Archive for October, 2008

Hot off the presses: Health Wonk Review

Thursday, October 30th, 2008

David Harlow of HealthBlawg has posted the Samhain edition of Health Wonk Review. If you are like me and don’t know what Samhain refers to, go and get yourself educumated – it’s interesting! As are all the entries in this last-call edition for health policy posts before the upcoming election. David is one of our long-time participants in the biweekly wonkery. If you wonder why he calls his site a “blawg” that is a little legal pun used to signify the blogger is an attorney. While many of our regulars are consultants and physicians, David brings also his perspective as an attorney to the legal, policy and business issues facing the health care community.

Health & Safety resource roundup

Wednesday, October 29th, 2008

Cleaning out our bookmark files, we came upon an assortment of health and safety resources that we thought we’d pass along.

Disability Insurer Oversight: Just Ducky?

Tuesday, October 28th, 2008

Last month we blogged the emerging scandal involving the Long Island Railroad, where over 90 percent of employees (management included) retire on disability. Walt Bodanich and Duff Wilson of the New York Times have a follow up article that goes into some of the deails. It’s not surprising to find that workers were coached in the best way to apply for disability, including a select list of doctors and paying for their disability exams in cash.
One detail of the new report caught the Insider’s eye. Two private sector insurers wrote coverage for railroad workers: Transamerica and Aflac. Transamerica has walked away from the (unprofitable) business. Aflac, on the other hand, has approached the scandal in a rather circumspect and casual manner.
Wlliam Capps, manager of Aflac’s special investigations unit, testified at a hearing convened by New York AG Andrew Cuomo that since 2003 his company had paid out $4.1 million to LIRR employees holding short-term disability policies. He says that Aflac did not realize anything was amiss until this year. (Perhaps they read about it in the papers while enjoying their morning commute?).
Capps’s investigation focused on three areas: the close proximity betweeen retirement and the submission of claims; the similarity of ailments; and the use of the same three doctors by most of the employees. Under questioning, Capps said that about a quarter of LIRR policyholders had cashed in on the coverage.
Twenty five percent! In this era of data mining and performance management, you would think that such a high level of disability claims would raise a few red flags. Private insurers are accountable for results on a quarterly/annual basis. There is no way they could make money on a disability program with such a high percentage of those covered drawing down benefits. You have to wonder whether the Aflac sales department ever gets feedback from claims, or whether anyone actual reads the performance data.
I can just see Aflac’s ubiquitous duck in a new ad campaign: the duck is strapped across a railroad tie, with the LIRR commuter train heading straight for it. The duck quacks in alarm and scatters feathers in a desparate effort to escape. That’s more than can be said for Aflac itself, which lay down on the tracks, closed its eyes and took a nap, while the 5:02 hurtled down the track on its scheduled rounds.

Attorney Fees in Florida: What is “Reasonable”?

Monday, October 27th, 2008

Emma Murray was a certified nursing assistant for Mariner Health Care in Florida. While helping to lift a patient, she suffered a uterine prolapse, which required a hysterectomy. She filed for workers comp, but her claim was denied because the carrier determined that the condition was not work related. Murray appealed. Based upon a favorable independent medical exam, she prevailed. The court awarded her $3,244.21. That’s chump change for the comp system, but Murray’s award is not the issue. The case before the Florida Supreme Court involved the fee owed to Murray’s attorney.
Under the most recent reforms to the Florida comp statute, attorneys are supposed to be paid according to the following schedule:
20 percent of the first $5,000
15 percent of the next $5,000
10 percent of the amount above $10,000
You can see where this is going: based upon Murray’s rinky-dink award of $3,244.41, her attorney collects $649. The attorney put in 80 hours, so the hourly rate for the effort is $8.11 – in the same order of magnitude as “would you like fries with that burger?”
The Florida Supremes found some ambiguity in the statute, as there is language awarding “reasonable” fees outside of any specific formula. The court noted that defense attorneys billed for $16,000. If you multiply the 80 hours of work performed by Murray’s attorney with the usual and customary fee of $200 per hour, the resulting fee would be about $16,000.
Bottom line: the court ordered the carrier to pay Murray’s attorney $16,000 for securing a $3,244 settlement for her client. Naturally, business and insurance people are outraged by the court’s ruling and fearful of its implications for the future. Claimaint attorneys, by constrast, have raised their glasses in a toast to the black robed justices.
A World of Gray
Is the ruling bad for workers comp? Will attorney fees drive rates back up? Strict adherence to the above fee standard would have two potentially negative consequences: attorneys would walk away from small cases (bad for claimants) and they would hold out for the largest possible settlements (thereby enhancing their fees). Of course, there is a distinct possibility that some attorneys will aggressively pursue “nuisance” claims, in the sure knowledge that it won’t benefit their clients very much, but they will make out like bandits. (I know, analogy in poor taste…)
When it comes to defining “reasonable,” reasonable folks will disagree. It’s always been that way and always will be. Workers comp is supposed to be no fault and friction free. In the best of all possible worlds, attorneys would not even be needed. But in case you haven’t noticed, we are not yet living in the best of all possible worlds.

