made a motion to kill the bill after listening to her testimony.

Workers compensation is a cost of business. But according to CNBC, Iowa has the second lowest cost of doing business in the country. Iowa, like Nebraska, generally ranks well in national surveys of business climate. Iowa’s weakest area when it comes to business climate,  according to CNBC, is quality of workforce. Unlike Nebraska, Iowa lacks vocational rehabilitation for injured workers. If Iowa is looking to reform its workers compensation system, they should consider investing in vocational rehabilitation so injured workers can fully regain their ability to contribute to the economy in Iowa.

Opioid Task Force, Recent Studies, and CDC Opioid Recommendations

Today’s post comes from guest author Kristina Brown Thompson, from The Jernigan Law Firm.

The North Carolina Industrial Commission recently joined many other states (i.e. Massachusetts) in tackling the issue of opioids in the workers’ compensation cases by creating a Workers’ Compensation Opioid Task Force. The goal of the task force is to “study and recommend solutions for the problems arising from the intersection of the opioid epidemic and related issues in workers’ compensation claims.” According to the Chair, “[o]pioid misuse and addiction are a major public health crisis in this state.” 

As of last June, a study by the Workers’ Compensation Research Institute (WCRI) noted “noticeable decreases in the amount of opioids prescribed per workers’ compensation claim.” From 2012 – 2014, “the amount of opioids received by injured workers decreased.” In particular, there were “significant reductions in the range of 20 to 31 percent” in Maryland, Massachusetts, Michigan, Oklahoma, North Carolina, and Texas. 

Additionally last March, the Centers for Disease Control and Prevention (CDC) issued new recommendations for prescribing opioid medications for chronic pain “in response to an epidemic of prescription opioid overdose, which CDC says has been fueled by a quadrupling of sales of opioids since 1999.” 

Currently, the CDC’s recommendations for prescribing opioids for chronic pain outside of active cancer, palliative, and end-of-life care will likely follow these steps:

1.  Non-medication therapy / non-opioid will be preferred for chronic pain.

2.  Before starting opioid therapy for chronic pain, clinicians should establish treatment goals and consider how therapy will be discontinued if benefits do not outweigh risks.

3.  Before starting and periodically during opioid therapy, clinicians should discuss with patients known risks and realistic benefits of opioid therapy. 

Agriculture Labor Law Training Offered by WA Dept. of Labor and Industries

The WA Department of Labor and Industries has announced labor law training for employers in April, including as a topic “workers’ compensation claims.” While this notice of training is directed to employers that hire migrant workers under H-2A visas, it is interesting to note that Washington State provides workers’ compensation coverage to injured workers regardless of their immigration status.  Non-documented injured workers receive the full complement of benefits under our system, although with wrinkles that can be manipulated by the employer or claims manager to limit benefits. 

The full text of the training announcement follows:

Agricultural supervisors and crew bosses who have the right training play an important role in ensuring that employers who hire migrant, seasonal and foreign workers with H-2A visas are following the law.

Training on state and federal labor laws will be offered in Spanish and English at labor laws forums in Yakima on April 26 and Wenatchee on April 27.

The forums are sponsored by the Washington State Department of Labor & Industries, the Washington Employment Security Department and the U. S. Department of Labor Wage and Hour Division.

The free half-day trainings cover wage and hour requirements, workplace safety and health regulations, transportation and housing, workers’ compensation claims and more.

Space is limited, so preregistration is recommended. For more information or to register, go to:

April 26 – Yakima – Spanish

April 26 –Yakima – English 

April 27 – Wenatchee- Spanish

April 27 – Wenatchee – English 

For more information, contact Fabiola Gonzalez at 360-902-5419.

 

Photo credit: jaci XIII via Foter.com / CC BY-NC-SA

Age Discrimination Claims in Workers’ Compensation Settlements?

Today’s post comes from guest author Anthony L. Lucas, from The Jernigan Law Firm.

When an employee settles a workers’ compensation claim, the employer often wants to terminate the employee and is cautious because of potential age discrimination. The Age Discrimination in Employment Act (ADEA), 29 U.S.C. 621 et seq. (2015), prohibits companies with 20 or more employees from discriminating against a person (40 years of age or older) because of his or her age with respect to any term, condition, or privilege of employment, including hiring, firing, promotion, layoff, compensation, benefits, job assignments, and training.

