John Pike may be the most (in)famous campus cop in America. He was video taped on November 18, 2011, at the University of California, Davis, spraying seated demonstrators with pepper spray. His demeanor was remarkably casual, as if he were spraying bushes for an infestation of bugs. He is now the subject of a meme that has spread across the internet, with images of Pike spraying Christina, in the famous painting by Andrew Wyeth, among other things. While we live in a culture where many are famous for being famous (the Kardashians come to mind), Pike is famous for one moment of his policing career.
An internal investigation by the university recommended that Pike be demoted. New police chief Michael Carmichael – the original chief had resigned – rejected that recommendation, deciding, in July of 2012, to fire Pike. There were a number of problems with Pike’s behaviour: he used an unapproved pepper spray that was three times stronger than the university’s preferred brand and he violated university protocol by spraying people in the face at close range.
Enter Workers Comp
Pike has filed a stress claim under the California workers comp statute. The state used to be famous for its lenient criteria for stress claims: only 10 percent of the stress had to be work related for a claim to be compensable. (How could work not comprise at least 10 percent of what is wrong in one’s life?) Over time, California tightened up the compensability guidelines, which now total six (as outlined by the Kenton Koszdin Law Office):
1.The employment must be six months or more. Check
2.The employee must have a psychiatric condition that is listed in DSM IV. Probably a check.
3.The employee must prove that the actual events of employment are the predominant cause of the psychiatric condition (51% or more). Definitely a check.
4.A psychiatric condition that is substantially caused (35%–45%) by good faith, non discriminatory personnel action(s) is not compensable as a work-related injury. Examples of good faith personnel actions are criticism of the employee’s work or attendance, change in work assignments, and decision about raises or promotion. The employer has the burden of proof on this issue. DNA.
5.A psychiatric injury that is caused by the litigation process is not compensable. Examples of psychiatric injury caused by the litigation process are an employees reaction to the denial of their claim, dealing with an abusive claims adjuster, or having their benefits terminated.DNA
6.A stress claim or mental–mental psychiatric injury claim filed after termination or notice of termination is not compensable unless the employer know of the injury or medical records of treatment for the psychiatric dated prior to the termination exist. He filed on June 10, presumably before the notice of termination.
A Mental-Mental Claim
Pike must prove compensability of the notoriously difficult “mental-mental” claim. In many states, there must be a physical injury that precedes the mental disability. In this case, the physical injury was limited to the protesters; the university settled their claims for $1 million. In the immediate aftermath of the incident, Pike in his new-found infamy has been subject to harassment, threats and humiliation. He is the principal subject of a meme that has spread throughout the internet. Stressful? Certainly. Compensable? Possibly, but by no means a certainty.
Pike’s former employer will try to show that he violated policy in spraying the students, including the use of an unapproved spray. Pike will undoubtedly try to show the ambiguity of the university’s policies, perhaps a lack of training specific to the circumstances he faced.
In the meantime, Pike has lost a job that paid in excess of $100,000 per year. He has achieved indelible fame for a single, ill-advised work-day decision. He is without a doubt suffering from work-related stress – stress of his own making – but the compensability of that stress is another matter altogether. We await the results of the August conference with great interest.
Author Archive
Pike’s Pique: The Stress of Behaving Badly
Monday, July 29th, 2013IMEs in a New York Minute
Tuesday, July 23rd, 2013Back in 2009, we blogged an expose from the New York Times concerning the abuse of independent medical exams (IMEs) in New York. The article quoted 79 year old Dr. Hershel Samuels, who performed as many as 50 exams in a day. He filled out a checklist and let others write the reports. Did he read these reports? “I don’t,” he said. “That’s the problem. If I read them all, I’d have them coming out of my ears and I’d never have time to talk to my wife. They want speed and volume. That’s the name of the game.”
Muckraking journalism apparently did not solve New York’s IME problem. Which brings us to orthopedist Michael Katz, who makes a pretty good living performing, among other things, about 1,000 IMEs a year for the state of New York. [Details can be found at the invaluable Workcompcentral (subscription required).] After examining an injured worker, Manuel Bermejo, Dr. Katz wrote up his findings. In testimony, he declared that he spent 10 to 20 minutes with Bermejo. Unfortunately for Dr. Katz, Bermejo secretly recorded the session, which lasted just four seconds shy of 2 minutes.
