Workers' Compensation

Tuesday, August 13, 2013

Legal Fees and Reform

Today's post was shared by WorkCompCentral and comes from daviddepaolo.blogspot.com

Take a look at

What do you see?

Lots of employment opportunities for lawyers, primarily those on the insurance/employer defense end.

Some firms are even taking out full display ads for recruitment days and other practices that are typically the province of Corporate America.

Indeed, this does appear to be anecdotal evidence of a larger trend in California workers' compensation - as recent Workers' Compensation Insurance Rating Bureau data shows, spending on lawyers this past year totaled $1.2 billion and has been increasing at a dramatic rate, particularly for defense legal fees.

That's a lot of legal fees, which represents a lot of benefit contestation.

Break it down even further, though, and the anecdote of job ads for lawyers becomes even more salient - defense fees are double what applicant attorney fees are.

Here's the graphical depiction based on the WCIRB numbers:

The chart is interesting in a couple of aspects.

Note that following the 2004 reform, SB 899, defense fees skyrocket from $368 million in 2003 to nearly double at $642 million in 2006, while applicant attorneys, whose fees are largely pegged to permanent disability indemnity, lost some ground, but essentially remained flat.

Things stabilize a bit after 2006 until 2011 when the lawyers on both sides, start taking home a bit more pay, such that 2012 legal fees are double what they were in 2002 for both defense and applicant.

Compare to the Consumer Price Index rate of inflation - $100 in 2002...

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The Trend to Supersize Hospitals

The trickle down effect of the current trend to supersize hospitals through mergers and acquisitions may far reaching unintended consequences on medical costs for employers, insurance companies and injured workers. An consequence of the Affordable Care Act is to encourage hospitals to keep people healthy and avoid hospital admissions.

Hospital have been not only purchasing other hospitals reducing the number of independent hospitals in the US from 5,000 to 1,000, but it has also accelerated the trend for hospitals to purchase lucrative medical practices to earn income from diagnostic tests and to control the flow of hospital admissions.

An unintended consequence of this path may actually increase hospital costs because fewer hospital facilities exist, or the lack of competition may just lead to a universal medical care system. Workers' compensation insurance programs may therefore be required higher fees to hospitals.

"Hospitals across the nation are being swept up in the biggest wave of mergers since the 1990s, a development that is creating giant hospital systems that could one day dominate American health care and drive up costs."

Read the complete article, "New Laws and Rising Costs Create a Surge of Supersizing Hospitals" (NY Times)

Monday, August 12, 2013

Pending NJ Supreme Court Workers' Compensation Cases

The following is a list of Workers' Compensation cases pending before the NJ Supreme Court as of August 12, 2013.

Off-Premises: Parking Lot Case

A-59-12 Cheryl Hersh v. County of Morris (071433)

Did this employee’s injuries, which occurred when she was struck by a car while walking across a public street to her place of employment from a privately owned garage in which she parked her car at her employer’s expense, arise out of the course of her employment entitling her to benefits under the Workers’ Compensation Act, N.J.S.A. 34:15-1 to -142?

Certification granted: 5/9/13

Posted: 5/13/13

Argued:

Decided:

Conflict of Laws: Preemption

A-130-11 Jersey Central Power & Light Co. v. Lempke (070649)

Was defendant's workers' compensation proceeding in New Jersey a "first-filed litigation" that preempts her Pennsylvania lawsuit against multiple parties over the work-related accident that caused her husband's death?

Certification granted 7/12/12

Posted: 7/13/12

Argued:

Decided:

Cardiovascular: Causal Relationship

A-71-11 James P. Renner v. AT&T (068744)

Does the record support this workers' compensation claim under N.J.S.A. 34:15-7.2, which sets the standard of proof governing claims based on injury or death from cardiovascular causes?

Certification granted: 2/14/12

Posted: 2/14/12

Decided:

CMS Releases Revised List of Workers Compensation Set-Aside Contacts

The Centers for Medicare and Medicaid Services has released a revised list of contacts for Workers' Compensation Set-Aside Contacts. The contacts have been centralized in 6 areas of the US.

Click here to download the PDF version of the revised list of contacts.

Bloomberg Sees Higher Costs in a Union-Friendly Mayor

How government looks at the distribution of health care benefits is insightful as to predicting the future of workers' compensation. The change of delivery mechanism implied in the comments of NYC's Mayor, Mike Bloomberg, sketch out a potential future blueprint.Today's post was shared by Steven Greenhouse and comes from www.nytimes.com

Warning of the fiscal danger if New York City fails to rein in its spiraling pension and health care costs, Mayor Michael R. Bloomberg on Tuesday challenged his would-be successors to take a tough line in negotiations with the city’s unions, while worrying aloud that whoever is elected will be too beholden to labor.

“We can’t wake up tomorrow morning — the day after the election — and find that some candidate has made a back-room deal with one of the unions that sets the pattern for all the other unions that will eventually lead to stopping the growth in this city,” Mr. Bloomberg said, departing from his prepared remarks at the end of a speech in Brooklyn on the city’s economy and fiscal situation.

“We cannot afford certain things,” he continued. “It’s tough to say no. It’s particularly tough to say no when nobody wants anybody to get hurt. But the bottom line: this is the taxpayers’ money, and this is our future.”

Mr. Bloomberg’s speech, delivered at a former Pfizer manufacturing plant that is now home to some two dozen small companies, producing everything from 3D printers to kimchi, was in part an attempt to burnish his record of fiscal stewardship, which is hotly debated. He argued that he has determinedly tried to reform pensions and health care but has been stymied by unions.

Fiscal watchdogs note that his administration presided over a 40 percent increase in the city budget, and in his second term handed out raises without demanding concessions on pensions and...

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U.S. Companies Thrive as Workers Fall Behind

In 1911 most states enacted workers' compensation legislation creating a promise for a better system of benefits for injured workers. Over the decades that promise has been broken. Today's post was shared by Steven Greenhouse and comes from www.nytimes.com

American companies are more profitable than ever — and more profitable than we thought they were before the government revised the national income accounts last week. Wage earners are making less than we thought, in part because the government now thinks it was overestimating the amount of income not reported by taxpayers.

The major change in the latest comprehensive revision of the national income and product accounts — known as NIPA to statistics aficionados — is to treat research and development spending as an investment, similar to the way the purchase of a new machine tool would be treated by a manufacturer, rather than as an expense. That investment is then written down over a number of years.

The result is to make the size of the economy, the gross domestic product, look bigger, and to appear to be growing faster, in years when new research spending is greater than the amount being written down from previous years. For the same reason, corporate profits also look better in those years.

A lot of money is spent on research and development. Nicole Mayerhauser, the chief of the national income and wealth division of the Bureau of Economic Analysis, which compiles the figures, said that in 2012 the total was $418 billion, about one-third of which was spent by governments. That amounted to about 2.6 percent of G.D.P.

The other major conceptual change deals with pensions. Until now, corporate and government contributions to pension plans were counted as personal...

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