CMS/MSP Not Going To Require Pre 12/5/1980 Exposure Reporting, BUT....

CMS will not require reporting of claim data where the exposure occurred prior to 12/5/1980 (Effective date of the MSP Act), but if exposure continues after that date, that is another story.

"We were asked about the 12/5/80 date for liability and no fault and the date of incident. Yes we say that in general CMS is determined that it won’t pursue recovery if the date of CMS defined date of incident is prior to 12/5/1980. But then we give an example of a situation with a continuing DOI specifically with respect to exposure.

"If it’s easier for you to think of it that way, if you have a situation with exposure and that exposure continues on or after 12/5/80 it’s really like you’ve got a series of continuous multiple DOIs and we only require you to report the first DOI but yes we do have a recovery claim in that situation.
Transcript of Teleconference 3/24/1980, page 12

CMS/MSP Requires Deceased Beneficiary Information

CMS has announced that workers' compensation information concerning deceased beneficiaries must be reported by insurance carriers.

"We received another question about deceased beneficiaries, were they covered under the reporting; yes they are. If someone is a Medicare beneficiary or was a Medicare beneficiary at any of the time period issue the claim has to be reported if it meets the other criteria."
Transcript of Teleconference 3/24/09, page 5

Death benefits to dependents, are those reportable? Again you go back to what we’ve referenced in the manual where something that doesn’t claim or release or have the effect of releasing medicals with respect to the beneficiary does not need to be reported. But if it does any other those things then yes it needs to be reported.
Transcript of Teleconference 3/24/09, page 12

NY Times Series Calls The Compensation System "A Costly Legal Swamp"

In another of a series of articles, the NY Times highlights the serious procedural and emotional issues involved in navigating the present workers' compensation system.

“This is a terrible thing to say,” said Dr. Robin Herbert, co-director of the occupational and environmental division at Mount Sinai Medical Center, “but if I had a health problem at work, I’m not sure I’d file a workers’ comp claim. It’s the Wild West of health insurance.”

http://tinyurl.com/dyp4c7

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.

Getting Lead Out of the Workplace...Finally

A recently issued report by the School for Public Health of the University of California at Berkeley, calls for a new effort to reduce lead exposure in the workplace. The organization, Health Research for Action, at UC Berkeley concluded that low to moderate levels of lead exposure are a major hazard to both workers and their household contacts.

The report concludes: "Much more is known today about the health effects of lead than was known when OSHA enacted its lead standards in 1978 (for general industry) and 1993 (for the construction industry). Research has identified significant health risks at low to moderate levels of lead exposure that were formerly without recognized harm. Because lead can seriously impair cardiovascular health, cognition, reproduction,and kidney function, the persistence of elevated blood lead levels in workers may be a significant contributor to chronic illness and societal health care costs."

CMS Publishes a User Manual for MSP Reporting

The Centers for Medicare and Medicaid Services (CMS) has now published a User Manual. The manual details the federal procedures that will be utilized to implement Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA Section 111).

July 1, 2009 is the implementation date for mandatory reporting in workers' compensation claims. Section 111 adds reporting requirements and does not eliminate any existing statutory provisions or regulations. CMS' existing processes, including for example, CMS’ process for self-identifying pending liability insurance (including self-insurance), no-fault insurance, or workers’ compensation claims to CMS’ Coordination of Benefits Contractor (the COBC) or the processes followed by CMS’ Medicare Secondary Payer Recovery Contractor (the MSPRC) for MSP recoveries, remain undisturbed. The Act does impose penalties for noncompliance.

CMS has announced that it will offer a "query function" to required reporting entities to ascertain whether or not the claimant is a Medicare beneficiary. The query will be based upon identifying data including: HICN or SSN; first initial of the last name; first 6 characters of the last name; date of birth and gender.

Yet to be determined are a host of reporting issues including:

• Interim dollar reporting threshold for "Total Payment Obligation to the Claimant" (TPOC) amounts -- CMS’s decision on this issue will be released separately in the near future.
  