Tantrum in the Court
When presented evidence of the IME’s duration, Queens Supreme Court Judge Duane Hart went ballistic. “How do I stop carriers from putting people like Dr. Katz on the stand and causing the state to spend thousands and thousands of dollars trying a case and putting a lying witness on the stand?” Judge Hart referred the transcripts of the proceedings to a Queens administrative law judge for potential perjury action against Dr. Katz.
The judge’s rage is understandable: IMEs are a vital activity in workers comp: in theory, IMEs offer a fresh, objective look at a worker’s injuries to determine what, if anything, is wrong, the extent of the disability and the role work played in it. In an ideal world, the IME is dispassionate, with no vested interest in the ultimate determination of compensability.
Good Faith, Bad Faith, No Faith
Dr. Katz claims he has been set up by plaintiff attorneys, who believe he acts primarily to further the interests of insurance carriers. (Here is a link to a plaintiff attorney’s blog featured Dr. Katz and other alleged abusers of IMEs.) On the other hand, there are surely IME doctors who tend to find in favor of injured workers and are thus favored by plaintiff attorneys, .
The world of medicine is supposed to be driven by objective medical evidence, but doctors are hardly robots, evidence is in the eye of the beholder and what the doctor sees might well be influenced by political views, personal history and, yes, even financial considerations.
It is interesting to note that the Bermejo claim began in the workers comp system, where the benefits are limited to lost wages and medical costs. Because the injury involved a fall from heights, the claim also fell under New York’s unique – and understandably unreplicated – Scaffold Law. But the claim now involved literally millions of dollars: Bermejo was suing the hospital where he was treated for malpractice. It is this last suit that brought Dr. Katz into Judge Hart’s courtroom. The judge was hoping for an objective analysis of the claim in order to determine whether the hospital had really screwed up. Alas, he ended up with no faith whatsoever in the quickie IME performed in the proverbial New York minute.
Connecticut: The Hard Edge of Exclusive Remedy
Monday, June 24th, 2013Connecticut is one of the highest cost states in the country, rising to #2 in the 2012 Oregon survey and a consistent source of pain to the state’s employers. So we might expect that it would prove flexible to the point of surrender in the contentious area of exclusive remedy. Not so. The state Supreme Court recently barred a factory worker from accessing tort liability in a case involving what appeared to be extreme employer misconduct.
Rajanikant Patel worked the night shift as a machine operator for Flexo Converters, a manufacturer of paper bags. He was injured while trying to remove a bag that was jammed in the machine he was operating. He claimed that the machine guard had been removed and that his supervisor ordered him to reach in and remove the bag. Patel further claimed that the supervisor would not allow him to shut off the machine and threatened to fire him if he fell short of his quota of 90 bags per minute. [I will think of Patel every time I am asked the inevitable question, “Paper or plastic?”] Patel did as he was ordered and suffered the consequences, although the court ruling does not specify the extent of his injuries.
Comp or Tort?
To pierce comp’s exclusive remedy shield, Patel must prove two distinct things: that his employer acted in full knowledge that he would be injured in carrying out the task and that his supervisor acted as an alter ego of the corporation. On the first point, the defense denied Patel’s version of the event, claiming that there was no substantial certainty that removing the stuck bag would injure Patel. On the second, and in this case more compelling point, there was no evidence that Patel’s supervisor was an “alter ego” of the corporation.
Here is the court’s summary of the alter ego issue, part of its approval of a lower court’s summary judgment in favor of Flexo:
In Jett v. Dunlap, supra, 179 Conn. 219, this court announced a narrow exception to the exclusivity of the act for intentional torts committed by an employer or a fellow employee ”identified as the alter ego of the corporation . . . .” The court expressly declined, however, to extend the exception to a supervisory employee’s intentional torts. The court reasoned that ”[t]he correct distinction to be drawn . . . is between a
supervisory employee and a person who can be characterized as the alter ego of the corporation. If the assailant is of such rank in the corporation that he may be deemed the alter ego of the corporation under the standards governing disregard of the corporate entity, then attribution of corporate responsibility for the actor’s conduct is appropriate. It is inappropriate where the actor is merely a foreman or supervisor.”
