NJ Workers' Compensation System Termed “completely dysfunctional”

The NJ Star-Ledger newspaper conducted an eight-month survey involving hundreds of thousands of workers compensation claims pending before the New Jersey Division of Workers Compensation. The Star Ledger series ran for three days and exposed huge difficulties in the NJ workers’ compensation system.

The flaws in the $1.8 billion system include:

-Frequent delays for claimants who can least afford them: totally disabled workers with mounting medical needs, no income or insurance.In its review of court
dockets, The tar-Ledger found that hearings were rescheduled on average more than a dozen times.

-Inexperienced judges who, once on the bench, lack any substantial power to enforce their orders. The main qualification for some is friends in high places.

-A Legislature where some of the same lawmakers who approve comp judges and
decide which workers' benefits bills get considered belong to law firms that
earn big money in compensation cases.

-A workers' compensation administration that does a woeful job of tracking its own performance. New Jersey officials acknowledged they could not identify the outcome in more than 10,000 of the most complex cases in the past seven
years.

-More than almost any state, New Jersey lets insurers dictate where, when and for how long injured workers get treated. There are no alternative forms of resolution, no incentives to quickly resolve a claim and weak sanctions against companies slow to act.

Senate Majority Leader Stephen Sweeney (D-Gloucester), vowed Wednesday to overhaul the state's "completely dysfunctional" workers' compensation system. “To fix the $1.8 billion-a-year system, Sweeney said, ‘You've got to go back and completely take it apart and put it back together again so it benefits employers and employees.’" (Star Ledger April 9, 2008)

In an editorial the Start Ledger demanded an “overhaul” of the entire NJ Workers’ Compensation system:

New Jersey's nearly 100-year-old workers' compensation system is in desperate
need of an overhaul.

The picture in "comp court" can verge on the Dickensian: Thousands of cases become bogged down for years, delaying much-needed payments to workers with the most serious injuries or disabilities.

Compensation court judgeships are often treated as patronage plums, with skill
and expertise taking a back seat to political connections.

The insurance companies have responded by requesting more detailed analysis of the present system.

David J. Socolow, Commissioner of the New Jersey Department of Labor and Workforce Development, appeared before the Senate Budget Committee April 9, 2008 and testified that the system was working well.

A series of bills introduced by NJ Assemblyman Neil Cohen are presently pending for reform of the present NJ Workers’ Compensation system including a bill to establish a review commission, reimbursement of medical liens, increases certain workers’ compensation benefits, and to ban the sale of asbestos products.

W.G. Grace to Settle Asbestos Claims for $3 Billion

W.R. Grace and Co. has announced that it will fund a trust for resolving all current and future asbestos-related personal-injury claims. The company entered bankruptcy 7 years ago with 135,000 asbestos claims pending. Grace had set aside $1.7 Billion in 2004 to pay its asbestos liabilities and will probably finance another $1.5 Billion to provide additional contribution to the financial package for asbestos claim resolution.

In March 2008 Grace agreed to reimburse the U.S. Superfund program for the cleanup costs associated with its Libby, Montana, asbestos facility

Iowa Joins Other States Not Adopting the AMA Guides 6th Edition

The State of Iowa joins many other States who will not implement the 6th Edition of the AMA Guides. This follows mounting criticism against the use of the 6th Ed. of the AMA Guides to determine workers’ compensation disability.

Under emergency rule making authority The Iowa Commission promulgated the following rule.
“AMA GUIDES – Rule 876—2.4 has been amended as follows:
876—2.4(85,86) Guides to evaluation of permanent impairment. The Guides to the Evaluation of Permanent Impairment, Fifth Edition, published by the American Medical Association are adopted as a guide for determining permanent partial disabilities under Iowa Code section 85.34(2)“a” to “s.” The extent of loss or percentage of permanent impairment may be determined by use of this guide the Fifth Edition of the guides and payment of weekly compensation for permanent partial scheduled injuries made accordingly. Payment so made shall be recognized by the workers’ compensation commissioner as a prima facie showing of compliance by the employer or insurance carrier with the foregoing sections of the Iowa workers’ compensation Act. Nothing in this rule shall be construed to prevent the presentations of other medical opinions or guides or other material evidence for the purpose of establishing that the degree of permanent disability to which the claimant would be entitled would be more or less than the entitlement indicated in the Fifth Edition of the AMA guide guides.”

Robbing The People of Justice

On Tuesday the voters of Wisconsin changed the configuration of the State’s Supreme Court from liberal to conservative in a referendum vote to oust Justice Louis Butler. In a highly contested election, divided heavily between conservative business interest groups and public interest organizations, by a mere 20,000 votes, a liberal Democratic was removed from office and the Court will now have a 4-3 conservative majority.

The fiercely fought and costly ($4 million) election brings to light, once again, the issues involved in conducting judicial elections. Last year over $3.1 million dollars was spent by special interest groups to challenge yet another judicial election in Wisconsin. Elections of judiciary are the case in 39 States who elect some, if not all, of their appellate Judges.

The Wisconsin Supreme Court, in nationally recognized opinions: has recognized manufacturers’ liability in latex glove litigation; guarded patients from medical malpractice; and protected children from the problems associated with lead paint. The Court defined the standard for “enterprise liability” in an effort to guard the public from hazardous and toxic substances.

