Category Archives: Workers’ Compensation

WA L&I NEWS: Cost of Workers’ Compensation Insurance Dropping for Many Yext Year

The price of workers’ compensation insurance will go down for many businesses in Washington next year. Today, the state Department of Labor & Industries (L&I) announced that the average amount employers and workers pay for the coverage will drop by 2.5 percent in 2018.

Unlike many states, Washington employers and employees share the expense of workers’ compensation premiums.

After proposing the decrease in September, the agency hosted several public hearings around the state to take input. L&I Director Joel Sacks made the final decision this week.

“We’ve made several improvements that are helping injured workers heal, return to work sooner and avoid long-term disability,” said Sacks. “We’ve also used small rate increases in recent years to make the workers’ compensation system healthier and to build our contingency reserve. As a result, we’re able to cut premiums in 2018.”

Lower rate means businesses and employees will pay millions less

The rate decrease means employers will pay about $34 less a year per employee for workers’ compensation coverage in 2018. As a group, Washington employers will pay $67 million less in premiums. Employees will also pay less for their share.

L&I attributes the decrease to several factors, including the improved economy, employers and workers focusing on safety, and L&I initiatives that are helping injured workers recover sooner and reducing workers’ compensation costs.

One example of an improvement to the workers’ compensation system involves providing injured workers vocational support and assistance much earlier in claims. It’s helping people hurt on the job return to work sooner. The rate of workplace injuries that develop into long-term disability is down by more than 18 percent from 2012.

The 2.5 percent workers’ compensation premium decrease is an average; individual employers may see smaller or larger drops depending on that employer’s industry and claims history. For that same reason, some employers will see increases.

Steady and predictable rates

L&I is working to avoid large rate swings that make it hard for employers to plan. The agency determines the proposed rate each fall by looking closely at expected workers’ compensation payouts, the size of the reserve funds, wage inflation and other financial indicators.

Employers and workers pay into the workers’ compensation system to help cover the cost of providing wage and disability benefits, as well as medical treatment. L&I is the state’s primary workers’ compensation insurance provider, covering about 2.8 million workers and nearly 180,000 employers. The agency accepts more than 90,000 claims a year.

The new rates go into effect on Jan. 1, 2018. More information about 2018 workers’ compensation rates is available at www.Lni.wa.gov/Rates.

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Law Promoting Openness Regarding Pharmacy Benefit Managers Meets Industry Resistance

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

A North Dakota law attempting to promote openness about fees and prevent conflicts of interests with so-called pharmacy benefit managers (PBM) would seem non-controversial.

Non-controversial to everyone besides lobbyists for the PBMs who have sued the State of North Dakota in federal court claiming this commonsense legislation harms patient safety and is unconstitutional.

The North Dakota suit matters in the world of workers’ compensation because PBMs are an essential component of drug formularies which are popular with workers compensation insurers and have been touted as a way to prevent opioid abuse and control drug costs. Formularies are a list of approved drugs and dosages. Formularies are administered by the PBMs who buy the drugs, allegedly at a discount, from drug companies and pass along those savings onto users.

Drug formularies have come under criticism for issues addressed by the North Dakota legislation. First, a PBM may have a relationship with a particular drug maker which means that drugs are picked on for business reasons rather than medical reasons. Formularies also may not control drug costs as advertised.  In response to a drug formulary bill in Nebraska last session, the City of Omaha was concerned that formularies might increase drug costs because of the inability to use generic drugs.

Related to that concern, PBMs have been criticized for their role in helping drug companies pass along higher drug costs to consumers. PBMs are paid on what the discount they can negotiate, so drug companies have an incentive to inflate drug costs which benefits PBMs.

Lawmakers on a state or federal level are correct in having concerns about PBMs if they want to address drug costs and opioid use. The PBM industry has argue that state laws are “pre-empted” by federal laws regulating prescription drugs, so state laws are unconstitutional. Pre-emption is premised on the fact that federal laws are superior to state laws if there are federal and state laws on both subject matters.  Recently the U.S. Supreme Court has used pre-emption to strike down state-based consumer protection laws in favor of corporate defendants. The threat of successful litigation may scare states, especially smaller states, from passing laws to regulate PBMs.

But state laws regulating the use of PBMs in the context of workers’ compensation may be easier to defend from a legal standpoint. Workers compensation laws are enacted under a state’s police powers under the 10th Amendment. The constitutional basis of workers’ compensation laws is arguably a fluke of legal history but workers’ compensation is traditionally seen as a state law concern so federal courts may be less to strike down laws regulating PBMs in the context of workers’ compensation.

