(c) 2018 Jon L Gelman, All Rights Reserved.

Thursday, March 27, 2008

Governmental Opposition Swells Against Implementation of the 6th Edition of the AMA Guides

State governments throughout the United States are now delaying implementation of the 6th Edition of the AMA guides as a standard to determine permanent disability. The governmental officials are heeding warnings that the guides do not carry out the legislative intent of the workers’ compensation acts which is to provide a remedial social insurance benefit to injured workers.

In 1911 workers bargained away the right to seek redress in the civil litigation system for a more limited benefit structure called workers’ compensation. Workers’ compensation was the original “no fault system” that was to provide limited benefits in a summary and efficient fashion to disabled workers.

Soon there was an attempt by Industry to modify the system in the 1970’s to create a standardized system of measuring disability and reduce even the meager benenfits offered. The AMA guides were drafted and adopted in several state to measure permanent disability. Presently
many jurisdictions utilize the 5th Edition to determine disability.

The 6th edition were published in late 2007s under the guidance of Christopher R. Brigham M. D. whose company,
Brigham and Associates conducts medical evaluations. Dr. Brigham contends that only 40% of those totally disabled are really unable to perform meaningful work. It has been reported that if the new guides are adopted then permanent disability will no longer be recognized in 70% of the present claims.

At a recent meeting of the
IAIABC (The International Association of Industrial Accident Boards and Commissions) , an organization composed of industrial boards and commissions throughout the United States, but open to membership from dues paying members, which include many of the workers’ compensation insurance carriers in the United States, there was “a lively discussion” concerning use of the new Guides.

"Dr. Russell Travis, Medical Director for the Kentucky Office of Workers’ Claims, suggested the 6th Edition makes improvements in guiding impairment rating, particularly in consistency of ratings across organ systems. However, Dr. Travis highlighted some of the perceived weaknesses he found in the AMA Guides; his presentation pointed to issues of apportionment, pain, and the qualifications required to perform a rating as still unresolved. The strong debate among the rating physicians demonstrated the lack of consensus on techniques for impairment rating and the role of the AMA Guides."
Within the last few weeks, several states have paid attention to warnings and taken action to resist immediate implementation of the 6th Edition of the AMA Guides. Kentucky legislatively voted to adopt the prior 5th Edition of the AMA guides to permanent impairment rather than the current 6th edition. Vermont issued an administrative directive barring use of the new 6th Edition. Iowa has joined the growing chorus of those who will not follow the adoption of the 6th Edition. Opposition to implementation in New York is at a fever pitch.

Joining the chorus of growing opposition is The Workplace Injury Law And Advocacy Group
. In an article authored by Todd McFarrin, the President-Elect of CAAA, he cautions that:

“By using impairment ratings from the Guides, essentially as a proxy for disability, permanent disability benefits are being slashed. The use of impairment and the eclipse of disability as the relevant permanent consequence of an injury in workers’ compensation is a dangerous trend for injured workers. The latest [6th] edition of the Guides accelerates this decline.”

How to determine permanent disability has always been an agonizing proposition to all who participate in the system. While State legislatures and the Federal government would be pleased to adopt an objective standard, such a goal is illusionary. One cannot be substituted for subjective nature of pain and restrictions of movement in the human environment.

While the economy may be struggling, it is anticipate that the outrage of Labor to the implementation of the restrictive 6th Edition to determine permanent disability will only increase. The objections will become louder and stronger as Industry tries to renege on its 1911 bargain called workers’ compensation.

Tuesday, March 25, 2008

California Considers Taxing Workers' Compensation Attorneys Fees

If Governor Arnold Schwarzenegger has his way the battered advocacy system for injured workers in California is about to get hit again. The Governor recently proposed charging a sales tax on professional fees in the State of California. He indicated that he is well aware of the loopholes in the present system and would like to end them in order to recover money for California sagging state revenues.

Charging a “sales tax” for professional fees is a concept that the Social Security system has imposed for several years by charging a user fee (6.3%) to successful attorneys who receive favorable awards for their clients before that agency. In fact, the concept of Social Security charging a fee to have Medicare review proposed settlements has often been rumored as they are analogous to IRS private opinions.

While no definite proposal has been offered to the California legislation, the Governor will obviously need to reach into someone’s bank account to keep California’s budget afloat.

Sunday, March 23, 2008

Collecting Both Social Security Disability Insurance And Workers’ Compensation Benefits Generates Inequality of Benefits

A recent study by the federal government reports that some disabled workers who receive workers' compensation or public disability benefits may receive less money than their counterparts. The reason why this phenomenon occurs is because the Social Security benefit computation is designed to replace more of the lower earner’s pre-retirement or predisability earnings than a higher earner’s.
“The Social Security benefit computation is designed to replace more of a lower earner's preretirement or predisability earnings (average indexed monthly earnings) than a higher earner's. This is done by "bend points" in the primary insurance amount formula, which create three earnings brackets. Earnings up to the first bend point are replaced at 90 percent; earnings between the first and second bend point, at 32 percent; and earnings above the second bend point, at 15 percent, up to the taxable maximum. The three brackets are a convenient way to group workers by income (represented here by AIME). This grouping also helps distinguish differences in replacement rates, which are largely determined by the earnings bracket in which the worker belongs.”