Private financing of judicial elections are problematic and bring to the forefront a need for review of the entire process to maintain the integrity of the judicial system. As Justice Butler remarked in his concession speech, "We cannot continue to see elections like last year 's and this year 's, and expect people to maintain their faith in our judicial system, " Butler said. "If we rob people of their faith in that system, we've robbed them of justice. "

National Asbestos Awareness Week

Senate Resolution 462 designates the first week of April 2008 as National Asbestos Awareness Week. The proclamation urges public awareness about the prevalence of asbestos-related diseases and the dangers of asbestos exposure.

Asbestos, a know carcinogen, is still used in the US and has not been banned. "Asbestos" is a generic name given to a fibrous variety of six naturally occurring minerals that have been used for decades in the development of thousands of commercial products. The term "asbestos" is not a mineralogical definition but a commercial name given to a group of minerals that possess high tensile strength, flexibility, resistance to chemical and thermal degradation, and electrical resistance. These minerals have been used in many products, including insulation and fireproofing materials, automotive brakes and textile products, and cement and wallboard materials. It has recently been found in toys.

Asbestos exposure affects both workers and their families. The legacy of asbestos related disease continues: mesothelioma, lung cancer and asbestos medical conditions continue to be diagnosed. Litigation continues against the asbestos manufaturers, distributors and health research groups. Ill conceived legislation by the insurance industry failed to survive Congressional debate.

The Workers’ Compensation system continue to fail in delivering benefits to asbestos exposed workers due to latency and coverage issues complicated by bureaucratic nightmares. Hopefully, public awareness will draw attention to crafting a better system to deliver benefits to injured asbestos workers than the present workers’ compensation system crafted in 1911, decades before the disease become recognized as an occupational disease.

Governmental Opposition Swells Against Implementation of the 6th Edition of the AMA Guides

State governments throughout the United States are now delaying implementation of the 6th Edition of the AMA guides as a standard to determine permanent disability. The governmental officials are heeding warnings that the guides do not carry out the legislative intent of the workers’ compensation acts which is to provide a remedial social insurance benefit to injured workers.

In 1911 workers bargained away the right to seek redress in the civil litigation system for a more limited benefit structure called workers’ compensation. Workers’ compensation was the original “no fault system” that was to provide limited benefits in a summary and efficient fashion to disabled workers.

Soon there was an attempt by Industry to modify the system in the 1970’s to create a standardized system of measuring disability and reduce even the meager benenfits offered. The AMA guides were drafted and adopted in several state to measure permanent disability. Presently many jurisdictions utilize the 5th Edition to determine disability.

The 6th edition were published in late 2007s under the guidance of Christopher R. Brigham M. D. whose company, Brigham and Associates conducts medical evaluations. Dr. Brigham contends that only 40% of those totally disabled are really unable to perform meaningful work. It has been reported that if the new guides are adopted then permanent disability will no longer be recognized in 70% of the present claims.

At a recent meeting of the IAIABC (The International Association of Industrial Accident Boards and Commissions) , an organization composed of industrial boards and commissions throughout the United States, but open to membership from dues paying members, which include many of the workers’ compensation insurance carriers in the United States, there was “a lively discussion” concerning use of the new Guides.

"Dr. Russell Travis, Medical Director for the Kentucky Office of Workers’ Claims, suggested the 6th Edition makes improvements in guiding impairment rating, particularly in consistency of ratings across organ systems. However, Dr. Travis highlighted some of the perceived weaknesses he found in the AMA Guides; his presentation pointed to issues of apportionment, pain, and the qualifications required to perform a rating as still unresolved. The strong debate among the rating physicians demonstrated the lack of consensus on techniques for impairment rating and the role of the AMA Guides."

Within the last few weeks, several states have paid attention to warnings and taken action to resist immediate implementation of the 6th Edition of the AMA Guides. Kentucky legislatively voted to adopt the prior 5th Edition of the AMA guides to permanent impairment rather than the current 6th edition. Vermont issued an administrative directive barring use of the new 6th Edition. Iowa has joined the growing chorus of those who will not follow the adoption of the 6th Edition. Opposition to implementation in New York is at a fever pitch.

Joining the chorus of growing opposition is The Workplace Injury Law And Advocacy Group. In an article authored by Todd McFarrin, the President-Elect of CAAA, he cautions that:

“By using impairment ratings from the Guides, essentially as a proxy for disability, permanent disability benefits are being slashed. The use of impairment and the eclipse of disability as the relevant permanent consequence of an injury in workers’ compensation is a dangerous trend for injured workers. The latest [6th] edition of the Guides accelerates this decline.”

How to determine permanent disability has always been an agonizing proposition to all who participate in the system. While State legislatures and the Federal government would be pleased to adopt an objective standard, such a goal is illusionary. One cannot be substituted for subjective nature of pain and restrictions of movement in the human environment.

While the economy may be struggling, it is anticipate that the outrage of Labor to the implementation of the restrictive 6th Edition to determine permanent disability will only increase. The objections will become louder and stronger as Industry tries to renege on its 1911 bargain called workers’ compensation.

California Considers Taxing Workers' Compensation Attorneys Fees

If Governor Arnold Schwarzenegger has his way the battered advocacy system for injured workers in California is about to get hit again. The Governor recently proposed charging a sales tax on professional fees in the State of California. He indicated that he is well aware of the loopholes in the present system and would like to end them in order to recover money for California sagging state revenues.

Charging a “sales tax” for professional fees is a concept that the Social Security system has imposed for several years by charging a user fee (6.3%) to successful attorneys who receive favorable awards for their clients before that agency. In fact, the concept of Social Security charging a fee to have Medicare review proposed settlements has often been rumored as they are analogous to IRS private opinions.

While no definite proposal has been offered to the California legislation, the Governor will obviously need to reach into someone’s bank account to keep California’s budget afloat.