Monday, September 29, 2008
Liberty Mutual's Rating Falls as the Workers' Compensation Industry Continues to Tremble
Standard and Poor's has announced that Liberty Mutual's rating has been lowered from A to A-. This happened as another rating agency, Fitch, placed Liberty Mutual Inter-company Pool (on "Rating Watch Evolving" status.
Saturday, September 27, 2008
CMS Begins to Roll Out Details of The Mandatory Insurance Carrier Registration Progress-Teleconference Oct. 1, 2008
Implementation of the mandatory insurance company reporting process mandated pursuant to Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (See 42 U.S.C. 1395y(b)(7)&(b)(8) have now been unveiling by CMS. The process will require identification of Responsible Reporting Entities (RRE). A telephone conference call has been scheduled for October 1, 2008.
A Hurricane Over Florida Fees
The Supreme Court of Florida is about render a decision that may change the course of Florida workers’ compensation practice dramatically. In 2003 limitations were placed upon the attorney fee structure in Florida severely limiting the fees that claimant’s attorneys were authorized to receive. Murray v. Mariner, argued in April 2008, raises the issue that such limitations are denial of constitutional rights.
Is It Time For A Delay Of Game Penalty in Workers' Compensation?
Delay has always been a problem when injured workers need medical treatment. Traditionally, insurance companies, especially in hard economic times, have sought to hold onto their money and not distribute benefits. In a recent New Jersey workers' compensation case, the Appellate Division refused to allow the insurance company to "snow" the court with excuses on why it should not provide medical care to an injured worker.
A worker was seriously injured when he was struck by a forklift and was pinned against the wall by the machinery. An MRI indicated that the injured worker suffered a right hip anterior labral tear and the worker was conservatively treated with injections and chiropractic care. After nine months lost time he was able to return to work part time with a restricted limit to lifting of 20 pounds..
Six months after his return to work while merely walking through deep snow and he suffered a re-occurrence of the right hip pain and limitation of motion of the limb. Arthroscopic hip surgery was required. Prior to surgery, the workers' compensation carrier denied responsibility and refused to provide medical care.
The worker was required to file a notice of motion to seek reimbursement for medical treatment and temporary disability benefits. The respondent denied causal relationship raising the defense of an intervening superseding event. The respondent also claimed that the motion was moot since medical treatment had already occurred. The Division Workers' Compensation, issued a written decision in December 2007, 22 months after the respondent refused to provide medical treatment. An appeal was taken in nine months later, before the Appellate Division of the state New Jersey and the trial court decision was affirmed. The process took 29 months.
The Appellate Division in its decision did not address the issue of why the system takes a long, but it did comment upon the fact that the defenses raised by the respondent did not meet the threshold level to reverse the trial ltrial court's decision. The Appellate Division indicated that the motion was not moot merely because the medical treatment was subsequently rendered and that the employer did not establish that the injured workers suffered an independent and subsequent injury in February of 2006.
This case highlights the fact that the workers' compensation process has a major failing. While the State of New Jersey has perennially attempted to address these issues legislation has not been enacted to improve the system. The process itself is fraught with problems and does not keep up with the advancements in medical science and delivery of modern medical care in an expeditious and efficient manner.
The hurdles that the injured worker has to j navigate provide substantial barriers for injured workers and their advocates. In a system that was supposed to be remedial, efficient and summary, has now turned into a dilatory litigation machine utilized by employers in an effort to defeat claims. The same employers who complain that reimbursement of medical benefits through secondary payers such as the Centers for Medicare and Medicaid Services, have now made a simple process into a complex and painfully slow remedy. The practice of snowing the court with meritless defenses, without penalty, i.e. pre-judgment interest, contributes to further destruction in workers’ compensation program.
Cuccineillo v Sports Authority, 2008 WL 4329874 (N.J. Super. App. Div.) Decided September 24, 2008.
A worker was seriously injured when he was struck by a forklift and was pinned against the wall by the machinery. An MRI indicated that the injured worker suffered a right hip anterior labral tear and the worker was conservatively treated with injections and chiropractic care. After nine months lost time he was able to return to work part time with a restricted limit to lifting of 20 pounds..