• Interim dollar reporting threshold for "Ongoing Responsibility for Medicals" (ORM) -- CMS has this issue under consideration.
  
• Further information regarding reporting for mass torts – This issue is still under discussion.
  
• ICD9 Codes – CMS is reviewing the codes to determine if there are certain codes which Responsible Reporting Entities (RREs) will be prohibited from submitting.
  
• Examples regarding "Who is the RRE" -- CMS is reviewing additional examples submitted by the industry for possible inclusion in the User Guide.

Private Claim for Medicare Reimbursement Dismissed

A private suit, brought by a consortium of plaintiff entities and individuals seeking reimbursement of Medicare for the failure of the tobacco companies’ to repay The Centers for Medicare and Medicaid [CMS] for benefits, was dismissed by a Federal. The parties had sought to recovery benefits and damages against Philip Morris USA Inc.

The Court reasoned that the law suit did not demonstrate the tobacco companies’s responsibility for the payment of a Medicare beneficiary’s medical costs. The plaintiff’s had attempted to rely upon the opinion in a bench trial instituted by the Federal government under the RICO Act.

The Federal Court judge held that the defendants, the tobacco companies, “are not subject to suit under the MSP unless and until they are found responsible for Medicare costs and they fail to reimburse Medicare within 120 days after that responsibility first arises.” The suit by the private parties was dismissed.

National Committee to Preserve Social Sec. and Medicare v. Philip Morris USA Inc., ___ F.Supp.2d ___, 2009 WL 590573 E.D.N.Y., March 05, 2009.

Medicare Reporting - $1,000 fine/claim/day

The failure to report claims to Medicare could cost insurance carriers $1,000. per day per claim. The penalties are discussed in a very informative article authored by Stephanie Stacy and Jill Schroeder that appears in The Nebraska Lawyer, March, 2009. A copy has been posted to the Yahoo Workers' Compensation Blog.

The article:
http://tinyurl.com/bthcfm

AMA Guides Tossed Aside in California

The California Workers Compensation Appeals Board has ruled that the 2005 version of the AMA Guides to Impairment need not be followed. The Court ruled:

(1) the AMA Guides portion of the 2005 Schedule is rebuttable;
(2) the AMA Guides portion of the 2005 Schedule is rebutted by showing that an impairment rating based on the AMA Guides would result in a permanent disability award that would be inequitable, disproportionate, and not a fair and accurate measure of the employee’s permanent disability; and
(3) when an impairment rating based on the AMA Guides has been rebutted, the WCAB may make an impairment determination that considers medical opinions that are not based or are only partially based on the AMA Guides.

Almarz v Environmental Recovery, et al
Case No. ADJ1078163 (BAK 0145426) Decided Feb. 3, 2009

AIG Up For Sale

AIG, the distressed insurance company, is expected to announce a $60 Billion quarterly loss. The announcement, anticipated shortly, follows three separate failed efforts by the Federal Government to rescue the company.

Creditors of the company, and the US Government, have reached a four new deal to bailout the company. This time the company is being structured to be sold. It has been reported that the property and casualty lines maybe the first to go. 

The US Treasury and AIG issued the following statement:

"The steps announced today provide tangible evidence of the U.S. government’s commitment to the orderly restructuring of AIG over time in the face of continuing market dislocations and economic deterioration. Orderly restructuring is essential to AIG’s repayment of the support it has received from U.S. taxpayers and to preserving financial stability. The U.S. government is committed to continuing to work with AIG to maintain its ability to meet its obligations as they come due."

Is The Recovery Of The Workers’ Compensation System An Illusion?

The present economic downturn has been compared to the Great Depression of the 1930’s or the recession of the 1980’s. The factors that existed during those financial cycles need to be compared to the present political and economic dynamic to determine whether or not history is repeating itself. Analysis of those two periods provides an insight as to whether or not there will be a rebound or surge of claims in the future.

