Check out the latest Health Wonk Review posted by Peggy Salvatore at Healthcare Talent Transformation – it’s chock full of good posts and entertaining to boot: Health Wonk Review: Take Me To Your Leader – Egads!
And in a few other news items …
Can you offer unpaid internships? – Is your organization eligible to offer unpaid internships? If you are a profit-making entity, the answer is probably not. As part of its enhanced focus on employee misclassification, internships are one of the areas that the Department of Labor is examining. If your organization offers internships, you need to ensure you are in compliance with the Fair Labor Standards Act. DOL’s Wage and Hour Division has issued guidance: Fact Sheet # 71: Internship Programs Under The Fair Labor Standards Act. If your organization’s internship qualifies as a “training program” you may be an exception to the rule. The linked Fact Sheet lists 6 criteria which organizations can use to determine eligibility for training programs that would be allowed as unpaid internships.
While on the topic of compliance with wage & hour laws, here’s a list of other Fact Sheets, which looks like a good page to bookmark for reference.
Work comp trends – Work Comp Complex Care Blog recently featured series on “Big 3 Trends in Workers Compensation” as noted by the Total Medical Solutions vice president of clinical services, Kevin Glennon. There’s some good information, if you haven’t seen them: Part One: Obesity; Part Two Aging Workforce; and Part Three: Antibiotic-Resistant Infections
Lost tax revenue – The IRS estimates that across the country, $345 billion of tax revenue is lost each year to the underground economy. Check out Roberto Ceniceros’ post at Comp Time fro more on the topic: Notes on the underground economy
Safety is top labor issue – A new study by the National Opinion Research Center at the University of Chicago found that more than eight in 10 workers ranked workplace safety as their most important labor issue. Family and maternity leave was ranked as the second most important issue, followed by minimum wage, paid-sick days and time-and-a-half overtime pay. David Shadovitz offers more on the study at Human Resources Executive: Putting Workplace Safety First.
Healthcare costs – A recent survey of 466 large and midsize employers conducted by Towers Watson projects that employers’ health care costs will rise by 8.2% in 2011. According to the Employee Benefit News coverage of the survey, “Among survey respondents, 59% plan to implement significant or moderate health care plan design changes in 2011, and 67% plan to do so in 2012.”
Archive for September, 2010
Check out the latest Health Wonk Review posted by Peggy Salvatore at Healthcare Talent Transformation – it’s chock full of good posts and entertaining to boot: Health Wonk Review: Take Me To Your Leader – Egads!
In November the voters in the Evergreen state have the opportunity to end one of the few remaining monopolistic systems for workers compensation (the three others are North Dakota, Ohio and Wyoming). As you might expect, there is much fulminating and little rational discourse evident in the pre-election build up on Initiative 1082.
Opponents of privitization project visions of greedy insurers denying claims (Hank Greenberg with an ax?), while proponents lampoon the arrogance and incompetence of a bloated state bureaucracy. (If you want to see what passes for humor in the great northwest, check out this rather lame rap video in support of the initiative.)
It’s hardly surprising that opponents of the measure view insurers as a greedy, heartless enemy. On the other hand, it’s pretty clear that most monopolies tend to evolve (or is it devolve?) into behemoths slow to respond and slow to innovate. Both visions suffer from inaccuracy and distortion.
In most states, employers bear the full cost of workers comp: employees pay nothing for the premiums and nothing for the treatments. In Washington, there are three funds supported by comp premiums: an indemnity fund; a medical fund; and a supplemental pension fund. Employees contribute through payroll deduction to the latter two funds. The current deduction is 0.1543 percent of earnings, with no caps. If I’ve done the math right – a big if, unfortunately! – that’s about $76 per year for the average worker. Not a lot of money, but the principle is interesting – employees have a little “skin” in the game. Total employee contribution of premiums does reach the substantial level of about 22 percent.
While you would expect small businesses to embrace competition, some oppose 1082 for the simple fact that it will eliminate the employee contribution to premiums and shift the entire burden onto employers. Costs might go up. On the other hand, competition might bring costs down.
Currently, costs for workers comp in Washington are modest: they rank 38th for cost in the 2008 Oregon survey, with an average rate of $1.98 per $100 of payroll. If the costs were higher, the pressure for change would probably be much more intense. As it is, voters will go the polls as they often do, with a lot of inflammatory rhetoric (and perhaps an annoying rap song) ringing in their ears. Then they will fill out their ballots. The fate of Washington’s comp system is in their hands.
