Archive for December, 2005

How Long should a Disability Last?

Thursday, December 8th, 2005

One of the most important questions confronting disability managers is how long a disability should last. During Lynch Ryan’s 20+ years in the business, we have seen the loss of a finger tip turn into a permanent total disability, while the loss of three fingers resulted in only a month of lost time. One employee injures his back and is gone forever; another with a more serious back strain is back to work on modified duty within a week. What accounts for the differences? How many days of disability are medically necessary?
What are Disability Duration Guidelines?
If you study a lot of injuries, over a long period of time, you can develop a strong sense of how long a disability should last, ranging from no time lost to years and years of disability. The data can encompass many diagnoses and can take into account the occupation of the individual (sedentary to physically demanding) as well as co-morbidities (health problems that may impact the speed of recovery). The data can reveal optimum results (minimal time away from work), average and mean durations (the middle of the bell curve) and the outlyers on the wrong side (many months of what is often medically unnecessary disability). This type of data should be very useful for claims adjusters, nurse case managers, sophisticated employers and insurers in general for setting goals in returning disabled individuals to fully productive lives. There are a number of these data bases available; the Reed Group has one that is both comprehensive and user-friendly.
Like managed care, disability duration guidelines are a hot topic, one of the new buzz words in the world of cost control. A lot of people are now using these guidelines – but are they using them effectively? I doubt it. Our esteemed colleague, Dr. Jennifer Christian, head of Webility MD, has done a great job of listing the uses and misuses of disability duration guidelines in one of her “Ask Dr. J” columns, available here in PDF format.
What not to do!
Jennifer notes that people often simply match the guideline numbers with the current length of disability for a given situation. The adjuster tends to feel that there is no need to do anything until the mid-point has been reached. And of course, the red flags really start blowing in the wind once the claim approaches the maximum durations. As happens all too often in the world of insurance, this approach results in too little being done too late. You are shutting the barn door long after the horse has wandered into the field.
Aligning Incentives
Jennifer suggests that people focus on the optimal side of the distribution. Adjusters should set a goal of beating the best: returning disabled people to work faster than is normally expected for the given disability. In doing this, you ensure that the proper resources are directed with a laser-like focus on the situation. In Lynch Ryan’s experience, you have to treat every disability with a sense of urgency from day one. Too many things can and often do go wrong if you sit back and wait for a situation to resolve itself.
Jennifer acknowledges that the “worst case” number might be useful for setting reserves, but absolutely not for setting the agenda. She suggests that adjusters be rewarded for taking risks early on – for drawing upon the full range of options before the claim drifts toward long-term duration. With this strategy, you are likely to find yourself spending a little more in the short run and much less in the long run.
Jennifer’s column contains a lot of interesting detail. It’s well thought out and very comprehensive. If you are interested not just in using disability guidelines, but in using them well, this would be a good place to begin.

Texas Workers Compensation Reform

Wednesday, December 7th, 2005

After our recent post on Missouri, one of our regular readers asked for a summary of reform provisions in the Texas law enacted in June. Here’s what we came up with – we invite Texas readers to add any comments and clarifications – we’d welcome the input!

  • TWCC was eliminated; workers compensation is now managed by the TX Department of Insurance through the Division of Workers Compensation (DWC). The intent is to streamline & reduce bureaucracy.
  • Office of Injured Employee Counsel (OIEC) is formed to advocate for and help injured workers.
  • Employers can designate a medical provider network (MPN) which employees will be required to use for workers compensation medical care. This is optional, employers can choose a network or not. This is a major new provision, rather complex, and still in the works since rules were to be adopted by Dec. 1, 2005. Essentially, networks will designate treating doctors, and injured workers must choose a treating doctor from the network list. For several years, the number of docs in the system had been decreasing, and the hopes are that these changes will help attract more quality MDs back into the system, and afford employers more control; the employee still has choice, but for those employers with certified networks, the employee must choose a doctor in the network. (However, they can redirect for a second visit).
  • Employee benefits will increase after 10/1/06 (according to AON, by about 15%) and the waiting period for payment of Temporary Income Benefits is reduced from 4 to 2 weeks.
  • Exclusive remedy is bolstered to encompass some claims that were previously denied, such as horseplay. While these were meant to exclude employees who were at fault, the end result was that denied employees were free to sue for damages.
  • A fee schedule for prescription drugs has been added.
  • The Supplemental Income Benefits eligibility has been tightened in terms of work-search requirements
  • The Hazardous Employer Program will be eliminated. This was a program that identified employers with injury rates substantially higher than those anticipated for their industries. Once identified as Hazardous, these employers were mandated to hire a consultant approved by the Division.

