Getting Lead Out of the Workplace...Finally

A recently issued report by the School for Public Health of the University of California at Berkeley, calls for a new effort to reduce lead exposure in the workplace. The organization, Health Research for Action, at UC Berkeley concluded that low to moderate levels of lead exposure are a major hazard to both workers and their household contacts.

The report concludes: "Much more is known today about the health effects of lead than was known when OSHA enacted its lead standards in 1978 (for general industry) and 1993 (for the construction industry). Research has identified significant health risks at low to moderate levels of lead exposure that were formerly without recognized harm. Because lead can seriously impair cardiovascular health, cognition, reproduction,and kidney function, the persistence of elevated blood lead levels in workers may be a significant contributor to chronic illness and societal health care costs."

CMS Publishes a User Manual for MSP Reporting

The Centers for Medicare and Medicaid Services (CMS) has now published a User Manual. The manual details the federal procedures that will be utilized to implement Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA Section 111).

July 1, 2009 is the implementation date for mandatory reporting in workers' compensation claims. Section 111 adds reporting requirements and does not eliminate any existing statutory provisions or regulations. CMS' existing processes, including for example, CMS’ process for self-identifying pending liability insurance (including self-insurance), no-fault insurance, or workers’ compensation claims to CMS’ Coordination of Benefits Contractor (the COBC) or the processes followed by CMS’ Medicare Secondary Payer Recovery Contractor (the MSPRC) for MSP recoveries, remain undisturbed. The Act does impose penalties for noncompliance.

CMS has announced that it will offer a "query function" to required reporting entities to ascertain whether or not the claimant is a Medicare beneficiary. The query will be based upon identifying data including: HICN or SSN; first initial of the last name; first 6 characters of the last name; date of birth and gender.

Yet to be determined are a host of reporting issues including:

• Interim dollar reporting threshold for "Total Payment Obligation to the Claimant" (TPOC) amounts -- CMS’s decision on this issue will be released separately in the near future.
  
• Interim dollar reporting threshold for "Ongoing Responsibility for Medicals" (ORM) -- CMS has this issue under consideration.
  
• Further information regarding reporting for mass torts – This issue is still under discussion.
  
• ICD9 Codes – CMS is reviewing the codes to determine if there are certain codes which Responsible Reporting Entities (RREs) will be prohibited from submitting.
  
• Examples regarding "Who is the RRE" -- CMS is reviewing additional examples submitted by the industry for possible inclusion in the User Guide.

Private Claim for Medicare Reimbursement Dismissed

A private suit, brought by a consortium of plaintiff entities and individuals seeking reimbursement of Medicare for the failure of the tobacco companies’ to repay The Centers for Medicare and Medicaid [CMS] for benefits, was dismissed by a Federal. The parties had sought to recovery benefits and damages against Philip Morris USA Inc.

The Court reasoned that the law suit did not demonstrate the tobacco companies’s responsibility for the payment of a Medicare beneficiary’s medical costs. The plaintiff’s had attempted to rely upon the opinion in a bench trial instituted by the Federal government under the RICO Act.

The Federal Court judge held that the defendants, the tobacco companies, “are not subject to suit under the MSP unless and until they are found responsible for Medicare costs and they fail to reimburse Medicare within 120 days after that responsibility first arises.” The suit by the private parties was dismissed.

National Committee to Preserve Social Sec. and Medicare v. Philip Morris USA Inc., ___ F.Supp.2d ___, 2009 WL 590573 E.D.N.Y., March 05, 2009.

Medicare Reporting - $1,000 fine/claim/day

The failure to report claims to Medicare could cost insurance carriers $1,000. per day per claim. The penalties are discussed in a very informative article authored by Stephanie Stacy and Jill Schroeder that appears in The Nebraska Lawyer, March, 2009. A copy has been posted to the Yahoo Workers' Compensation Blog.

The article:
http://tinyurl.com/bthcfm

AMA Guides Tossed Aside in California

The California Workers Compensation Appeals Board has ruled that the 2005 version of the AMA Guides to Impairment need not be followed. The Court ruled:

(1) the AMA Guides portion of the 2005 Schedule is rebuttable;
(2) the AMA Guides portion of the 2005 Schedule is rebutted by showing that an impairment rating based on the AMA Guides would result in a permanent disability award that would be inequitable, disproportionate, and not a fair and accurate measure of the employee’s permanent disability; and
(3) when an impairment rating based on the AMA Guides has been rebutted, the WCAB may make an impairment determination that considers medical opinions that are not based or are only partially based on the AMA Guides.

Almarz v Environmental Recovery, et al
Case No. ADJ1078163 (BAK 0145426) Decided Feb. 3, 2009

AIG Up For Sale

AIG, the distressed insurance company, is expected to announce a $60 Billion quarterly loss. The announcement, anticipated shortly, follows three separate failed efforts by the Federal Government to rescue the company.

Creditors of the company, and the US Government, have reached a four new deal to bailout the company. This time the company is being structured to be sold. It has been reported that the property and casualty lines maybe the first to go. 

The US Treasury and AIG issued the following statement:

"The steps announced today provide tangible evidence of the U.S. government’s commitment to the orderly restructuring of AIG over time in the face of continuing market dislocations and economic deterioration. Orderly restructuring is essential to AIG’s repayment of the support it has received from U.S. taxpayers and to preserving financial stability. The U.S. government is committed to continuing to work with AIG to maintain its ability to meet its obligations as they come due."

Is The Recovery Of The Workers’ Compensation System An Illusion?

