Labor and Industry Join Forces to Change the Path of Health Care Delivery

The United States is now facing a crucial change, necessitated by economics, to the health care delivery system. Not since the movement initiated in the early 1900’s to embrace a national workers’ compensation system, has the nation faced such a critical turning point in health care and the identical parties expressed such a keen interest in change.

The nation’s largest private employer, Walmart (non-union), and the nation’s largest union representing health care workers, SEIU, as well as the influential policy think-tank, the Center for American Progress, delivered a letter to President Obama today, endorsing a mandate for employer and employee contribution for a health care plan.

Citing the Senate Finance Committee (Max Bacus (D-Montana, Chairman) that “health care expenditures are expected to consume nearly 20 percent of the GDP” by 2017, the collation seek, “…an employer mandate which is fair and broad in its coverage.”

While the debate is being to flow in the direction of the adoption a “public plan” option, the “single payer system” has not yet been ruled out entirely. Funding continues to remain a concern.

It is anticipated that if a “public plan” is adopted, the workers’ compensation system will probably be targeted as an economic engine to contribute generated revenue through various reimbursement mechanisms in addition to outright payment reform including incentive based medicine. It is estimated that the plan's cost may amount to a $2 Trillion cost.

Cost shifting enforcement could be more strictly pursued. Additional fines, penalties and user fees, maybe assessed under the Medicare Secondary Payer Act. Even taxing workers’ compensation benefits may become an option if other employer provided health care benefits are also subject to tax.

OSHA Fines Metro North $300,000 for Retaliation Against Injured Workers

The U.S. Department of Labor's Occupational Safety and Health Administration (OSHA) has fined Metro North Commuter Railroad Co. for retaliation against four employees who reported work-related injuries. The railroad was ordered by OSHA to take corrective actions and pay back wages, fees and a total of $300,000 in punitive damages.

"Railroad employees have the right to report occupational injuries and illnesses without fear that doing so will negatively affect their jobs, their health or their income," said Jordan Barab, Acting U.S. Assistant Secretary of Labor for Safety and Health. "Retaliating against employees for exercising this basic, legally protected workplace right is unacceptable."

The employees were injured on the job in 2007 and 2008 and filed whistleblower complaints against Metro North Commuter Railroad Co. The complaints filed with OSHA alleged that the railroad disciplined them for reporting their injuries, interfered with their medical treatment plans and/or reclassified injuries from occupational to non-occupational.

OSHA investigated the incidents, held a hearing and fined the company under OSHA's The Whistleblower Protection Program.

Court Sets Proof Standard for Medical Bill Review

A challenging aspect of a workers' compensation hearing is the determination of what is the reasonable value of medical services.  The Indiana Appellate Court has now established proof standards to implement legislative criteria. Washington Township Fire Department v. Beltway Surgery Center, No. 93A02-0811-EX-1006 (Ind. Ct. Appeals 2009)

The Indiana Act provides for the valuation of medical services by using a billing review service to calculate the pecuniary liability to a medical provider based on the 80th percentile standard. Ind. Code Section 22-3-3-52.  The Court determined that the employer has the burden of proof to establish excessive charges,

Ind. Code Section 22-3-3-52:

(a) A billing review service shall adhere to the following requirements to determine the pecuniary liability of an employer or an employer‟s insurance carrier for a specific service or product covered under worker‟s compensation: 

(1) The formation of a billing review standard, and any subsequent analysis or revision of the standard, must use data that is based on the medical service provider billing charges as submitted to the employer and the employer‟s insurance carrier from the same community. This subdivision does not apply when a unique or specialized service or product does not have sufficient comparative data to allow for a reasonable comparison. 

(2) Data used to determine pecuniary liability must be compiled on or before June 30 and December 31 of each year. 

(3) Billing review standards must be revised for prospective future payments of medical service provider bills to provide for payment of the charges at a rate not more than the charges made by eighty percent (80%) of the medical service providers during the prior six (6) months within the same community. The data used to perform the analysis and revision of the billing review standards may not be more than two (2) years old and must be periodically updated by a representative inflationary or deflationary factor. Reimbursement for these charges may not exceed the actual charge invoiced by the medical service provider. 7 

(4) The billing review standard shall include the billing charges of all hospitals in the applicable community for the service or product. 

Mesothelioma Compensation Rate 32% in Canada

When combined with a history of occupational asbestos exposure, mesothelioma is often presumed work-related.

In Canada, workers diagnosed with mesothelioma caused by occupational asbestos exposure are often eligible for compensation under provincial workers' compensation boards. Although occupational asbestos exposure causes the majority of mesothelioma, Canadian research suggests less than half of workers actually apply for compensation.

