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.

“Filling the Gaps” Did Not Accelerate the Statute of Limitations

In a novel decision the NJ Appellate Division decided the custom the workers’ compensation insurance company of “filling the gaps” between periods of temporary disability with permanent disability payments was an unauthorized acceleration and did not step up the final date of payments for purposes of the statue of limitations. The petitioner was permitted to file an application to review and modify his former award for increased benefits two years from the payment of benefits that would have been paid had they not been accelerated by the insurance carrier. Pollock v. Tri State Motor Transit, Inc. , No. A-6224-06T1, NJ App. Div. Decided August 15, 2008.

http://www.judiciary.state.nj.us/opinions/a6224-06.pdf

2009 NJ Workers’ Compensation Benefit Will Amount to $19.32 Per Hour

The 2009 workers’ compensation benefit rate for 2009 has been announced and it will increase to a maximum of $19.32 per hour or the equivalent of $40,196. per year. NJ bases its rate on only 70% of the SAWW.

• NJ SAWW $1030

• NJ SAWW Hourly $25.75/hr

• 2009 Annual Benefit 75% SAWW of the 2008 SAWW $773.00

• 2009 Maximum Annual SAWW cap = $19.32/hour

• $19.32 x 40 x 52 = $40,196.00 per year

Where NJ Stands in Comparison to Other States
13 States have SAWW Caps that are higher than 100% of the SAWW. Iowa has 200%. 20 States, including close or nearly adjacent States/Federal District (Pennsylvania, Rhode Island, Connecticut, Massachusetts and District of Columbia.), have 100%.

Of the States with fixed dollar caps on benefits, 33 States have caps that are 100% or greater than New Jersey and only 6 states have dollar caps lower than NJ.

What an Increase of the “CAP” Would Cost
Some proponents have sough a legislative change in NJ to increase the benefit payment, It has been estimated that in increase in the cap from merely from 75% to 80% would cost no more that a 1% percent increase in total cost and therefore an increase to 100% would be no more than 5% or about $100 million in total premium dollars.

CMS/MSP and the Increase in Drug Costs

Hold onto your seats because the cost of drugs are soaring and so will be the requests from CMS for MSP reimbursements and future allocations for set-aside agreements. CMS just announced that to merely make ends meet next year that it is increasing the drug premium cost 12% for 2009. While CMS announced that this is lower than anticipated it still will be a major increase to workers’ compensation programs through reimbursement procedures.

With 17.4 million beneficiaries enrolled in the program and the average person living longer due to enhanced medical care the issue reimbursement will continue to have a greater impact on State workers’ compensation programs.

EIRSA’s Reach Shortened by the US Supreme Court

The US Supreme Court denied certification in Silverleaf v Resorts, Inc. v. McAteer, 128 S.Ct. 2884, and allowed to stand a 5th Circuit decision, McAteer v. Silverleaf Resorts, Inc., 514 F.3d 411 (C.A.5-Tex. 2008) ,that held that an employee’s state law negligence claim against her employer for the failure to maintain a safe workplace were not preempted by the Employee Retirement Income Security Act (ERISA]. The employee’s action was improperly removed on theory based on ERISA preemption. The employee was required to waive participation in the State of Texas’ workers compensation program in order to participate in the employer’s EIRSA plan. The election made ERISA the exclusive remedy for any on-the-job-injuries.

In the decision rendered by the 5th Circuit, the Court held that RISA does not preempt state law negligence claims relying upon its prior decision in Hook v. Morrison Milling Co., 38 F.3d 776 (C.A.5-Tex. 1994).

The employer, Silverleaf, was a non-subscriber to the Texas workers’ compensation plan and had stabled an ERISA governed plan to provide benefits to employee in the event of a job-related injury and provide for the arbitration of disputes regarding benefits.

Workers’ Comp by an ATM Machine

Workers’ Compensation is high finance and the delivery of benefits a costly procedure. JP Morgan Chase & Co. has announced that it will issue a Visa credit card underwritten by workers’ compensation funds. Ohio’s Central Mutual Insurance Co. is expected to be one of the first companies to use this financial mechanism for distribution of funds.

Since injured workers are probably in financial distress to begin with, as they lack adequate wage replacements and are disabled, it will be important to watch what safeguards are put in place to regulate this vehicle so that the captive market of injured workers does not become prey to credit card companies.

Hospital-Acquired Infections - The Next Wave of Litigation

The old saying, “Sick people don’t belong in hospitals,” was given new meaning by a recent jury verdict for over $2.5 Million against a heart surgeon and his practice group and a hospital in St. Louis Missouri. The patient was admitted for the installation of a pacemaker and a resulting hospital acquired infection resulted in the loss of his right leg a portion of his left foot, a kidney and his a majority of his hearing.

The award was entered after the patient contracted a hospital-acquired infection. The patient had developed a drug-resistant staph infection called methicillin-resistant Staphylococcus aureus (MRSA)

Medicare has taken the position recently that it will no longer reimburse hospital for the conditions, citing them as “never” events. Many infections in hospitals are preventable through proper sanitation and serialization procedure. The verdict serves as a wake-up call to hospitals and their staff’s that they will suffer economic consequences if they fail to maintain a safe working environment.