Texas Department of Insurance page on the new law
Key provisions and frequently asked questions about the new law broken into separate sections for employees, for employers, for health care providers, and for insurers; also, House Bill 7 Frequently Asked Questions for Employers and Insurance Carriers.
Changes in Texas Workers� Compensation (pdf)
An excellent summary and analysis of the changes by AON, September 2005.
Texas Enacts Workers� Compensation Reform Featuring MPNs, Administrative Reforms
A brief summary of the reform by Sedgwick June 3, 2005.
Texas Workers� Compensation 2005 Reform (HB7) Overview (pdf)
A brief summary of the changes in the law by St Paul Travelers.
Texas Reforms Its Workers’ Compensation System
Summary of the new law by law firm Littler Mendelson.
The complete text of the law
The text shows additions and deletions from the prior law.

Obese Trucker = Public Safety Hazard?

Monday, December 5th, 2005

We all know that morbidly obese people are at risk for a wide variety of health problems. But do they pose inherent dangers to others? In a recent case decided in Oregon, a 550 pound trucker was suspended and eventually fired because his employer believed he posed a risk to others on the road: due to his girth, he might have trouble turning the steering wheel, which was pressed by his stomach. A jury begged to differ.
Driving Versus Lifting
This was not a simple case. The issue first arose when the driver, John McDuffy, was given a smaller-than-usual vehicle. The steering wheel adjustment mechanism was broken, so he could not fit in the cab. When he reported the problem, he was suspended.
“I could see them suspending me if I did something wrong, or if I couldn’t do my job,” he said. “But I’d been there 14 months. I’d always done my job…”
Before allowing McDuffy to return to work, they subjected him to a physical capacities exam, where they videotaped him climbing in and out of the truck. (I would be interested to know whether such an exam was in itself an act of discrimination, as McDuffy was singled out to take it due to his size.) The video tape became an important piece of evidence in the trial.
The treating doctor stated that driving was not a problem for McDuffy, but he was not released to handle freight. What is not clear from this article — and what may be the most important point of all – is whether handling freight was an essential part of the job. If freight handling was essential, then McDuffy was not able to perform the work and could have been safely terminated (after options for accommodating him had been thoroughly explored). However, the employer did not focus on the issue of handling freight, but on a more general concern for public safety relating to the operation of the vehicle.
Warn’s Warning
McDuffy’s defense quoted an internal memo from the company’s risk manager, aptly named Tammy Warn, who observed about another obese driver at the company: the man’s excessive girth was a problem because “his protruding belly gets in the way of the steering wheel.”
Within a week of this memo’s writing, McDuffy was suspended.
McDuffy returned to work in some capacity (the article is not clear about the circumstances). While working, he bent to pick up something off the trailer floor and pulled a muscle in his back. He went out on workers comp for several months. During his prolonged disability, he was fired. So he sued. In November of this year, a jury found that the employer had discriminated against McDuffy and awarded him $109,000.
McDuffy’s employer made at least three fundamental mistakes. First, the employer failed to focus on the essential requirements of the job, which appeared to include elements of handling freight which McDuffy could not perform. Second, the employer was unable to demonstrate that McDuffy’s obesity directly impaired his ability to drive. Finally, the employer resorted to a blanket defense that tried to cast all obese drivers in a common light.
LynchRyan reminds employers to focus relentlessly on the essential elements of the job. Every disability law empowers employers to define the nature of the job and how it is to be done (while requiring accommodations in certain circumstances). Had McDuffy’s employer done this, they could probably have avoided the court case.
Obese Truckers
We learn from a trucking website that obesity is not uncommon in the trucking industry. In a 2004 survey, researchers found that the average OOIDA member was 5�10� tall and weighed 216 pounds � a 31 percent body mass index (BMI) number, or 1 percent over what the Centers for Disease Control and Prevention considers obese. In an earlier 2001 survey, the OOIDA Foundation found that roughly 87 percent of truckers polled were either overweight or obese.
While it’s true that obesity may place these drivers at greater risk for injury, there is no evidence that there are increased risks to the general public. Driving, by definition, involves a lot of sitting – the kind of inactivity that leads directly to weight gain. Savvy transportation companies might do well to encourage their drivers to participate in wellness programs. There’s no discimination in that — and in the long run there would likely be significant reductions in costs, along with an increase in productivity.

