Nationalizing Workers’ Compensation Medical Delivery

Recently the Obama Administration invited the medical insurance industry to the White House to discuss possible future scenarios on the delivery of health care. A planted floated at the meeting was one that President Obama advocated in h campaign. That proposal was allow the Federal government to sell health care coverage.

Obama remains committed that employees and employers, as well as the Federal government, should participate in the program. Does that mean that workers compensation insurance coverage is also going to be an element of the plan? The next obvious step would be to allow the Federal government to sell workers’ compensation insurance coverage.

Representative Jan Schakowsky (D-IL), a probable author of the legislations, stated, “We're not trying to figure out what represents the interests of private insurers, we're trying to come up with a plan that makes sure all Americans have health care…”

 The Federal Government is ultimately going to set the stage for the change in health care delivery. The incentive will be the $19 Billion dollars it has set aside for health information technology. Where the road to health care reform takes the ailing workers’ compensation medical delivery system in this era of struggling industrial growth still remains uncertain

Administration in California Requests Judges to Vacate Their Decision Against AMA Guides

California Administration officials have written to the California Appellate Judges and requested that they vacate their decision setting aside the AMA Guides.  The letter, an unprecedented action, has not yet received a response from the California Workers' Compensation Appellate Court.

However, Todd McFarren, a California attorney and President of the California Applicants Attorneys Association, has remarked that the the Judges, will “...still be handcuffed by the administration’s inadequate permanent disability schedule.”  “The administration has not addressed the fundamental flaws in its disability rating schedule. We’ve been waiting more than a year for the governor to approve his own administration’s proposal to restore a small percentage of the permanent disability compensation he cut by 50% to 70%.”

Salaries Frozen for State Workers' Compensation Staff

The national economic downturn continues to impact State administrative services. The NJ Department of Labor and Workforce Development has been prohibited by legislation from raising the salaries of Judges and administrative personnel of the NJ Division of Workers' Compensation for the fiscal year 2009.

The bill directs that no Fiscal Year 2009 appropriations may be used to provide salary increases to workers' compensation judges or administrative law judges, retroactive to January 1, 2009. The legislation provides for an exception if Federal stimulus become available.

"Notwithstanding the provisions of R.S.34:15-49 to the contrary, including the reference therein to salaries of judges of the Division of Workers' Compensation determined as a percentage of the annual salary of judges of Superior Court, beginning on January 1, 2009 there shall be no increase paid from appropriations made herein for an annual salary increase for judges of the Division of Workers' Compensation."

2009 NJ Sess. Law Serv. Ch. 22 (SENATE 15)

Court Holds Autopsy Not Required in Mesothelioma Claim

A New Jersey Appellate Court has ruled that an autopsy is not required in order to proceed with a claim against the manufacturers, suppliers and distributor of asbestos fiber. The appeals court decided that the defendants did not present a sufficient basis to prove that retrieval of lung tissue from the deceased workers' body would lead to obtaining significance evidence for use at trial. It was alleged that the former auto-repair worker had died of mesothelioma as a result of exposure to products containing asbestos fiber.

Furthermore, since the trial in the matter had been scheduled to commence within two weeks of the death of the worker, the Court also held that the trial preparation in the claim was , "... in no way hampered by the denial of their [defendant's] request for a limited autopsy."

Defendants in the claim, including Chrysler Motor Corp and Honeywell International, obtained a Court Order to bar the funeral minutes before the burial of the deceased asbestos worker. On review, following an evidentary hearing, the Appellate Court denied the request by the defendant's for a limited autopsy of the deceased worker.

New Jersey ranks second highest in the nation for asbestos related deaths. Over 10,000 workers each year continue to die from asbestos related disease. Asbestos is not yet banned in the United States.

Harold St. John v. Affinia Group, Inc., et al., NJ Appellate Division, March 3, 2009.

6th Circuit Allows RICO Decision Against Employer to Stand

The Sixth Circuit Court of Appeals permitted its favorable decision for employees and against an employer, its workers' compensation insurance carrier and its examining physician to stand. The Court, on January 5, 2009, denied a Rehearing and a Rehearing En Banc request made by the defendant who were held to be in violation of the Racketeer Influence and Corrupt Organization Act (RICO).

The Court held that 13 original predicated acts constituted a pattern of racketeering activity. The workers were not required to plead or prove reliance on the misrepresentations. The Circuit Court also ruled that the Michigan workers' compensation act did not reverse preempt RICO under the McCarran-Ferguson Act.

Brown v Cassens Transport Co. 546 F.3d 347 (6th Cir. 2009).

CMA Issues an Alert on MSP Reporting Data Extending Testing Period and Setting Thresholds

The Centers for Medicare and Medicaid Services (CMS) has issued an Alert on mandatory workers' compensation reporting extending the permissible testing period through December 31, 2009. They have also issued threshold criteria for “Ongoing Responsibility for Medicals” (ORM) and “Total Payment Obligation to the Claimant (TPOC).”

The Voice of Change in the Medical Care Debate

The Workers' Compensation industry  appears to lack a meaningful voice in the US health care legislative debate. As the interested parties are being tapped by a coalition of Senate leadership for support, the fractionalized workers' compensation industry remains on the sidelines waiting for the opportunity to be asked to dance at the party.

The Henry J. Kaiser Family Foundation reports that Senator Edward M. Kennedy (D-Mass) and a core group of other Senators, including Republicans, have formed a coalition to craft health care legislation. The legislation will be introduced before the August recess.

Based on a report from CongressDaily, it appears that the Senators are forming a coalition of strategic partners  with a variety of economic positions. The target is the introduction of a single bipartisan health care bill. 

This is consistent with reports appearing in The Hill which reflect that a conciliatory approach is being followed by the Obama Administration and the legislative leadership. This creates a very uneasy position for the traditional Republican leadership and the traditional lobbying groups.

The workers' compensation industry now consists of a broad and fractionalized group of stakeholders. They seek  individual economic survival in the current frantic and fearful economy. Their adverse interests have been a huge factor in the expansion of the administrative process and increasing stagnation within the present system. 

As the individual stakeholders find that their interests are being represented individually in a new and non-traditional setting, the need for their economic survival will over power the existing organizational lobbying effort. That lobbying effort was very successful in past decades to defeat legislative initiatives for a universal health care system.

Should this new legislative strategy advance and succeed, the voices of the past will be silenced. The transformation process has already commenced. Public opinion surveys report a majority of Americans want change. It is that voice that will govern the legislative process. This occurred in the  non-partisan outrage over AIG bonuses.  In the end, the process will be successful, for after all, we are a county of " The People,"and it  is their voice that will be the voice of change.