The present economic downturn has been compared to the Great Depression of the 1930’s or the recession of the 1980’s. The factors that existed during those financial cycles need to be compared to the present political and economic dynamic to determine whether or not history is repeating itself. Analysis of those two periods provides an insight as to whether or not there will be a rebound or surge of claims in the future.

The depression of the 1930’s occurred at a time when the workers’ compensation program in the United States was in its infancy. The benefits delivered were very limited. Occupational diseases were not included in most acts, the population had a lower life expectancy, early retirement plans did not exist, social security was not yet enacted, and Medicare was only an idea. The federal government poured dollars into the economy to construct public works [WPA] projects while limiting private debt. A consumer based economy didn’t exist at the time of the Great Depression.

Likewise, the recession of the 1980’s had its own characteristics. During the 1980’s, the populations mostly affected by layoffs were those who were the labor force of post-World War II. The workers of that generation suffered from occupational exposures to many deleterious and carcinogenic substances. The occupational diseases were latent in manifestation and epidemic in proportion. Laid-off workers who became victims of the recession of the 1980’s participated in a surge of litigation, both workers’ compensation claims and third-party actions against the manufacturers of toxic substances. Litigation snowballed against , including asbestos manufacturers, suppliers and distributors because of the minimal money recovered in the ordinary workers’ compensation claim. Asbestos litigation became “the longest mass tort in history.” In the years following the 1980’s the many workers separated from their jobs did not return to employment. Instead they collected both workers’ compensation benefits and Social Security disability.

The medical costs incurred, due to their occupational illnesses, were intentionally shifted from the workers’ compensation program to the Social Security Medicare program. The Medicare Secondary Payer Act was enacted by Congress in 1980 to end the cost shifting tactics by employers and their workers’ compensation insurance companies programs, Medicare and health group coverage, and pension offsets.

The current workforce, now being laid-off, is composed of an entirely different demographic than what existed in the 1930s and the 1980s. The social and political factors at the present time are far different from what was facing the workforce of the prior recession/depression years. The US Bureau of Labor Statistics reported, “In January 2009, the unemployment rate of persons with a disability was 13.2 percent, compared with 8.3 percent for persons with no disability, not seasonally adjusted. The employment-population ratio for persons with a disability was 20.0 percent, compared with 65.0 percent for persons with no disability.” The elderly have now been designated as a “new class of workers” as they return to the labor market out of economic desperation. The numbers of unemployed workers who are 65 years old and older now in the workforce, compared to a decade ago, have increased to 7.3% from 4.7%.

The census of workers currently without employment opportunities include significant numbers of aging baby boomers who were about to seek retirement while looking forward to the "golden years." The erosion of planned retirement savings requires that many older workers now return to work. There is a reluctance to file claims. Therefore, fewer injured workers now seek total disability payments under workers’ compensation. The stagnation of the administration of the workers’ compensation system makes it even more difficult for the elderly who are injured to navigate the system. This only adds to the claimant’s frustration and encourages a greater reluctance to file a formal claim for benefits.

Some workers’ compensation insurance companies now involved in the compensation system have been nationalized by the federal government to the various stimulus and bailout programs. They lack funds to remain economically viable with out further insurgence of capital from the federal government. The federal government is now a stakeholder in the process. Self-insured employers are becoming financially weaker. Corporate assets have been minimized by lack of credit and the massive economic stock value decline. Municipal entities and others involved in joint insurance funds (JIFs) are now having difficulty in maintaining economic viability. Because of the lack of tax revenues and federal support, State and local communities are on the verge of bankruptcy.

The present ills of the American workers’ compensation system mirror the economic woes of the national economy. The last decade has demonstrated an accelerated decline in the functioning of the system. It is reflective of what Paul Krugman, Professor of Economics and International Affairs at Princeton University, commented in the NY Times, that Americans are having financial “illusions.” “The bottom line is that there has been basically no wealth creation at all since the turn of the millennium: the net worth of the average American household, adjusted for inflation, is lower now than it was in 2001.” The workers’ compensation system is so bogged down in increasing medical debt that it is unable to deliver benefits efficiently. The present compensation system can’t be relied upon to rebound.

Compounding this downturn in the financial sector is the fact that workplaces have become safer. Over the years there has been a decline in fatalities as reported Bureau of Labor Statistics National Census of Fatal Occupational Injuries. As the United States becomes more of a service-based economy with a dwindling manufacturing sector, less injury risk exists in the occupational sector. The workplace has become safer and there are fewer serious injuries and less occupational illness.

The corporate downturn has been reflected by the implosion of many defense law firms who have reduced their staffs. Over a thousand lawyers were laid-off in a single day by major defense firms. The legal market restructuring is the result of a domino effect of the downsizing of corporate America. Representing injured workers and defending compensation claims on behalf of corporate America has taken a dramatic downturn. The trend is toward less attorney participation in the present system. Even attorney layoffs have become epidemic as the economic downturn intensifies.

Additionally, workers’ compensation programs have been subject to insurance industry targeted reform. The yet number of claims, eligible for benefits that would require legal representation has declined substantially as the California wave of reform swept towards the east coast. As the economies of the States shrink, so do the dollars available to operate the administrative programs for injured workers. Workers’ Compensation hearing offices in California will be closed two days per month and in New Jersey, a state that has already imposed a hiring freeze, is about to similarly close State offices.

The workers’ compensation system, based upon new national social and economic characteristics is already being re-crafted into a new program requiring less need for litigation support. Unlike the Great Depression of the 1930’s and the recession of the 1980’s, the present downturn in workers’ compensation claims activity is not anti-cyclical. It is an illusion of grandeur to believe that the present workers’ compensation system will recover or rebound in its present format. A national universal medical program will ultimately embrace the compensation delivery system and determine the future destiny of workers compensation.