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

Tuesday, March 31, 2009

NY Times Series Calls The Compensation System "A Costly Legal Swamp"

In another of a series of articles, the NY Times highlights the serious procedural and emotional issues involved in navigating the present workers' compensation system.

“This is a terrible thing to say,” said Dr. Robin Herbert, co-director of the occupational and environmental division at Mount Sinai Medical Center, “but if I had a health problem at work, I’m not sure I’d file a workers’ comp claim. It’s the Wild West of health insurance.”

Monday, March 30, 2009

Nationalizing Workers’ Compensation Medical Delivery

Recently the Obama Administration invited the medical insurance industry to the White House to discuss possible future scenarios on the delivery of health care. A planted floated at the meeting was one that President Obama advocated in h campaign. That proposal was allow the Federal government to sell health care coverage.

Obama remains committed that employees and employers, as well as the Federal government, should participate in the program. Does that mean that workers compensation insurance coverage is also going to be an element of the plan? The next obvious step would be to allow the Federal government to sell workers’ compensation insurance coverage.

Representative Jan Schakowsky (D-IL), a probable author of the legislations, stated, “We're not trying to figure out what represents the interests of private insurers, we're trying to come up with a plan that makes sure all Americans have health care…”

 The Federal Government is ultimately going to set the stage for the change in health care delivery. The incentive will be the $19 Billion dollars it has set aside for health information technology. Where the road to health care reform takes the ailing workers’ compensation medical delivery system in this era of struggling industrial growth still remains uncertain

Sunday, March 29, 2009

Administration in California Requests Judges to Vacate Their Decision Against AMA Guides

California Administration officials have written to the California Appellate Judges and requested that they vacate their decision setting aside the AMA Guides.  The letter, an unprecedented action, has not yet received a response from the California Workers' Compensation Appellate Court.

However, Todd McFarren, a California attorney and President of the California Applicants Attorneys Association, has remarked that the the Judges, will “...still be handcuffed by the administration’s inadequate permanent disability schedule.”  “The administration has not addressed the fundamental flaws in its disability rating schedule. We’ve been waiting more than a year for the governor to approve his own administration’s proposal to restore a small percentage of the permanent disability compensation he cut by 50% to 70%.”

Thursday, March 26, 2009

Salaries Frozen for State Workers' Compensation Staff

The national economic downturn continues to impact State administrative services. The NJ Department of Labor and Workforce Development has been prohibited by legislation from raising the salaries of Judges and administrative personnel of the NJ Division of Workers' Compensation for the fiscal year 2009.

The bill directs that no Fiscal Year 2009 appropriations may be used to provide salary increases to workers' compensation judges or administrative law judges, retroactive to January 1, 2009. The legislation provides for an exception if Federal stimulus become available.

"Notwithstanding the provisions of R.S.34:15-49 to the contrary, including the reference therein to salaries of judges of the Division of Workers' Compensation determined as a percentage of the annual salary of judges of Superior Court, beginning on January 1, 2009 there shall be no increase paid from appropriations made herein for an annual salary increase for judges of the Division of Workers' Compensation."

2009 NJ Sess. Law Serv. Ch. 22 (SENATE 15)

Court Holds Autopsy Not Required in Mesothelioma Claim

A New Jersey Appellate Court has ruled that an autopsy is not required in order to proceed with a claim against the manufacturers, suppliers and distributor of asbestos fiber. The appeals court decided that the defendants did not present a sufficient basis to prove that retrieval of lung tissue from the deceased workers' body would lead to obtaining significance evidence for use at trial. It was alleged that the former auto-repair worker had died of mesothelioma as a result of exposure to products containing asbestos fiber.

Furthermore, since the trial in the matter had been scheduled to commence within two weeks of the death of the worker, the Court also held that the trial preparation in the claim was , "... in no way hampered by the denial of their [defendant's] request for a limited autopsy."

Defendants in the claim, including Chrysler Motor Corp and Honeywell International, obtained a Court Order to bar the funeral minutes before the burial of the deceased asbestos worker. On review, following an evidentary hearing, the Appellate Court denied the request by the defendant's for a limited autopsy of the deceased worker.

New Jersey ranks second highest in the nation for asbestos related deaths. Over 10,000 workers each year continue to die from asbestos related disease. Asbestos is not yet banned in the United States.