Governor Patterson Signs Legislation Extending Benefits for 911 Workers

New York State workers’ compensation benefits have been expanded for 911 workers as a result legislation signed Governor Patterson. Under the prior law the registration period would have closed in August 208. The date has been extended to September 10, 2010.

The definitions in this bill expand the scope of a "qualifying WTC condition" under the Accidental Diability Law to include:

(1) members who did not undergo apre-employment physical examination, but who provide access to medical records which demonstrate the absence of a qualifying condition priorto September 11, 2001;

(2) 911 dispatchers who worked on September 11, 2001 and suffered psychological injury;

(3) members who worked for any period of time within the first 48 hours after the first airplane hit the WTC; and

(4) members who repaired, cleaned or rehabilitated vehicles or equipment, including emergency vehicle radio equipment owned by New York City ("NYC") that was contaminated by debris from the WTC site.

Sections 18, 19 and 20 of the bill amend Workers` Compensation Law("WCL") SS 162, 164 and 168 to allow claimants to file a sworn statement indicating the dates and locations of their participation inthe rescue, recovery and clean-up operations until September 10, 2010,with the date of disablement being determined as the date mostbeneficial to the claimant. Claims for disablements occurring between September 1, 2003 and September 11, 2008 will not be time barred. The time period was to have expired on August 14, 2008.

“We have a profound responsibility to provide those who participated in the rescue, recovery and clean-up efforts in the aftermath of the terrorist attack on September 11, 2001 with the benefits they deserve,” said Governor Paterson. “It is imperative that we continue to provide those workers who face health consequences from their work at Ground Zero with the very best care and the opportunity to apply for disability benefits.”

“We also have a responsibility to better protect patients in New York. Strengthening the disciplinary system for physicians and giving the public more information, combined with enhancing infection control measures, is vital to the safety of all of our citizens,” added Paterson.

What Impact Will AIG’s Decline Have on the Workers’ Compensation Industry

AIG’s announcement yesterday, of yet another loss of $5.4 Billion brings their total loss to $18.5 Billion in the last 3 quarters, shook Wall Street. The announcement caused the 5th largest daily decline in the value of its stock. Yesterday alone, AIG stock fell 18% in value as the NYSE fell 224.64 points.

Since AIG is a major component of the national workers’ compensation scene, the devaluation of the company will most probably have financial repercussions thought the workers’ compensation sector. If AIG is unable to meet its obligation in some jurisdictions then an automatic insolvency procedure will be implemented. The ultimate cost will flow into the system itself.

Compounding this issue is the fact that workers’ compensation premiums that are to be collected are heading south. Also announced yesterday was that the job market in the US had become further restricted as unemployment claims rose to 455,000 last week which is a 6 year high.

The NCCI also reported recently that claims nationally were down 2.5% in 2007. These factors may demonstrate that reforms to restrict access to the system are becoming effective, but the massive infrastructure that has been amassed for handling the dwindling claims will need to be ramped down at even a faster rate that anticipated because of the declining economic base signaled by the AIG announcement.

The Odd Lot Doctrine Springs New Life

In 1921 Justice Cardoza while sitting on the Court of Appeals of the State of New York introduced The Odd Lot Doctrine into workers’ Compensation. The Doctrine has been brought to life again in New Jersey.

The “Odd Lot Doctrine” had its genesis in England where a claimant's search for work was fruitless since his physical defects in combination with his lack of skills made him an unmarketable unit. Various States, including New Jersey, have embodied the concept statutorily. In New Jersey where at least 75% of total disability can be attributed to medical reasons, then the other personal handicaps may be considered in combination with the medical conditions in reaching a determination of unemployability.

The Appellate Division remanded a total disability award for failure of the petitioner to provide adequate notice of the assertion of the Odd Lot Doctrine. 06T14598-06T1 JOYCE R. RAMBOUGH, Respondent, v. C.V. HILL REFRIGERATION "Under the ["odd-lot"] doctrine, the worker is viewed in the [context] of the competitive market place, where his inability to sell his labor may be traceable to his [personal] background superimposed upon his physical disability." Id. at 540; see Barbato v. Alsan Masonry, 64 N.J. 514, 526-28 (1974)

See also: "The pretrial memorandum should specify that total permanent disability under the odd-lot doctrine is an issue in the claim so that the respondent can be prepared to meet it at the time of trial. In addition, the ability to perform limited service in one's own enterprise, or a family enterprise, may not of itself be sufficient to negate industrial employability for workers' compensation purposes; the question in such a case is the worker's ability to sell his services in a competitive job market. Germain v. Cool-Rite Corporation, 70 N.J. 1, 355 A.2d 642 (1976)." 38 NJ Practice Sec. 12.12

CMS Gearing Up for Mandatory Insurance Reporting

CMS will implement mandatory insurance company reporting: GHP January 1, 2009 and liability insurance carriers (workers’ compensation) on July 1, 2009. Mandatory reporting announcements will be posted on the CMS web site and e-mail notices may be requested by e-mail

The new provisions for Liability Insurance (including Self-Insurance), No-Fault Insurance, and Workers' Compensation found at 42 U.S.C. 1395y(b)(8):

Add reporting rules; do not eliminate any existing statutory provisions or regulations. The new provisions do not eliminate CMS' existing processes if a Medicare beneficiary (or his/her representative) wishes to obtain interim conditional payment amount information prior to a settlement, judgment, award, or other payment.