The depression of the 1930’s occurred at a time when the workers’ compensation program in the United States was in its infancy. The benefits delivered were very limited. Occupational diseases were not included in most acts, the population had a lower life expectancy, early retirement plans did not exist, social security was not yet enacted, and Medicare was only an idea. The federal government poured dollars into the economy to construct public works [WPA] projects while limiting private debt. A consumer based economy didn’t exist at the time of the Great Depression.

Likewise, the recession of the 1980’s had its own characteristics. During the 1980’s, the populations mostly affected by layoffs were those who were the labor force of post-World War II. The workers of that generation suffered from occupational exposures to many deleterious and carcinogenic substances. The occupational diseases were latent in manifestation and epidemic in proportion. Laid-off workers who became victims of the recession of the 1980’s participated in a surge of litigation, both workers’ compensation claims and third-party actions against the manufacturers of toxic substances. Litigation snowballed against , including asbestos manufacturers, suppliers and distributors because of the minimal money recovered in the ordinary workers’ compensation claim. Asbestos litigation became “the longest mass tort in history.” In the years following the 1980’s the many workers separated from their jobs did not return to employment. Instead they collected both workers’ compensation benefits and Social Security disability.

The medical costs incurred, due to their occupational illnesses, were intentionally shifted from the workers’ compensation program to the Social Security Medicare program. The Medicare Secondary Payer Act was enacted by Congress in 1980 to end the cost shifting tactics by employers and their workers’ compensation insurance companies programs, Medicare and health group coverage, and pension offsets.

The current workforce, now being laid-off, is composed of an entirely different demographic than what existed in the 1930s and the 1980s. The social and political factors at the present time are far different from what was facing the workforce of the prior recession/depression years. The US Bureau of Labor Statistics reported, “In January 2009, the unemployment rate of persons with a disability was 13.2 percent, compared with 8.3 percent for persons with no disability, not seasonally adjusted. The employment-population ratio for persons with a disability was 20.0 percent, compared with 65.0 percent for persons with no disability.” The elderly have now been designated as a “new class of workers” as they return to the labor market out of economic desperation. The numbers of unemployed workers who are 65 years old and older now in the workforce, compared to a decade ago, have increased to 7.3% from 4.7%.

The census of workers currently without employment opportunities include significant numbers of aging baby boomers who were about to seek retirement while looking forward to the "golden years." The erosion of planned retirement savings requires that many older workers now return to work. There is a reluctance to file claims. Therefore, fewer injured workers now seek total disability payments under workers’ compensation. The stagnation of the administration of the workers’ compensation system makes it even more difficult for the elderly who are injured to navigate the system. This only adds to the claimant’s frustration and encourages a greater reluctance to file a formal claim for benefits.

Some workers’ compensation insurance companies now involved in the compensation system have been nationalized by the federal government to the various stimulus and bailout programs. They lack funds to remain economically viable with out further insurgence of capital from the federal government. The federal government is now a stakeholder in the process. Self-insured employers are becoming financially weaker. Corporate assets have been minimized by lack of credit and the massive economic stock value decline. Municipal entities and others involved in joint insurance funds (JIFs) are now having difficulty in maintaining economic viability. Because of the lack of tax revenues and federal support, State and local communities are on the verge of bankruptcy.

The present ills of the American workers’ compensation system mirror the economic woes of the national economy. The last decade has demonstrated an accelerated decline in the functioning of the system. It is reflective of what Paul Krugman, Professor of Economics and International Affairs at Princeton University, commented in the NY Times, that Americans are having financial “illusions.” “The bottom line is that there has been basically no wealth creation at all since the turn of the millennium: the net worth of the average American household, adjusted for inflation, is lower now than it was in 2001.” The workers’ compensation system is so bogged down in increasing medical debt that it is unable to deliver benefits efficiently. The present compensation system can’t be relied upon to rebound.