Harold St. John v. Affinia Group, Inc., et al., NJ Appellate Division, March 3, 2009.

Tuesday, March 24, 2009

6th Circuit Allows RICO Decision Against Employer to Stand

The Sixth Circuit Court of Appeals permitted its favorable decision for employees and against an employer, its workers' compensation insurance carrier and its examining physician to stand. The Court, on January 5, 2009, denied a Rehearing and a Rehearing En Banc request made by the defendant who were held to be in violation of the Racketeer Influence and Corrupt Organization Act (RICO).

The Court held that 13 original predicated acts constituted a pattern of racketeering activity. The workers were not required to plead or prove reliance on the misrepresentations. The Circuit Court also ruled that the Michigan workers' compensation act did not reverse preempt RICO under the McCarran-Ferguson Act.

Brown v Cassens Transport Co. 546 F.3d 347 (6th Cir. 2009).

Monday, March 23, 2009

CMA Issues an Alert on MSP Reporting Data Extending Testing Period and Setting Thresholds

The Centers for Medicare and Medicaid Services (CMS) has issued an Alert on mandatory workers' compensation reporting extending the permissible testing period through December 31, 2009. They have also issued threshold criteria for “Ongoing Responsibility for Medicals” (ORM) and “Total Payment Obligation to the Claimant (TPOC).”

Sunday, March 22, 2009

The Voice of Change in the Medical Care Debate

The Workers' Compensation industry  appears to lack a meaningful voice in the US health care legislative debate. As the interested parties are being tapped by a coalition of Senate leadership for support, the fractionalized workers' compensation industry remains on the sidelines waiting for the opportunity to be asked to dance at the party.

The Henry J. Kaiser Family Foundation reports that Senator Edward M. Kennedy (D-Mass) and a core group of other Senators, including Republicans, have formed a coalition to craft health care legislation. The legislation will be introduced before the August recess.

Based on a report from CongressDaily, it appears that the Senators are forming a coalition of strategic partners  with a variety of economic positions. The target is the introduction of a single bipartisan health care bill. 

This is consistent with reports appearing in The Hill which reflect that a conciliatory approach is being followed by the Obama Administration and the legislative leadership. This creates a very uneasy position for the traditional Republican leadership and the traditional lobbying groups.

The workers' compensation industry now consists of a broad and fractionalized group of stakeholders. They seek  individual economic survival in the current frantic and fearful economy. Their adverse interests have been a huge factor in the expansion of the administrative process and increasing stagnation within the present system. 

As the individual stakeholders find that their interests are being represented individually in a new and non-traditional setting, the need for their economic survival will over power the existing organizational lobbying effort. That lobbying effort was very successful in past decades to defeat legislative initiatives for a universal health care system.

Should this new legislative strategy advance and succeed, the voices of the past will be silenced. The transformation process has already commenced. Public opinion surveys report a majority of Americans want change. It is that voice that will govern the legislative process. This occurred in the  non-partisan outrage over AIG bonuses.  In the end, the process will be successful, for after all, we are a county of " The People,"and it  is their voice that will be the voice of change.

Saturday, March 21, 2009

Getting Lead Out of the Workplace...Finally

A recently issued report by the School for Public Health of the University of California at Berkeley, calls for a new effort to reduce lead exposure in the workplace. The organization, Health Research for Action, at UC Berkeley concluded that low to moderate levels of lead exposure are a major hazard to both workers and their household contacts.

The report concludes: "Much more is known today about the health effects of lead than was known when OSHA enacted its lead standards in 1978 (for general industry) and 1993 (for the construction industry). Research has identified significant health risks at low to moderate levels of lead exposure that were formerly without recognized harm. Because lead can seriously impair cardiovascular health, cognition, reproduction,and kidney function, the persistence of elevated blood lead levels in workers may be a significant contributor to chronic illness and societal health care costs."

CMS Publishes a User Manual for MSP Reporting

The Centers for Medicare and Medicaid Services (CMS) has now published a User Manual. The manual details the federal procedures that will be utilized to implement Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA Section 111).

July 1, 2009 is the implementation date for mandatory reporting in workers' compensation claims. Section 111 adds reporting requirements and does not eliminate any existing statutory provisions or regulations. CMS' existing processes, including for example, CMS’ process for self-identifying pending liability insurance (including self-insurance), no-fault insurance, or workers’ compensation claims to CMS’ Coordination of Benefits Contractor (the COBC) or the processes followed by CMS’ Medicare Secondary Payer Recovery Contractor (the MSPRC) for MSP recoveries, remain undisturbed. The Act does impose penalties for noncompliance.

