Putting Workers First - A Proposed Agenda for the Obama Administration

The Center for American Progress will host a program  on Tuesday, December 8, 2008 to discuss how the Obama Administration may immediately improve upon the Bush's administration's poor track record for the ordinary American worker.

9:00 - 10:30 a.m.

Panel I: Enforcing Change: Strategies for the Obama Administration to Enforce Workers' Rights at the Department of Labor
Jordan Barab, Senior Labor Policy Advisor, Committee on Education and Labor, U.S. House of Representatives
Kim Bobo, Founder and Executive Director, Interfaith Worker Justice 
Thomas E. Perez, Secretary, Maryland Department of Labor, Licensing and Regulation 
Catherine K. Ruckelshaus, Litigation Director, National Employment Law Project
Karla Walter, Policy Analyst, American Worker Project, Center for American Progress Action Fund

Moderated by:
David Madland, Director, American Worker Project, Center for American Progress Action Fund

10:30 - 11:00 a.m.
Keynote Address:
Governor Jon Corzine (D-NJ)

11:00 - 12:00
Panel II: Making Federal Contracting Work for the United States
Scott Amey, General Counsel, Project on Government Oversight
Margaret Daum, Counsel, House Oversight and Government Reform Committee
Richard C. Loeb, University of Baltimore School of Law
David Madland, Director, American Worker Project, Center for American Progress Action Fund

Moderated by:
Scott Lilly, Senior Fellow, Center for American Progress Action Fund

Dry Cleaning Agent 1-BP Causing Neurological Illness

The Centers for Disease Control (CDC) has reported that 1-Bromopropane (1-BP) (n-propyl bromide),  a solvent increasingly used as a substitute for ozone-depleting chloro-fluorocarbons and similar regulated compounds, has been reported to cause neurological illness. 1-BP is used in vapor and immersion degreasing operations and other manufacturing processes, and as a solvent in industries using aerosol-applied adhesives.

Two cases of illness occurring in New Jersey and Pennsylvania have been reported, In NJ a worker in a cleaning facility, following the use of 1-BP, reported "...unusual fatigue and headaches and developed arthralgias, visual disturbances (difficulty focusing), paresthesias, and muscular twitching."

NIOSH had previously reported that some workers developed adverse problems in use of this product. In 2006 it made suggestions to reduce exposure.

The CDC has made the following recommendation, "....Clinicians and public health officials should be alert to potential adverse health effects from exposures to 1-BP in industries where such use might increase, such as the dry cleaning industry, and in workplaces where 1-BP use might be more established. A thorough occupational history always should be part of the clinical evaluation of persons who have unexplained or onset of nonspecific neurologic symptoms. Exposure to electronics cleaning solvents or dry cleaning solvents should prompt a more through inquiry concerning exposure to 1-BP. In the evaluation of a worker with occupational exposure to 1-BP and neurologic abnormalities, diagnosis of 1-BP poisoning is suggested by an elevated urinary or serum bromide concentration and a negative serum anion gap. Findings of potential 1-BP poisoning in a potentially exposed worker should prompt removal of the worker from the exposure while an evaluation of workplace exposures is conducted by a qualified professional"

A Bailout for Workers’ Compensation

The issues facing the present economic downturn are not necessarily the same that existed  during the great depression and therefore the outcome may not be the same. The US workers' compensation system, a patchwork of State programs, is seriously being challenged during the present tough economic times. The past does identify a pattern that may require similar solutions. 

 It has been reported that the US government is contributing vast sums to bring the economy out of the ditch. "In the last year, the government has assumed about $7.8 trillion in direct and indirect financial obligations. That is equal to about half the size of the nation’s entire economy and far eclipses the $700 billion that Congress authorized for the Treasury’s financial rescue plan."

Workers’ compensation is not necessarily an anti-cyclical market. It is a political entrenched program. The present economic crisis will change the social and economic fabric of the country. "....the most troublesome unknowns are how the maze of protections for investors and consumers will change economic and political behavior in the future." The NY Times reported that levels of unemployment may reach 10%, a number used to define a depression.

During The Great Depression the US workers’ compensation system had an additional unique challenge confronting it. Silicosis claims were challenging Industry with uncertain economic outcomes. The insurance industry rushed to the rescue by advocating that silicosis and other occupational diseases be brought within the umbrella of the workers’ compensation system.

Activity soared within the workers’ compensation arena. The pace continued through the pre and post World War 2 years as the legacy of disease and death continued. Asbestos claims and other toxic tort claims continued the spiral. When workers’ compensation was unable to fully compensate the victims, the activity switched to the liability arena and claims proliferated and activity soared. Insurance exhaustion, corporate bankruptcy, an aging workforce, lack of manufacturing in the US and Federal Multi-District litigation. soon lead to a decline litigation activity.

Confronting the present workers’ compensation programs are the residual issues generated by  the expansion of occupational disease litigation program of the 1930’s. Cost shifting from workers’ compensation to other programs has resulted in workers’ compensation system becoming a collection agency and has resulted in bureaucratic stagnation. Occupational disease claims created major cost shifting of medical costs to other systems including: temporary disability benefits, major medical and Medicare and Medicaid, disability pension and Social Security.

 In the 1930’s the Federal government though the Department of Labor stepped in to save the system. David Rosner and Gerald Markowitz in their volume, Deadly Dust, point out that without national standards and a uniform approach, the 1930s' system system would not survived that moment in time.

The economic factors of The Great Depression now hover  over the present workers’ compensation system. The Federal Government now needs to intervene and bail out the State systems and rethink the medical delivery system that has generated tension in medical and reimbursement programs.

AAJ Publishes Report on Insurance Companies

The American Association for Justice (AAJ) has published a report, "Tricks of the Trade: How Insurance Companies Deny, Delay, Confuse and Refuse."