The alter ego test is stringent. The supervisory employee alleged to have intentionally injured the plaintiff must be the employer’s alter ego under the ”standards governing disregard of the corporate entity”; Jett v. Dunlap, supra, 179 Conn. 219; a test corresponding to the requirements for piercing the corporate veil. ”The
concept of piercing the corporate veil is equitable in nature. . . . No hard and fast rule . . . as to the conditions under which the entity may be disregarded can be stated as they vary according to the circumstances of each case.” (Citations omitted; internal quotation
marks omitted.) Naples v. Keystone Building & Development Corp., 295 Conn. 214, 233, 990 A.2d 326 (2010). The standard requires that the corporation, functionally
speaking, have no separate existence from the alter ego who controls and dominates the corporation’s affairs.
Connecticut has set a high standard for piercing the comp shield of exclusive remedy. This is not necessarily a bad thing, but it does raise a potential issue of fairness. Would the exclusion include egregious and potentially criminal acts by a supervisor: for example, a supervisor orders an employee to ignore standard safety procedures, using the threat of termination, and the employee is severely injured or even killed as a result. According to this ruling, as long as a “mere” supervisor directed the employee, and as long as the supervisor was not explicitly directed by company owners, the latter cannot be held accountable. Comp remains the only remedy for the injured worker.
Accountability in the Gray Zone
There may be enough ambiguity in Patel’s situation to justify the retention of the comp shield, but it is not difficult to imagine a situation where exclusive remedy shields a company from what should be the core responsibility of providing a workplace free from unusual risk of injury.
Patel may have been injured due to the wilful intent of his supervisor, but the court has ruled that his only recourse is comp. In Connecticut, “exclusive remedy” comes with a hard edge that basically cuts one way, in the direction of the state’s hard-pressed employers.
New York Self Insurance: Chicken Stew
Tuesday, May 28th, 2013The folks at Murray Bresky Consultants are just trying to scratch out a living by raising chickens – not just any chickens, but free range chickens that are “happy and healthy.” Their signature breed is “fed an all-natural and all-vegetable diet that, combined with plenty of exercise, makes our birds the leanest on the market. The leisurely lifestyle eliminates the need for antibiotics to prevent diseases commonly found in chickens as a result of stress and confined living conditions. Minimally processed, without the use of preservatives or other artificial ingredients, Murray’s Certified Humane Chicken is truly all chicken.”
Unfortunately for the company, they secured workers comp insurance through New York Compensation Managers (NYCM), the now defunct operator of a dozen self-insurance groups in New York. NYCM claimed to offer favorable rates, strict underwriting standards and exemplary claims services. They ended up with egg on their face with their inadequate rates, suspect underwriting and rampant under-reserving of claims. In retrospect, the operation ran around like a chicken with its head cut off. By the time the problems emerged (in 2006), it was too late to shake a feather and correct the problems.
Following the SIG’s failure, Murray Bresky Associates was hit with a $1.2 million assessment to make up their share of the SIG’s deficit. That ain’t chicken feed.
A Game of Chicken
Murray Bresky is not chickening out of a fight. Indeed, the chickens have come home to roost in the form of a lawsuit filed against NYCM and its board of trustees. The lawsuit seeks to recover the $1.2 million and then some, alleging breach of contract and breach of fiduciary duty. The case worked its way up to the NY Supreme Court, Appellate Division, where the motion by the defendents to dismiss the lawsuit was, for the most part, dismissed.
Now the defendents are walking on egg shells, facing the prospect of personal liability for the failures of the SIG. Where they once feathered their nests with the proceeds of the operation, their financial security has flown the coop. This is a legal mess perhaps best described by the late Lyndon Baines Johnson: “Boys, I may not know much, but I know chicken poop from chicken salad.”
Roles and Irresponsibilities
One of the former trustees of the SIG is squawking that he was not aware that he was, in fact, a trustee. He may have signed off on a few trustee documents, he may have performed some of the functions of a trustee, but he insists that he had no memory of being appointed. He insisted that he was not a bad egg and claimed that he had no place in the pecking order. The court, however, ruled otherwise.