Six months after his return to work while merely walking through deep snow and he suffered a re-occurrence of the right hip pain and limitation of motion of the limb. Arthroscopic hip surgery was required. Prior to surgery, the workers' compensation carrier denied responsibility and refused to provide medical care.
The worker was required to file a notice of motion to seek reimbursement for medical treatment and temporary disability benefits. The respondent denied causal relationship raising the defense of an intervening superseding event. The respondent also claimed that the motion was moot since medical treatment had already occurred. The Division Workers' Compensation, issued a written decision in December 2007, 22 months after the respondent refused to provide medical treatment. An appeal was taken in nine months later, before the Appellate Division of the state New Jersey and the trial court decision was affirmed. The process took 29 months.
The Appellate Division in its decision did not address the issue of why the system takes a long, but it did comment upon the fact that the defenses raised by the respondent did not meet the threshold level to reverse the trial ltrial court's decision. The Appellate Division indicated that the motion was not moot merely because the medical treatment was subsequently rendered and that the employer did not establish that the injured workers suffered an independent and subsequent injury in February of 2006.
This case highlights the fact that the workers' compensation process has a major failing. While the State of New Jersey has perennially attempted to address these issues legislation has not been enacted to improve the system. The process itself is fraught with problems and does not keep up with the advancements in medical science and delivery of modern medical care in an expeditious and efficient manner.
The hurdles that the injured worker has to j navigate provide substantial barriers for injured workers and their advocates. In a system that was supposed to be remedial, efficient and summary, has now turned into a dilatory litigation machine utilized by employers in an effort to defeat claims. The same employers who complain that reimbursement of medical benefits through secondary payers such as the Centers for Medicare and Medicaid Services, have now made a simple process into a complex and painfully slow remedy. The practice of snowing the court with meritless defenses, without penalty, i.e. pre-judgment interest, contributes to further destruction in workers’ compensation program.
Cuccineillo v Sports Authority, 2008 WL 4329874 (N.J. Super. App. Div.) Decided September 24, 2008.
Thursday, September 25, 2008
Newt Gingrich’s New Strategy for Workers’ Compensation
In a plan reminiscent of his earlier ideas, the former Speaker of the House is back again advocating an expanded Regan Administration economic plan which would shift the burden from employers and onto the employees. In an effort to eliminate litigation costs Newt Gingrich has proposed a plan that would eliminate employer contributions to employee benefits entirely.
He is suggesting that employees maintain their own economic funds to cover their own needs including medical care and presumably workers’ compensation type benefits. Gingrich is suggesting that employees be “self-insured” for injuries and illnesses and resulting disability freeing the employees of the need to contribute to insurance coverage or Social Security benefits at all.
A recent article in The American Spectator highlights Newt Gingrich’s thoughts concerning the shift of responsibility from the employer to the employee. This builds upon his previous suggestion which was to just eliminate workers’ compensation altogether.
He is suggesting that employees maintain their own economic funds to cover their own needs including medical care and presumably workers’ compensation type benefits. Gingrich is suggesting that employees be “self-insured” for injuries and illnesses and resulting disability freeing the employees of the need to contribute to insurance coverage or Social Security benefits at all.
A recent article in The American Spectator highlights Newt Gingrich’s thoughts concerning the shift of responsibility from the employer to the employee. This builds upon his previous suggestion which was to just eliminate workers’ compensation altogether.
Monday, September 15, 2008
Workers’ Compensation May Become a Creditor in an AIG Bankruptcy
The economically distressed insurer, American International Group (AIG), announced Sunday that it would attempt to obtain a $49 billion bailout form the Federal Government to avoid a complete financial collapse. AIG which represents one of the nations largest workers' compensation insurers and re-insurers is now facing severe economic consequences because of inadequate capitalization.