Most people are aware that, since 1970, the Occupational Health and Safety Administration (OSHA) has been responsible for issuing and enforcing standards for workplace health and safety. But if I were a betting person, I would wager that far fewer are aware of OSHA’s responsibilities in relation to the Sarbanes Oxley Act. OSHA is charged with protecting workers ” …from retaliation for reporting alleged violations of mail, wire, bank, or securities fraud; violations of rules or regulations of the SEC; or federal laws relating to fraud against shareholders.”
This responsibility is part of the Office of Whistleblower Protection Program (OWPP),for which OSHA has oversight. OWPP was originally intended to protect workers from being retaliated against for such things as reporting safety violations to OSHA, requesting or participating in an OSHA inspection, or testifying in any proceeding related to an OSHA inspection.
Over the years, this responsibility has expanded to encompass oversight of the whistle-blowing provisions for eighteen other statutes, including violations of various airline, commercial motor carrier, consumer product, environmental, financial reform, health care reform, nuclear energy, pipeline, public transportation agency, railroad and securities laws.
And according to a recent report by the Government Accountability Office (GAO), OSHA gets failing grades for discharging its whistleblower protection responsibilities. The GAO cited lack of training, chronic inattention from OSHA leaders, and long delays in resolving cases, among other problems.
Some say the problems are no surprise: too few staff spread too thin, resulting in long case delays and staff demoralization. You can see charts depicting the growth of responsibilities while staff remained flat on pages 16-17 of the GAO Whistleblower Report. (PDF)
Some relief is in the offing – 25 new investigators are scheduled for appointment to OWPP. In addition, the Department of Labor (DOL) is conducting a “top to bottom” review and there is some discussion about whether the program should be moved to another part of DOL.
Whistleblowers are fundamental to workplace safety, but even with protections built into the laws, the reality is that protection for whistle-blowing employees can be a long time in coming, when and if it does. Read about truck driver John Simon’s whistle-blowing ordeal as a case in point. There are unfortunately many other similar stories. OSHA offers employees a a bill of rights to ensure safety, but fundamental to those rights are protections when and if they speak up in the cause of safety.
Most of us associate a determination of disability with the inability to perform some or all aspects of a job. But most us do not work in Bell, California.
When former Bell police chief Randy Adams agreed to leave his job as chief in Glendale and run the department in Bell, he entered into an unusual agreement with city administrator Robert Rizzo. The agreement stipulated that Adams was disabled, suffering from the lingering effects of back, knee and neck injuries sustained in his prior public safety jobs. His attorney, Mark Pachowicz, said the agreement was designed to ensure that his client would not have to fight Bell for a medical pension.
Lest you think that Bell simply had an aggressive “hire the handicapped” program, it appears that Adams was able to perform all the duties of his job, with no accommodation required. In other words, this “disabled” hire was indistinguishable from able-bodied applicants for the job. There was a single stipulation of “no heavy lifting” – for a job which required no heavy lifting.
An Offer He Could Not Refuse
Rizzo considered Adams so capable, he hired him into two positions: police chief and special police counsel. Bell was so anxious to secure Adams’s services, they offered him $457,000 a year, double his prior salary. The hiring agreement qualified Adams for a tax-free disability benefit of $205,000 per year. Oh, did I mention that the hiring agreement also provided lifetime health insurance for Adams and his dependents, with no vesting period? Sure, that sounds like a pretty generous package, but Rizzo himself was pulling down $787,000 for taking on the burdens of managing the relatively small (pop. 40,000) working class town.
During his prior employment, Adams settled a workers comp claim for $45,000, following back surgery. He returned to work after a two week absence – which makes the amount of settlement appear rather generous. The comp settlement, however, is chump change compared to the irrestible benefits of working for Bell.
Fortunately for the beleagured Bell (and California) tax payers, this entire corrupt edifice came crashing down with the arrest of Rizzo and his numerous co-conspirators. (Adams has not been charged.) The status of Adams’s questionable hiring agreement with the city remains unresolved. As spokesperson for the California Public Employee’s Retirement System Ed Fong put it: “You’re only supposed to receive a disability retirement if you are disabled and unable to perform the normal duties of your job. If that is not the case, it would be fraud.”
In Bell they called it “standard operating procedure.” It was lucrative while it lasted. But the bell has tolled, bringing to an abrupt end a corruption scheme of All-American proportions.
The folks at American College of Occupational and Environmental Medicine (ACOEM) know something about doctors. They also know quite a bit about workplace injuries in that most of the members are physicians actively practicing in the field, in one capacity or another. That’s why we sat up and took notice when we saw their recent publication, A Guide to High-Value Physician Services in Workers’ Compensation – How to find the best available care for your injured workers. ACOEM joined forces with the International Association of Industrial Accident Boards and Commissions (IAIABC) to produce the 11-page “best practice” summary, which includes the best thinking and contributions from a diverse group of workers’ compensation system stakeholders in a meeting convened by ACOEM and the IAIABC last April. You can see the list of participants on page 11 – a group of heavy hitters that includes a geographical and industrial sampling. It’s great to see a think tank of employers and insurers sitting down at table with policymakers and physicians to come to some agreement about best practices. The only thing we might suggest for improvement would be to add a representative from labor at any future convocations.
