Tag Archives: reform

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

States with Opt-Out Workers’ Comp System are Strict on Injured Workers

Dallas attorney Bill Minick (Photo credit Dylan Hollingsworth for ProPublica)

Today’s post comes from guest author Hayes Jernigan, from The Jernigan Law Firm.

Texas and Oklahoma have both adopted an “opt-out” system for Workers’ Compensation. ProPublica along with NPR recently published an in-depth look at the results in these two states. Under this system, employers can opt-out of state mandated workers’ compensation insurance by creating their own policy for injured workers. These employer-written policies give employers 100% control over the terms, the benefits, and even settlements.

Specifically, ProPublica and NPR found that these employer-created policies generally have strict 24-hour reporting requirements or even require an injury to be reported by the end of a shift. This means, if an employee does not report their injury within their shift, or within 24 hours, they are prevented from bringing a claim at all. Period. End of discussion. Employers can also dictate how much benefits will be paid and some employers have capped death benefits for employees who are killed at work at $250,000. Whereas under the State Workers’ Compensation system, if a deceased worker leaves behind minor children, they will continue to receive benefits until they turn 18 (which could easily end up being well over $250,000 when you factor in lost wages until the worker would have been 65). This is potentially detrimental to a young widow or widower who is left with very young children.

This morning we tweeted a recent ABC news article that a worker was killed when he fell at a construction site in Charlotte. I’d hate to think that his or her family would be limited to recovering only $250,000 in the event the worker left behind dependent family members and young children. Money can’t begin to replace someone who is lost to us too early from an accident at work, but $250,000 would hardly cover a lifetime of income that the family will lose, especially if young children are left behind.

 

To read more on how the Opt-Out system is affecting injured workers in Texas and Oklahoma, go to: ProPublica: Inside Corporate America’s Campaign to Ditch Workers’ Comp.

Call “Reform” What It Is: Death By A Thousand Cuts For Workers’ Rights

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.

To stay on top of important Workers’ Compensation happenings, please visit the Facebook page of Pasternack Tilker Ziegler Walsh Stanton & Romano, LLP and “Like Us.” That way you will receive the latest news on your daily feed.

 

 

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.

 

The Washington Health Care Authority: We’re Doing it Wrong

+++ Looking at the Cost of Healthcare

     While Congress, specifically the House of Representatives, continue to wrangle over funding the Patient Protection and Affordable Care Act (“Obamacare,” to use the pejorative), we here in the “Soviet of Washington”[1] have been quietly taking our own steps towards controlling health care costs. One such step was the establishment of the Washington Health Care Authority (HCA) in 2006. The stated purpose of the HCA is to ensure that the “most comprehensive health care options” are available through state-funded health care plans while “minimizing the financial burden which health care poses on the state.” RCW 41.05.006. The HCA selects different medical technologies for review by the Health Technology Clinical Committee (HTCC)—a panel of physicians and other health care professionals who determine whether those technologies will be covered by state-funded insurance programs.

 This complete and utter lack of oversight is troubling…

     Sounds like a laudable goal, doesn’t it? Unfortunately, in practice, the committee operates as an unaccountable cabal whose coverage decisions are not subject to any substantive review. When the legislature passed the bill creating the HCA and HTCC, it included a provision for appealing the HTCC’s coverage determinations. But Governor Gregoire vetoed that provision, ostensibly on the belief that other portions of the bill provided sufficient opportunity for review of HTCC coverage decisions. However, as the court of appeals has noted, “there is no statutory procedure for substantively challenging HTCC determinations.” Joy v. Dep’t of Labor & Indus.

     This complete and utter lack of oversight is troubling because the HTCC often makes decisions at odds not only with the medical community, but also most other insurance companies.

     Recently, the non-partisan Center for Public Integrity ran a story lauding the Washington HCA for “making the tough choice” to implement cost-cutting measures.[2] According to the story, “the Health Technology Assessment . . . reviewed three common, expensive and controversial treatments for chronic back pain: spinal injections, spinal stimulation, a transcutaneous electrical nerve stimulation.” That sentence needs a bit of unpacking. First of all, while relatively common, spinal injections are actually fairly inexpensive and generally considered conservative care. Conversely, while spinal stimulation is expensive, it is comparatively uncommon. But at its essence, the statement from this story is that these treatments are controversial. But are they? Let’s focus first on spinal cord stimulation, for which the HTCC denied coverage on the grounds that it is not safe, medically effective, or cost-effective.

     When the HTCC proposes a rule on the coverage or non-coverage of a given health technology, it submits that rule for public comment before publishing the final rule. When it published its findings to the public on spinal cord stimulation, medical practitioners from across the country submitted voluminous literature in support of coverage of spinal cord stimulation—not one medical provider commented that spinal cord stimulation was ineffective or unsafe. One commenter noted that spinal cord stimulation had been used safely and effectively since 1967 to treat intractable back pain without the use of addictive narcotics. The same commenter pointed out that Washington would be the only state to deny coverage of spinal cord stimulation, and that the vast majority of private insurers also cover the procedure.