The US insurance industry represents a huge portion of the nation's financial assets and the instability of the market threatens the backbone of an unregulated workers' compensation national market, The AIG announcement comes on the heels of the failure of Lehman Brothers', the 4th largest financial institution in the United States, statement that it will be filing for bankruptcy after a weekend of failed negotiation seeking a bailout and government support. This cascading economic crash was further reflected by the Bank of America rush agreement to purchase Merrill Lynch for $53.03 billion within the last few days.
The economic woes of AIG, have been longstanding and were triggered by major investigations into the actions of its former chairman, Maurice "Hank" Greenberg's activities and the company's irregularities in the workers' compensation market. This sparked both State and Federal investigations into the company, but did not result in Federal regulation of the financial viability of the workers' compensation insurance program that are mostly State run and regulated.
State workers' compensation programs provide a huge amount of medical, temporary disability and permanent disability benefits to injured workers' and their families. While most of these benefit programs are financed by premiums collected from employers, the programs are administered and ultimately financed, administratively and fiscally, through insurance companies and reinsurers like AIG. State mechanisms that are triggered when the insurance companies or employers become insolvent are mostly if completely reliant upon other insurance companies and employer contributions.
The AIG collapse signals the need for Federal monitoring and regulation of workers' compensation benefits. It has been over 3 decades since a national commission was appointed survey the benefit program that was universally enacted by the States in 1911. The workers' compensation programs may at this time become nothing more than a bankruptcy creditor is a long and non-rewarding litigious process. The Federal Government needs to do more to honor the dignity of its workers.
The US insurance industry represents a huge portion of the nation's financial assets and the instability of the market threatens the backbone of an unregulated workers' compensation national market, The AIG announcement comes on the heels of the failure of Lehman Brothers', the 4th largest financial institution in the United States, statement that it will be filing for bankruptcy after a weekend of failed negotiation seeking a bailout and government support. This cascading economic crash was further reflected by the Bank of America rush agreement to purchase Merrill Lynch for $53.03 billion within the last few days.
The economic woes of AIG, have been longstanding and were triggered by major investigations into the actions of its former chairman, Maurice "Hank" Greenberg's activities and the company's irregularities in the workers' compensation market. This sparked both State and Federal investigations into the company, but did not result in Federal regulation of the financial viability of the workers' compensation insurance program that are mostly State run and regulated.
State workers' compensation programs provide a huge amount of medical, temporary disability and permanent disability benefits to injured workers' and their families. While most of these benefit programs are financed by premiums collected from employers, the programs are administered and ultimately financed, administratively and fiscally, through insurance companies and reinsurers like AIG. State mechanisms that are triggered when the insurance companies or employers become insolvent are mostly if completely reliant upon other insurance companies and employer contributions.
The AIG collapse signals the need for Federal monitoring and regulation of workers' compensation benefits. It has been over 3 decades since a national commission was appointed survey the benefit program that was universally enacted by the States in 1911. The workers' compensation programs may at this time become nothing more than a bankruptcy creditor is a long and non-rewarding litigious process. The Federal Government needs to do more to honor the dignity of its workers.
Saturday, September 13, 2008
NJ Workers' Compensation System Purportedly Under Investigation by State Commission of Investigation
New Jersey’s workers’ compensation problems are far from over as the NJ State Commission of Investigation (SCI) has purportedly launched an investigation of the NJ Compensation Rating and Inspection Bureau. The NJ system became the center of media attention following a Star Ledger newspaper series reporting serious problems.The NJ SCI last performed a comprehensive review of the NJ Workers’ Compensation system 28 years ago following an investigative report in the State Ledger. At that time the SCI reported serious violations which resulted in judicial reviews and changes in the substantive and procedural aspects of the NJ workers’ compensation system.
The NJ Legislature expeditiously held hearings and passed legislation embracing some administrative requested changes, endorsed by Industry, which Governor Corzine has not acted upon. The finance bills and procedural oversight bills remain pending. The silence of the victims at the legislative hearings set an ominous tone to the earlier oversight hearings.
The release of data has always been problematic for the governmental agency charged with compensating victims and financed through insurance company premium payments and regulated by a rating agency that was entirely insurance Industry dominated. This new turn in developments possibly will shed some more light at what is happening in the dark closet.
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