Down the Rabbit Hole: The Economic Crisis and Workers Comp

Thursday, October 23rd, 2008

We are all struggling to keep our bearings in a world where the conventional compass is spinning madly. The economic crisis has sent the stock market plummeting and has impacted every aspect of our lives. We wake up with the same thoughts that Alice had, following her fall down the rabbit hole:

I wonder if I’ve been changed in the night? Let me think. Was I the same when I got up this morning? I almost think I can remember feeling a little different. But if I’m not the same, the next question is ‘Who in the world am I?’ Ah, that’s the great puzzle!

Great puzzle, indeed. For what it’s worth, here are just some of the financial crisis implications for workers compensation:
Illegal Immigrants: Our colleague Peter Rousmaniere has done a great job of keeping us up to date on immigration issues. He points out that all states (with the single exception of Wyoming) provide at least some comp benefits to injured, undocumented workers. Ironically, the collapse of the economy may be accomplishing what an ineffective Congress has been unable to do: with jobs becoming more difficult to find, many illegal immigrants are returning to their native countries. The scale of this exodus is only likely to impact the overall numbers if the recession turns into a full-scale depression. That is one “solution” to the undocumented worker problem that no one wants to see.
Older Workers: many older workers have seen retirement nest-eggs – in the form of equity in a home and stocks – disappear altogether in just a few weeks. These people will do everything they can to stay employed. Older bodies break down and are slower to heal. There are profound and as yet unknown implications for the workers comp system.
Lay offs: There are a number of factors leading to the loss of jobs, most of them related to tightening credit. Work has dried up in construction and related industries. Consumer-based industries, confronted with reduced demand, are cutting back on inventories. With credit more difficult and more expensive to secure, companies are having difficulty making payrolls. This means lay offs. Once the employer-employee bond is broken, desperate unemployed workers will scramble for any benefits they can find: while unemployment insurance provides support for just 26 weeks, workers comp can help pay the bills for years…
Commercial insurance: Insurers make money by conservatively investing premium dollars in the market. The float from invested dollars provides an essential cushion for covering future losses. Well, the float is no longer floating – it has sunk. Blue chip stocks have been transformed into cow chips. As a result, the margin of error for insurers is much tighter than it was just a few months ago.
A Dark Wonderland
We live in interesting times. The Republicans accuse the Democrats of socialism, even as they provide a socialistic intervention for Wall Street. The federal government cannot find money to rebuild our crumbling infrastructure, but suddenly $700 billion is “freed up” (actually, put on the credit card) to bail out the financial system. We all recognize the need to reduce our dependence on foreign oil, even as the earth cries out for less harmful forms of energy. Then oil, impacted by the collapsing economy, suddenly becomes cheap again. Is it my imagination, or is there less urgency in the talk about alternative energy sources?
The once reliable assumptions – steady growth, blue chip reliability, stability in the markets – have suddenly evaporated. We have tumbled down the rabbit hole and our world is becoming “curiouser and curiouser.” We have returned to a cruder form of the fundamentals, as outlined by the mock turtle: Reeling and Writhing, of course, to begin with, and then the different branches of arithmetic — Ambition, Distraction, Uglification, and Derision. In these undesirable respects, we are doing pretty well!
The Gryphon reminds us: “The adventures first… explanations take such a dreadful time.” Alas, we are still in the middle of our adventure, with no reasonable explanations in sight…