"The U.S. insurance industry has trillions of dollars in assets, enjoys average profits of over $30 billion a year, and pays its CEOs more than any other industry. But insurance companies still engage in dirty tricks and unethical behavior to boost their bottom line even further."

The repoort describes methods that it alleges that insurance companies utilize to make money at the expense of consumers.

The tactics insurance companies use against consumers include:

Denying Claims: Some of the nation’s biggest insurance companies – Allstate, AIG, and State Farm among others – have systematically denied valid claims in an attempt to boost their bottom lines. These companies have rewarded employees who successfully denied claims, replaced employees who would not, and when all else failed, engaged in outright fraud to avoid paying claims.

Delaying until Death: Many insurance companies routinely delay claims, even going as far as to lock paperwork in safes, knowing full well that many policyholders will simply give up. In the words of one regulator, “the bottom line is that insurance companies make money when they don’t pay claims… They’ll do anything to avoid paying, because if they wait long enough, they know the policyholders will die.”

Confusing Consumers: Insurance contracts are some of the densest and incomprehensible contracts a consumer is ever likely to see. More than half of all states have enacted “plain English” laws for consumer contracts, yet many Americans still do not fully understand the risks they are subject to.

Discriminating By Credit Score: Insurance companies are increasingly using credit reports to dictate the premiums you pay, or whether you can even get insurance in the first place. The practice penalizes senior citizens with little credit, those who responsibly pay bills every month with cash or check, or those who have suffered financial crisis through no fault of their own.

Abandoning the Sick: Health insurers looking to cut costs have taken to retroactively canceling, or rescinding, the policies of people whose conditions have become expensive to treat. Some insurance companies have even offered bonuses to employees who meet “cancellation goals” – cancer patients in the middle of chemotherapy have even been targeted.

Canceling for a Call: Many people are rightly reluctant to make small claims on their home insurance for fear their insurance company will raise their premiums. But few realize that insurance companies often refuse to renew a policy just for making a phone call. Often an insurance company will count an inquiry over the phone as the same as a claim, and then they will do everything in their power to drop you.

CMS Announces Future Tele-Conferences for MSP Reporting

November 17, 2008 Updates - Future Town Hall Teleconference Meeting Dates

January 22, 2009 - Liability (including Self-Insurance), No-Fault Insurance and Workers' Compensation

January 28, 2009 - Liability (including Self-Insurance), No-Fault Insurance and Workers' Compensation

February 25, 2009 - Liability (including Self-Insurance), No-Fault Insurance and Workers' Compensation

March 25, 2009 - Liability (including Self-Insurance), No-Fault Insurance and Workers' Compensation

April 22, 2009 - Liability (including Self-Insurance), No-Fault Insurance and Workers' Compensation

CMS Publishes Intrim Record Layout for Mandatory Reporting

CMS (The Centers for Medicare and Medicaid Services) has published a proposed format for reporting data under the Medicare Secondary Payer Act. Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA) (P.L. 110-173) madates reporting where, "...the settlement, judgment, award or other payment date is July 1, 2009 or subsequent and claims on which ongoing responsibility for medical payments exists as of July 1, 2009, regardless of the date of an initial acceptance of payment responsibility."

NJ Senate Passes WC Coverage Legislation

The NJ Senate passed (40-0) a substituted bill requiring the investigation of cases where employers fail to obtain workers' compensation coverage. The substituted bill adopts the suggestions of Governor Corzine who had proposed some changes in his October 2008 condititonal veto message.

The legislation requires the Insurance Fraud Prosecutor (IFP) to establish a liaison with the NJ Department of Labor and Workplace Development and authorizes the investigation of cases involving failure to obtain Workers' Compensation coverage.

CMS Announces Intention to Clarify MSP Recovery Language

CMS has announced it intends to clarify the language in recovery scenarios where occupational exposures occurred prior to the effective date of the Medicare Secondary Payer Act.

Barbara Wright of CMS said at a recent town hall meeting,...

"If all exposure (peaks) before 12/5/80, then it is CMS policy that it will not assert a recovery claim with respect to any liability settlement. And that can depend on -- again I’ll use asbestos as the example. Let’s say that you’re suing five different entities. I’ve seen situations where three of the entities -- all exposure connected with them -- did in fact end before 12/5/80 wherefore at the last one there was some exposure after 12/5/80. We are looking at language that could potentially eliminate reporting when it’s clear that the exposure ended before 12/5/80. "

As CMS ramps up for mandatory insurance carrier reporting, additional town hall conferences have been scheduled.

National Health Leaps Ahead on Agenda

It should no surprise to anyone that the Obama Transition is already targeting national health care as a first year agenda item. With Senator Edward Kennedy and the Clintons anticipated to be major participants in the new Obama Administration, the health care issue has now leaped to forefront.

Senator Kennedy's return to the Senate this week coincided with his announcement of the formation of 3 working groups to assist in the development of heath care legislation. He announced the following participants to his team: Sen. Hillary Rodham Clinton (D-N.Y.); Sen.Barbara Mikulski (D-Md.) and Tom Harkin (D-Iowa). They planned a meeting for today in an effort to plan out the immediate effort. This signals that health care reform will emanate from the Congress and not The White House.

Insurance company reaction was immediate. The carriers offered full medical coverage for pre-existing coverage providing that there was a global requirement for all to be insured.

As this program rolls out it is most certainly anticipated that workers' compensation medical coverage be included in the global effort. Studies have long shown that the litigation progress delays the delivery of benefits, increases administrative costs and depletes much needed medical resources from health research efforts.