Include penalties for noncompliance.

Who must report: "an applicable plan." "…[T]he term 'applicable plan' means the following laws, plans, or other arrangements, including the fiduciary or administrator for such law, plan or arrangement: (i) Liability insurance (including self-insurance). (ii) No fault insurance. (iii) Workers' compensation laws or plans."

What must be reported: the identity of a Medicare beneficiary whose illness, injury, incident, or accident was at issue as well as such other information specified by the Secretary to enable an appropriate determination concerning coordination of benefits, including any applicable recovery claim.

When/how reporting must be done:

• In a form and manner, including frequency, specified by the Secretary.

• Information shall be submitted within a time specified by the Secretary
after the claim is resolved through a settlement, judgment, award, or other
payment (regardless of whether or not there is a determination or
admission of liability).

• Submissions will be in an electronic format.

The Asbestos Debate is Over

Almost 45 years following the historic 1964 NY Academy of Medicine conference in New York experts continue to memorialize the history of asbestos related disease. Now enters, defense expert John E. Craighead, who has written his viewpoint on the subject.

Asbestos is one of the modern world’s most historic occupational medical disasters. Not only is it well documented, it continues not to be banned in the US , in fact, the incidence of asbestos related disease reported has turned upward, according to recently released NIOSH data (1979-2003.

In a recent review of the Craighead volume, the New England Journal of Medicine, has called it, “….highly personalized with strong individual viewpoints. It is less authoritative as a source for risk assessment and litigation issues.”

Yet others have including: Victor L. Roggli (Pathology of Asbestos-Associated Diseases), Barry I. Castleman (Asbestos: Medical and Legal Aspects, Fifth Edition) and Paul Brodeur (Outrageous Misconduct) have followed in the historic footsteps of the late, Irving J. Selikoff, MD and have guided us to seek a remedy and cure for wrongdoings of the past.

The asbestos debate is over. It is no longer time to profit from the debate and sell controversy. It is no longer time to allow this product to be sold anywhere in the world for profit. It is time to direct attention to provide medical treatment to those who suffer from asbestos related illness and draw our attention to find a cure for this disease.

The Future of Workers' Compensation: Navigating the New Benefit Highway

The Future of Workers' Compensation: Navigating the New Benefit Highway

The past and present will predict the future of the new workers' compensation benenfit highway. This Power Point presentation is available in a PDF format and for the next 14 days may be securely downloaded from https://www.yousendit.com/transfer.php?action=download&ufid=Smp1Q3QzTWNtUUZFQlE at no cost to the first 500 requests.

Link available at:
https://www.yousendit.com/transfer.php?action=download&ufid=Smp1Q3QzTWNtUUZFQlE

The Federal Government is Offering Funding for a World Trade Center Non-Responder Medical Program.

An announcement has been for applications for the provision of screening, referral and treatment services for residents, students, and others in the community, related to the September 11, 2001 terrorist attacks in New York City. The program is aimed at the ‘non-responder population.’ Since September 11, 2001, the Department of Health and Human Services, CDC, and NIOSH have been active in assessing the health impact of the World Trade Center disaster. There is currently a program in place to provide health assessment examinations, diagnosis, and treatment for first response emergency personnel (the responder population) in the New York City (NYC) area. The application deadline is August 25, 2008.

The grant awardee would be involved in the following activities:

1. Immediately provide for accessible health assessments, eligibility confirmation, diagnostic, referral and treatment services (including medications and durable medical equipment) to the non-responder population for health conditions associated with WTC dust/debris exposure.

2. Identify the organizational components required to support access to these services, including personnel, examination venues, maintenance of patient records, data platforms and management, compliance with applicable laws, assurance of quality care, coordination of healthcare benefits, and programmatic recordkeeping.

3. Provide referral and treatment services with grant funds only as the Payor of Last Resort. Private health insurance (self-funded or employer-funded), workers’ compensation insurance (employer-funded), and government-funded health insurance (Medicare and Medicaid) shall be used first before grant funds are used. Applicants should demonstrate their capacity to determine insurance status and to seek reimbursement from outside payers. Funds shall not be used to supplant existing activities or for the treatment of the responder population.

4. Establish service information and patient management systems as needed in order to accommodate intake, referral, prompt healthcare services, and reporting of the services provided to the non-responder population. In carrying out these activities, collaborate with other WTC-related healthcare providers, as appropriate and needed.

5. Develop a written Management and Prioritization Plan which identifies the projected service delivery area, explains how the assessment of potential non-responder patient needs will be determined, provides a strategy to ensure meeting those needs, and provides a section focused on ensuring prioritization and management of this program’s health services delivery to meet those needs, within the broader context of all organizational activities and responsibilities. The applicant should state an estimate for the number of non-responders to be served with the requested funds and provide a justification based on an estimation of the projected costs to provide health assessment examinations, and the costs to provide treatment for the expected World Trade Center-related conditions that will be identified.

