There has been a call among eminent commentators
in California to invoke “The Nuclear Option,” abolishment of the Workers’
Compensation Act entirely. The
suggestion was aired in response to proposed legislation (AB
1309) that would implement a statutory limitation on extraterritorial
coverage for professional athletes and reflects a trend to emasculate the
benefit program by incremental “take backs.”
An analysis demonstrates that the law, proposed by
California Insurance Committee Chairman Henry
Peres (D-Fresno), may indeed be the triggering mechanism to implode the
entire system both in California and in the Nation. It may very well be the
sentinel event.
California has had a logarithmically problematic workers’
compensation program for at least the past 3 decades. It has been literally a
political football. The promise to provide a simple, economically conservative
and expeditious administrative system of benefits has turned into an outright
nightmare. Both labor and Industry have tried, to no avail, to meet those noble
goals against a tide of crippling economic downturn, new and costly medical
modalities, waves of emerging occupational diseases, and an onslaught of
outside vendors who are “eating the lunch” of the system.
The situation in California is not unique. It is mirrored
nationally. California stands out among the crowd because it traditionally is
the “proving ground” or “beta test site” for what will eventually spread and
engulf all jurisdictions to the East coast.
Extraterritorial coverage restrictions are not a new concept
to workers’ compensation programs. They have been aggressively promoted by
several states in an effort to stake out their territory against economic
invasion by other jurisdictions. The bottom line is that each state is fighting
in the long run for the money and fiscal survival.
The Full Faith and Credit Clause of the United States
Constitution permits claimants from obtaining benefits in more than one
jurisdiction. The U. S. Supreme Court in
Industrial
Commission of Wisconsin v. McCartin (330 U.S. 622 (1947) recognized the
validity of successive awards. An employee hired in Illinois performed work in
Wisconsin. The employee, who sustained an occupational illness, was permitted
to file claims in both states.
The U.S. Supreme Court reaffirmed and enlarged the McCartin
Doctrine. “To vest the power of determining such extraterritorial effect in the
State itself risks the very kind of parochial entrancement on the interests of
other States that it was the purpose of the Full Faith and Credit Clause and
other provisions of Art. IV to prevent.” Thomas v. Washington
Gas Light Co., 448 U.S.261
(1980).
In opposition to “the separatist movement” that attempts to
assert state exclusivity legislation in workers’ compensation, there has been a
feverishly growing trend to create uniformity in the delivery of compensation
benefits. The 1972 Report of the National Commission on
State Workmen’s Compensation Laws triggered
an effort to establish minimum uniform
national standards.
A major player in that effort have been all the medical
insurance plans who have been the target of insidious cost shifting by the
workers’ compensation system to avoid economic responsibility of the payment of
claims. This includes the American taxpayer who has been a direct victim as a
result of the failure by workers’ compensation programs to reimburse the
Medicare, Medicaid, Veterans Administration and Tricare insurance programs.
Consistency and reliability of workers’ compensation
benefits and data uniformly across that national spectrum of programs has
increasingly been mandated by: reporting, rating and reimbursement auditors.
The Inspector General of the Centers for Medicare and Medicaid Services (CMS)
recognized this deficiency decades ago in a report concerning deficient in
enforcement of the Medicare Secondary Payer Act (MSP).
Continued chopping away by individual states so that may carve
out their economic territory will merely exacerbate stress on the failing
system. President Lincoln recognized that “A house divided against itself
cannot stand.” A balanced, consistent, fair and unified rule of law must exist
to advance the National interest. The goal is to maintain a safe, secure, stable,
healthy, and productive workforce, while balancing the interests of Industry.
The time has come to just come to the realization that individual
state imposed exceptions and competition are emasculating the rule. The original
simplicity and uniformity of the workers’ compensation program must prevail. The
non-competitive nature of the system needs to be restored among the states to
avoid workers’ compensation’s very extinction.
