Medical Costs Soar in Workers' Compensation

The cost of medical care has increased tremendously according to a recently issued  report. The NCCI (National Council on Compensation Insurance Inc.) reports an increase in medical costs from 40% in the early 1980s to almost 60% currently.

NCCI reports that the increase appears to be national, "....Furthermore, although there are differences in the medical share by state, the change in the relative mix of states has had very little impact on the estimated countrywide share of medical and indemnity benefits."

The national workers' compensation medical delivery system has now become a focus of attention in light of the prospects of an overhaul of national health care system as medical costs continue to put American businesses at a economic disadvantage with foreign competitors. James Kvaal, in his article, "The Economic Imperative for Health Reform," highlights that "...ever rising medical costs are threatening to drive an unsustainable explosion in the national debt." Higher insurance premiums result in lower wages or lack of medical coverage all together and the loss of preventive care.

The costly and inadequate workers' compensation medical delivery system provides a fragmented approach to medical care. The system's focus should treat current medical conditions and provide for preventive care. The administrative costs savings in providing global coverage will translate into reduced delivery costs and a healthier work force. Some of the extra savings could be well spent on much needed medical research to avoid the need for costly medical care.

Putting Workers First - A Proposed Agenda for the Obama Administration

The Center for American Progress will host a program  on Tuesday, December 8, 2008 to discuss how the Obama Administration may immediately improve upon the Bush's administration's poor track record for the ordinary American worker.

9:00 - 10:30 a.m.

Panel I: Enforcing Change: Strategies for the Obama Administration to Enforce Workers' Rights at the Department of Labor
Jordan Barab, Senior Labor Policy Advisor, Committee on Education and Labor, U.S. House of Representatives
Kim Bobo, Founder and Executive Director, Interfaith Worker Justice 
Thomas E. Perez, Secretary, Maryland Department of Labor, Licensing and Regulation 
Catherine K. Ruckelshaus, Litigation Director, National Employment Law Project
Karla Walter, Policy Analyst, American Worker Project, Center for American Progress Action Fund

Moderated by:
David Madland, Director, American Worker Project, Center for American Progress Action Fund

10:30 - 11:00 a.m.
Keynote Address:
Governor Jon Corzine (D-NJ)

11:00 - 12:00
Panel II: Making Federal Contracting Work for the United States
Scott Amey, General Counsel, Project on Government Oversight
Margaret Daum, Counsel, House Oversight and Government Reform Committee
Richard C. Loeb, University of Baltimore School of Law
David Madland, Director, American Worker Project, Center for American Progress Action Fund

Moderated by:
Scott Lilly, Senior Fellow, Center for American Progress Action Fund

Dry Cleaning Agent 1-BP Causing Neurological Illness

The Centers for Disease Control (CDC) has reported that 1-Bromopropane (1-BP) (n-propyl bromide),  a solvent increasingly used as a substitute for ozone-depleting chloro-fluorocarbons and similar regulated compounds, has been reported to cause neurological illness. 1-BP is used in vapor and immersion degreasing operations and other manufacturing processes, and as a solvent in industries using aerosol-applied adhesives.

Two cases of illness occurring in New Jersey and Pennsylvania have been reported, In NJ a worker in a cleaning facility, following the use of 1-BP, reported "...unusual fatigue and headaches and developed arthralgias, visual disturbances (difficulty focusing), paresthesias, and muscular twitching."

NIOSH had previously reported that some workers developed adverse problems in use of this product. In 2006 it made suggestions to reduce exposure.

The CDC has made the following recommendation, "....Clinicians and public health officials should be alert to potential adverse health effects from exposures to 1-BP in industries where such use might increase, such as the dry cleaning industry, and in workplaces where 1-BP use might be more established. A thorough occupational history always should be part of the clinical evaluation of persons who have unexplained or onset of nonspecific neurologic symptoms. Exposure to electronics cleaning solvents or dry cleaning solvents should prompt a more through inquiry concerning exposure to 1-BP. In the evaluation of a worker with occupational exposure to 1-BP and neurologic abnormalities, diagnosis of 1-BP poisoning is suggested by an elevated urinary or serum bromide concentration and a negative serum anion gap. Findings of potential 1-BP poisoning in a potentially exposed worker should prompt removal of the worker from the exposure while an evaluation of workplace exposures is conducted by a qualified professional"

A Bailout for Workers’ Compensation

The issues facing the present economic downturn are not necessarily the same that existed  during the great depression and therefore the outcome may not be the same. The US workers' compensation system, a patchwork of State programs, is seriously being challenged during the present tough economic times. The past does identify a pattern that may require similar solutions. 

 It has been reported that the US government is contributing vast sums to bring the economy out of the ditch. "In the last year, the government has assumed about $7.8 trillion in direct and indirect financial obligations. That is equal to about half the size of the nation’s entire economy and far eclipses the $700 billion that Congress authorized for the Treasury’s financial rescue plan."

Workers’ compensation is not necessarily an anti-cyclical market. It is a political entrenched program. The present economic crisis will change the social and economic fabric of the country. "....the most troublesome unknowns are how the maze of protections for investors and consumers will change economic and political behavior in the future." The NY Times reported that levels of unemployment may reach 10%, a number used to define a depression.