The stated purpose of the document is to provide specific guidance and resources to all stakeholders in the workers comp system – from injured workers and employers to insurers and TPAs – to help identify the best physicians for care of both everyday, uncomplicated injuries, as well as for specialized medical services addressing catastrophic injury or administrative tasks required by the workers’ compensation process.
It identifies ways to find physicians who:
- Are willing to accept patients covered by workers’ compensation insurance
- Employ best practices in providing high quality and compassionate medical care
- Respect and fulfill the extra responsibilities that the workers compensation system creates
- Produce better overall outcomes at comparatively better total cost over the course of an injury or illness. (High-quality care produces better outcomes for workers and better value for payers.)
The Guide offers both a “High value” checklist and a step-by-step process for identifying physicians, verifying credentials, working with, and measuring performance. We put this one on our “required reading” list. And for adjunct reading, we also recommend ACOEM’s Preventing Needless Work Disability by Helping People Stay Employed.
Russell Chatwood hosts this week’s edition of Cavalcade of Risk. Our host from “down under” brings the latest and greatest from the world of risk, with a heavy skewing to healthcare. Think that’s on everyone’s mind, at least here in the pre-election U.S.? Go check it out!
Matt Mitchell was an Illinois state trooper. On November 23, 2007, he was bombing along Interstate 64 at 126 miles per hour, on his way to an accident scene. He was chatting with his girlfriend and sending text messages. The road was somewhat clogged with holiday travelers. His speeding was not necessary, as help had already arrived at the accident scene. The distracted trooper crossed over the median and hit a car head on. Two sisters, Kelli and Jessica Uhl, were killed instantly. Two other occupants of the car were injured. Trooper Mitchell suffered severe leg injuries.
Speeding for no reason. Texting and talking unrelated to his job. Reckless. Negligent. And, it appears, compensable.
Mitchell pleaded guilty to reckless homicide and reckless driving and was sentenced to 30 months probation. He resigned his position with the state police. He has filed a claim for workers comp benefits, which is likely to be awarded because Mitchell was in the course and scope of employment. In the stipulation during a civil suit filed by the parents of the Uhl sisters, the Illinois attorney general agreed that, despite the criminal negligence, Mitchell was acting in his capacity as a state trooper when the accident occurred. Yes, the speeding was gratuitous, the texting irresponsible, the girl friend chats unrelated to work. But Mitchell was heading to the scene of an accident. He was a jerk and a menace, but he was working.
On the Hook
Illinois taxpayers face an interesting double jeopardy. They are on the hook for the deaths of the Uhl sisters. And they will soon be on the hook for Mitchell’s loss of function payments and possibly for permanent total benefits.
It’s worth noting that just three days after pleading guilty to the criminal charges, Mitchell testified in a claims hearing that he was not responsible for the crash.
If Mitchell had not been heading for an accident scene, if he was speeding simply because he wore a uniform that allowed him to get away with it, perhaps his claim would be denied under the concept of “wilful intent.” We are reminded once again of comp’s cornerstone principle of “no fault.” There’s plenty of fault in this sorry saga, but it does not – alas, it cannot – matter one bit.
Last year the Insider blogged the unfortunate fate of Arthur Pierce, who died in a work-related accident, but whose claim was denied due to a glitch in the Virginia comp statute. Fearing a rash of bogus claims by workers faking severe brain injuries, the lawmakers allow insurers to deny any unwitnessed incident where the injured worker cannot testify to what happened. If Pierce had died instantly, his claim would have been accepted. By surviving for months without being able to talk, he never collected a dime.
Dan Casey, a columnist for the Roanoke Times, brings us the saga of Mike Gentry, who fell off a roof while installing a satellite dish. He survived, but suffered brain damage and severe physical trauma. While paying the claim at first (Gentry was in a coma and rehab for weeks), the insurer finally got to talk to him. Here is Mike and his wife Andrea’s summary of the exchange with the claims adjuster:
“She asked me,’Ever jumped off a roof before? Ever thought of killing yourself?'”
“I said, ‘No, and no.'”
And then she said, “Do you remember what happened?”
“And he said no,” Andrea interjected. “Because he didn’t. And she said, ‘OK, that’s all I need.'”