Cavalcade of Risk, plumbers, illegal immigrants, cranes, contractors, and more

Wednesday, October 22nd, 2008

Cavalcade of Risk #63:The WABAC edition hosted by John Cogan at Regulating Health Insurance. John is the Executive Counsel-Executive Assistant for Policy and Program Review for the Rhode Island Office of the Health Insurance Commissioner. He’s a first time host of Cavalcade so you might kick the tires at his blog after catching up on the news.
One of this week’s posts we found noteworthy is from Louise at Colorado Health Insurance Insider entitled Business 101 For Joe the Plumber, in which she analyzes how Joe’s business would fare under the Obama and the McCain tax health care reform plans.
In other news:
Illegal immigrants and workers comp – Peter Rousmaniere posts about a new analysis of workers comp laws and illegal workers recently issued by the Independent Insurance Agents and Brokers. His post summarizes some of the key issues in the report but the bottom line is that 38 states offer at least some type of benefits to illegal aliens. The report is available in chart form (PDF) from WorkCompCentral.
High comp costs for defense-based contractors – The Pentagon is looking to curtail workers compensation costs for overseas defense-based contractors. Costs went from $7.6 million on 430 claims in 2002 to $170 million on 11,887 claims in 2007, according to the Congressional Research Service, with the Defense Department accounting for 90% of those costs. One of the ways that they are looking to cut costs is to consolidate to a single insurer.
Van pool risks – Nick Whitfield of Workforce looks at the risks involved with company-sponsored van pools. In response to skyrocketing gas prices, many employers adopted measures to help defray their employees’ costs of commuting, with van pools being one of the options. A van pool can have potential workers comp exposure depending on the way the pool is established. While injuries sustained during a commute would not normally be compensable under workers compensation laws, many state laws treat employer-sponsored transportation differently so injuries sustained in a commute might indeed be compensable. Many employers turn to third party contractors to run van pools and while this would generally mitigate the risk, experts suggest that employers who sponsor programs first consult with their broker, insurer and state workers’ comp authority.
OSHA and cranes safety – Celeste Monforton of The Pump Handle looks at the OSHA proposed rule on crane safety, which was published in the Federal Register on Oct 9 and will be in public comment phase until December 8. She notes that, curiously, the estimated 55 lives saved annually with the improved standard is not mentioned in the proposal.
Health & safety blogsThe Pump Handle referred to above does a great job covering health and safety issues in the workplace. We’d like to do a shout-out to a few other blogs that are on the health and safety case: long-time blogger rawblogXport; Tammy Miser at Weekly Toll; the vigilant folks at OSHA Underground; GotSafety Blog and The Safety Blog.

Make way for the cyborgs: robotic mobility devices

Monday, October 20th, 2008

We are totally fascinated with some of the assistive technologies that hold promise for the disabled to regain powers of mobility. We’ve previously discussed exciting developments in high tech wheelchairs and in July, we posted about a truly exciting development: an exoskeleton device from Israel called ReWalk, a light, wearable brace that holds promise for helping those paralyzed by spinal chord injuries to actually walk again. Quite astounding.

More recently, thanks to Medgadget, one of our favorite reads, we learned about another promising development in assistive mobility technology: HAL, the robot suit. HAL, which stands for Hybrid Assistive Limb, is currently being marketed in Japan in one- and two-legged models. These braces help people to walk by detecting electrical signals on the skin that are sent from the brain to the muscles, which then provide robotic assistance to people as they walk. You can learn more about HAL at the web site of the developer, Cyberdyne or check out this video issued as it was being developed – it looks like something out of a science fiction film. (ed. note: video updated with newer version)

Robotic suits or exoskeletons are an interesting area of technology to keep an eye in in terms of potential applications for the disabled. Unsurprisingly, much of the research in this area focuses on military applications so we may be seeing armies of cyborg-like soldiers with super-human strength. Ironically, warfare is often the spark for many developments in medical technologies.

Pre-election Health Wonk Review is posted

Thursday, October 16th, 2008

Things are heating up with the election just a few short weeks away. You can read about the pre-election health policy debate over at Joe’s place. Now if you saw last night’s debate, you might be thinking “Joe the Plumber,” but no, this is Joe the health policy wonk at Managed Care Matters. Some of the key issues that wonkers discuss in this week’s issue: Is health care a right or a responsibility? Which candidate has the best health plan? How has the media being covering the health care issue? There’s much more awaiting you in this week’s issue – and you’ll have one more chance to get the health policy blog world’s take on things before the election in our next issue on October 30.