As the saying goes, you have to break eggs to make an omelette. Quite a few more eggs will be broken before this particular concoction is served up. Hard-boiled attorneys will parse the details to figure out who, if anyone, owes Murray Bresky Consultants and exactly how much they owe.
Pecking Orders
The courts now rule the roost. They have upheld Murray Bresky’s right to sue, with the exception of some actions that are time-barred. There may well be a sunny side up in the chicken company’s quest for justice. We look forward to the final resolution of this stew, the chicken scratch of a judge’s signature that will put a final number on the liability of an insurance operation that flaps my wattles (ie., annoys me).
Here’s a little unsolicited advice to Murray Bresky Consultants: don’t count your chickens before they hatch. This one has a long way to go before the company can feather its nest with the proceeds of a complex litigation. In the meantime, their free range chickens have the run of the coop, enjoying their cage-free, stress-free lives right up to the very end. Bon appetite!
Workers Compensation Looking Up?
Monday, May 20th, 2013Dennis Mealy, chief actuary for NCCI, has issued his state of the line report on workers compensation. There’s a lot of good news for insurers, along with a few little red flags that might well morph into big banners of bad news. Mealy’s presentation will soon be available as a webinar at the NCCI site, but for the moment, let’s glean the essence from his Powerpoint presentation.
There’s a lot of positive news (with apologies to those who are not up to speed in insurance jargon). Premium is up by $3.3B, about 9 percent in all. The all-important combined ratio has dropped from 115 to 109 (projected). Given suppressed interest rates, 109 is still high, but it puts profitability within reach. The calendar year loss ratio has dropped from the unacceptable – 70.8 percent – to 66 percent. Pre-tax operational gains are plus 5 percent.
There is (mostly) good news in the loss area: frequency of lost-time claims is down an average of five per cent across all sectors. Indemnity claim costs are up just slightly, as are severity costs. Even in assigned risk pools – insurers of last resort – results have improved, with combined ratios down to 112 percent, compared to 117 in the two prior years.
At the same time – and directly related to the improving results – discounting of premiums has diminished from -7.6 percent to a projected level of -4.5 percent. [Perhaps even the sceptical rate setters in Massachusetts will begin to see the relationship between (slightly) higher rates and a healthy market. If they continue their intransigence on rate increases, the Massachusetts miracle will soon collapse in a heap.]
Who Pays?
In all success stories – however modest – there are winners and losers. In workers comp, the winners are employers with low losses; the losers tend to be those with relatively high losses. NCCI has upped the ante by changing the way experience mods are calculated.
Beginning in January and rolling throughout this year, NCCI is implementing a new mod calculation, raising the split point of primary losses from $5,000 to $10,000. (See Tom Lynch’s detailed explanation beginning here.) For many experience rated risks, the change has been positive. Despite paying slightly higher rates in many states, the cost of insurance has remained stable or even dropped. Here is NCCI’s summary of the new rating plan impact:
– 12 percent of risks see premiums decreasing by 5 to 15 percent
– 76 percent see plus or minus changes within 5 percent
– 11.3 percent see increases in the 5 to 15 percent range
– less than 1 percent see increases above 15 percent (these are the folks who have been calling…)
The Big (Cloudy?) Picture
Mealy’s presentation offers a good news/bad news overview of workers comp. On the plus side, we have seen a slight increase in premiums, a reduction in frequency, stable severity and a good capital position for the industry in general.
On the negative side, the slow pace of economic recovery is troubling, as is the structural unemployment that threatens the livelihoods of aging, middle class workers. Underwriting is confronted with unprecedented instability in predicting risk: today’s low loss company might well be tomorrow’s catastrophe. Low interest rates impede profitability. Alternative markets – the new opt-out law in Oklahoma being a prime example – threaten to drain good risks from the market and leave higher risks in conventional coverage. Finally, it is too soon to know the impact of health care reform, though in the long run, it seems likely that virtually universal health care should reduce cost-shifting into workers comp.
Perhaps we should add the impact of global warming to the negative side. As storms increase in magnitude, the risks to those who are working when storms hit also increase exponentially.