     So why did Washington State decide not to cover spinal cord stimulation? According to the Center for Public Integrity, Josiah Morse, director of the Health Technology Assessment Program, says that the committee “downplays the role of cost in its decisions.” “[I]n most cases there isn’t enough research on the cost-effectiveness of medical technologies, so the committee makes most of its decisions based on safety and effectiveness.” But if no medical professional commented that spinal cord stimulation was unsafe or ineffective, why would the HTCC deny coverage?

     Consider another HTCC coverage decision—in 2011, it decided that femoroacetabular impingement (FAI) surgery was not covered. FAI is a condition involving the cartilage of the hip socket. It is extremely painful and, if left untreated, can result in the need for an early hip replacement. FAI surgery is the only solution for moderate to severe cases. The HTCC again requested public comments and again received overwhelming support for coverage of FAI surgery. In fact, the only comment not urging coverage came from Josiah Morse, who urged his own committee “to bullet, bold or otherwise call out the last sentence that no cost, cost-effectiveness data were found.” It seems inappropriate for Mr. Morse to emphasize a lack of data to his own committee as a reason to deny coverage of the surgery—especially when it is his committee that is entrusted to gather the data in the first place.

     The Washington Health Care Authority must be held accountable to the people of Washington State. Skyrocketing costs are obviously of great concern to anyone interested in healthcare reform, but costs alone cannot be the sole, or even dominant, ground upon which to base a healthcare benefit coverage determination. I, for one, am not comfortable living in a world where decisions about whether or not my insurance company will cover an expensive, life-saving or –altering procedure are based predominantly on the cost of the procedure.

 

 


[1] A quote attributed to Postmaster General James Farley in 1937.

[2] Joe Eaton, The Other Washington Could Hold the Key to Medicare’s Cost Crisis, The Center for Public Integrity (July 29, 2013).

Photo credit: Truthout.org / Foter / CC BY-NC-SA

DLI Announces New Centers of Occupational Health and Education

Another option for speeding recovery from injury.

     The Department of Labor & Industries has finalized new agreements with health-care organizations to provide Centers of Occupational Health and Education (COHEs). COHEs are organizations that improve medical treatment for Washington’s injured workers.

     “The COHEs have proven their ability to prevent disability for workers,” said Joel Sacks, L&I director. “By improving occupational health care, they keep valuable workers on the job and reduce costs for employers.”

     Two brand-new COHE sponsors include:

  • A coalition of 12 health-care organizations led by Franciscan Health System, that will offer COHE services covering all western Washington counties.
  • Group Health Cooperative, which will provide services to injured workers at 11 clinics in western Washington and one in Spokane. Patients do not need to be members of Group Health to see doctors in these clinics for work-related injuries or illnesses.

 

 Ask us about our opinion of Group Health Cooperative as a DLI provider…

     L&I has also renewed contracts with the four existing COHEs:

     The COHEs provide training and organizational support to medical providers to increase their use of best practices in treating injured workers. These best practices focus on safely returning workers to full function and full employment. Examples of best practices include talking with the employer about return to work and regularly assessing a worker’s ability to do work activities.

     A 2011 study found that injured workers treated by COHE-affiliated health-care providers are away from work for 20 percent fewer days than other injured workers. COHE care also reduces disability and medical costs by $510 per claim during the first year.

     The new agreements are a major step towards meeting a legislative requirement to expand COHE services to all injured workers statewide by 2015, part of the 2011 workers’ comp reform

 

Photo credit: Paul Schreiber / Foter / CC BY-NC

Careful What You Wish For: Denying Worker’s Compensation for Undocumented Workers

Today’s post comes from guest author Charlie Domer from The Domer Law Firm.

In Washington State, undocumented workers are allowed to receive workers’ compensation benefits if injured in the course of employment. Many issues unique to this circumstance arise in such claims, including difficulties in documenting date-of-injury wages and job offers made during the course of a claim that require proof of eligibility for legal employment used as a tool by employers to truncate receipt of benefits by workers injured while in their employ.

Immigration reform is a continual and vexing issue in Washington. While politicians, lobbyists, and service organizations grapple with potential resolutions, there is no disputing the existence of illegal immigrants working for employers in our country. And when there are employees working, work injuries happen.  This may be especially true with the undocumented population who may be more susceptible to significant injuries because many perform more dangerous or hazardous jobs that other may not accept. For further information, see Do Immigrants Work in Riskier Jobs? and the CDC’s report on work-related injury deaths among Hispanics.

…excluding illegal immigrants from worker’s compensation coverage could create a financial incentive for employers to keep hiring illegal immigrants.

When injured, are these undocumented workers eligible for worker’s compensation? Some harshly argue that these workers should receive no benefits, as they are not working legally in the country. However, one of the underlying pillars of worker’s compensation is that the expense of workplace injuries (covered by insurance) should be placed on the employers who profit from the workers’ labors. Additionally, excluding illegal immigrants from worker’s compensation coverage could create a financial incentive for employers to keep hiring illegal immigrants—a practice that is against federal law.

The worker’s compensation laws in our country do not have a definitive answer to this question—though the trend is toward coverage of undocumented workers. Many states do Continue reading