The Rush to Follow Oregon

Praising of the Oregon workers' compensation system continues in earnest by the insurance industry. The Workers' Compensation Research Institute's (WCRI), Duncan Ballantyne, presented the winning factors about the Oregon system at a seminar to reform the Oklahoma system.

A reform movement has been launched in Oklahoma to overhaul the Oklahoma system. Orgeon contines to have very low workers' compensation rates and utilizes an administrative system to resolve work related claims. Legislation has been authored by Rep. Mark McCullogh to abolish the adversarial system in Oklahoma.

Workers' Compensation Medical Benefits are in Critical Condition

Now that Barach Obama is a going to be at the helm of the US, greater attention is being focused on the need for a national health care system incorporating workers’ compensation medical coverage. With private insurance companies failing, unemployment increasing, the cost of medical care soaring, more attention has now been placed on the elimination of medical care as a workers’ compensation benefit paid by Industry.

It is not all surprising that Dr. Peter Barth reported to the WCRI Conference in Boston, that workers’ compensation programs may be swept up into a national health care system. He reminds us that this was attempted in the Clinton proposal. The enactment of such a proposal looks even more urgent now.

The medical system overall is now being stressed by: an aging workforce; medical conditions manifested by stress and aging; consumerism in health care; the attempt to shift costs from major medical plans and CMS to workers’ compensation; new and expensive treatment modalities, procedures and pharmaceutical products,and the expansion of palliative and “end of life care.” It is anticipated that the average cost may amount to $500.000 per claim.

The workers’ compensation system just can’t deliver medical treatment quickly and cheaply enough. The systems are frough with administrative costs delay. It is adversarial requiring legal timetables of investigation, litigation, adjudication and appeals. The progress of disease is not subject to court rules or judicial administration. Immediate and emergent medical treatment protocols follow a biological timetable not a legal one.

National health reform that embodies workers’ compensation as an element is a long awaited solution to coordinate and advance the delivery of health care to all Americans. Old, inefficient and archaic systems need to be abandoned if progress is to advance. Moving forward to the inclusion of workers' compensation into a universal and nationalized program for health care is an important and innovative change. The change is crticial and necessary to advance with science, the economy and the social structure of America.

“Going Green”-Alternate Dispute Resolution Proposed for Comp

A proposal has been introduced in the NJ Assembly formalizing an alternate dispute resolution (ADR) program for workers’ compensation. The proposal would allow the establishment of such a system through collective bargaining units and insurance carriers and group self-insurance plans.

Such programs have been utilized throughout the United States for decades and are commonly called “carve-out” programs. Labor and Industry have found them cost-effective and an expeditious manner of handling work related benefits. The cost of the NJ system, has been estimated at $1.8 Billion. The Star Ledger, in a series of articles entitled “Waiting in Pain,” highlighted the frustrations that have emerged because of delays encountered in the present system. The series focused on delays caused by multiple and fragment hearings.

The proposal has been introduced at a time when workers’ compensation systems and Industry as well as injured workers are seeking ways to reduce the spiraling costs of the administration of workers’ compensation and to enhance the delivery of benefits. Workers’ Compensation is struggling to reduce costs and employ environmentally friendly systems. The ADR program is an attempt to reduce costs and reduce environmental impact.

“Going Green” is a concept now being utilized by administrative and judicial systems throughout the country. One company, CourtCall®, utilizes telephonic conferences to avoid court appearances to help save the environment. Workers' Compensation claims in NJ require multiple appearances of the parties for both pre-trial conferences and hearings over extended periods of time.

Some reviewers have suggested elimination of the high cost of workers’ compensation program entirely as a value no longer justifying tort immunity. Instituting an ADR system, in a time of economic stress and increasing environmental costs associated with administration of a formal system, may offer an option to explore.

CMS Discusses Asbestos Claims MSP Reporting Requirements

CMS confirmed in a national telephone conference today that in workers' compensation claims where the toxic exposure, ie. asbestos exposure, ceased prior to December 5, 1980, reimbursement or reporting was not required. On the telephone conference call mandatory reporting requirements for liability insurance, no-fault and workers' compensation were discussed and questions solicited and from the participants..

The CMS position was validation of prior informal memorandum in circulation concerning asbestos exposures. The rationale for the opinion has been previously bean based upon the fact that the Medicare Secondary Payer Act was not enacted until that date.

The telephone conference call was scheduled by CMS in an effort to clear the air about its recent rules and suggestions concerning the implementation of the recent working requirements mandated by Congress. 42 U.S>C. 1395y(b)(7)).

Asbestos Dealer of Death - Canada

The Canadian delegation to the Rotterdam Convention was able to lobby effectively to prohibit a ban on asbestos for another two years. The Canadian mines will continue to churn out the killer fiber and ship it to unsuspecting countries as a result of an effective major lobbying effort of the Canadians to sway the votes of India, Pakistan, Vietnam and the Philippines.

Despite a report from an independent committee of scientist urging the ban of chrysotile asbestos this year, the effort to ban asbestos failed. Chrysotile asbestos is classified as a known human carcinogen by the International Agency for Research on Cancer and more than 40 countries have already banned its sale.

It has been reported that last year alone Canada sold $77 million to developing countries around the world. Unfortunately the cost for medical care caused by asbestos related disease far exceeds that value and the loss of life is priceless. Shielded by national laws the Canadian entities have protected themselves from recovery. Exporting disease for economic greed is beyond human comprehension and is shameful. Who are the Canadians kidding, asbestos kills!

Injured Workers' RICO Claim to Proceed Against Employer and Insurance Company

In a landmark decision of immense national significance, the US Sixth Circuit Court of Appeals ruled that a RICO claim brought by injured workers against their employer, insurance carrier and employer medical expert could proceed. Several injured workers brought the Federal Racketeer Influenced and Corrupt Organizations Act (RICO) against their employer, Crawford & Company and [cut-off treatment doctor] Dr. Saul Margules.