CMS has announced that it will offer a "query function" to required reporting entities to ascertain whether or not the claimant is a Medicare beneficiary. The query will be based upon identifying data including: HICN or SSN; first initial of the last name; first 6 characters of the last name; date of birth and gender.

Yet to be determined are a host of reporting issues including:

  • Interim dollar reporting threshold for "Total Payment Obligation to the Claimant" (TPOC) amounts -- CMS’s decision on this issue will be released separately in the near future.
  • Interim dollar reporting threshold for "Ongoing Responsibility for Medicals" (ORM) -- CMS has this issue under consideration.
  • Further information regarding reporting for mass torts – This issue is still under discussion.
  • ICD9 Codes – CMS is reviewing the codes to determine if there are certain codes which Responsible Reporting Entities (RREs) will be prohibited from submitting.
  • Examples regarding "Who is the RRE" -- CMS is reviewing additional examples submitted by the industry for possible inclusion in the User Guide.

Tuesday, March 17, 2009

Private Claim for Medicare Reimbursement Dismissed

A private suit, brought by a consortium of plaintiff entities and individuals seeking reimbursement of Medicare for the failure of the tobacco companies’ to repay The Centers for Medicare and Medicaid [CMS] for benefits, was dismissed by a Federal. The parties had sought to recovery benefits and damages against Philip Morris USA Inc.

The Court reasoned that the law suit did not demonstrate the tobacco companies’s responsibility for the payment of a Medicare beneficiary’s medical costs. The plaintiff’s had attempted to rely upon the opinion in a bench trial instituted by the Federal government under the RICO Act.

The Federal Court judge held that the defendants, the tobacco companies, “are not subject to suit under the MSP unless and until they are found responsible for Medicare costs and they fail to reimburse Medicare within 120 days after that responsibility first arises.” The suit by the private parties was dismissed.

National Committee to Preserve Social Sec. and Medicare v. Philip Morris USA Inc., ___ F.Supp.2d ___, 2009 WL 590573 E.D.N.Y., March 05, 2009.

Saturday, March 14, 2009

Medicare Reporting - $1,000 fine/claim/day

The failure to report claims to Medicare could cost insurance carriers $1,000. per day per claim. The penalties are discussed in a very informative article authored by Stephanie Stacy and Jill Schroeder that appears in The Nebraska Lawyer, March, 2009. A copy has been posted to the Yahoo Workers' Compensation Blog.

The article:

Thursday, March 12, 2009

AMA Guides Tossed Aside in California

The California Workers Compensation Appeals Board has ruled that the 2005 version of the AMA Guides to Impairment need not be followed. The Court ruled:

(1) the AMA Guides portion of the 2005 Schedule is rebuttable;
(2) the AMA Guides portion of the 2005 Schedule is rebutted by showing that an impairment rating based on the AMA Guides would result in a permanent disability award that would be inequitable, disproportionate, and not a fair and accurate measure of the employee’s permanent disability; and
(3) when an impairment rating based on the AMA Guides has been rebutted, the WCAB may make an impairment determination that considers medical opinions that are not based or are only partially based on the AMA Guides.

Almarz v Environmental Recovery, et al
Case No. ADJ1078163 (BAK 0145426) Decided Feb. 3, 2009

Monday, March 2, 2009

AIG Up For Sale

AIG, the distressed insurance company, is expected to announce a $60 Billion quarterly loss. The announcement, anticipated shortly, follows three separate failed efforts by the Federal Government to rescue the company.

Creditors of the company, and the US Government, have reached a four new deal to bailout the company. This time the company is being structured to be sold. It has been reported that the property and casualty lines maybe the first to go

The US Treasury and AIG issued the following statement:

"The steps announced today provide tangible evidence of the U.S. government’s commitment to the orderly restructuring of AIG over time in the face of continuing market dislocations and economic deterioration. Orderly restructuring is essential to AIG’s repayment of the support it has received from U.S. taxpayers and to preserving financial stability. The U.S. government is committed to continuing to work with AIG to maintain its ability to meet its obligations as they come due."