6. Provide patient encounter reporting on health assessment examinations and treatment to NIOSH for quality assurance. 7. Establish and maintain information and data management systems that will ensure the provision to NIOSH of electronic data in a uniform fashion

Complete Announcement

http://www.cdc.gov/od/pgo/funding/OH08-801.htm

New Chemotherapy Treatment Reported "Responsive" to Mesothelioma

A new set of drugs has been reported responsive in treating mesothelioma, a tumor caused by exposure to asbestos fiber. The British Journal of Cancer has reported that cisplatin and vinorelbine effective in the treatment of mesothelioma. “Cisplatin and intravenous vinorelbine is a highly active regimen in MPM with a response rate and survival comparable to the most active regimens so far reported.”

The report appears in the June 10, 2008 edition of The British Journal of Medicine.

NJ Workers' Compensation Legislative Analysis

Why there is a need to increase “The Cap.”

NJ’s Statutorily Imposed Cap of Benefits

The average worker is dependent upon his weekly wage to provide the necessities to maintain a standard of living for himself and his family. When the flow of salary ceases, immediate concern focuses on the provision of food, clothing and shelter. The Workers' Compensation system is a major social benefit program that addresses the need to provide for benefits to replace earned wages and a “socially adequate” standard of living.

Disability rates for workers' compensation benefits in the State of New Jersey are based upon the computation of the wages of the injured employee. Statutorily, the wages are defined to mean "the money rate" at which the service rendered is compensated.

Since the Act was amended in 1979, New Jersey workers' compensation benefits are based upon the statewide average weekly wage (SAWW). There are both minimum and maximum compensation rates. The Act provides for a sliding scale of maximum allowable weekly benefits through the first 180 weeks of disability, and thereafter eliminates the sliding scale, replacing it with a single percentage rate, which itself increases as the severity of the disability increases. The beginning rate of disability is 20% of the SAWW, and increases by approximately one percent until it reaches the level of 35% of the SAWW for injuries which warrant disability payments of over 180 weeks. [From that point on, as the severity of the disability increases, the percentage of the SAWW which is paid also increases by five (5) percentage points for approximately every 30 weeks of disability paid.

NJ’s Dilemma:

2008 State Average Weekly Wage (SAWW)

NJ State Average Weekly wage (SAWW) for all workers was determined to be $989.23, 39 N.J.R. 3714(a).

NJ State Average Hourly Wage for 2008, calculated as 1/40th of the SAWW = $24.73, NJSA 34:15-12. The Maximum Workers’ Compensation benefit, which is capped at $75% of the SAWW for 2008 is $742 per week.

The Maximum HOURLY Workers’ Compensation SAAW cap is, based on a 40 hour week, $18.55.

Many workers in NJ are earning wages that EXCEED $18.55 per hour!

Where NJ Stands in Comparison to Other States

13 States have SAWW Caps that are higher than 100%. Iowa has 200%. 20 States, including close or nearly adjacent States/Federal District (Pennsylvania, Rhode Island, Connecticut, Massachusetts and District of Columbia.), have 100%.

Of the States with fixed dollar caps on benefits, 33 States have caps that are 100% or greater than New Jersey and only 6 states have dollar caps lower than NJ.What an increase in “the cap” would cost NJ. It has been estimated that in increase in the cap merely from 75% to 80% would cost no more that a 1% percent increase in total cost and therefore an increase to 100% would be no more than 5% or about $100 million.

Cost of NJ System in Comparison to Other Systems

The most current numbers available indicate that the cost of workers’ compensation benefit per $100 payroll compare as follows:NJ = $0.85 (which amounts to 81% of the national average)All States – National Average = $1.05

NJ presently rates14th lowest in cost nationally and a mere increase of only 5% would increase the cost to $0.89 which equates to 85% of the national average which would rank NJ still as 19th lowest in cost.

Download Legislative Complete Legislative Analysis

http://www.gelmans.com/FrontEnd/ReadingRoom/vwFile.asp?FileId=276

Florida’s “Circle Solution” Revisited: NJ Struggles to Speed up the Benefit Highway

After a major investigative report entitled “Waiting in Pain,” the Star Ledger, newspaper reflected delays and frustrations in the operation of the NJ Workers’ Compensation system. The NJ Legislature has found itself struggling to define an effective approach to resolve the problems of the century old compensation system.

The Legislature immediately convened a hearing to discuss the issue. It heard testimony from many of the stakeholders, except the victims of the alleged abuse, the injured workers. Their voices were silent.

In a complete about face the leadership of the Legislature turned from the initial comments that the system was “completely dysfunctional” and needed a complete overhaul, to its present course of action, a piecemeal modification of the Act without the benefit of a complete and thorough evaluation of the system.

The enormous delay in the delivery in medical care appears to be a most significant and complex issue facing the Workers‘Compensation system in New Jersey and other jurisdictions throughout the United States. Medical benefits, which have soared in cost, now have now become the epicenter of controversy.

It is obvious that the system is need of more than merely first aid. A complete evaluation of the system is required such as has been proposed by Assemblyman Neil Cohen. Without such an evaluation it is difficult to determine a valid diagnosis, never mind trying to define a plan for treatment.

The Next Crisis in Comp: What Happens When the Funds Go Insolvent?

Workers’ Compensation coverage is not immune from the economic realities of the market and injured workers again fail to lose big time as the economy falters. Many States have established UEFs, Uninsured Employer Funds and IFs, Insolvency Funds but they are not uniform in application, some are based on weak economic foundations and others do not provide full benefits.