The allegations included that, ".....Cassens and Crawford deliberately selected and paid unqualified doctors, including Margules, to give fraudulent medical opinions that would support the denial of worker’s compensation benefits, and that defendants ignored other medical evidence in denying them benefits. The plaintiffs claimed that the defendants made fraudulent communications amongst themselves and to the plaintiffs by mail and wire in violation of 18 U.S.C. §§ 1341, 1343, which serve as the predicate acts for their RICO claims."

The decision authored by Judge Karen Nelson Moore held "...that plaintiffs’ RICO claims [may go forward] because the WDCA [Michigan Workers' Compensation Disability Act] does not preempt their RICO claims and because plaintiffs have sufficiently pleaded a pattern of racketeering activity given that reliance is not an element of a civil RICO fraud claim."

The Court concluded, "...Our conclusion that worker’s compensation benefits are not insurance and our conclusion that the WDCA was not "enacted . . . for the purpose of regulating the business of insurance," each independently foreclose the defendants’ argument that the WDCA reverse preempts RICO under the McCarran-Ferguson Act.

Of additional signifiance is that sitting by designation on the panel with Judge Moore and Judge Gibbons, was The Honorable Harold A. Ackerman, US District Court Judge for the District of NJ. Judge Ackerman has long and knowledge history of RICO actions was a former NJ Workers' Compensation Judge.

Brown, et al. v. Casses Transport Co., et al., 6th Cir. 2008, Decided October 23, 2008

CMS Publishes User Guide for Workers' Compensation Reporting

The Centers for Medicare and Medicaid Services (CMS) has now released a guide for madatory reporting of Workers' Compensation claims. The 60 page guide outlines reporting formats required pursuant to Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA) (P.L. 110-173).

The US Congress mandated reporting in legislation enacted late last year, 42 U.S.C. 1395y(b)(8). The burden falls under insurance carriers to report the claims data.

"The purpose of the Section 111 MSP reporting process is to enable CMS to correctly pay for Medicare covered items and services furnished to Medicare beneficiaries by determining primary versus secondary payer responsibility. Section 111 requires RREs to submit information specified by the Secretary in a form and manner (including frequency) specified by the Secretary. "

General Requirements

•Input Claim Files must include properly formatted header, detail and trailer records as defined in the file layouts provided.

•Input Claim Files must be submitted on a quarterly basis, four times a year.

•Files must be submitted within an assigned, 7-day submission period each quarter. File submission timeframes will be assigned after successful registration for Section 111 reporting.

•RREs will be assigned a Section 111 Reporter ID during registration which is to be used on all submitted files.

•Section 111 liability insurance (including self-insurance), no-fault insurance, and workers’ compensation RREs must submit their initial production Section 111 Input Claim File during the fourth calendar quarter (October - December) of 2009 during their assigned submission timeframe.

•RREs must register on the COB Secure Web site (COBSW) by June 30, 2009, and complete testing prior to submission of production files. (The earliest date for registration is May 1, 2009.)
•Files may be submitted via the COBSW using Hypertext Transfer Protocol over Secure Socket Layer (HTTPS) or Secure File Transfer Protocol (SFTP). As an alternative, RREs with large amounts of data may submit via Connect:Direct (formerly known as NDM) via the AT&T Global Network System (AGNS). To use the AGNS method, RREs must first establish an AGNS account in order to send files directly to the COBC over AGNS. RREs that currently do not have an existing AGNS account should contact one of the well-established resellers of AT&T services to obtain a dedicated or a dial-up access line to the AGNS VAN. RREs are encouraged to do this as soon as possible since this set up can take a significant amount of time.

•RREs must implement a procedure in their claims resolution process to determine whether an injured party is a Medicare beneficiary. RREs must submit either the Social Security Number (SSN) or Medicare Health Insurance Claim Number (HICN) for the injured party on all Input Claim File detail records.

•RREs’ initial file submissions must report on all claims, where the injured party is/was a Medicare beneficiary, that are resolved (or partially resolved) through a settlement, judgment, award or other payment on or after July 1, 2009, regardless of the assigned date for a particular RREs first submission. This includes resolution (or partial resolution) through one payment obligation (regardless of whether the payment obligation is executed through a single payment, a structured settlement, or an annuity) as well as those situations where there is a responsibility for ongoing medical services.

•RREs must also report on claims for which the RRE still has responsibility for ongoing payments for medical services as of July 1, 2009, regardless of an initial resolution (partial resolution) date prior to July 1, 2009). (See the associated special reporting extension later in this document.)

•If an RRE has accepted Ongoing Responsibility for Medical payments (ORM) on a claim, then the RRE must report two events; an initial record to reflect the acceptance of ongoing payment responsibility and a second (final) record to reflect the end date of ongoing payment responsibility with the corresponding end date reflected in the ORM Termination Date (Field 78). Because reporting is done only on a quarterly basis, there may be some situations in which the RRE reports the assumption of ongoing responsibility in the same record as which a termination date for such responsibility. RREs are not to submit a report on the Input Claim File every time a payment is made for situations involving ongoing payment responsibility.

•A Federal Tax Identification Number (TIN) Reference File must be submitted with the Initial Claim File containing records for each plan TIN submitted in Field 47 of Claim File detail records. For those who are self-insured, their TIN may be an Employer Identification Number (EIN) or Social Security Number (SSN) depending upon their particular situation.

•All combinations of Plan TIN and TIN Site ID submitted in Fields 47 and 48 of the Claim File detail records must have a corresponding TIN/TIN Site ID combination on the TIN Reference File.