During The Great Depression the US workers’ compensation system had an additional unique challenge confronting it. Silicosis claims were challenging Industry with uncertain economic outcomes. The insurance industry rushed to the rescue by advocating that silicosis and other occupational diseases be brought within the umbrella of the workers’ compensation system.

Activity soared within the workers’ compensation arena. The pace continued through the pre and post World War 2 years as the legacy of disease and death continued. Asbestos claims and other toxic tort claims continued the spiral. When workers’ compensation was unable to fully compensate the victims, the activity switched to the liability arena and claims proliferated and activity soared. Insurance exhaustion, corporate bankruptcy, an aging workforce, lack of manufacturing in the US and Federal Multi-District litigation. soon lead to a decline litigation activity.

Confronting the present workers’ compensation programs are the residual issues generated by  the expansion of occupational disease litigation program of the 1930’s. Cost shifting from workers’ compensation to other programs has resulted in workers’ compensation system becoming a collection agency and has resulted in bureaucratic stagnation. Occupational disease claims created major cost shifting of medical costs to other systems including: temporary disability benefits, major medical and Medicare and Medicaid, disability pension and Social Security.

 In the 1930’s the Federal government though the Department of Labor stepped in to save the system. David Rosner and Gerald Markowitz in their volume, Deadly Dust, point out that without national standards and a uniform approach, the 1930s' system system would not survived that moment in time.

The economic factors of The Great Depression now hover  over the present workers’ compensation system. The Federal Government now needs to intervene and bail out the State systems and rethink the medical delivery system that has generated tension in medical and reimbursement programs.

AAJ Publishes Report on Insurance Companies

The American Association for Justice (AAJ) has published a report, "Tricks of the Trade: How Insurance Companies Deny, Delay, Confuse and Refuse."

"The U.S. insurance industry has trillions of dollars in assets, enjoys average profits of over $30 billion a year, and pays its CEOs more than any other industry. But insurance companies still engage in dirty tricks and unethical behavior to boost their bottom line even further."

The repoort describes methods that it alleges that insurance companies utilize to make money at the expense of consumers.

The tactics insurance companies use against consumers include:

Denying Claims: Some of the nation’s biggest insurance companies – Allstate, AIG, and State Farm among others – have systematically denied valid claims in an attempt to boost their bottom lines. These companies have rewarded employees who successfully denied claims, replaced employees who would not, and when all else failed, engaged in outright fraud to avoid paying claims.

Delaying until Death: Many insurance companies routinely delay claims, even going as far as to lock paperwork in safes, knowing full well that many policyholders will simply give up. In the words of one regulator, “the bottom line is that insurance companies make money when they don’t pay claims… They’ll do anything to avoid paying, because if they wait long enough, they know the policyholders will die.”

Confusing Consumers: Insurance contracts are some of the densest and incomprehensible contracts a consumer is ever likely to see. More than half of all states have enacted “plain English” laws for consumer contracts, yet many Americans still do not fully understand the risks they are subject to.

Discriminating By Credit Score: Insurance companies are increasingly using credit reports to dictate the premiums you pay, or whether you can even get insurance in the first place. The practice penalizes senior citizens with little credit, those who responsibly pay bills every month with cash or check, or those who have suffered financial crisis through no fault of their own.

Abandoning the Sick: Health insurers looking to cut costs have taken to retroactively canceling, or rescinding, the policies of people whose conditions have become expensive to treat. Some insurance companies have even offered bonuses to employees who meet “cancellation goals” – cancer patients in the middle of chemotherapy have even been targeted.

Canceling for a Call: Many people are rightly reluctant to make small claims on their home insurance for fear their insurance company will raise their premiums. But few realize that insurance companies often refuse to renew a policy just for making a phone call. Often an insurance company will count an inquiry over the phone as the same as a claim, and then they will do everything in their power to drop you.

CMS Announces Future Tele-Conferences for MSP Reporting

November 17, 2008 Updates - Future Town Hall Teleconference Meeting Dates

January 22, 2009 - Liability (including Self-Insurance), No-Fault Insurance and Workers' Compensation

January 28, 2009 - Liability (including Self-Insurance), No-Fault Insurance and Workers' Compensation

February 25, 2009 - Liability (including Self-Insurance), No-Fault Insurance and Workers' Compensation

March 25, 2009 - Liability (including Self-Insurance), No-Fault Insurance and Workers' Compensation

April 22, 2009 - Liability (including Self-Insurance), No-Fault Insurance and Workers' Compensation

CMS Publishes Intrim Record Layout for Mandatory Reporting

CMS (The Centers for Medicare and Medicaid Services) has published a proposed format for reporting data under the Medicare Secondary Payer Act. Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA) (P.L. 110-173) madates reporting where, "...the settlement, judgment, award or other payment date is July 1, 2009 or subsequent and claims on which ongoing responsibility for medical payments exists as of July 1, 2009, regardless of the date of an initial acceptance of payment responsibility."