When the system fails on the employer side of the ledger the consequences trickle down to the employees on the benefit end. In a recent development in the State of New York 12 trusts embracing $200 Million have failed. The domino effect is now a real threat for 50 group trusts remaining covering 20,000 business and 500,000 employees.

States will now have to scramble to provide a resolution of this issue or the consequences of further economic impact will fall upon the taxpayers who are unable to accept the shift in this burden as injured workers seek alternate avenue for at least medical care.

NJ Assembly to Consider New Workers' Compensation Bills

C O M M I T T E E N O T I C E

TO: MEMBERS OF THE ASSEMBLY LABOR COMMITTEE

FROM: ASSEMBLYMAN JOSEPH V. EGAN, CHAIRMAN

SUBJECT: COMMITTEE MEETING - JUNE 12, 2008

The public may address comments and questions to Gregory L. Williams, Committee Aide, or make bill status and scheduling inquiries to Alfonsina Mavros, Secretary, at (609)984-0445, fax (609)777-2998, or e-mail: OLSAideALA@njleg.org.

Written and electronic comments, questions and testimony submitted to the committee by the public, as well as recordings and transcripts, if any, of oral testimony, are government records and will be available to the public upon request.

The Assembly Labor Committee will meet on Thursday, June 12, 2008 at 10:00 AM in Committee Room 15, Fourth Floor, State House Annex, Trenton, New Jersey. The following bills will be considered:

A-1581Cohen/EganIncreases workers' compensation for loss of hand or foot.
A-2593Scalera/EganRequires reporting of wage records under certain solid waste contracts.
A-2934Conners/Conaway(pending intro)Allows persons affected by certain plant closings, transfers and mass layoffs to receive temporary suspension of payment of interest on mortgage loans.
A-2935Conaway/Conners(pending intro)Provides for expedited injunction for violations of law requiring prenotification of certain plant closings, transfers and mass layoffs.
A-2936Conaway/Conners(pending intro)Concerns access to certain job training courses for employees affected by plant closings, mass layoffs or transfer of operations.
A-2966Cohen/Egan/Giblin(pending intro)Increases power of judges of compensation to enforce workers' compensation law.A-2967Egan/Cohen/Giblin(pending intro)Strengthens enforcement against employers for failure to provide workers' compensation coverage.
A-2969Cohen/Egan/Giblin(pending intro)Expands the membership of the Compensation Rating and Inspection Bureau.
A-2970Egan/Cohen/Giblin(pending intro)Makes failure to provide workers compensation coverage a violation of "New Jersey Insurance Fraud Prevention Act" and crime of insurance fraud.

Issued 6/6/2008 For reasonable accommodation of a disability call the telephone number or fax number above, or TTY for persons with hearing loss (609)777-2744/toll free in NJ (800)257-7490. The provision of assistive listening devices requires 24 hours’ notice. Real time reporter or sign language interpretation requires 5 days’ notice. For changes in schedule due to snow or other emergencies, call 800-792-8630 (toll-free in NJ) or 609-292-4840.

The NJ Supreme Court Declares Dependency Benefit Increases are Not to Be Retroactively Applied

The NJ Supreme Court reversed a ruling of the Appellate Division and declared the Legislature’s 2004 amendment to the workers’ compensation act not to have retroactive application. The Amendment increased benefits to 70% of wages for dependents of injured workers. The Supreme Court reasoned that the Legislature demonstrated no intent of making the amendment retroactive

Hispanic Workers Have High Death Rates

The Centers for Disease Control (CDC) has again reported higher death dates for Hispanic workers in the United States. Hispanic workers are one of the fastest growing segments in the US workforce and their death rate has been reported as consistently high.

Work-related injury deaths among Hispanic workers during 1992-2006 totaled 11,202 which equates to 13% of the entire US work-related deaths during that timeframe. Of that number 67% of the Hispanics who lost their lives during the years 2003-2006 were foreign born which is an increase of 52% from 1992.

While the highest number of deaths of Hispanic workers were reported 2003-2006 in California (773 deaths), the highest rates were in South Carolina (22.8 per 100,000 Hispanic workers.)

Will New Jersey’s Injured Workers Continue to Silently Wait in Pain?

The NJ legislature is bogged down in controversy over what direction to take in order to respond to the State’s injured workers. While proposed administration legislation has passed through the Senate Labor Committee, the actual voices of the injured remain silent. No injured workers have yet testified before the legislature.

Without a master plan to address the issues raised in the Star Ledger series, the NJ Legislature is attempting to address specific issues and not considering some other thoughtful legislative proposals that have been pending for sometime. These include not only those outlined in my prior article introduced by Senator Sweeney and Assemblyman Cohen, but also A2846 and S785 which permits a COLA increase to benefits.

As the employers and insurance carriers continue to raise their voices, the silence of the injured workers is both eerie and foreboding.

CDC in Reviewing WCMSA Limits Review to One Life Expectancy Table

Effective July 1, 2008 the Centers for Medicare and Medicad (CMS) will exclusively use the Centers for Disease Control (CDC) Table 1 (Life Table for Total Population) when determining life expectancy in Workers’ Compensation Medicare Set-Asides (WCMSA) proposals. The directive was issued in a memo dated May 20, 2008.