Compounding this downturn in the financial sector is the fact that workplaces have become safer. Over the years there has been a decline in fatalities as reported Bureau of Labor Statistics National Census of Fatal Occupational Injuries. As the United States becomes more of a service-based economy with a dwindling manufacturing sector, less injury risk exists in the occupational sector. The workplace has become safer and there are fewer serious injuries and less occupational illness.

The corporate downturn has been reflected by the implosion of many defense law firms who have reduced their staffs. Over a thousand lawyers were laid-off in a single day by major defense firms. The legal market restructuring is the result of a domino effect of the downsizing of corporate America. Representing injured workers and defending compensation claims on behalf of corporate America has taken a dramatic downturn. The trend is toward less attorney participation in the present system. Even attorney layoffs have become epidemic as the economic downturn intensifies.

Additionally, workers’ compensation programs have been subject to insurance industry targeted reform. The yet number of claims, eligible for benefits that would require legal representation has declined substantially as the California wave of reform swept towards the east coast. As the economies of the States shrink, so do the dollars available to operate the administrative programs for injured workers. Workers’ Compensation hearing offices in California will be closed two days per month and in New Jersey, a state that has already imposed a hiring freeze, is about to similarly close State offices.

The workers’ compensation system, based upon new national social and economic characteristics is already being re-crafted into a new program requiring less need for litigation support. Unlike the Great Depression of the 1930’s and the recession of the 1980’s, the present downturn in workers’ compensation claims activity is not anti-cyclical. It is an illusion of grandeur to believe that the present workers’ compensation system will recover or rebound in its present format. A national universal medical program will ultimately embrace the compensation delivery system and determine the future destiny of workers compensation.

The Right to Choose Your Doctor

Selecting your own treating physician in a workers’ compensation claim may soon become permitted nationally. A movement in Iowa has now sparked national interest to permit employees the right to choose their medical provider.

Coupled with the effort for employees to seek freedom of choice “to form unions and bargain for a better life” is the effort to seek freedom to choice a medical provider in a work-related accident or occupational illness.

The effort has been supported by an interest group formed on Facebook, “Iowians for Workers Choice of Doctor.” “Because life is about more than just work...In Iowa, if you are injured on the job, employers can decide which doctor treats you. You choose what foods you eat and which exercises you do, but they can choose who is best to care for you.”

Iowa Senate Bill 1119 would allow injured workers to designate their choice of physician. “Too much has been made of how much this is going to cost a company and not enough on how this affects an individual and their personal lives,” said Democratic Sen. Bill Dotzler of Waterloo.

The vast majority of states allow workers the freedom to choose their own treating physicians. Studies have shown that employees who have the right to select their own physician have more confidence in their medical care and have a more successful recovery.

The delivery of medical services continues to be a major problem in the national network of workers’ compensation systems now in place since 1911. Federal initiatives for a national healthcare system are under consideration that would incorporate the entire workers’ compensation system’s medical delivery system.

CMS to Provide Query Access Through Mandatory Reporting

At a recently moderated telephone conference session CMS announced that beneficiary verification would be available through a query function on its new database system to determine eligibility Medicare beneficiary status. The system will be in response to new insurance carrier mandatory reporting procedures that have been Congressionally imposed. The query will be based on 4 basic criteria including: Social Security number; data birth; name or gender. The verified Social Security information will be provided for all criteria except Social Security numbers and a corrected format.

CMS will not provide outstanding conditional payments or other data by use of the reporting system. Individual beneficiaries may be able to find this information upon governmental website that allows for individual beneficiary access through http://www.mymedicare.gov/. That site is accessible only by beneficiaries.

The federal is agency is planning for the release of a User Guide prior to the actual date of mandatory deployment and activation of the federal reporting site. Activation is anticipated in July 2009.

WR Grace Officials on Trial

The focus of litigation against WR Grace has now shifted to the civil courts in a trial against 5 former company officials for damages resulting from the death and harm caused its former workers. In Libby Montana, WR Grace mined asbestos (vemiculite) ore that ultimately was manufactured into insulation and other products.