The Social Security disability system was established in 1956 to pay cash benefits to those workers who sustained long-term disabilities and were insured for coverage. On the other hand, state workers compensation systems had been in place since 1911 and may be combined with other public disability benefits in addition to Social Security benefits.

The Social Security system, unlike state workers compensation programs, provides a nationally distributed benefit to over 8 million disabled-worker beneficiaries. State public disability benefits are paid under numerous laws including federal, state or local government were plans that provide compensation for medical conditions that are not work related. Some of them may be short-term such as state temporary disability benefits.

As of December 2005, the date that the study utilized for collection of data, there were 8,305,702 disabled-worker beneficiaries in the Social Security program. Of those beneficiaries, 1,440,772 had some past or present connection to workers compensation or public disability benefits and 798,476 at a current connection to workers' compensation or public disability benefits.

In 1984 Congress amended The Social Security Amendments of 1956 and required that workers’ compensation benefits were to be offset against the federal Social Security disability insurance benefit. In 1985 the offset was eliminated and it was again reinstituted in 1989 by Congress. Further amendments in 1996 to The Omnibus Budget Reconciliation Act Of 1981 extended the offset provision to public disability benefit programs. However, Congress excluded the offsets of workers’ compensation and public disability beneficiaries who are receiving Social Security disability benefits in those states where the State took the offset. These have been named reverse offset states. The state law needed to be in effect as of February 18, 1981. Presently there are 16 states and Puerto Rico that are reverse offset states.

The recent study involving 18 month period from January 2003 through June 2004, identifies that a proximately 11% of all Social Security disability beneficiaries were also entitled to receive state workers compensation for public disability payments. It reported that those who receive combined benefits were most likely to be male, high earners, older it retirement and from the Western states.

The report concludes that the earnings replacement rate for disability insurance beneficiaries under the Social Security system, as measured by the ratio of the monthly disability insurance benefits to the average indexed monthly earnings, demonstrates that disabled workers without workers’ compensation or public disability benefits had higher replacement rates. Therefore, collecting multiple benefits may create an economic disparity.

Tuesday, March 11, 2008

The Future of Spitzer’s NY Workers’ Compensation Reform Effort and the AMA Guides 6th ed.

With Governor Spitzer now embroiled in a major scandal that may end in his resignation as Governor of the State of New York, all eyes in the workers’ compensation arena are now focused on his reform efforts. On February 27, 2007 shortly after taking office he signed landmark legislation to overhaul the NY system.

The legislation mirrors the concerns of Labor and Industry throughout the country about a workers’ compensation system bogged down in administrative bureaucracy and failing to meet the medical and permanent disability needs of injured workers. The new NY act is a skeleton on a program that will be reconstructed by regulations and administrative memos.

Injured workers in NY, as in other parts of the country, are concerned of the implantation of the new AMA Guidelines as the criteria for determining disability. It has been remarked that the new AMA Guidelines 6th edition will eliminate at 60% of all findings of disability resulting in no benefits for those injured workers. The Business Council on NY has been advocating for their implementation.

It is doubtful that there will be a change of course in NY. The NY legislation was originally drafted under the Republication Administration of Governor Pataki and merely passed in the Democratic Administration of Spitzer in about 45 days after he took office. The political deal was struck NY long before the Spitzer Administration, but the legislation is only a skeleton that will require additional crafting and implementation.

NY mirrors the same issues of other jurisdictions. Unfortunately implementing the AMA Guidelines 6th edition will not solve the problem in NY or elsewhere. It is like taking a wheel off a vehicle with 2 flat tires already. Yes the system needs reform, but one that will be crafted as the fathers of workers’ compensation legislation intended, which is a system that provides expeditious and adequate compensation for injured workers.

Now Available: New 2008 Supplement for Gelman on Workers' Compensation Law 3rd Ed.

Thomson/West has published the 2008 supplement to Workers' Compensation Law 3rd ed., (Vols. 38 - 39A, New Jersey Practice Series) authored by Jon L. Gelman.


• These pocket parts provide information concerning the Asbestos Fund, which has been established for those entities where workers' compensation coverage cannot be established. The newly designed forms that need to be utilized in filing for benefits are included. Also, the newly designed Motion for Temporary and Medical Benefits, including the required certification, is provided and discussed.

• The newly revised Judgments for Total and Permanent Disability are included. The Judgments include new refinements in offsets for pensions and Social Security disability benefits.

• The recently promulgated administrative rules governing the disposition of Temporary Disability Benefits are discussed. The nonduplication of benefits provisions are reviewed including the multiple agency adjudication process.

• Collateral medical benefit issues are discussed in light of the recent Supreme Court decision concerning this matter, including a Motion to Join the Collateral Health Carrier and sample Certifications to be used in support of the application.

