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(c) 2010-2024 Jon L Gelman, All Rights Reserved.

Monday, November 22, 2010

Congress Told Workers Compensation is a Deteriorating System

The former chair of the 1972 National Commission on Workers' Compensation told Congress that the present system is deteriorating and a new course of action is warranted. Profession Emeritis John F. Burton, Jr., last Wednesday testified before The Subcommittee on Workforce Protections of the Congressional Committee on Education and Labor.

Professor Burton told Congress that during the last 20 years he has observed the "...deterioration in adequacy and equity of state workers' compensation programs..." He reported that "the decline in workers' compensation cash benefits in the states during the 1990's is explained by ....changes in workers' compensation provisions and practice than  is explained by the drop in workplace injuries and disease during the decade."

Burton proposed that Congress consider new legislation to prohibit costs shifting from workers' compensation to Social Security Disability Insurance (SSDI). He advised the Subcommittee that cost shifting was continuing because 15 states were permitted to continue "reverse offset" provisions, the Social Security Administration (SSA) was paying benefits to workers who were not totally disabled under workers compensation acts, and a larger number injured workers were not qualifying for workers' compensation benefits.


As Professor points out, the aging workforce further complicates the burden placed upon the nation's Medicare system. With the erosion of the doctrine that workers' compensation takes the worker as it finds him or her, medical treatment for pre-existing conditions will be a growing cost for Medicare and a cost-shift from the workers' compensation system. The NY Times reported that, "Nearly one-fourth of Medicare beneficiaries have five or more chronic conditions. They account for two-thirds of the program’s spending."

A "reaffirmation" of "Federal standards" as enunciated in the 1972 National Commission report were recommended by Burton.  Additionally, he called upon Congress to enact legislation requiring employers and/or their insurance carriers reimburse Social Security for permanent disability cash benefits paid by Social Security for disability flowing from a work related event or disability.

Friday, November 19, 2010

US Seeks to Amend Complaint in Reimbursement Action to Define SOL

The Centers for Medicare and Medicaid Services (CMS) has filed a Motion to Amend its complaint in a lawsuit that will define the Statute of Limitations in a Medicare Secondary Payer (MSP) recovery action. The action by CMS followed the Court granting CMS's Motion for Reconsideration in order to clarify the alleged $25 Million continuing accrual claim.

The Motion pleads, "Although the United States contends that it has set forth sufficient facts alleging its cause of action, the amendments set forth with more specificity (1) the Defendants’ payment of and receipt of annual payments made and received through 2013 as a result of the Abernathy Settlement Agreement, (2) their liability under the MSP Statute stemming from the annual payments, (3) additional information concerning the identified Medicare beneficiaries among the Abernathy Plaintiffs, (4) changes to certain allegations based on facts included in Court filings, and (5) the removal of The Cody Law Firm as a defendant."

CMS alleges that the parties knew of the outstanding conditional payments made by CMS and failed to reimburse the payments under the MSP Act.

USA v. Strickler, et al., Civil Action No. 1:09-cv- 02423-KOB (USDCT ND Alabama) Filed 11/16/10

Thursday, November 18, 2010

Dean Emily Spieler Requests Congress to Review The Workers' Compensation Disability Rating System

In recent testimony before the Subcommittee on Workforce Protections Committee on Education and Labor U.S. House of Representatives, Emily A. Spieler, Dean of the Northeastern University Law School, requested further investigation to develop a new rating system for workers compensation claims.


Dean Spieler reviewed current difficulties with the current AMA Guides 6th ed. She stated,
"I urge that you ask the National Academies of Science / Institute of Medicine to conduct a review. This review should include recommendations regarding the best way to develop a new system for rating workers’ injuries as measured by the impact of those injuries and diseases on the extent of permanent impairments, limitations in the activities of daily living, work disability and nonwork disability (or noneconomic losses)."


Click here for complete testimony.

Wednesday, November 17, 2010

Congresswoman Woolsey Calls For A GAO Study of Workers Compensation-Cites Insurance Company Cost Shifting

Below are the prepared remarks of U.S. Rep. Lynn Woolsey (D-CA), chairwoman of the Workforce Protections Subcommittee, for a subcommittee hearing on “Developments in State Workers’ Compensation Systems” 11.17.2010
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Thank you all for attending this hearing on “Developments in State Workers’ Compensation Systems.” Here in Congress, we don’t examine these state compensation programs very often because they are generally under the purview of state legislatures.