The Road Ahead: Adjusting To Life After An Injury

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

As an attorney who has represented injured workers for more than 27 years, I see first hand what an injury can do to workers and their families. A number of years ago I represented an injured electrician, who as a result of an overextension injury sustained on the job, ended up having multiple surgeries. Almost immediately, this once athletic, high wage earner with a beautiful family and comfortable lifestyle saw an abrupt end to the life he knew.

My client faced a debilitating injury. He was no longer able to travel, his personal relationships suffered, and his once strong physique withered away. His financial situation was dire and he was unable to afford his home. Beside the extreme physical impairment, he ended up being treated for major depression. Both the insurance carrier’s medical providers, as well as the claimant’s treating doctors in this particular case, agreed that the claimant was totally disabled or incapable of performing any meaningful work activity – a standard not easy to meet.

Many of those injured on the job may not be able to return to their prior employment. Yet, according to the law, that does not mean they are totally disabled from any employment. If they are able to perform any work activity at all then they may be considered partially disabled. The amount of weekly payments an injured person receives and the length of time an injured worker receives these benefits is dependent upon a number of factors including degree of disability and loss of earning capacity. A partial disability can be considered mild, moderate, or marked.  These degrees are further broken down into when an injury is deemed permanent to a percentage loss of earning capacity. In some cases the difference of one percent loss of earning capacity can mean the difference of a full year of additional benefits. As you can imagine, much of my practice is consumed with litigation regarding the degree of disability and the loss of earning capacity.

The road for those who are partially disabled is not an easy one. Despite the Workers’ Compensation Board’s determination that an injured person has an ability to perform some work activity, it does not always translate into being able to obtain employment. In the case of serious injuries resulting in extensive lost time, the employer may have had to fill the position or the employer may not be able to accommodate the physical limitations. This puts injured workers in a position of having to look for alternate employment that they may not be trained for. The Board recommends a number of resources available to those seeking assistance, including one-stop career centers, as well as participating in vocational rehabilitation programs and continuing education such as SUNY Educational Opportunity centers adult career and continuing education. For more information go to www.wcb.ny.gov/labor-market-attachment

Many workers who are unable to obtain employment because of their injuries apply for Social Security Disability benefits. The standard for Social Security disability is different than Workers’ Compensation and relies more on the age and ability of the injured person to be retrained and to obtain relevant future employment. Social Security Disability benefits are payable for any illness or injury and do not have to be work related. All medical conditions are considered by the federal judge when making a determination as to eligibility, including physical or emotional impairments.

While an injury on the job can be life altering, there are resources available. You may never be able to return to your pre-injury status, but knowing your options allows you the ability to have some control over your future.

 

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.

Medicaid Cuts Will Cause More Nursing Injuries

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

While efforts to repeal the Affordable Care Act and cut Medicaid appear to have stalled for now, any successful effort to cut Medicaid will adversely impact workplace safety for nurses and nurse’s aides.

Studies by the National Institutes of Health show that reductions in Medicaid funding leads to less staffing at long term care facilities and that lower staffing leads to more injuries for nursing employees. Since most nurses and nurse’s aides are covered under state-based workers compensation laws the additional costs of work injuries from Medicaid cuts may not be fully accounted for on a federal level.

At least in Nebraska nursing employees have some ways to protect themselves when advocating for safer working conditions even if they do not belong to a union.

Nebraska has a whistleblower law that applies specifically to health care workers, including nurses. The benefit of this act is that it allows employees to recover for damages similar to what they could collect under the Nebraska Fair Employment Practices Act, including front pay and possibly attorney fees, without having to exhaust administrative remedies. Additionally, health care workers would have four years to bring a suit under the health care whistleblowers law, rather than the much shorter and complicated statute of limitations under the Nebraska Fair Employment Practices Act.

Nebraska has a broad general whistleblower law that allows employees to oppose unlawful conduct by their employers. Nebraska law requires that nursing homes to be adequately staffed. Federal law also requires that employers provide a workplace to be free of recognizable hazard. Inadequate staffing would certainly be deemed be a recognizable hazard in a nursing home. The only drawback to Nebraska’s whistleblower law is the short and potentially uncertain statute of limitations.

Nebraska law would also allow nurses reporting inadequate staffing to be protected from retaliation under a public policy claim that also has a four year statute of limitations.

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.

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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.

 

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