Five former officials of WR Grace, an asbestos producer, are standing trial for concealing information from the former employees and for not taking the appropriate action to protect their health. The criminal trial has been delayed since 2006 because of pending appeals.

The company has recently filed an amended reorganization plan on Feb. 3, 2009. The plan contains the following comments about workers' compensation claims:

WR Grace - Proposed First Amended Reoganization Plan 2-3-09
"3.1.4 Class 4. Workers’ Compensation Claims
(a) Classification Class 4 consists of all Workers’ Compensation Claims against the Debtors.
(b) Treatment This Plan leaves unaltered the legal, equitable, and contractual rights to which each such Workers’ Compensation Claim entitles the Holder of such Workers’ Compensation Claim. For the avoidance of doubt, in no event shall any of the Sealed Air Indemnified Parties or the Fresenius Indemnified Parties have any liability with respect to any Workers’ Compensation Claim.
(c) Impairment and VotingClass 4 is unimpaired. The Holders of the Workers’ Compensation Claims in Class 4 aredeemed to to have voted to accept this Plan and, accordingly, their separate vote will not be solicited."

Medical Costs in Comp Higher Than Group Health

A report issued by NCCI concludes that medical costs in Workers' Compensation were higher in some instances than in Group Health Plans.

The main findings were: 

1.  For comparable injuries, when WC pays higher prices than GH for specific services, those services tend to be used more often in WC than in GH 
2.  The proportion of WC medical cost that is subject to physician fee schedules is declining by about one percentage point per year 
3.  The Medicare fee schedule is very useful as a starting point for the design of WC medical fee schedules, but has notable shortcomings for WC, including too little emphasis on return to function and too little sensitivity to cost differences among states 
4.  Particularly in specialty areas such as surgery and radiology, fee schedules can result in WC reimbursement rates that are especially high compared with GH  
5.  While fee schedules tend to concentrate reimbursements at the maximum allowable rate, there are many payments that are either greater than or less than the maximum allowable rate 
6.  Reimbursement for care that physicians provide at hospitals and other facilities is more likely to exceed the fee schedule than care provided in their offices. This is partly because the fee schedule need not always apply when facilities bill for these services.  
7.  A higher proportion of reimbursements are at or below the fee schedule when WC medical services are provided through a network as opposed to when they are not. 

California Closes Division of Workers Compensation 2 Days Each Month-Lack Revenue to Operate

Citing lack of State revenue, Governor Schwarzenegger issued Executive Order S16-08, on Dec. 19, 2008, ordering the California Division of Workers' Compensation close the first and third Friday of every month, beginning on Feb. 6, 2009, and ending on June 30, 2010.

Legal documents that would otherwise be due on a furlough day will not be due until the next open business day (normally the next Monday, but Tuesday if the Monday is a holiday).

Pittsburg Corning to Plans to Pay Asbestos Victims $825 Million

PPG Industries (Pittsburg Corning Corp.) and its insurers plan to pay out millions of dollars to victims of asbestos disease. In a bankruptcy reorganization plan filed with the Court for its approval, it was announced that PPG intended to pay out $825 Million in cash over the next 15 years.

PPG had filed for bankruptcy protection in 2000 under because of alleged potential asbestos lawsuit liabilities. Asbestos fiber, which the company supplied and manufactured, has been linked to asbestos related diseases in former asbestos workers, users and household contacts of former workers, including: asbestosis, lung cancer and mesothelioma.

"While we continue to believe PPG is not responsible for injuries caused by Pittsburgh Corning products, this amended plan would permanently resolve PPG's asbestos liabilities associated with Pittsburgh Corning," James C. Diggs, PPG's senior VP, general counsel and secretary, said in the statement.

The trust would be funded with $1.6 Billion in cash payments through 2027. Approval of the reorganization plan is required.