Alberta's mandatory reporting requirements may produce higher filing rates but this is currently unknown. This study evaluates Alberta's mesothelioma filing and compensation rates.

METHODS: Demographic information on all mesothelioma patients diagnosed between 1980 and 2004 were extracted from the Alberta Cancer Board's Cancer Registry and linked to Workers' Compensation Board of Alberta claims data.

RESULTS: Alberta recorded a total of 568 histologically confirmed mesothelioma cases between 1980 and 2004. Forty-two percent of cases filed a claim; 83% of filed claims were accepted for compensation.

CONCLUSIONS: Patient under-reporting of compensable mesothelioma is a problem and raises larger questions regarding under-reporting of other asbestos-related cancers in Alberta. Strategies should focus on increasing filing rates where appropriate.

Cree MW, Lalji M, Jiang B, Carriere KC. Am J Ind Med. 2009 Jul;52(7):526-33. PMID: 19484745 [PubMed - in process]

Defense Bar Floods the US Supreme Court With Amicus Briefs in RICO Case

In a RICO case which will have profound impact on the national workers' compensation system, the defense bar has inundated the US Supreme Court with applications to submit amicus briefs. Pending before the US Supreme Court is a petition for a writ of certiorari to review a decision where: the employer, insurance company and their experts were found to have conducted themselves in violation of the RICO Act.

Motions for leave to file Amicus briefs in support of the defense position have been filed by: MI Self-Insurers Association; Michigan Defense Trial Counsel; DRI - The Voice of the Defense Bar;  American Trucking Associations, Inc.;  Chamber of Commerce of the United States of America; and  National Council of Self-Insurers. 

The  US Court of Appeals for the Sixth Circuit denied rehearing on January 5, 2009 and a Petition for a writ of certiorari was filed on May 6, 2009.  On May 26, 2009 US SUpreme entered an Order extending time to file a response to petition to and including June 29, 2009.

Cassens Transport Co., et al., Petitioners v,  Paul Brown, et al.,  No. 08-1375.

California Governor Reportedly Wants to Sell The State Insurance Fund

California, with post reform claim decreases and facing an increase in workers' compensation premiums rates,  reportedly wants to get out of the insurance business. The San Francisco Business Times is now reporting that the Governor is attempting to sell the State Insurance Fund for $1 Billion.  The profits received are anticipated to help fund the State's budget gap.

US Supreme Court Bars Direct Asbestos Claims Against Travelers Insurance

The US Supreme Court ruled that the direct action claims against Travelers Insurance Company for its conduct in the asbestos conspiracy with Johns-Manville Corporation (Manville) were barred by the 1986 reorganization plan of the Manville.

"As part of the 1986 reorganization plan of the Johns-Manville Corporation (Manville), an asbestos supplier and manufacturer of asbestos containing products, the Bankruptcy Court approved a settlement providing that Manville’s insurers, including The Travelers Indemnity Company and related companies (Travelers), would contribute to the corpus of the Manville Personal Injury Settlement Trust (Trust), and releasing those insurers from any “Policy Claims,” which were channeled to the Trust. “Policy Claims” include, as relevant here, “claims” and “allegations” against the insurers “based upon, arising out of or relating to” the Manville insurance policies. 

"The settlement agreement and reorganization plan were approved by the Bankruptcy Court (1986 Orders) and were affirmed by the District Court and the Second Circuit. Over a decade later plaintiffs began filing asbestos actions against Travelers in state courts (Direct Actions), often seeking to recover from Travelers not for Manville’s wrongdoing but for Travelers’ own alleged violations of state consumer-protection statutes or of common law duties. Invoking the 1986 Orders, Travelers asked the Bankruptcy Court to enjoin 26 Direct Actions. Ultimately,a settlement was reached, in which Travelers agreed to make payments to compensate the Direct Action claimants, contingent on the court’s order clarifying that the Direct Actions were, and remained, prohibited by the 1986 Orders. 

"The court made extensive factual findings, uncontested here, concluding that Travelers derived its knowledge of asbestos from its insurance relationship with Manville and that the Direct Actions are based on acts or omissions by Travelers arising from or related to the insurance policies. It then approved the settlement and entered an order (Clarifying Order), which provided that the 1986 Orders barred the pending Direct Actions and various other claims. Objectors to the settlement (respondents here) appealed. The District Court affirmed, but the Second Circuit reversed. 

"Agreeing that the Bankruptcy Court had jurisdiction to interpret and enforce the 1986 Orders, the Circuit nevertheless held that the Bankruptcy Court lacked jurisdiction to enjoin the Direct Actions because those actions sought not to recover based on Manville’s conduct, but to recover directly from Travelers for its own.