Public Heath Advocates Form Committee to Ban Asbestos in America

"The most efficient way to eliminate asbestos- related diseases is to stop using all types of asbestos." The World Health Organization

Public health advocates, led by the Asbestos Disease Awareness Organization (ADAO) and The John McNamara Foundation, today announced the formation of the Committee to Ban Asbestos in America (CBAA). Asbestos kills more than 10,000 men, women and children every year. The National Center for Health Statistics (NCHS) of the Centers for Disease Control and Prevention (CDC) reported mesothelioma deaths increased from 2004 to 2005 in "Health, United States, 2007." Since first tracked in 1980, mesothelioma deaths have increased every year. "As recommended by the National Institute for Occupational Safety and Health (NIOSH) in 1976 the only way to prevent asbestos-related diseases is to ban its use, the CBAA supports language in a Committee Print before the House Energy & Commerce Subcommittee on Environment & Hazardous Materials," said Linda Reinstein, Chairperson of the Committee to Ban Asbestos in America. "We are calling on the U.S. Congress and the President to do the right thing and ban asbestos in America and fund critical medical programs. Doctors and scientists agree: asbestos is a carcinogen and that there is no safe level of exposure. Preventing asbestos exposure is the only way to eliminate asbestos caused diseases. Recent ADAO product testing confirmed asbestos is still found in consumer products including toys."

"Asbestos and the manufacturers of asbestos are responsible for creating the largest man made health crisis in this country," said TC McNamara, Founder of The John McNamara Foundation. "Asbestos went from being a miracle product to a serial killer which makes this legislation long overdue, but now is the time to ban asbestos in America."

http://www.banasbestos.us/

5TH ANNUAL THIS YEAR IN WORKERS’ COMP – THE TOP ISSUES & CASES

5TH ANNUAL THIS YEAR IN WORKERS’ COMP – THE TOP ISSUES & CASES
http://www.njicle.com/seminar.aspx?sid=558

Hear an expert analysis of key cases decided during the past year

Presented in cooperation with the NJSBA Workers’ Compensation Section

Tuesday, July 08, 2008 4:00 PM to 8:00 PMNew Jersey Law Center, New Brunswick / S1485d-14533

This fifth annual program features a panel of some of the most respected Workers' Conmpensation Judges and attorneys, who will review and provide insight on the top issues and cases that have emerged during the past year.

This fast-paced program will be packed with practical pointers that have proven successful in matters ranging from jurisdictional issues through coverage of employment. The program will expand your horizons and broaden your practice potential into expanding in developing areas of the law such as the Longshore Act, Defense Base Act claims, and actions involving New York jurisdiction, including 9/11 claims. Make plans to register today!

PROVEN STRATEGIES FOR DEALING WITH THE TOP ISSUES CONFRONTING TODAY’S WORKERS’ COMPENSATION ATTORNEYS, INCLUDING…
• Proving that a claim arose out of, and occurred in, the course of the employment: Mojica v. The Valley Hospital
• Interpreting the "Going and Coming Rule" to prove your case: Scott v. Foodarama Supermarkets • Determing jurisdiction of the court: Morella v. Grand Union/New Jersey Self-Insurers Guaranty Association 193 N.J. 350 (2008), Kibler v. Roxbury Bd. of Educ. 392 N.J. Super. 45 App. Div. 2007) , Flick v. PMA Ins. Co. and Kathleen Reed, 394 N.J. Super. 605 (App. Div. 2007)• What you need to know about counsel fees: Alvarado v. J & J Snack Foods Corp.
• How to handle a Longshore and/or Defense Base Act Claim
• What you need to know about NJ 911 exposure filing and proof requirements
...and more

http://www.njicle.com/seminar.aspx?sid=558
Moderator:JON L. GELMAN, ESQ.

Speakers include:
STEPHEN C. EMBRY, ESQ.
NANCY J. JOHNSON, ESQ.
EDGAR N. ROMANO, ESQ.

Click here to print paper registration form http://www.njicle.com/ICLEOrderForm.pdf

Medicare Recovery Made Simple

Navigating the Medicare recovery system just became a whole lot easier with the deployment of the new website launched by the new national MSP Recovery Contractor (MSPRC). The Centers for Medicare & Medicaid Services (CMS) has consolidated all of the functions and workloads related to Medicare Secondary Payer (MSP) post-payment recoveries into one MSP recovery contract.

The contract for the new national MSP Recovery Contractor (MSPRC) was implemented on October 2, 2006. The MSPRC has taken over new MSP recovery cases and most existing cases. Chickasaw Nation Industries, Inc. (CNI) is the national contractor. CNI has received several prestigious national awards including: Top Small Businesses, ranked #23 by Federal Times 2006; U.S. Department of Commerce Minority Business Development Agency National Minority Small Business of the Year SBA Administrator’s “Award for Excellence” 2005; and American Indian-Owned Businesses, ranked #2 by New Mexico Business Weekly 2004.

The website explains in detail the procedures and forms utilized by CNI to contact the parties and implement the procedures that it utilizes for recovery in: Workers’ Compensation, Liability, Med-Pay, PIP and Group Health Plan recoveries.

The new website site is a major step forward in assisting all parties in the recovery process.

Are Second Injury Funds Going to be History Soon?