The New Economic Recovery Act Fails to Include Workers' Compensation Privacy Needs

The new stimulus package, The American Recovery and Reinvestment Act [ARRA], fails to protect medical record privacy for injured workers. The new economic recovery package includes an appropriation of $19 Billion for the expansion of electronic health records [EHR] by funding intellectual technology. The legislation fails to include an essential prohibition on the dissemination and misuse of workers' compensation medical records.

The spokesperson for the Center for Healthcare Transformation and the Gingrich Group, stated that, "Privacy cannot be compromised, but neither can we compromise progress in pulling our health care system out of the technological Stone Age," ... "We need to find the right balance between privacy at all costs and progress at any cost."

The legislation should be expanded to protect the privacy of workers’ compensation medical records from misuse use. A coalition of legislators, including Rep. Edward J. Markey, Massachusetts Democrat, expressed deep concerns. Markey stated, "Medical information is probably the most sensitive and personal information that we have about ourselves. Without strong privacy safeguards, a health [information-technology] database will become an open invitation for identity thieves, fraudsters, extortionists or marketers looking to cash in on our medical histories." He further remarked that, "tough privacy safeguards" are necessary to reap the benefits of integrated health databases.

While the EHR is a noble project to increase overall efficiency and economy, the misuse of the data of injured workers remains a deep concern. The open door to this information left by the Health Insurance Portability and Accountability Act [HIPA] and ignored by ARRA must be addressed so that the medical records of our working wounded do not become a gold mine for unscrupulous exploitation..

Paying for Medical Performance in Workers' Compensation Claims

The workers' compensation medical delivery system is a target of much controversy over its effectiveness. The extensive delays in the delivery of medical benefits because of bureaucratic stagnation, and the massive employee dissatisfaction over the results of industry managed care are a rising chorus of concern.

The Federal government, in an emerging concept, is now looking toward limiting escalation costs and other medical issues, by utilizing a concept that provides reimbursement to medical providers based on outcome success. The system will no longer pay for medical failures or mismanagement. The traditional fee-for-services approach is slowly giving way to newer and innovated approaches for medical provider reimbursement.

Whether the compensation system is either closed panel (employer choice of physician) or open panel (employee choice of physician) the ultimate outcome would determine the level of medical reimbursement. In a nation where there is a premium placed upon getting skilled and talented employees back to work in a full capacity, this concept is gaining popularity.

Paying for medical performance in Workers' Compensation might be just what the doctor ironically ordered so that the disabled population receives appropriate and timely care that so justly deserve.

Privacy Went Out the Window

Privacy, a core element in the workers’ compensation system, is rapidly become a thing of the past. Both the State and Federal governments have not considered it a key ingredient in the program.

States, in their to conversion to electronic claims record keeping, have eliminated privacy. The State of California electronically released workers’ compensation claim data concerning Nadya Suleman, the mother who gave birth to eight babies last week. This was after months of complaints by claimants and attorneys that the California electronic claims system was flawed.

Likewise the Federal law, HIPPA [The Health Care Personal Information Non-Disclosure Act of 1998] governing medical records specifically excludes workers’ compensation medical information. Final Health Insurance Privacy Regulations that were published by the Department of Health and Human Services on December 28, 2000, establishing standards for privacy of individually identifiable health information records eliminate privacy in compensation claims. While the regulations cover health plans, health care clearinghouses and certain other providers who use computers to transmit claims information, workers' compensation insurance carriers are exempted.

The Institute of Medicine (IOM) committee has recently recommended the Congress and health agencies develop a new approach to protecting privacy in health research. In a 316 page report released by their Committee on Health Research and the Privacy of Health Information it concluded that HIPPA does not protect privacy.

As the country embarks on a new economic recovery program, including national health care, the Federal government must rebuild the national system of workers’ compensation system. Privacy should not be thrown out the windows when administering a workers' compensation benefit delivery system.

Perspectives on Asbestos Litigation - Symposium Published

What has been described as the longest mass tort in the history of litigation, which had its geniuses in workers' compensation, continues to be a judicial learning experience. The Southwestern University Law Review has recently published a issue in conjunction with the symposium on asbestos litigation. Judges, lawyers and professors who participated in this unique seminar reflected upon the lessons learned and the issues that developed in its long course in the civil justice system.