As the Chinese curse would have it, we live in “interesting times.” For the moment, from the rather narrow perspective of the workers compensation market, things look cautiously and incrementally better. But as they say in New England, if you don’t like the weather, just wait a minute. It was clear and warm a few moments ago. Suddenly, the wind picks up, the wind chills and the rain comes pouring down. Like a harried underwriter, we struggle to find shelter in the unexpected storm.
Annals of Claims Management: Full Catastrophe Denial
Tuesday, May 7th, 2013In the Insider’s decade of exploring workers comp, we have encountered many unusual instances of compensability, legitimate claim denials and outright fraud. But rarely have we found cases where a claims administrator, in this case, a TPA, simply refuses to pay for medically necessary treatment. The saga of the late Charles Romano reminds us that the great bargain of workers comp is not just between employers and their workers; it includes the good faith effort of claims adjusters to carry out the letter – and spirit – of the law.
Charles Romano worked as a stocker for Ralph’s Grocery Company, a California-based operation that is part of the Kroger chain. It is worth noting from the outset that Kroger is self-insured for comp, with Sedgwick serving as the TPA. As a stocker, Romano presumably did a lot of lifting and reaching. He suffered a work related injury involving his shoulder and back in August of 2003.
A Solution Worse than the Problem
After conservative treatment failed to resolve the problem, he underwent surgery in December 2003. What had seemed like a relatively simple solution to a shoulder problem quickly descended into a grave, life-threatening situation: Romano contracted a MRSA infection following the surgery, which led directly to total paralysis. He suffered renal failure and several heart attacks, which were related to the MRSA infection. After enduring inadequate medical treatment directly related to the TPA’s denial of treatment, Romano died in May 2008.
Nearly three years after the initial surgery, a workers comp administrative law judge (WCJ) ordered that the TPA pay for all the medical expenses related to the infection. Without consulting with medical professionals, the TPA unilaterally refused all payments – totalling, by this time, hundreds of thousands of dollars. The TPA appealed the adverse ruling.
In February 2012, a workers comp administrative law judge imposed penalties for delay of treatment in eleven specific instances, finding that the TPA “failed in its statutory duty to provide medical care, egregious behavior which increased the suffering of a horrifically ill individual.” He imposed the maximum $10,000 fine for each denial of treatment.
Unappealing Appeal
The TPA appealed the penalties for delayed treatment. In what surely qualifies as a new definition of chutzpah, the TPA contended that penalties were not appropriate, among other reasons, because the claimant had died. Well, duh, the routine denial of treatment throughout the course of the illness was a significant factor in the death. Romano simply did not receive medically necessary treatments to address his formidable medical conditions.
NOTE: The penalties, even when maxed out at $10,000 per incident, is dwarfed by the suffering inflicted upon Romano.
The Workers Comp Appeals Board upheld the penalties [For a link to a PDF of the lengthy ruling, Google “Charles Romano Trust vs. Kroger Company]:
The WCJ’s Report makes it clear that he imposed the harshest penalties possible under section 5814 because of defendant’s extensive history of delay in the provision of medical treatment; the effects of those delays on a paralyzed, catastrophically ill employee; the lengths of the various delays; and defendant’s repeated failure to act when the delays were brought to its attention.
Lest the ruling be considered in any respect ambiguous, the court went on to say: “We have rarely encountered a case in which a defendant has exhibited such blithe disregard for its legal and ethical obligation to provide medical care to a critically injured worker.”
Risk Transfer, Risk Retention
It is tempting to conclude that the TPA’s actions were related to their customer’s risk assumption – otherwise known as self insurance. It is one thing to purchase insurance (risk transfer) and have the insurance company assume liability for a catastrophic loss. It is quite another for a self-insured company to absorb a loss of this magnitude on its own. (Presumably Kroger had some form of stop loss in place.) Despite the multiple findings of compensability, despite the judicial determination that the horrendous MRSA infection was indeed work related, the TPA persisted in denying treatments and rejecting payments, long after Romano’s untimely death.