An individual who has been discriminated against because of his or her age may be entitled to back pay, reinstatement, hiring, promotion, front pay, liquidated damages, and court costs and attorney fees.

To avoid potential discrimination claims after a workers’ compensation settlement, the employer often seeks an ADEA waiver at the same time. For an ADEA waiver to be enforceable, it must:

  • Be in writing and understandable;

  • Specifically refer to ADEA rights or claims;

  • Not waive an individual’s future rights or claims;

  • Be in exchange for valuable consideration in addition to anything of value to which the individuals is already entitled;

  • Advise the individual to consult with an attorney before signing the waiver;

  • Provide the individual with a certain amount of time to consider the agreement:

    • 21 days for individual agreements

    • 45 days for group waiver agreements

    • A “reasonable” amount of time for settlements of ADEA claims

  • Provide a period of at least 7 days following the execution of the agreement, in which the agreement is not effective or enforceable, in which the individual may revoke the agreement.

Some termination agreements may not be enforceable, and the individual may have a valid claim to pursue under the ADEA.

A Dismantling of the Grand Bargain That Created Workers’ Compensation

Today’s post comes from guest author Catherine Stanton, from Pasternack Tilker Ziegler Walsh Stanton & Romano.

This week marks the official start of the holiday season. It is a time for family and loved ones, and a time to reflect on the blessings that we have received in our lives. This week marks the countdown to a number of holidays including Christmas, Hanukah and Kwanzaa. Unfortunately for some people, however, the holiday season is fraught with anxiety, depression, illness and injury. Many people who sustain work-related injuries find that without their weekly salary, the holidays are a stark reminder of how their lives have changed dramatically. The inability to provide for even the basic necessities, let alone splurge on holiday presents, is a prescription for depression.

The Grand Bargain Premise of Workers’ Compensation laws in this country is that the employer, through their insurance carrier, is responsible to pay for injured workers’ medical treatment, lost wages, and permanent disability in exchange for injured workers giving up their rights to sue their employers for negligence. During the last couple of decades, Workers’ Compensation benefits have been under the continuous scrutiny of the Business Council, which has been alleging that the cost of benefits to injured workers is at the root of their increase in costs and reduction in profits.

However, a report from the National Academy of Social Insurance (NASI) indicates otherwise. Benefits as a percent of payroll declined in 46 states between 2010 and 2014, continuing a national trend in lower benefits relative to payroll that began in the 1990s. Costs to employers, on the other hand, continue to climb. Between 2010 and 2014, employer costs associated with Workers’ Compensation – such as insurance premiums, reimbursement payments, and administrative costs – grew at a rate nearly five times faster than benefits. Instead of using employers’ money to provide benefits for injured workers, insurance companies pay a host of businesses, including insurance medical examiners, nurse case managers, vocational rehabilitation companies and defense counsel, all of which profit from the system at the expense of workers and reap record profits for themselves. Meanwhile, the insurance industry and the Business Council falsely blame the claims of disabled workers so they can continue to increase profits by slashing benefits and shifting costs to taxpayer-funded programs instead of employer-paid insurance.

Benefits in New York have decreased under the current Workers’ Compensation system. The changes in the law in 2007 allowed higher wage earners to benefit in the short term as the amount of their weekly benefits has increased. However, these benefits are only available for a fixed period of time. If injured workers are able to return to work after a short period of lost time and a limited period of medical treatment, then some may say the system is a success. Unfortunately for many severely-injured high and low wage earners, the Grand Bargain wasn’t so grand. Medical providers’ hands are tied by Medical Treatment guidelines that limit the amount of treatment authorized based upon “best practices” or cookie cutter treatment, as opposed to what is recommended by the treating doctor. Now there is the prospect of limiting prescription medications as well, all in the name of cost reduction.

The reduction of medical treatment based on the treatment guidelines to injured workers should not imply they are fully recovered. Also, they don’t all return to work once they reach their indemnity cap. The cost of providing monetary benefits and medical treatment are shifted to the taxpayers to pick up the tab. Injured workers don’t expect that the very act of working will forever alter their lives in a negative way. Workers’ Compensation benefits are not a charitable donation, but an entitlement based upon a compromise between workers and their employers. Unfortunately, it is clear that these benefits have been gradually eroded. We should not allow any legislation that further erodes these benefits. While the holidays will continue to bring depression and despair for some injured workers, it should not be as a result of our treatment of them afterward.