Second Injury Funds [SIF] are now undergoing a critical evaluation as the economy continues to deteriorate. Originally created post World War II, the SIFs encouraged the employers to hire handicapped employees who were hired and had pre-existing disability. The concept afforded a shared responsibility through pooled insurance and insulated the employer from the burden of on apportioning liability in total and permanent disability cases.

Recently, however, the SIF had become raided by State politicians in an effort to balance their State budgets. New Jersey highlights such a concern, and within the last decade funds have been raided three times in order to satisfy debt in the general treasury. Not only does it renege on the promise of providing benefits to injured workers, it slows down the bureaucracy of administrating a workers’ compensation program by inadequately funding staff. At recent hearings before the New Jersey State Senate there were a multitude of complaints concerning inadequate staffing of the SIF, including the need for more attorneys to represent SIF. As a result of this outrage there is pending before the state legislature a resolution to amend the New Jersey’s constitution to prohibit such raiding in the future of funds directed to employee benefits.

SIFs had been challenged by the insurance industry over the last 10 years and they have attempted to disband them and wind down their benefit distribution contributions. Such a challenge was recently opposed in the State of Missouri where an attempt to eliminate the SIF by 2011 was defeated.

Opponents the SIF’s indicate that the Americans with Disabilities Act insulates the employee from retaliatory claims, and the SIFs are no longer necessary. Additionally, insurance carriers would like more control over the distribution of the benefit dollars and the SIF appears as an additional obstacle to employers in crafting settlements in total and permanent disability cases.

It is likely that this debate will continue and that the trend towards elimination of SIFs will also continue.

Cost of Medical Benefits Continue to Soar in Workers Compensation

Medical benefits continue to soar in the workers compensation arena. They constitute the largest and most significant factor in the payment of workers' compensation claims. At a recent meeting of NCCI Holdings Inc. it was announced that data reflects a huge increase in the medical component.

What is significant is that medical now comprises 59% of the benefit dollar reflected in 2007 projections. The total indemnity in 2007 amounts to only 41% of the benefit dollar. In 1997 medical comprise 53% of the benefit dollar and in 1987. It comprised only 46% of the benefit dollar. This is a significant increase in a critical trend in the payment of workers' compensation benefits.

Workers compensation medical cost trends reflect a 6% increase in 2007. While this change is lower than the increase of 2006 which was 8.6%. The overall expenditures are increasing. Medical severity remains growing at a faster rate than the medical cost per loss-time claim. In 2007 while growth was at 6%., the medical CPI was only 4.4%.

Employer costs in workers' compensation have decreased to a projected 1.8% of the total cost in 2007 significantly down from the 2.2% reported in 1997. However, when combined, both the health insurance and workers' compensation programs, the employer' s costs continue to rise very significantly. Health insurance in 2007 amounted to 7.1% of the cost to employers for employee compensation while. In 1997 there were only 5.5%.

“Given the positive 2007 results, our short-term view of the market is optimistic,” added NCCI Chief Actuary Dennis Mealy. “However, our long-term outlook is cautionary due to the myriad of uncertainties that continue to face the business.”

Looking at an overview, when both benefit programs are combine, the statistics reflect a significant rise from the 7.7% in 1997 to the 8.9% in 2007. This trend, if continued, will probably result in consolidation of both benefit programs, and elimination of administrative and litigation costs, through use of a single-payer system.

Diagnosing and Curing the Ailing NJ Workers' Compensation System

On the eve the NJ Senate's investigation into New Jersey's workers' compensation system, the question lingers on how to evaluate its health. New Jersey has always had a very large and very dedicated workforce A recent newspaper series by Star-Ledger reporters Dunstan McNichol and John P. Martin revealed that the system is serious flawed and that it is in need of a “complete overhaul.”

The State has a history of being a heavily industrialized state with a huge legacy of pollution from asbestos to petrochemical. Dr. Irving J. Selikoff, of Paterson, NJ, began his landmark studies on asbestos workers in New Jersey. In 1911, almost a century ago, NJ adopted an administrative system known as workers' compensation and it was the intent of the Legislature to provide a speedy and cost effective system of delivering statutorily defined benefits to injured workers while passing the costs onto the consumers of products and services.

This will be the first major evaluation of the workers’ compensation system in 30 years. The last one resulted in a fraud report from the NJ State Commission of Investigation and subsequent statutory change.

Much has changed from the past. In 1911 modern medicine was unknown and so were the diseases that it now treats. The program’s benefits were meager and the conditions eligible for compensation were few and far between. More Americans have died from occupational disease in the United States of America in the past 40 years than in all wars dating back to 1776. Hearings on S.79 before the Subcomm. of Labor and Human Resources of the Senate Comm. on Labor and Human Resources, 100th Cong. 1st Session, S.Hrg. 100-56, pt. 1, at page 1 (1987). Collateral benefit programs did not exist: major medical insurance, long term disability, social security and pension programs.

We are experiencing a struggling economy today. Former Labor Secretary Robert Reich stated, “Fifty years ago, when over a third of the American workforce was unionized and most big industries were oligopolies, it was fairly easy for unionized workers to get higher wages and benefits without putting any individual company at a competitive disadvantage. The higher wages and benefits were merely passed on to consumers in the form of higher prices or came out of profits that would otherwise go to investors. Today, though, most companies are in fierce competition because new technologies combined with globalization have destroyed the old oligopolies and allowed many new entrants.”