Labor groups challenge Missouri’s new workers compensation law

Thursday, December 1st, 2005

This past July, Missouri’s Governor Blunt signed legislation overhauling the state’s workers compensation statute, swinging the pendulum much more heavily in favor of the employer. (In a prior post, my colleague Jon Coppelman commented on some of these changes while they were still under review.) Yesterday, more than 70 labor groups filed suit to challenge the constitutionality of the new law. The suit charges that:
“The workers’ compensation system was created as a way to resolve injury claims through administrative proceedings rather than the courts. But the lawsuit contends the “drastically altered” law diminishes workers’ rights to the point that the administrative system no longer is an adequate substitute for suing in court.
It alleges multiple due process violations of the state and federal constitutions, as well as equal rights violations for allegedly discriminating against older workers and others. The lawsuit claims that new drug testing policies violate rights against unreasonable searches. And it claims new legislative and executive branch control over administrative law judges who hear workers’ compensation cases violates the constitutional separation of powers.”

Major provisions of the new law
The new law involves many changes. Some of the most significant changes tighten the definition of compensable injuries. An injured worker must now demonstrate that work was the prevailing factor or primary cause of an injury. Previously, the standard was that the work had to be a substantial factor; also, the new law redefines an accident to be “an unexpected traumatic event or unusual strain identifiable by time and place of occurrence and caused by a “specific event’ during a ‘single work shift,’ “ notably striking the words “with or without human fault.”
The law adds a mechanism allowing for a 25% to 50% reduction in benefits if the injured worker failed to use a safety device or was not following safety rules. Significantly, this failure does not have to be willful. We find it troubling that coupled with this change is the provision that employers now only need to make a “reasonable effort” rather than the previous “diligent effort” to get employees to use safety devices and to follow safety rules. This effectively shifts the burden of safety from the employer to the employee. It’s hard to understand what the thinking was behind any provision that would weaken safety standards in any way.
There are many other changes – for a more in-depth view, Administrative law judge Carl Mueller produced a 20 page review of the new Missouri law (pdf) comparing it to the old law; or see The Employer’s Guide to Understanding the New Missouri Workers’ Compensation Statues (pdf) by J. Scott Gordon of Long, Luder & Gordon.
Be careful what you wish for?
We wouldn’t venture any predictions about whether this particular challenge by labor will succeed or fail, but we would lay money on the fact that if it fails, the matter won’t be put to bed. While reform may have been needed, some provisions in the new law mark an overall shift away from the no-fault pact that has been at the very core of exclusive remedy. Any significant erosion of that pact will inevitably lead to an increase in court challenges. To succeed, workers compensation needs to be a delicate balancing act between the rights and responsibilities of both the employer and the employee. Any swing of the pendulum that shifts the balance too heavily in favor of the employer will drive aggrieved workers to the courts, the very thing that workers compensation laws were designed to protect employers from. Time and the courts will tell whether Governor Blunt’s reform will prove to be too blunt an instrument.