 

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.

WA DLI Begins Employer First Contact Call Pilot

As part of the Joint Legislative Audit Review Committee (JLARC) implementation L&I received approval from the Legislature to hire additional account managers to increase capacity for first calls to employers and to provide loss control support. The Employer Services Early Contact Team was formed in October 2016. This team is currently staffed with 4 account managers with the plan to hire 4 additional account managers in February 2017. 

The Early Contact Team began the Employer First Contact Call Pilot on Tuesday, December 27th. As a pilot, they started by calling on a small number of potential time-loss claims and plan to gradually expand over time. 

The Early Contact Team will ask the following questions of the employer: 

  • What was the workers’ last day worked? 
  • Has the worker returned to work? Or, is there a planned returned to work date? 
  • Is light duty available? 
  • Will the worker be kept on salary? 
  • Are the wages and health care benefits the worker listed on the ROA correct? 

The Early Contact Team will educate employers on: 

  • The claim free discount, if the employer has one. 
  • Long-term impacts of time-loss on the firm’s experience factor. 
  • The benefits of light duty jobs and options to obtain cost reimbursements through the Washington Stay at Work Program. 
  • Early return-to-work assistance to develop light duty jobs consistent with the worker’s restrictions. 
  • Risk management services or a safety and health consultation for accident prevention. 

The Early Contact Team will make referrals if indicated for: 

  • Washington Stay at Work Program 
  • Early Return to Work (ERTW) Services 
  • Risk Management Services 
  • Safety and Health Consultation Services 
  • Ergonomic Evaluations 

This means the Early Contact Team will be the first to contact employers, rather than the claim manager, in some instances. As a future phase of implementing the JLARC recommendations, we will improve the speed of claim manager first contacts on claims at risk of long-term disability and equip them with the tools to help partner with employers to reduce this risk. 

 

Photo credit: KayVee.INC via Foter.com / CC BY-NC-SA

Why Immigration Policy Changes Will Probably Impact Workers Compensation

Today’s post comes from guest author Jon Rehm, from Rehm, Bennett & Moore.

In theory, the changes to immigration policy proposed by President Trump shouldn’t impact workers compensation in Nebraska. Workers compensation laws are state laws and Nebraska, like most states, awards workers compensation benefits regardless of immigration status.

But theory is one things and reality is another.

Mike Elk of Payday Report recently ran an article detailing that workplace deaths among Latinos were the highest in 2015 than they had been since 2007. This spike was attributed in part to aggressive immigration enforcement by the Obama administration which immigrant advocates believed made workers afraid to speak out about working conditions over fear of deportation.

During the Obama administration tougher immigration policies were at least coupled with tougher and even innovative workplace safety enforcement by OSHA. In the Trump era, workplace safety enforcement is expected to be curtailed and new OSHA rules are poised to be rolled back.

Immigration and workers compensation is often thought of in the context of Mexicans and central Americans working in industries like meatpacking and construction. This is a misconception, the meatpacking industry in Nebraska and elsewhere employs an uncounted but significant number of Somali workers. Somalis are one of seven nationalities banned from entering the United States under President Trump’s order. Ironically Somalis were recruited heavily into meatpacking work after raids during the Bush administration lead to the deportation of Latino meatpacking workers. Somalis had refugee status so there were few questions about their immigration status or eligibility to work legally. Under the new executive order, their immigration status is less secure and they may be less likely to speak out about working conditions.

A smaller but growing number of Cubans are coming to Nebraska for meatpacking work as well. Like Somalis, Cubans are deemed to be refugees so their ability to work lawfully is not a question for employers. However in the waning days of Obama administration, President Obama ended automatic refugee status for Cubans in an effort to normalize relationship with the Castro regime. There was little public outcry over this order like there was for the so-called Muslim Ban. However because of an executive order, Cuban nationals working in Nebraska may be less inclined to speak out about working conditions or claim workers compensation benefits due to newfound uncertainty over their immigration status.