•Subsequent Claim Files do not need to be accompanied by a TIN Reference File unless changes to previously submitted TIN/Site ID information or new TIN/TIN Site ID combinations have been added.

•Subsequent quarterly update files must include records for any new claims, where the injured party is a Medicare beneficiary, reflecting settlement, judgment, award, or other payment since the last file submission. However, if the settlement, judgment, award or other payment is within 45 days prior to the start of the 7-day file submission timeframe, then an RRE may submit that claim on the next quarterly file. This grace period allows the RRE time to process the newly resolved (partially resolved) claim information internally prior to submission for Section 111. For example, if the settlement date is May 1, 2010, and the file submission period for the second calendar quarter of 2010 is June 1-7, 2010, then the RRE may delay reporting that claim until the third calendar quarter file submission during September 1-7, 2010. However, if the settlement date is April 1, 2010, then the RRE must include this claim on the second calendar quarter file submission during June 1-7, 2010. Records not received timely will processed but marked as late and used for subsequent compliance tracking.

•Subsequent quarterly update files must include pertinent updates/corrections/deletions to any previously submitted records.

•Quarterly update files must contain resubmission of any records found in error on the previous file with corrections made. No interim file submissions will be accepted.

•If you have no new information to supply on a quarterly update file, you must submit an "empty" Claim Input File with a header record, no detail records, and a trailer record that indicates a zero detail record count.

•E-mail notifications will be sent to the Section 111 RRE contacts after a file has been initially processed and when a response file has been transmitted or is available for download.
•Each detail record on the Input Claim File must contain a unique Document Control Number (DCN) generated by the RRE. This DCN is required so that response records can be matched and issues with files more easily identified and resolved. It can be any format of the RREs choosing as long as it is not more than 10 alpha-numeric characters as defined in the record layout. Most of CMS’ current data exchange partners use some form of a Julian date and a counter as their DCN.

•The COBC will return response files to the RRE within 45 days of the receipt date posted for the input file.

Florida Supreme Court Rules $8/hour Attorney Fee Unreasonable

The Florida Supreme court ruled today in a workers' compensation case, that "....Inadequate fees and excessive fees are not reasonable attorney fees." It reversed the lower coourt ruling awarding an $8.00/per hour fee and upheld a counsel fee award of $16,000 for the trial work and left open an application for fee the appellate services.

Oversight Sought of NJ Workers' Compensation System

New Jersey lawmakers have not given up on their mission to legislate changes to the State's workers' compensation system which had become the subject of a series of investigative articles in the Star Ledger Newspaper. The investigative reporting revealed a series of problems that the NJ legislature has been challenged to address.

Senate Majority Leader Stephen Sweeney (D-Gloucester), has introduced legislation (S-1982) establishng the position of ombudsman modeled after the Oregon system.

CMS Schedules Another Teleconference to Address Mandatory Reporting

CMS has scheduled yet another teleconference to address questions about mandatory reporting requirements in workers' compensation matters. The program is in preparation ofImplementation of Medicare Secondary Payer Mandatory Reporting Provisions in Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007  (See 42 U.S.C. 1395y(b)(7)).

Participation is by telephone only:Wednesday October 29, 2008 1:00 PM – 2:30 PM Eastern Time - Call-in Line: 800-988-9534 -Pass Code:  NGHP 

A Time For Congress to Provide Compensation to 9-11 First Responders

The first responders to the horrific events of September 11, 2008 continue to be unsuccessful in obtaining NJ Workers' Compensation benefits. The Port Authority of New York and New Jersey (Port Authority), an agency formed as an Congressional Inter-State Compact, continues to prevail in the defense of claims brought by its employees, the first responders to the 9-11 tragedy.

Edward McQuade, a Port Authority police-officer, was assigned to the World Trade Center disaster site, "The Pit," for 8 weeks following the 9-11 event and allegedly developed symptomatically. Michael Ashton, also a Port Authority police-officer, worked at ground-zero for the 3 weeks (12 hour shifts) following 9-11, during the rescue and recovery phase complained of disability attributed to the post 9-11 tragedy.

The NJ Judge of Compensation denied their claims for benefits due to lack of objective evidence presented. NJ statutory language requires objective medical evidence to substantial the claims. The claims were denied without the benefits of medical monitoring being afforded for potentially latent medical conditions which are now being reported by medical investigators.

Unfortunately, the heroes of 9-11 continue to be caught in a Catch 22 situation. They lack the proof, based on scientific evidence, because the Federal government has not stepped up to the plate and done the responsible thing which is to adequately fund and co-ordinate medical monitoring, treatment and benefit programs for the 9-11 first responders and those caught the geographical web of the 9-11 scope of exposures.

These decisions scream out for Congressional oversight and advancement of legislation now pending in Congress to continue the program that the was started by the Mt. Sinai Hospital Environmental Sciences Laboratory and the NY City Fire Department. We owe our heroes nothing less than the care, concern and comfort that they gave to the victims and their families.

The Politics of Asbestos – US Government Failed the People Declares Senator Baucus

At a recent hearing of the US Senate Committee on Environment and Public Works, Senator Max Baucus presented a report revealing that the Federal government failed to take the appropriate action to declare Libby, Montana a public health emergency in 2002. The disregard of the federal government led to a lack of funding and manpower in cleaning up the asbestos contamination according to the Senator.

“EPA was going to let people know, but they were changed from their direction. A Public Health Emergency definitely would have helped--- it would have provided media and public attention. Without a Public Health Emergency, asbestos has not become a public health issue. That’s the politics of asbestos."

Libby Montana was the former vermiculite mine site of W.R.Grace & Company. Vermiculite is a form of asbestos, a known carcinogen. Grace recently agreed to globally settle all of its asbestos claims for $3 Billion.