Today the workers’ compensation process is confronted with the complexity of the causal relationship of new diseases to synergistic occupational exposures to complex substances as well as traumatic events. Multiple bureaucratic benefits programs that are not formally connected burden the system with claims and liens. Revenue is limited by fewer manufacturing facilities and it is more costly to provide medical treatment and pharmaceutical protocols that result in miraculous recoveries as well as serious and fatal unfortunate results. Benefits must be paid out longer since the average person has a greater life expectancy, ie 1911 – 50 yrs of age and 2007 – 78 years of age.

As in medicine, one must look at both subjective complaints and objective findings to guide its evaluation of the workers’ compensation system. One can hear the cry’s of injured workers “Waiting in Pain,” and of the injured workers and the families of those who did not survive the compensation system. Stories of frustration and outrage are reported in the press. Testimony to the NJ Senate will come from the stakeholders who have economic interests in the system and those who are organized representatives of those who are unable to speak any longer. Those voices must be heard and evaluated. It is important to heed to words and wisdom of all and evaluate them in the context of self-motivation.

The compensation system has been portrayed as, “a dead elephant in the room,” and one that fails to carry out the legislative intent of 1911. Professor Emeritus, John F. Burton, Jr., of Rutgers University of the School of Management and Labor Relations, describes the NJ system as, "It's kind of a sleepy system…” that is “…not particularly worker-friendly."

Unlike The Constitution, the workers' compensation act deals not in the theoretical and vague general concepts of Democracy. The compensation act is a document, which within its four comers, speaks with certainty, specifics and details.

The program has failed because under the present system the Legislative intent cannot be carried out. One cannot drive a 1911 model car on the NJ Turnpike today. Workers' Compensation should be viewed in that context, and not as a cash cow for any interest parties.

The Act can no longer provide medical treatment in an efficient and effective manner consistent with the legislative intent to provide social remedial benefits through a liberal and summary social insurance program. Medical coverage has become acute in NJ and in other jurisdictions. Almost a majority of workers will soon be uninsured for major medical coverage. NJ should take the initiative, as other states have, to provide for universal health care. NJ should combine workers' compensation medical coverage with a universal employer based medical care program and have a single payer system. A single payer system will be cost effective, efficient and provide more appropriate delivery of medical care.

The workers' compensation system began in 1911 with the noble mission as a social remedial system providing an efficient and certain system of benefits to injured workers. Today, the system struggles to protect employees as the rapidly evolving landscape is demanding increased attention to reconsideration of an IHC system in light of the consequences of the program's costs and the consequences of being uninsured for healthcare benefits. The participants in the current program, including employees and employers , will require a more balanced and certain medical delivery system. The lack of healthcare coverage takes an enormous toll on the uninsured, which results in avoidable deaths each year, poorly managed chronic conditions, undetected or under treated cancer and untried life-saving medical procedures. An Integrated Health Care plan is a potential national shift to reduce costs so that a healthcare safety net can be maintained for workers and their families.

“Full-time healthcare would save money. Instead of paying for two insurance plans – one to cover healthcare for injuries and illnesses on the job and another for injuries and illness off the job – businesses would buy one plan. As Roger Thompson, former director of Travelers Insurance Workers’ Compensation Strategic Business Unit put it, the present system is ‘like having two trains going down separate tracks and it doesn’t make a lot of sense to have all the administrative costs to maintain these separate systems.’” R. McGarrah, “Full-time Healthcare for America’s Working Families [Draft],” AFL-CIO (August 22, 2003).

In the short run, adopting such concepts, proposed by Senator Stephen M. Sweeney and Assemblyman Neil M. Cohen, would be fine initial steps:

• prohibiting the future raiding of revenue on designated workers' compensation funds (CSR-60) should be enacted;
• swifter scheduling and use of continuous trials;
• greater permanent, temporary rate and dependency [A-2499], benefits;
• rate increases [A-2498] should be enacted;
• a review of judicial appointments as recommenced in the 1974 by the State Commission of Investigation report;
• an enhanced in-service judicial training curriculum;
• exclusive jurisdiction of the Division of Workers compensation over medical fee disputes [A-2501];
• a less burdensome Uninsured Employer Fund system to shift the responsibility to the State to locate and serve responsible parties and in the alternative to carryout the mandate of the Legislature to make payment to uninsured workers and asbestos victims expeditiously and even more swiftly in exigent cases;
• an independent oversight commission [A-2503] should continuously evaluate the status and progress of this system that handles trust funds and benefits valued at over $1.8 Billion dollars per year; and
• Data Match with the Centers for Medicare and Medicaid Services to comply quickly with the Medicare Secondary Payer Act which was enacted decades ago.

By evaluating the health of the compensation system thorough an intensive analysis of both the objective findings and subjective complaints, the NJ Senate will have the opportunity to enact modern, creative and innovative solutions that will be able meet the present needs of the workers, the employers and taxpayers of State. The NJ Legislature has the opportunity to craft an up-to-date system that will cure the ailing and antiquated workers’ compensation system and embrace today’s needs and tomorrow’s future and bring the State into a new century.