However, there have been some disturbing national trends that may compel a comprehensive reexamination of these state programs and their impact on injured workers.

As most of you are aware, workers’ compensation statutes were passed beginning in the early  20th century to establish a no fault system for providing efficient redress for injured workers.

Workers’ compensation was called the ‘grand bargain.’

Workers waived their rights to bring individual suits against their employers and in return receive compensation for work-related injuries regardless of fault.

Every state and the District of Columbia have workers’ compensation programs in place.

Most employers purchase private workers compensation policies, but others self-insure or purchase insurance from a state managed compensation fund.

Beginning in the 1990s, changes in state workers’ compensation laws--brought about by the lobbying efforts of employers and insurance companies---have resulted in stricter eligibility requirements and the reduction in both the amount and duration of benefits—particularly for those workers with permanent partial disabilities.

Unfortunately this ‘grand bargain’ of the 20th century is not so ‘grand’ any more, especially for injured workers.

In addition, there are two other recent developments that merit our attention

The first has to do with the American Medical Association’s (AMA) Guides to Permanent

Impairment.

And the second concerns a cost-shifting trend away from state workers compensation programs, where the employer is responsible for an employee’s injury, to the federal government’s medical and disability programs.

The AMA Guides have been in effect since 1971 and are now in widespread use.

Some states even require workers’ compensation programs to use the latest edition of the Guides.

These Guides were originally designed to be used by physicians in making a scientific assessment of a worker’s level of impairment---or loss of function---due to a work-related injury.

The determination of whether a worker is permanently disabled and entitled to workers compensation is based upon his or her impairment rating, which is then applied to the specific case of a given worker.

For example, a worker who loses a hand may not suffer permanent disability if he or she is a teacher, but that same worker would be permanently disabled if he or she works in construction.

In 2007, the AMA published the 6th edition of the Guides, and witnesses today will describe how this new edition has dramatically reduced impairment ratings for many types of conditions, without apparent medical evidence, and transparency.

The 6th edition has become so controversial that many states, including Iowa, Kentucky and Vermont have decided not to adopt them.

It also appears that the 6th edition was developed in near secrecy, without the transparency and consensus which should necessarily accompany the development of standards that will have widespread use by state governments.

In addition, it appears that the physicians who developed this latest edition may have ties to insurance companies, and are making a profit training doctors on the use of the 6th edition, which is complicated and very difficult to apply.

The National Technology Transfer Advancement Act of 1996 sets forth minimum criteria for the development of voluntary consensus standards: openness; balance of interests; due process protections; and consensus.

The process used for developing the 6th edition appears to significantly deviate from these standards and is a focus of testimony before us today.

Workers who are wholly dependent on this ‘grand bargain’ when they are injured on the job, are the ones paying the price.

The subcommittee invited the AMA to testify today, but unfortunately, it declined.

Another troubling policy issue is that as eligibility for workers’ compensation benefits have become more restrictive, there has been a cost shift to Medicare and Social Security Disability (SSDI), placing an additional burden on the taxpayer.

In addition, costs are being shifted to private health insurance that should be borne by workers’ compensation policies and employers.

This is particularly worrisome, especially during a time of record deficits.

Chairman Miller and I believe that this cost-shifting trend warrants further study.

Therefore, we will be asking the Government Accountability Office (GAO) to do a study and issue recommendations.

The testimony today will illuminate these problems facing injured workers and taxpayers, and I look forward to hearing from our witnesses.

Tuesday, November 16, 2010

CMS Extends Interim Dollar Reporting Threshold Date

II. Extension of Current Dollar Thresholds for Liability Insurance
(Including Self-Insurance) and Workers’ Compensation

The interim dollar reporting thresholds set forth in Section 11.4 of version 3.1 of the MMSEA 111 Liability Insurance (Including Self-Insurance), No-Fault, and Workers’ Compensation User Guide have all been extended by one calendar year.