The exposure to asbestos has been long linked to several disease including, asbestosis, lung cancer and mesothelioma. Asbestos exposure occurs when the toxic particles are ingested or inhaled into the body. When asbestos articles attach themselves to the lining of the lung, pleural mesothelioma, a fatal disease, results. The fibers may also attach themselves to the mesothelioma linings surrounding the heart and abdomen.

Libby Montana was declared a Federal Superfund site in 1999. Following that declaration, the Federal government has poured millions of dollars into cleaning up the asbestos-contaminated site. The failure to declare the site a public health emergency limited the Federal government’s role in providing even more extensive cleanup operations and healthcare to those residents who innocently suffered the avoidable exposure to asbestos.

Proposed CMS Legislation Cannot be Resuscitated Following the Wall Street Bailout

The efforts of the insurance industry to revive the previously fatally ill CMS reform legislation can be declared over and the life support disconnected following the Congressional actions to bailout Wall Street. The bill had been given a bounce, like a dead cat thrown against the ground, by the insurance industry, and some misinformed stakeholders, but economics and public opinion will not support the effort any longer.

The combination of the nationalization of AIG and the need for the US government to raise $700 Billion, makes it extremely doubtful that the Federal government is going to give the insurance industry another break other than to reinforce the country's need to insure banks and their spreadsheets.

CMS made it absolutely clear on a national teleconference on October 1st that it was holding workers’ compensation insurance carriers as sole Responsible Reporting Entities (RRE) and it wasn’t going to let them just walk away and re-delegate responsibility to others. CMS declared that workers’ compensation conditional medical payments remained a “pay and chase” proposition and that CMS was not allowing the responsibility of reporting to be shifted by the insurance industry.

The tightening of governmental scrutiny is now a predominate theme as the socialization of the insurance industry becomes more apparent and the existence of workers' compensation as a State based program becomes ever more threatened. Both sides of the political aisle are now being encouraged to look at insurance programs in a new light and make major adjustments as the economic viability of the country remains threatened. Giving the insurance industry another break by allowing them to shift responsibility back to CMS just isn't on the horizon and the idea can be finally buried.

Liberty Mutual's Rating Falls as the Workers' Compensation Industry Continues to Tremble

Standard and Poor's has announced that Liberty Mutual's rating has been lowered from A to A-. This happened as another rating agency, Fitch, placed Liberty Mutual Inter-company  Pool (on "Rating Watch Evolving" status. 

CMS Begins to Roll Out Details of The Mandatory Insurance Carrier Registration Progress-Teleconference Oct. 1, 2008

Implementation of the mandatory insurance company reporting process mandated pursuant to Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (See 42 U.S.C. 1395y(b)(7)&(b)(8) have now been unveiling by CMS. The process will require identification of Responsible Reporting Entities (RRE). A telephone conference call has been scheduled for October 1, 2008.

A Hurricane Over Florida Fees

The Supreme Court of Florida is about render a decision that may change the course of Florida workers’ compensation practice dramatically. In 2003 limitations were placed upon the attorney fee structure in Florida severely limiting the fees that claimant’s attorneys were authorized to receive. Murray v. Mariner, argued in April 2008, raises the issue that such limitations are denial of constitutional rights.

Is It Time For A Delay Of Game Penalty in Workers' Compensation?

Delay has always been a problem when injured workers need medical treatment. Traditionally, insurance companies, especially in hard economic times, have sought to hold onto their money and not distribute benefits. In a recent New Jersey workers' compensation case, the Appellate Division refused to allow the insurance company to "snow" the court with excuses on why it should not provide medical care to an injured worker.

A worker was seriously injured when he was struck by a forklift and was pinned against the wall by the machinery. An MRI indicated that the injured worker suffered a right hip anterior labral tear and the worker was conservatively treated with injections and chiropractic care. After nine months lost time he was able to return to work part time with a restricted limit to lifting of 20 pounds..

Six months after his return to work while merely walking through deep snow and he suffered a re-occurrence of the right hip pain and limitation of motion of the limb. Arthroscopic hip surgery was required. Prior to surgery, the workers' compensation carrier denied responsibility and refused to provide medical care.

The worker was required to file a notice of motion to seek reimbursement for medical treatment and temporary disability benefits. The respondent denied causal relationship raising the defense of an intervening superseding event. The respondent also claimed that the motion was moot since medical treatment had already occurred. The Division Workers' Compensation, issued a written decision in December 2007, 22 months after the respondent refused to provide medical treatment. An appeal was taken in nine months later, before the Appellate Division of the state New Jersey and the trial court decision was affirmed. The process took 29 months.

The Appellate Division in its decision did not address the issue of why the system takes a long, but it did comment upon the fact that the defenses raised by the respondent did not meet the threshold level to reverse the trial ltrial court's decision. The Appellate Division indicated that the motion was not moot merely because the medical treatment was subsequently rendered and that the employer did not establish that the injured workers suffered an independent and subsequent injury in February of 2006.

This case highlights the fact that the workers' compensation process has a major failing. While the State of New Jersey has perennially attempted to address these issues legislation has not been enacted to improve the system. The process itself is fraught with problems and does not keep up with the advancements in medical science and delivery of modern medical care in an expeditious and efficient manner.

The hurdles that the injured worker has to j navigate provide substantial barriers for injured workers and their advocates. In a system that was supposed to be remedial, efficient and summary, has now turned into a dilatory litigation machine utilized by employers in an effort to defeat claims. The same employers who complain that reimbursement of medical benefits through secondary payers such as the Centers for Medicare and Medicaid Services, have now made a simple process into a complex and painfully slow remedy. The practice of snowing the court with meritless defenses, without penalty, i.e. pre-judgment interest, contributes to further destruction in workers’ compensation program.

