Building A Workers’ Compensation System That Works

State workers’ compensation systems are beginning to suffer from the impact of the national economic downturn. Economically induced factors are compounding the underlying issues that previously generated a growing level of critical stagnation. The combination of this dynamic now threatens the very core of the workers' compensation system and endangers its extinction.

Prior to the accelerated national economic downturn, the patchwork of State and Federal compensation programs were besieged by an assault of complex legal issues emerging during the last decade. These included: the reimbursement of collateral medical source issues, ie. CMS and MSP (Medicare Secondary Payer Act) ; greater difficulty in litigating complex scientific issues; a costly and inefficient medical benefits delivery system and a transition of “fault” into the administrative system.

As the national economy began to fail there was a surge of new administrative issues challenging the programs. These include: higher unemployment; self-imposed limitations on administrative cost by the States; and the increase of potential insolvency by the insurance industry. The filing of claims in NJ over the first 3 weeks of 2009 have already reflected a 27.5% decrease which is projected over the last reported year, 2007. Judicial salaries have been frozen and new State employees have been taken out of the State pension system. State budgetary freezes have caused a reduction of the hiring of critically needed new personnel such as the appointment of Deputy Attorney Generals to represent State funds, ie. Second Injury Funds. Hearing calendars have been reduced because of lack of personnel to appear.

Banking and investment house scandals continue. Insurance carriers have been threatened by insolvency including the giant AIG which has continued to require the infusion of “bail out” capital to float. Liberty Mutual has announced the plan to sell certain of its markets including the Wausau line of business.

As President Barack Obama reported, “The economic news has not been good.” The hope of a new beginning that prevailed at the recent inauguration signals creative opportunities for the reinvented and modernization of the entire workers’ compensation system. The implementation of technology and video conferencing initiated in Social Security hearings may be required to be utilized to lower expenses and increase efficiency. It is cheaper for the government to move electronic images rather than personnel. Technology advanced hearing systems and claims processing will be required to reduce costs and increase efficiency. Instead of hiring more personnel and establishing more offices, technologically advanced centralized hearing centers will be utilized. These will result in a lower carbon footprint and lower administrative costs.

Workers’ Compensation is not only an economic issue, it is also a human issue. Medical delivery and its associated costs remain problematic in the present workers’ compensation system. A single payer national medical insurance system program is a viable solution. Immediate delivery of medical benefits to injured workers will result in an administrative cost saving and allow for the introduction of medical monitoring, prevention programs and research grants to treat and cure industrial disease. The new system will require greater transparency and accountability.

The failing national economy is a catalyst for change. The ailing workers’ compensation program must obtain the course of treatment that it requires to rebound into a healthy and robust system once again.

6th Annual Top Issues in Workers’ Compensation Law - Save the date!

6th Annual Top Issues in Workers’ Compensation Law
Wednesday, October 7, 2009 5pm-9pm
The Law Center New Brunswick NJ

Moderator

Jon L. Gelman, Esq.
Jon L Gelman LLC

Presenters

Hon. Peter J. Calderone
Director and Chief Judge
NJ Division of Workers' Compensation

John F. Burton, Jr.
Professor Emeritus, School of Management and Labor Relations (SMLR),
Rutgers University

Christine DiMuzio Sorochen, Esq.
Hoffman DiMuzio

Jerome L. Eben, AIA. PP. CID
Jerome Leslie Eben – Architect
Past President of the NJ Society of Architects

John J. Jasieniecki, Esq.
Green Jasieniecki & Riordan LLC

Nancy J. Johnson, Esq.
Weston Stierli McFadden & Capotorto

Employee Exposed to Perfume at Work Allowed Workers' Compensation Benefits

A licensed practical nurse who suffered from preexisting pulmonary disability was permitted to recover benefits against her employer when a co-employee sprayed perfume at work. The NJ Appellate Division ruled that a licensed practical nurse was allowed to seek benefits when exposed to an employee's perfume even though the injured worker came to the employment with severe pre-existing obstructive lung disease.

The 64 year old nurse, who had smoked one pack of cigarettes daily for 43 years, had a severe reaction when a coworker sprayed herself with perfume on two occasions. The nurse subsequently became oxygen dependent and never returned to work.

The court reasoned in its opinion that the accident occurred in the course of her employment and arose out of her employment. The exposure at work was deemed a "neutral risk," one that was out of the control of the employee. The court determine that had she not been at work the nurse would not have had this exposure and reaction. The co-employee actions injured the nurse the court held and that the employee, "...had to breathe in order to fulfill her contract of service, contaminated by a co- employee, was a condition of the employment for Sexton and thus a risk of 'this' employment for her." The court reasoned that the injury was not self-inflicted and the employee takes their employees as they find them.

The Second Injury (SIF) was also held responsible for the pre-existing COPD condition since was the intent of the SIF to encourage employers to hire workers' with pre-exisiting conditions. In this case the pre-existing condition was not the sole cause of the injury; therefore, making the SIF liable also.

Sexton v. County of Cumberland/Culberland Manor, NJ App. Div., A-6414-06T1 Decided Januray 9, 2009).