Thus, in accordance with the peculiar and patently unfair Virginia law, the claim was denied. Ironically, just 12 days before Gentry fell off the roof, an attempt to change the Virginia statute, instigated by Arthur Pierce’s widow, was defeated in committee. The revision would have allowed brain injured workers the same presumption of compensability as workers killed on the job. In the words of insurance lobbyist and attorney Charles Midkiff, any changes in the current law would be “an invitation to fraud.”
It was only through the kindness of strangers that Gentry and his family were able to survive the months without any insurance benefits. Then a minor miracle occurred: Gentry’s memory of the incident came back. Not all at once, but gradually. First, he remembered that the battery on his power drill died. A few more memories filtered in. Finally, about a month after the initial recall, he remembered everything. He was climbing down to get a replacement battery from his truck, when the ladder slid and he fell.
Armed with this new information, Gentry filed for benefits. The carrier, defended by – who woulda guessed? – attorney Midkiff, managed to delay the hearing for months (from December 2009 until April 2010). Finally, three hours before the rescheduled hearing, the carrier caved and accepted the claim.
Mike Gentry will never work again. He has double vision, his speech is slurred and he is frequently exhausted. He has severe seizures and difficulty thinking. He takes 10 medications daily. But he and his family are finally protected by the workers comp safety net – no thanks to a carrier following the letter of the law, and no thanks to the legislators who think workers are going to fake brain injuries in order to qualify for benefits.
In the words of the immortal Frank Zappa: “The United States is a nation of laws: badly written and randomly enforced.” Not true of most laws, but certainly applicable to this bizarre and completely unnecessary provision of Virginia’s comp statute.
NOTE: The Insider is quoted in course of Casey’s fine article.
Louise Norris of Colorado Health Insurance Insider hosts the Politics, Money and Health edition of Health Wonk Review. There’s a particularly good crop of posts and Louise does a great job offering summaries, so be sure to check it out!
Follow up to tower safety – In posting yesterday’s dramatic tower-climbing video, we appealed to any safety to experts to add comments. We were fortunate to have commentary from Wally Reardon who points us to the Facebook Tower Climber Protection project. Of the video, he notes: “If free-climbing is allowed by OSHA; why is the other climbers face blurred? He would not want to be identified or have his company ID’d either (that’s why). OSHA does not allow free-climbing EVER on towers. Special PPE has been designed to eliminate the need to free-climb. We have double lanyards with fall arrest to “crab walk” up the tower for example. Free-climbing has been banned since 1994.”
Facebook as a fraud detector – New York’s State Insurance Department brought workers comp fraud charges against a woman based a Facebook posting. The woman was boasting about her salary at a job while collecting benefits from an injury that occurred at a previous employer. Attorney Jon Gelman’s blog has a good post on how how Facebook is turning up in workers compensation courts.
Industry innovators – Congratulations to all those named as winners in Risk & Insurance’s 2010 Innovator Awards, with special kudos to our friend Gary Anderberg, Practice Leaders for Analytics and Outcomes at
Broadspire Services. (Read a few of his guest posts here at Workers Comp Insider). For a dose of inspiration and to find out where the industry leaders are headed, check out all the innovator profiles.
Employer WC costs decrease – a report by the National Academy of Social Insurance (NASI) points to good news/bad news for employers. The good news: “Employer costs–defined as benefits paid and administrative costs for self-insured employers, and premiums and deductibles paid for those who buy insurance–fell 6.7 percent in 2008 to $78.9 billion.” But don’t get too excited because the bad news is that medical payments and cash benefits to injured workers saw the largest percentage increase since 2001: “workers’ compensation benefits paid increased 4.4 percent to $57.6 billion in 2008–the most recent year for which data was available. NASI said an 8.8 percent increase in payments for medical care drove medical spending to $29.1 billion in 2008, while wage replacement benefits paid directly to injured workers rose by 0.3 percent to $28.6 billion.”
Retaliation is a no-no – It’s never a good idea to harass a worker who has been injured on the job. Amtrak learned that the hard way after being ordered to pay a Seattle cleaning worker more than $160,000 after it was determined that supervisors had retaliated against her after she reported an on-the-job injury. She was discouraged from filing a report, and then fired, and then her firing was rescinded and reduced to a suspension.
When animals attack – It seems like there has been an increase in workers being attacked by wild animals lately, but it is probably just that these stories are more widely available due to the web. Here’s a scary clip of a lion attacking his trainer at MGM Las Vegas. Apparently, the worker needed stitches, but wildlife experts say if the lion had been serious, things could have been dire. Meanwhile, in an attack that ended less benignly, an exclusive remedy challenge is looming for SeaWorld Orlando related to the trainer who was killed by a whale. (Hat to tip Comp Time, where we found the lion clip.)