Cuccineillo v Sports Authority, 2008 WL 4329874 (N.J. Super. App. Div.) Decided September 24, 2008.

Newt Gingrich’s New Strategy for Workers’ Compensation

In a plan reminiscent of his earlier ideas, the former Speaker of the House is back again advocating an expanded Regan Administration economic plan which would shift the burden from employers and onto the employees. In an effort to eliminate litigation costs Newt Gingrich has proposed a plan that would eliminate employer contributions to employee benefits entirely.

He is suggesting that employees maintain their own economic funds to cover their own needs including medical care and presumably workers’ compensation type benefits. Gingrich is suggesting that employees be “self-insured” for injuries and illnesses and resulting disability freeing the employees of the need to contribute to insurance coverage or Social Security benefits at all.

A recent article in The American Spectator highlights Newt Gingrich’s thoughts concerning the shift of responsibility from the employer to the employee. This builds upon his previous suggestion which was to just eliminate workers’ compensation altogether.

Workers’ Compensation May Become a Creditor in an AIG Bankruptcy

The economically distressed insurer, American International Group (AIG), announced Sunday that it would attempt to obtain a $49 billion bailout form the Federal Government to avoid a complete financial collapse. AIG which represents one of the nations largest workers' compensation insurers and re-insurers is now facing severe economic consequences because of inadequate capitalization.

The US insurance industry represents a huge portion of the nation's financial assets and the instability of the market threatens the backbone of an unregulated workers' compensation national market, The AIG announcement comes on the heels of the failure of Lehman Brothers', the 4th largest financial institution in the United States, statement that it will be filing for bankruptcy after a weekend of failed negotiation seeking a bailout and government support. This cascading economic crash was further reflected by the Bank of America rush agreement to purchase Merrill Lynch for $53.03 billion within the last few days.

The economic woes of AIG, have been longstanding and were triggered by major investigations into the actions of its former chairman, Maurice "Hank" Greenberg's activities and the company's irregularities in the workers' compensation market. This sparked both State and Federal investigations into the company, but did not result in Federal regulation of the financial viability of the workers' compensation insurance program that are mostly State run and regulated.

State workers' compensation programs provide a huge amount of medical, temporary disability and permanent disability benefits to injured workers' and their families. While most of these benefit programs are financed by premiums collected from employers, the programs are administered and ultimately financed, administratively and fiscally, through insurance companies and reinsurers like AIG. State mechanisms that are triggered when the insurance companies or employers become insolvent are mostly if completely reliant upon other insurance companies and employer contributions.

The AIG collapse signals the need for Federal monitoring and regulation of workers' compensation benefits. It has been over 3 decades since a national commission was appointed survey the benefit program that was universally enacted by the States in 1911. The workers' compensation programs may at this time become nothing more than a bankruptcy creditor is a long and non-rewarding litigious process. The Federal Government needs to do more to honor the dignity of its workers.

NJ Workers' Compensation System Purportedly Under Investigation by State Commission of Investigation

New Jersey’s workers’ compensation problems are far from over as the NJ State Commission of Investigation (SCI) has purportedly launched an investigation of the NJ Compensation Rating and Inspection Bureau. The NJ system became the center of media attention following a Star Ledger newspaper series reporting serious problems.

The NJ SCI last performed a comprehensive review of the NJ Workers’ Compensation system 28 years ago following an investigative report in the State Ledger. At that time the SCI reported serious violations which resulted in judicial reviews and changes in the substantive and procedural aspects of the NJ workers’ compensation system.

The NJ Legislature expeditiously held hearings and passed legislation embracing some administrative requested changes, endorsed by Industry, which Governor Corzine has not acted upon. The finance bills and procedural oversight bills remain pending. The silence of the victims at the legislative hearings set an ominous tone to the earlier oversight hearings.

The release of data has always been problematic for the governmental agency charged with compensating victims and financed through insurance company premium payments and regulated by a rating agency that was entirely insurance Industry dominated. This new turn in developments possibly will shed some more light at what is happening in the dark closet.

Lehman Brothers Crisis May Meltdown State Workers’ Compensation Programs

The escalating financial crisis of Lehman Brothers [stock down 94% Jan-Sept 2008], may have a major impact on workers’ compensation throughout the US. Over this weekend the financial gurus scheduled meetings in an effort to avoid a complete crash of Lehman Brothers. In the meantime, the waves of this potential economic meltdown are sending hurricane type surges throughout the US workers’ compensation system.

Workers’ Compensation is an employer funded benefit program. Even self-insured companies purchase reinsurance for economic protection. The reliance upon insurance companies to operate workers’ compensation programs in the US is vital.

Major insurance companies such as AIG [stock down 79% Jan-Sept 2008], the nations largest insurer, are intricately involved in operating and funding the nation’s workers’ compensation program. AIG’s shares fell 30% on Friday as the Lehman Brothers fiscal crisis continued to escalate. Congress Waxman has expressed concern over AIG’s premium charges. AIG’s decline was based on their questionable credit default swaps, covering loses on securities based on mortgages.

As this economic crisis continues to domino the question will be whether State the insolvency mechanisms in place will be sufficient to react to keep the system afloat and provide an adequate benefit flow to the workers’ compensation system. It is doubtful that the beneficiaries of the compensation system, and its administrators, will think kindly of becoming creditor in a bankruptcy reorganization scheme paying ten cents on the dollar.

This unfortunate economic scenario brings new life to a call for the reevaluation of the entire failing US workers’ compensation program and the need to look at a Federal approach to co-ordination and delivery of benefits.

CMS Tightens Its Policy on Implant Devices and Restricts Early Termination of the WCMSAs

CMS, on August 25, 2008 issued its 11th Policy Memorandum on WCMSA (Workers’ Compensation Set Aside Accounts). If the pricing for implantable devices are NOT included in the WCMSA proposal then CMS will utilize its own pricing methodology. Additionally, CMS has rescinded its 7/11/05 memorandum and will no longer accept early termination of agreement requests.

