WR Grace Officials on Trial

The focus of litigation against WR Grace has now shifted to the civil courts in a trial against 5 former company officials for damages resulting from the death and harm caused its former workers. In Libby Montana, WR Grace mined asbestos (vemiculite) ore that ultimately was manufactured into insulation and other products.

Five former officials of WR Grace, an asbestos producer, are standing trial for concealing information from the former employees and for not taking the appropriate action to protect their health. The criminal trial has been delayed since 2006 because of pending appeals.

The company has recently filed an amended reorganization plan on Feb. 3, 2009. The plan contains the following comments about workers' compensation claims:

WR Grace - Proposed First Amended Reoganization Plan 2-3-09
"3.1.4 Class 4. Workers’ Compensation Claims
(a) Classification Class 4 consists of all Workers’ Compensation Claims against the Debtors.
(b) Treatment This Plan leaves unaltered the legal, equitable, and contractual rights to which each such Workers’ Compensation Claim entitles the Holder of such Workers’ Compensation Claim. For the avoidance of doubt, in no event shall any of the Sealed Air Indemnified Parties or the Fresenius Indemnified Parties have any liability with respect to any Workers’ Compensation Claim.
(c) Impairment and VotingClass 4 is unimpaired. The Holders of the Workers’ Compensation Claims in Class 4 aredeemed to to have voted to accept this Plan and, accordingly, their separate vote will not be solicited."

Medical Costs in Comp Higher Than Group Health

A report issued by NCCI concludes that medical costs in Workers' Compensation were higher in some instances than in Group Health Plans.

The main findings were: 

1.  For comparable injuries, when WC pays higher prices than GH for specific services, those services tend to be used more often in WC than in GH 
2.  The proportion of WC medical cost that is subject to physician fee schedules is declining by about one percentage point per year 
3.  The Medicare fee schedule is very useful as a starting point for the design of WC medical fee schedules, but has notable shortcomings for WC, including too little emphasis on return to function and too little sensitivity to cost differences among states 
4.  Particularly in specialty areas such as surgery and radiology, fee schedules can result in WC reimbursement rates that are especially high compared with GH  
5.  While fee schedules tend to concentrate reimbursements at the maximum allowable rate, there are many payments that are either greater than or less than the maximum allowable rate 
6.  Reimbursement for care that physicians provide at hospitals and other facilities is more likely to exceed the fee schedule than care provided in their offices. This is partly because the fee schedule need not always apply when facilities bill for these services.  
7.  A higher proportion of reimbursements are at or below the fee schedule when WC medical services are provided through a network as opposed to when they are not. 

California Closes Division of Workers Compensation 2 Days Each Month-Lack Revenue to Operate

Citing lack of State revenue, Governor Schwarzenegger issued Executive Order S16-08, on Dec. 19, 2008, ordering the California Division of Workers' Compensation close the first and third Friday of every month, beginning on Feb. 6, 2009, and ending on June 30, 2010.

Legal documents that would otherwise be due on a furlough day will not be due until the next open business day (normally the next Monday, but Tuesday if the Monday is a holiday).

Pittsburg Corning to Plans to Pay Asbestos Victims $825 Million

PPG Industries (Pittsburg Corning Corp.) and its insurers plan to pay out millions of dollars to victims of asbestos disease. In a bankruptcy reorganization plan filed with the Court for its approval, it was announced that PPG intended to pay out $825 Million in cash over the next 15 years.

PPG had filed for bankruptcy protection in 2000 under because of alleged potential asbestos lawsuit liabilities. Asbestos fiber, which the company supplied and manufactured, has been linked to asbestos related diseases in former asbestos workers, users and household contacts of former workers, including: asbestosis, lung cancer and mesothelioma.

"While we continue to believe PPG is not responsible for injuries caused by Pittsburgh Corning products, this amended plan would permanently resolve PPG's asbestos liabilities associated with Pittsburgh Corning," James C. Diggs, PPG's senior VP, general counsel and secretary, said in the statement.