• Additionally, these pocket parts provide information concerning thenew rules of the Division of Workers' Compensation embodying electronic filing requirements and new procedures involving both formal and informal proceedings, motion practice, post judgment process, and judicial performance. The expanded Medicare secondary reporting requirements and the mandatory coordination of benefits are reviewed in this supplement. The recovery aspects of Medicare conditional payments as well as future medical provisions are updatedand discussed. The new Child Support Lien distribution forms, computation worksheets and judgments are provided and explained in depth.

• This pocket part also discusses recent changes in the application for counsel fees. The supplement includes the newly promulgated administrative directive embodying those changes

To order: Click Here

The volume is also available on Westlaw and in CD-Rom format.

Wednesday, March 5, 2008

NJ WC Reports a Drop of 46% of CMS Backlog in 60 days

NJ, a State that elected not to data match with CMS, is now reporting a drop of 46% of its backlog from the cases designated "waiting for CMS approval," MCARE matters. In a memo to all judges and attorneys, the Director and Chief Judge reported the drop in the cases so designated.

The memo encourages and the use of "specialists" and suggestions that the cost for that service be shared among the parties. It also suggested that some cases be tried fully or partially and that special language be incorporated in Judgments/Settlements where cases have been compromised, providing the opportunity for the cases to be re-heard at a later date to address Medicare issues when reviews are actually completed by CMS. It is difficult to determine whether the CMS issues are actually being completely resolved or whether they are deferred to a later date. The State of NJ continues to offer the judicial assistance of the Division of Workers' Compensation to reduce the backlog of cases designated as MCARE matters.

The memo also recognizes that little action has occurred on the Industry supported, and previously ill fated, Medicare Secondary Payer Statute which attempts to modify the CMS recoupment procedure for conditional medical payments. The proposed admendments discourage the periodic payments of compensation benefits, a basic premise of the entire workers' compensation system.

Attention was brought to the NJ situation when local attorneys enlightened Senator Lautenberg who then introduce Federal legislation requesting the that CMS provide status on the CMS recovery effort.

“These delays mean that thousands of workers in New Jersey and across the country are waiting months and even years to be compensated for their workplace injuries. Workers who are hurt on the job rely on these payments for medical expenses and to get their lives back on track. Medicare needs to provide information to Congress immediately on the number and length of these delays so we can determine the best way to end them and get workers the settlements they need and deserve,” said Sen. Lautenberg, who is a member of the Senate Appropriations Committee.

CMS has since supported newely enacted legislation and Rules to place an increased burden on primary medical providers, major medical carriers and employers to comply with reporting issues.

Tuesday, March 4, 2008

NJ Workers' Compensation Carriers Win a "Get Out of Jail Card" on Asbestos Liability Claims

Workers' compensation insurance companies have a long history of guarding themselves from liability from asbestos exposure issues. Recently the NJ courts have ruled that workers' compensation insurance companies are shielded from liability when the insurance company performs hygiene studies and does not take action to protect the employees that it has insured under the policy. This ruling further limits the ability of asbestos victims to obtain benefits.

The court in Fackelman v Lac d'Amiante du Quebec, LTEE, et al ruled on that workers' compensation carriers are shielded from liability for failing to notify workers of known hazards on the job site and take efforts to correct them. An asbestos victim worked at the Owens-Corning plant in Berlin NJ for 10 months as a stripper of Kaylo, asbestos pipe covering. The ambient air conditions were described as "dusty" and "foggy" in the plant. His employer provided no information to the employee about presence of high levels of asbestos fiber and a mask was not required to be worn. Air testing was conducted by the workers' compensation insurance carrier, but the employees were not informed as to the results nor the hazards of asbestos fiber. The employee was diagnosed with asbestosis in 2002.

Between 1958 and 1972 Aetna insurance company conducted air testing at the plant. The testing revealed that asbestos in the air (10,000,000 parts per cubic foot) at the plant far exceeded the minimal standards then in place. Aetna had meetings with Owens and discussed with Owens Corning, the employer, what actions should be taken to improve the industrial environment.

The asbestos worker filed a civil action against Aetna for failing to warn the employees of the hazardous conditions and for its failure to minimize the exposure to a safe level at the Owens Corning plant. The Court dismissed the case and did not extent third party liability against the workers' compensation carrier. The court reasoned that there was no surrender of responsibility to maintain a safe workplace from the employer to the insurance carrier. The court also held that there was no common law liability for an insurance carrier did not have a duty "to reduce the risks of exposure or to warn the employees directly."

The long history of the involvement of the insurance industry with the asbestos industry has been memorialized in depositions and affidavits for decades. The conspiracy of silence has lead to premature and needless and agonizing deaths of those who have been exposed to asbestos fiber. NJ has been reported to have one of the highest rates of asbestos related disease in the US. That should be no surprise since it is the legacy of the State's enormous rate of asbestos production during the war years and shortly thereafter.

The NJ compensation system for the payment of benefits to asbestos victims is stagnant. The recent legislation to provide benefits from the "Uninsured Employers Fund" has been ineffective in moving the cases along and adequately compensating asbestos victims. The civil litigation system has been bogged down in bureaucratic bankruptcies. Hopefully the NJ Legislature will see fit to review this inequitable situation and provide the speedy and remedial benefits to asbestos victims.