The Integrity of Periodic Payments in Workers' Compensation

Yet again the basic theme of workers' compensation, "periodic payments," was reiterated by a Judge of Compensation. This philosophical premise, periodic payments, is the basic foundation upon which workers' compensation is structured and flies directly in the face of those who advance a legislative change to promote CMS workers' compensation set aside agreements.

In denying an application to commute an award, NJ Workers' Compensation Judge Philip A. Tornetta declared, "The essence of the scheme of the Workmen’s Compensation Act is to provide weekly compensation, in lieu of wages, to the injured employee during the period of disability and commutation of the payments is out of the normal course. Verra v. The Mayor and Council of the City of Hoboken, 70 N.J. Super. 422 (App. Div. 1961). In the exercise of his or her discretion when determining if commutation should be permitted or precluded, the compensation judge should be guided by the express language of N.J.S.A. 34:15-25. Harrison v. A & J Friedman Supply Co., 372 N.J. Super. 326 (App. Div. 2004). " See Piskoroz v. Beno Stucco Systems Corp. CP 2006-6559 (NJ Div of WC).

Note: Despite restrictions on confidentiality of records, the NJ DWC posts reserved, unpublished decisions on its web site.

Honoring Human Dignity in Workers' Compensation

In accepting the Democratic nomination for presidency of the United States, Barack Obama declared that he envisioned “….an economy that honors the dignity of work.” The State legislatures had many goals in mind when they crafted a system for compensating injured workers.

One of the goals was to relieve the injured worker of the burden of paying for their own medical care. The pendulum is swinging back to the 1911 era when the majority of workers are no longer covered for medical care. Uncompensated medical care is now a $42.9 Billion burden on governmental programs.

Generally speaking workers’ compensation was to provide a summary, efficient and economical administrative system of benefits for injured workers. One of the program’s major purposes was to avoid the tedious, costly and unpredictable results of the civil justice system. State laws created a system of a certain and reliable flow of benefits which gave support and dignity to the workforce that complemented their strong work ethic.

As the workers’ compensation expanded, salaries, pensions and benefits became unstable. The process became entangled into legalities and the assertion of a growing number of defenses became more troublesome. Consequently the system became entangled in the tedium of collateral issues and escalating delay.

This progression of events impacted the system with resulting frustration and the workers with a loss of self-esteem. It is time, that on this Labor Day, we reflect on the past and follow the vision of the future and embrace the concept, that the dignity of work and workers, should be honored.

NY Lowers Premiums 25% in Two Years!

Governor Patterson announced that premiums have been lowered 25% for workers' compensation in New York over the last two years. Just how did NY do it?

They claim reduced claims, reduced administrative costs and an increase in weekly benenfits for a few. What they didn't mention is that NY is probably delivering lower benefits with slower service than before.

The ultimate consequence is that line for benefits becomes longer and the ultimate benefit is still capped at an incredibly low rate of $550. per week. Additionally, the NY State system is now cracking down on liberal impairment ratings and medical providers, modalities and drugs for injured worker.

The New York Alliance for Injured Workers declared, "The admirable goal of the 'rocket docket' regs was to speed the resolution of disputed workers' compensation claims. However, the new regs would do just the opposite, and cause further delay in the in receipt of benefits by injured workers."

Lower premiums translate to a lower performance and benefits to injured workers. A studious change evaluation of changes should be required in advance of change is warranted. NY must become more relastic of the consequence of changes.

Rate Your Workers' Compensation Doctor?

The US Department of Health and Human Services (HHS) has initiated serveral programs to improve the delivery of medical care. HHS no longer wants to pay hospitals for "medical mistakes" and has now announced a program to rate the medical facilities.

“CMS’ goal for updating and enhancing the Hospital Compare Web site is to provide usable and accurate information about hospital performance to providers and communities that will encourage hospitals to excel in the quality of care they provide,” said CMS Acting Administrator Kerry Weems. “With these new enhancements, consumers and health care providers will be able to look at individual hospital mortality scores. We hope that this new information will cement the Web site’s role as a key driver in improving the quality and reliability of care in the nation’s hospitals.”

This interesting concept is one that may interest the workers' compensation insurance companies as well as governmental agencies that regulate the programs. The opportunity to provide a comparison of services may likely lead to the delivery of better medical care for injured workers.

Cosmetic Workers Suffer Exposures at Work

Nail salon workers are now reporting an increase in symptoms frequently sought in serious occupational exposure claims. In a series of news articles appearing in West coast publications, it has been reported that nail salon workers have been exposed to hazardous chemicals in cosmetic products.

Increasing evidence has become available that reflects that cosmetic workers had been exposed to hazardous and carcinogenic substances, in an unregulated environment, for prolonged periods of time, that may result in occupational asthma conditions and even breast cancer.

"Every day, nail salon workers are exposed to a wide array of carcinogenic chemicals," said Migden, a San Francisco Democrat chair of the Senate's Labor and Industrial Relations Committee. It has been reported that some of the substances used in US salon have been banned already in Europe.

The American Public Health Association will be holding some additional seminars on this subject this fall directed their attention to increase cancers that have been reported by former cosmetic workers. The APHA reported that 15% of the salon workers that were surveyed presented with complaints similar to asthma, eczema, and hives and 30% claimed they had hay fever.

Fatal Injuries Decline to The Lowest Level in 36 Years

The US Bureau of Labor Statistics has announced that that number of fatal on the job injuries has dramatically declined dramatically. It is now at the lowest level in any year since it began reporting statistics in 1992.