Under Section 11.4, “Workers’ Compensation ORM”, the date 12/31/2011 is changed to 12/31/2012.
Under Section 11.4, “Liability Insurance and Workers’ Compensation TPOC Amounts”, the last four bullets are revised to read:
• Claim reports where the last (most recent) TPOC Date is prior to January 1, 2013 with TPOC Amounts totaling $0.00 - $5,000.00, are exempt from reporting. Initial claim reports (add records) with no ORM (ORM Indicator = ‘N’) where the most recent TPOC Date is prior to January 1, 2013 with a total TPOC amount less than or equal to $5000.00 will be rejected.
• Claim reports where the last (most recent) TPOC Date is January 1, 2013 through December 31, 2013 with TPOC Amounts totaling $0.00 - $2000.00, are exempt from reporting. Initial claim reports (add records) with no ORM (ORM Indicator = ‘N’) where the most recent TPOC Date is prior to January 1, 2014 with a total TPOC amount less than or equal to $2000.00 will be rejected.
• Claim reports where the last (most recent) TPOC Date is January 1, 2014 through December 31, 2014, with TPOC Amounts totaling $0.00 - $600.00 are exempt from reporting. Initial claim reports (add records) with no ORM (ORM Indicator = ‘N’) where the most recent TPOC Date is prior to January 1, 2015 with a total TPOC amount less than or equal to $600.00 will be rejected.
• No threshold applies to claims where the last (most recent) TPOC Date is January 1, 2015 and subsequent.

November 09, 2010
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)&(b)(8))


Lloyds Report Targets Potential Cell Phone Liability

Yet another reason why employers should be concerned with the risks of distracted driving has been reported by Lloyds of London. A recent report considers the electromagnetic fields (EMF) from mobile phones a potential risk to health.

The report reviews the medical causation issues involving a myriad of conditions ranging from brain cancer (acoustic neuromas and gliomas) to central nervous system effects, as well as reproduction and biological development consequences of EMF exposure over the long term. In reviewing historical litigation trends, the Lloyds report compares the legal consequences of asbestos exposure and the development of mesothelioma and analyzes the complicity and enormous liability that resulted from corporate concealment and conspiracy.

With over 4.3 billion mobile phones in use worldwide as of June 2009, this report increases the concern of employers who are already experiencing increased liability because of the use of cell phones while driving. A major initiative is underway by US Department of Transportation to curtail the use of cell phone by employee while driving because of the increase risk of motor vehicle accidents.

As workers’ compensation insurance carriers have already been challenged by significant losses as a result of occupational exposure to asbestos, the Lloyds report may encourage employers to restrict the use of a cell phone, except when used in a safe and protected manner. 


Monday, November 15, 2010

Congress to Hear Experts on New State Workers' Compensation Limitations

A sub-committee of the Committee on Education and Labor, chaired by the Congressman George Miller, will be hearing testimony from national experts concerning the new limitations being imposed on State workers' compensation systems. The systemic problems to be examine include the delivery of medical benefits and the assessment of the nature of disability.

On Wednesday, November 17, the Workforce Protections Subcommittee of the House Education and Labor Committee will examine state workers’ compensations systems. Workers’ compensation traditionally provides financial assistance and job training to workers injured on the job and aid to the surviving family of a worker killed on the job.

Not only are the state systems drawing the attention of the US Congress, but also the federal programs are becoming problematic. The United States Postal Service announced last week that workers' compensation costs are so high that the quasi-governmental agency may have to declare bankruptcy.

With the newly elected Republican majority in Congress, the water ahead may be rough for workers' compensation. The last time the Republican's held the majority in Congress, Newt Gingrich , the former Speaker, was entertaining dramatic changes in the program. Those appear to have been refreshed in recent comments about a year ago.

These systems have undergone numerous changes in the past decade as many states have begun strictly limiting workers’ compensation benefits – changes that may be stressing the Social Security Disability Insurance (SSDI) program. Additionally, the American Medical Association’s (AMA) guide to assessing injured workers has undergone significant changes in its latest edition, which has made consequential changes to injured workers’ evaluation procedure.

Workforce Protections Subcommittee Hearing
2:00 PM, November 17, 2010
2175 Rayburn H.O.B.
Washington, DC

Additional witnesses TBA.

Witnesses:
Emily SpielerDeanNortheastern University School of LawBoston, MA
John BurtonProfessor Emeritus, School of Management and Labor Relations, Rutgers UniversityProfessor Emeritus, School of Industrial and Labor Relations, Cornell UniversityPrinceton, NJ
Christopher GodfreyIowa Workers Compensation CommissionerDes Moines, IA
Dr. John NimlosOccupational Medicine ConsultantShoreline, WA