New Jersey: The Fix is In

Wednesday, October 15th, 2008

Back in April, we blogged the troubled status of workers comp in New Jersey, a patronage-ridden system that failed to provide timely benefits to many injured workers. The system suffered from a decades-long inertia: yes, there were problems for injured workers, but employers benefitted from relatively low rates. There was little groundswell for reform; the last effort to update the legislation took place in the 1970s.
This past spring, Dunstan McNichol and John Martin, reporters for the Star-Ledger, ran a lengthy expose of problems in the system. Perhaps muckraking is not what it used to be, but in this case, it worked wonders. Governor Corzine recently signed five reforms bills into law, all stemming from the exceptional reporting performed by McNichol and Martin.
Here is a brief summary of the bills:
S1917/A2969: The governing board of the state’s rating bureau is expanded to include representatives of labor, business and the general public. Presumably, the meetings will be open and, for the first time, actions of the board will be documented.
S1916/A2968: This bill ensures prompt judicial attention to disputed claims. In the past, workers might wait years (literally) for treatment if a carrier disputed the claim.
S1915/A3059 requires employers to submit proof of workers comp coverage on their annual reports filed with the Department of Treasury. As with many states, undercollection of premiums penalizes employers who carry full coverage for their workers.
S1914/A2967 strenthens enforcement through enhanced administrative and criminal penalties against employers who fail to secure comp coverage.
S1913/A2966 increases the power of judges to enforce the law against insurers, employers or attorneys who fail to comply with a judge’s orders or deadlines.
In the original expose, McNichol and Martin demonstrated that the appointment of judges was based almost entirely on patronage. We can only hope that legislative reforms include training for judges and sanctions (including removal) for those who are unable or unwilling to improve the way the system functions.
While it will take some time to determine the effectiveness of the New Jersey reforms, these five laws definitely move the system in the right direction, toward fairness and accountability. The fix is in – and that’s a good thing. Of course, a system is only as good as the people who run it. It’s comforting to know that an independent and quality press – exemplified by McNichol and Martin – will be on hand to monitor the results.

Texting can be lethal

Tuesday, October 14th, 2008

With the recent focus on the economic meltdown and the pending election, you might have missed the story about the likely cause of the horrific California train crash that killed 25 people last month and injured 135 others. Almost immediately, authorities knew that the accident was the result of human error – the driver had failed to stop at a stop sign. But what didn’t surface until later is that the driver was text messaging just seconds before the crash:

“Robert Sanchez, the driver of a Los Angeles Metrolink commuter train that crashed head-on with a freight locomotive, may have been text messaging seconds before the fatal crash, according to subpoenaed reports from Verizon Wireless. Records show the driver had received a text at 4:21.03 p.m. and sent a text at 4:22.01 p.m. The two trains crashed seconds later at 4:22.23 p.m.
Records also showed that during his time operating the train, the engineer received seven text messages and sent five. Earlier in the day, during a two-hour morning shift, the engineer’s cell phone received 21 text messages and sent 24 text messages.”

The driver’s texting was in violation of the National Transportation Safety Board’s policy banning all use of phones while operating a train. As any employer knows, having a policy and enforcing it can be two separate matters, in this case with tragic results.
In most states, texting while driving is still a legal practice. While several states are looking at potential laws to ban the practice, only a handful of states currently have such laws on the books – the state of California and the city of Chicago have recently both banned the practice. A recent survey of 1500 drivers by Nationwide Insurance revealed that about 20% of drivers are texting while behind the wheel – and that number may reach as high as 66% when isolating drivers aged 18 to 24.
Regardless of state law, employers should enact safety policies that encompass mobile devices. Tom Starner deals with safety and other issues related to emerging technology in Human Resource Executive Online article Calling for Enforcement. And if the human cost alone isn’t enough to catch an employer’s attention, Starner cites a number of litigated cases with multi-million dollar settlements related to fatalities caused by employees who were using mobile devices. He quotes Portland, Ore. attorney Nancy M. Cooper:

“As those latest examples show, it’s becoming increasingly important for employers to implement effective cell-phone-use policies, both to limit liability and improve safety,” Cooper says. “It doesn’t matter if a call is being made during regular office hours or not; what matters is that the call [or text messaging] is work related. Employers may be found liable for any damages caused by an employee acting within the scope of his or her employment.”

Motor vehicle related workplace injuries are among the most common, and are also one of the leading causes of workplace death. We’ve talked about he need for diligent risk management policies and procedures for employees who drive – it’s a good time for employers to update policies to specifically address text messaging.