As Mark Twain famously noted, “denial is not just a river in Egypt.” It’s also a poor strategy for managing claims. In his last years, the unfortunate Charles Romano certainly had to confront health issues beyond anyone’s worst nightmare; denial for him was not an option. For reasons that remain unclear, when it came to paying for Romano’s extensive and expensive care, the TPA chose a path of full catastrophe denial .
In the findings of the court, this denial was in itself an unmitigated disaster for the acutely vulnerable Romano, accelerating his precipitous decline and death. In the interests of saving their client some serious bucks, the TPA dug in its heels and refused to accept the compensability of a claim that had been adjudicated as compensable. In doing so, they violated the spirit and letter of the workers comp contract and earned themselves, in this particular instance at least, a place on the Insider’s Management Wall of Shame.
Health Wonkery Calls
Thursday, April 25th, 2013Hank Stern at InsureBlog has posted the latest edition of Health Wonk Review, Money Tree Edition. If you have no interest in American health care, you can skip it. But given that health care impacts literally everyone on the planet, this timely compendium is worth a few moments of your valuable time.
Massachusetts: Governor Adding Insult to Injury?
Wednesday, April 24th, 2013We have long touted Massachusetts as the gold standard for workers compensation reform. In 1990 the state operated the second or third highest cost comp system in the nation; today MA is ranked 44th, with rates less than half of those in the other New England states. At the same time, the benefit structure is relatively generous, with a maximum indemnity wage of $1,150. The “taxachusetts” label applies to many aspects of living in the Bay State, but the cost of workers comp insurance is certainly not one of them.
But as is so often the case, failure lurks at the edge of success. The Insider has written extensively about the rate suppression that is opening like a sink hole below the market. The comp rates are so low, even good risks become questionable, simply due to the law of averages. Any company in MA with a .80 mod is by definition a marginal risk, because there is not enough premium to cover the exposure.
Generous to a Point
While benefits for injured workers are for the most part generous, there is one aspect of comp where state benefits fall short of what is needed and what is available in most states: injured workers only receive 60 percent of their average weekly wage, compared to the 66 2/3 percent or higher offered in other states. The 60 percent figure emerged in negotiations during the monumental reforms of 1990; even then it seemed harsh to extract savings from the pockets of those least able to afford it.
Now, in a desperate effort to increase revenues, Governor Deval Patrick is proposing that workers comp indemnity benefits be taxed. As a result, the already reduced 60 percent would be reduced another 4-6%, depending upon the final income tax rate in the new budget. Such taxation would violate the spirit of workers comp and exacerbate the stress of being injured and out of work. One of the unintended consequences of such a tax would be to push injured workers into the hands of attorneys, who thrive on friction and live off the most inefficient and expensive part of comp, cash settlements.
A Matter of Fairness
There are many factors contributing to the MA success story: a stingy fee schedule that doctors abhor, reduced reliance on settlements, which antagonizes claimant attorneys, a speedier dispute resolution process, and a reduction in indemnity benefits for workers.
In the Bay State, injured workers have already paid a price for the lower costs of workers comp. It would be unfair to ask these workers to make even greater sacrifices, when workers in other states receive higher benefits with no taxation. No matter what the rationale for taxing indemnity benefits may be – supporting education, fixing infrastructure – the measly $8 million raised by such a tax would be insignificant when compared to the cost to those least able to absorb it. It’s hard enough suffering through the pain of injury and recovery without adding insult to injury by further reducing already reduced income. This is a very bad idea and it should be tossed from the budget immediately.
Annals of Compensability: A Tick in Time
Monday, April 8th, 2013Ben Ciccone Inc. is a construction company that confronts formidable risks every working day. They are involved in excavation, site development, bridge construction and, if that isn’t risky enough for you, blasting and demolition. Most underwriters would give them a quick pass. So it is ironic that they are dealing with a permanent total disability claim involving a tiny, barely visible tick.
Worrell Bailey was doing some work in the woods back in July 2008 when he was bitten by a deer tick. He contracted Lyme Disease. When he began to suffer from upper body muscle weakness, he quit his job. He filed for workers comp benefits, which were granted. He underwent several courses of antibiotics, but he did not get better.