CMS May Participate in Conferences to Discuss Mandatory Reporting

CMS has announced that it will consider participating in conferences to address mandatory reporting requirements and their implementation. It is accepting email requests at
PL110-173sec111-comments@cms.hhs.gov

The requests must include the following information:

-Conference Name/Title.
-Contact Person for the CMS Participation Request: Name/address/telephone/email.
-Sponsoring Organization: Name/address/telephone/email.
-Date(s) and Time(s) of Conference.
-Location of Conference: City/State.
-Approximate Number of Conference Attendees.
-Conference Topics: Please attach a draft agenda for the conference if available.
-Target Audience for the conference: Please be as specific as possible (for example, plaintiff attorneys, defense attorneys, insurers, third party administrators, risk managers, etc.).
-Scope of CMS participation requested: CMS needs to know whether audience interest is expected to be directed at Group Health Plan (GHP) related reporting issues as well as Liability -Insurance (including Self-Insurance), No-Fault Insurance, and Workers’ Compensation reporting issues or is expected to be more focused on some subset such as Workers’ Compensation reporting issues.
-Is the event open to the public?

CMS plans to respond within two weeks of the submitted request.

Taxing Workers' Compensation Benefits to Finance the Bailout

As the greatest economic bailout goes forward, the Federal and State governments are exploring new areas to raise revenue, including from workers’ compensation benefits. The multi-billion dollar national workers’ compensation system, insured by recently nationalized unstable insurance carriers, maybe be a source to fund the rapidly increasing national debt.

The US national debt already amounts to almost $10 Trillion. The population of the US is 305.603, 863 and each citizen's share of the debt equals $35,091.43.

The economies of the Federal and State governments are crashing. California has now enacted furlough days to reduce its payroll. Delays in the delivery of workers’ compensation benefits will be compounded and insurance companies will be able to hold onto the benefits longer.

Benefit programs have increasingly become a source of revenue for the government. The Social Security Administration has enacted a user fee.

Other Federal programs charge for issuing opinions and rulings. The IRS has such a program for private rulings. CMS maybe required to impose a fee for the review and analysis of CMS MCSAA (Medicare Compensation Set Aside Agreements). The IRS already taxes punitive and non-economic awards.

As the demand for funding increases, Workers’ Compensation benefits may become a source of additional governmental revenue, especially in light of the need to monitor insurance funds and expedite the delivery of benefits. These new developments give added urgency to a complete review of the entire workers' compensation system.

Commissioning The Federal Government for a New Workers' Compensation System

Legislation was recently introduced in Congress to re-establish a National Commission on State Workers’ Compensation Laws [Commission]. This attempt to recreate the almost 4 decades ago effort to evaluate uniformity of benefits, was introduced by a sole legislator, Representative Joe Baca [CA-43] and lacks any co-sponsorship or a duplicate effort in the US Senate.

The initial Commission I, 1972 Report of the National Commission on State Workmen's Compensation Laws, chaired by Professor Emeritus John Burton, looked the national patchwork of chaotic programs to provide uniformity of benefit delivery in the program almost 4 decades ago.

The 1972 report concluded: “We have concluded that there is a significant role for a modern workmen's compensation program and that the States' primary responsibility for the program should be conserved. We also agree that the protection furnished by workmen's compensation to American workers presently is, in general, inadequate and inequitable. Significant improvements in workmen's compensation are necessary if the program is to fulfill its potential.”

The bottom line is that the national system is a hodgepodge of state workers’ compensation laws that are not at all functional in today’s economic/medical market. The times changed since the original enactment of multiple state enactments in 1911. The present program has indeed out lived its usefulness. Over the decades many stakeholders have become preoccupied with economic considerations that have far seriously degraded human considerations.

A national review at the Federal level is a welcome sign that The Administration is using a thoughtful approach to change. This path must embrace the workers’ compensation medical delivery system into universal health care.