Social Security Judges (ALJ) Productivity Report

Search SSA judges’ (SLJ's) decisions online.

In response to a Freedom of Information Act request by The Oregonian, the Social Security Administration released the production numbers and approval rates for all of its administrative law judges.

The agency released complete reports for 2005, 2006 and 2007. The table for 2008 covers most — but not all — of the year.To search the database, enter a judge’s name or select a year. You can sort the table by any of the categories by clicking on the category header.

Click here to access the database

http://bridge.caspio.net/dp.asp?AppKey=64ae0000d1i0d2c9f2d8i9a3f2h4

The Office of Inspector General released a report in April 2008 highlighting the deficiencies and the delay in the hearing process. As of that date there were 773,999 cases awaiting a decision and the average processing time was 505 days.

NJ Charges 11 Corporations for Massive Workers’ Compensation Insurance Fraud

The NJ Attorney General announced that seven people and 11 corporations were charged with a massive plan to commit workers’ compensation fraud that has allegedly netted the companies over $1.5 million. The indictments against the corporations and individuals were made available yesterday.

Anne Milgram, NJ Attorney General, and Deborah L. Gramiccioni, Criminal Justice Director, informed the public that, "The indictments allege that the defendants lied on insurance applications and failed to remit insurance premiums to the insurance companies, instead keeping the money for themselves. It is also charged that the defendants laundered money so that the scheme would go undetected. As a result, many people were allegedly left without workers’ compensation insurance."

"The indictment alleges that between June 2003 and September 2007, Sciarra, a former licensed insurance producer, and his co-defendants fraudulently avoided premium payments for workers’ compensation insurance they obtained for clients. The defendants allegedly submitted falsified applications for workers’ compensation insurance by misrepresenting and omitting information in the applications. These misrepresentations included understating the number of employees leased, the kind of work those employees did and the number of past injury claims involving the employers, all factors that are relevant to determining the cost of workers’ compensation insurance. The defendants also are charged with failing to turn over money that was provided by clients of the PEOs to pay for insurance premiums."

The State of New Jersey has recently enacted legislation expanding its insurance fraud program. In December 2008 the NJ legislature passed and the Governor signed Senate Bill No. 1918 which requires the Insurance Fraud Prosecutor to establish liaison with the Department of Labor and Workplace Development and authorizes its investigation of cases for failure to provide workers' compensation coverage.

Federal Court Rejects Review of Workers’ Compensation Judge’s Alleged Gross Judicial Misconduct

A complaint filed by an injured worker who sought Federal Court review of a NJ Workers’ Compensation Judge for alleged gross misconduct was dismissed. The Court held that it lacked the authority to review the matter.

The injured worker, who had filed an action for temporary and medical benefits before the NJ agency, was previously awarded by the Division of Workers’ Compensation 20% of the right wrist and 20% of permanent partial total for residuals of a “contusion, strain, tendonitis, and synovitis of the hand. "

In a complaint filed in the Federal Court, pro se, the injured worker alleged, “…Plaintiff asserts that the actions and inactions of the Department of Labor, the Division of Workers' Compensation, and specifically the Workers' Compensation judges violated her right to due process of law under the Constitution of the United States …..Plaintiff sought damages in the amount of $5 million.”

The complaint alleged, among other items, that, "....the Workers' Compensation hearing and trial judges engaged in gross judicial misconduct by: (1) conducting hearings in Plaintiff's absence, (2) adjourning hearings without good cause, (3) relying on fraudulent and factually inaccurate medical evidence to reach its determination, and (4) ordering an independent medical exam without Plaintiff's consent and without a court order."

Judge Greenway, rejected review of the matter based on the Rooker-Feldman doctrine. “The Rooker-Feldman doctrine, derived from Rooker v. Fidelity Trust Co., 263 U.S. 413, 44 S.Ct. 149, 68 L.Ed. 362 (1923), and District of Columbia Court of Appeals v. Feldman, 460 U.S. 462, 103 S.Ct. 1303, 75 L.Ed.2d 206 (1983), bars lower federal courts from exercising jurisdiction over an action that is “the functional equivalent of an appeal from a state court judgment.” Marran v. Marran, 376 F.3d 143, 149 (3d Cir.2004). The Supreme Court restated the Rooker-Feldman doctrine in Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 125 S.Ct. 1517, 161 L.Ed.2d 454 (2005).”

The court reasoned , that “Whether the Workers' Compensation judges erred in holding a hearing in Plaintiff's absence, adjourning the hearings without notifying Plaintiff, or relying on “fraudulent” evidence at trial is an issue that must be decided by the New Jersey courts through the appeals process. In short, Plaintiff failed to avail herself of the proper appellate process.”

Hogg’s v. New Jersey, 2008 WL 5272372 (D.N.J. 2008) Decided December 16, 2008.

We are moving....January 1, 2009

JON L GELMAN LLC
Attorney at Law
1700 State Route 23 North Suite 120
Wayne, NJ 07470-7537
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e-mail: jon@gelmans.com
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