The trust would be funded with $1.6 Billion in cash payments through 2027. Approval of the reorganization plan is required.

The New Economic Recovery Act Fails to Include Workers' Compensation Privacy Needs

The new stimulus package, The American Recovery and Reinvestment Act [ARRA], fails to protect medical record privacy for injured workers. The new economic recovery package includes an appropriation of $19 Billion for the expansion of electronic health records [EHR] by funding intellectual technology. The legislation fails to include an essential prohibition on the dissemination and misuse of workers' compensation medical records.

The spokesperson for the Center for Healthcare Transformation and the Gingrich Group, stated that, "Privacy cannot be compromised, but neither can we compromise progress in pulling our health care system out of the technological Stone Age," ... "We need to find the right balance between privacy at all costs and progress at any cost."

The legislation should be expanded to protect the privacy of workers’ compensation medical records from misuse use. A coalition of legislators, including Rep. Edward J. Markey, Massachusetts Democrat, expressed deep concerns. Markey stated, "Medical information is probably the most sensitive and personal information that we have about ourselves. Without strong privacy safeguards, a health [information-technology] database will become an open invitation for identity thieves, fraudsters, extortionists or marketers looking to cash in on our medical histories." He further remarked that, "tough privacy safeguards" are necessary to reap the benefits of integrated health databases.

While the EHR is a noble project to increase overall efficiency and economy, the misuse of the data of injured workers remains a deep concern. The open door to this information left by the Health Insurance Portability and Accountability Act [HIPA] and ignored by ARRA must be addressed so that the medical records of our working wounded do not become a gold mine for unscrupulous exploitation..

Paying for Medical Performance in Workers' Compensation Claims

The workers' compensation medical delivery system is a target of much controversy over its effectiveness. The extensive delays in the delivery of medical benefits because of bureaucratic stagnation, and the massive employee dissatisfaction over the results of industry managed care are a rising chorus of concern.

The Federal government, in an emerging concept, is now looking toward limiting escalation costs and other medical issues, by utilizing a concept that provides reimbursement to medical providers based on outcome success. The system will no longer pay for medical failures or mismanagement. The traditional fee-for-services approach is slowly giving way to newer and innovated approaches for medical provider reimbursement.

Whether the compensation system is either closed panel (employer choice of physician) or open panel (employee choice of physician) the ultimate outcome would determine the level of medical reimbursement. In a nation where there is a premium placed upon getting skilled and talented employees back to work in a full capacity, this concept is gaining popularity.

Paying for medical performance in Workers' Compensation might be just what the doctor ironically ordered so that the disabled population receives appropriate and timely care that so justly deserve.

Privacy Went Out the Window

Privacy, a core element in the workers’ compensation system, is rapidly become a thing of the past. Both the State and Federal governments have not considered it a key ingredient in the program.

States, in their to conversion to electronic claims record keeping, have eliminated privacy. The State of California electronically released workers’ compensation claim data concerning Nadya Suleman, the mother who gave birth to eight babies last week. This was after months of complaints by claimants and attorneys that the California electronic claims system was flawed.

Likewise the Federal law, HIPPA [The Health Care Personal Information Non-Disclosure Act of 1998] governing medical records specifically excludes workers’ compensation medical information. Final Health Insurance Privacy Regulations that were published by the Department of Health and Human Services on December 28, 2000, establishing standards for privacy of individually identifiable health information records eliminate privacy in compensation claims. While the regulations cover health plans, health care clearinghouses and certain other providers who use computers to transmit claims information, workers' compensation insurance carriers are exempted.

The Institute of Medicine (IOM) committee has recently recommended the Congress and health agencies develop a new approach to protecting privacy in health research. In a 316 page report released by their Committee on Health Research and the Privacy of Health Information it concluded that HIPPA does not protect privacy.

As the country embarks on a new economic recovery program, including national health care, the Federal government must rebuild the national system of workers’ compensation system. Privacy should not be thrown out the windows when administering a workers' compensation benefit delivery system.