2009 Supplement to Workers' Compensation Law - Order Now

Jon L. Gelman's 2009 supplement to the 3 volume hard bound practice series has been published. Now available for order.

The newly enacted statutory changes to the New Jersey Workers’ Compensation Act permitting Emergent Medical Care Motions, new registration requirements for insurers, and new judicial enforcement powers of Judges of Compensation, including sanctions and contempt powers, are contained in this supplemental material.

The mandatory reporting requirements of the SCHIP Extension Act of 2007 are described as well as the appeal procedure under the reimbursement provision of the Medicare Secondary Payer Act.

These pocket parts provide information concerning the requirements for medical monitoring in workers’ compensation claims. It discusses. the Asbestos Fund, which has been established for those entities where workers’ compensation coverage cannot be established. The newly designed forms that need to be utilized in filing for benefits are included. Also, the recently modified Motion for Temporary and Medical Benefits, including a form Certification, is provided and discussed.

The newly revised Judgments for Total and Permanent Disability are provided in this pocket part. The Judgments include new refinements in offsets for pensions and Social Security disability benefits. Reviewed also is the “intentional wrong exception” to the Exclusivity Bar which has been the subject of new workers’ compensation insurance policy language and regulation.

The recently promulgated administrative rules governing the disposition of Temporary Disability Benefits are discussed. The non-duplication of benefits provisions are reviewed including the multiple agency adjudication process. An expansion of benefits available to Federal public safety officers is reviewed in this supplement.

Collateral medical benefit issues are discussed in light of the recent Supreme Court decision concerning this matter. The pocket parts include a Motion to Join the Collateral Health Carrier and provide sample Certifications to be used in support of the application.

Additionally, these pocket parts provide information concerning the new rules of the Division of Workers’ Compensation embodying electronic filing requirements and new procedures involving both formal and informal proceedings, motion practice, post judgment process, and judicial performance. The expanded Medicare secondary reporting requirements and the mandatory coordination of benefits are reviewed in this supplement. The recovery aspects of Medicare conditional payments as well as future medical provisions are updated and discussed. The new Child Support Lien distribution forms, computation worksheets and judgments are provided and explained in depth. The NJ Supreme’ Court ruling and the legislative enactments are discussed concerning same sex couples and the availability of workers’ compensation benefits.

This supplement reviews the newly promulgated Rules concerning the Uninsured Employers’ Fund and audio and video coverage of workers’ compensation proceedings. The horrific tragedy of September 11th, 2001 and the impact it has upon the Workers’ Compensation system is discussed. This supplement reviews the newly enacted Smallpox Emergency Protection Act as well as recent court decisions concerning acts of terrorism. The subsequent legislative changes enacted in response to potential terrorist threats are reviewed, including the Public Safety Officers’ Benefit Act as well as the liberalized legislative enactments involving rescue workers and medical personnel.

The impact of the newly promulgated Federal rules and regulations concerning medical record privacy and compliance with the Health Insurance Portability and Accountability Act (HIPPA) medical authorization requirements are reviewed in this supplement and model forms are furnished. The recently enacted statutory workers' compensation coverage options available to proprietors and partners are discussed. The supplement reviews the recent court decisions expanding the responsibility of the Second Injury Fund for pre-existing medical conditions in cases in which latent diseases become manifest during retirement. The statutory enactments concerning State Temporary Disability Benefits are reviewed. The recently amended Energy Employees Occupational Illness Compensation Act is explained in detail and forms are furnished and discussed.

The recent Supreme Court decisions concerning the high judicial threshold for evaluation of scientific evidence are analyzed. The requirements for proof of scientific evidence in complex workers’ compensation cases are discussed including the admissibility of testimony from non-physicians experts. Furthermore, the evolving and expanding issues concerning medical monitoring are reviewed.

This pocket part also discusses recent changes in the application for counsel fees. The supplement includes the newly promulgated administrative directive embodying those changes.

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.