By June of 2009 his condition had worsened to the point where a judge deemed him permanently and totally disabled. Ben Cicconne appealed, alleging that there was no definitive link between Bailey’s progressive deterioration and Lyme disease. The carrier presented the opinions of several neurologists, who could not state “with certainty” that Bailey’s Lyme disease was the cause of his motor neuron disease. In other words, Lyme disease might be the cause of Bailey’s disability and then again, it might not.
Dueling Doctors
Bailey’s doctors were convinced of a causal relationship. His treating physician stated that by March 2009, Bailey suffered from significant muscle atrophy that rendered him totally disabled, which the doctor attributed to Lyme disease. Samuel Koszer, a board-certified neurologist, testified that Bailey’s progressive muscle weakness and consequent total disability were causally related to Lyme disease. Finally, Bailey’s psychiatrist – treating him for anxiety and stress relating to his diagnosis – testified that the lyme disease had prompted an autoimmune reaction that resembled amyotrophic lateral sclerosis (ALS). The psychiatrist went on to criticize the comp carrier for denying benefits, which interrupted the course of treatments and may even have made the situation worse. These strong, unambiguous opinions were, in the language of claims adjusting, not very helpful to the defense.
The award of permanent total benefits was upheld by the Appellate Division of the Supreme Court of New York, Third Department. Thus Ben Ciccone Inc, a high risk operation by any definition, finds itself responsible for a very expensive claim involving the kind of risk we all face when we go for a walk in the woods. Luckily for Ciccone, they appeared to carry conventional insurance, so the impact of the claim on their costs through experience rating has already run its course. For the carrier and its underwriters, however, this little tick will go on ticking for a long, long time.
Annals of Compensability: (Lack of) Education Pays
Tuesday, March 26th, 2013Imagine identical injuries to two workers: one is a junior college graduate, the other lacks a high school diploma;one can read and compute fairly well, the other reads at the 8th grade level and performs math at the 6th grade level. The injury involves failed back syndrome, with the injured worker experiencing fairly constant pain and the inability to perform sustained physical work.
In the world of workers comp, the first worker is deemed “employable” and entitled to temporary total benefits, followed (in some states) with a lump sum settlement for permanent loss of function. The second worker, lacking the education and skills to transfer to another job, is awarded permanent total disability benefits. In the two claims involving identical injuries, a marginal education pays.
For many years, Missouri resident Todd Grauberger worked for Atlas Van Lines, moving furniture and household goods. He performed heavy lifting routinely, avoiding physically demanding work only when driving from pick up point A to delivery point B. Ironically, his injury did not involve heavy lifting: in December 2001, he bent over to put padding on a nightstand – something virtually anyone could do – and felt an immediate pain in his back. His herniated disc required surgery. Even after some minor improvements, he continued to suffer from substantial pain and numbness in his legs. He was diagnosed with a phrase that terrifies any injured worker – and any claims adjuster: “failed back syndrome.”
Grauberger filed for permanent total disability benefits. His employer countered with a vocational rehabilitation assessment that concluded – without directly interviewing Grauberger – that he could perform light factory work or perhaps drive a car or truck. But the claimant’s doctor countered that with a failed back and almost no transferable (non-physical) skills, Grauberger was unemployable for any position that he might be qualified to hold. In other words, his only employable asset was the labor of his body and his body was irreparably broken. In a unanimous decision, the Court of Appeals in Missouri sided with Grauberger and upheld the award of permanent total benefits.
Hiring Conundrum
Employers do not give much thought to transferable skills when they hire new employees. They simply hire people qualified to do the work. Indeed, for jobs requiring sheer physical strength, it is often cheaper to hire the lowest skilled available workers. But workers comp, long the great equalizer, takes a post-injury look at employability. Once maximum medical improvement has been reached, the issue for workers comp is simple: the worker is either employable or not. If employable, benefits come to an end. If there are no transferable skills and no reasonable prospect of employment, the benefits may continue for the lifetime of the worker.
Grauberger will never again have to worry about finding gainful employment. Because he can offer nothing of value to the labor market, and because of his persistent, debilitating pain, he will be supported by workers comp indefinitely. It’s an odd calculus, seemingly rewarding the absence of marketable skills beyond the strength in one’s body. In this Missouri case, limited skills and limited education secure a future well beyond the reach of a failed back and a failing body.
