Archive for the ‘Best Practices’ Category

Aging Workers, Limited English, Limited Skills

Tuesday, November 20th, 2012

When a laborer with limited English is disabled from physical work, is he obligated to increase his employability by learning English? This interesting question emerged in the case of Enrique Gutierrez, a 48 year old welder who worked at Merivic, a company specializing in grain-related processing. Gutierrez came to the United States at age 14, but in his 34 years in the country never learned to speak or write English. While at work, Gutierrez fell about 10 feet onto a steel table, injuring his shoulder and wrist. He underwent two surgeries, worked for a while as a one-armed welder, and then was let go. His post-injury functioning was significantly limited, including difficulty lifting and carrying, gripping and grasping, and reaching.
When the workers comp commission found him permanently and totally disabled, the employer appealed and the case reached the Iowa Court of Appeals, where the finding of compensability was upheld. Up until 2007, Iowa courts routinely lowered the indemnity paid to limited English speaking workers, on the theory that a language disability was something within the power of the worker to correct. A case entitled Lovic v. Construction put an end to that practice. The reasoning in this decision is worth quoting:

Unfortunately, this line of cases [involving reduced indemnity]
overlooked the fact that the employers who hired these workers should
have reasonably anticipated that an injury which limits an ability to return
to manual labor work would have far more devastating consequences
upon non-English speaking workers than English speaking workers.
Oftentimes, this agency has penalized non-English speaking workers
despite the knowledge that the employers actually recruited such workers
because they were willing to work for less wages.

In other words, you get what you pay for: limited English speaking workers are willing to work for less, so the employer benefits from this potential “disability.” The ruling goes on to attack the rationale for the reduced wages:

What has been troublesome to many, including myself, is that this
agency has never similarly treated non-immigrant workers for failing to
learn other skills. Defendants would certainly have trouble citing any
agency or court precedent in the workers’ compensation arena where an
industrial award for an English speaking worker was lowered because the
injured worker, before the injury, failed to anticipate he would suffer a
devastating work injury and failed to obtain a type of education before the
injury that would mitigate the effects of such an injury.
We simply cannot assume that claimant was capable of such training or that such classes are generally successful in leading to employment where fluent English is required . . . .

By reiterating the logic of the pre-Lovic court, Merivic was attacking settled – albeit recently settled – law. The Appeals Court rejected this “collateral attack” on Lovic and upheld the permanent total award, and in doing stumbled upon yet another conundrum: that of the older worker. The court found that once a laborer goes beyond age 47, his ability to perform physically demanding work comes into question. A vocational expert retained by Gutierrez described the 48 year old worker as “approaching advanced age.” The Judge noted that “We have previously held the age of forty-seven is a factor that the commissioner may consider in finding industrial disability.” The expert also noted that Gutierrez’s entire career involved “limited education” and a work history limited to physically demanding jobs, which his permanent work restrictions now prevented him from performing.
The Very Big Picture
Our Colleague Peter Rousmaniere provides a valuable perspective on aging manual workers. In his Risk & Insurance article “The Age Trap” he points out that 55+ workers comprised 16.7 percent of the workforce in 2010, a number projected to increase to 22.7 percent by 2020. In contrast to Enrique Gutierrez, most aging workers are not injured and eligible for workers comp; to be sure, their bodies are wearing down and they are confronted with diminishing strength and balance, even as they desperately try to hold onto their places in the workforce. Rousmaniere suggests that employers develop a renewed focus on prevention, one that has been adapted to the realities of the aging worker. After all, these workers are valued for the skill and experience they bring to the work, even as their work capacities diminish.
The Big picture here – and it is a very big picture indeed – is the dilemma of aging workers who perform physically demanding jobs and who have little education and virtually no transferable skills. There are millions of such workers, some are immigrants, while many others are native born. Most have zero prospects for a secure retirement, even as Congress contemplates pushing social security retirement even further into the future.
Whether they like their jobs or not, aging workers see themselves working out of necessity well into the their 60s, 70s and even 80s. As their bodies inevitably wear out, as their injuries (cumulative and sudden) lead a number of them into workers comp courts across the country, judges will be confronted with the same dilemma that faced the appeals court in Iowa: for older workers with no transferable skills, workers comp becomes the retirement plan of choice for those with no retirement plans and no way to continue working.

A Modest Proposal for New York

Monday, November 5th, 2012

New York’s workers’ compensation system has taken a few high hard ones to the head lately. Premiums are now the 5th highest in the nation (according to the well-respected “2012 Oregon Workers’ Compensation Premium Rate Ranking”); its surcharges are the highest in the nation; the Spitzer reforms, aimed at reducing costs to employers and improving care for injured workers, have done neither; attorney involvement is among, if not the, highest in the nation; the house-that-Jack-built bureaucracy is cumbersome and unwieldy; and all the parties in the system, every last one of them, bemoan what they perceive to be a train wreck of monumental proportions.
At the same time, New York’s Workers’ Compensation Board has come under wilting criticism from nearly all quarters. Mike Whitely, from Work Comp Central, has been doing an excellent job of reporting and documenting the whole thing. Last week, the New York Business Council weighed in with some heavy artillery of its own. In short, everyone’s frustrated, and tempers are frayed.
I know the Board’s senior management, and I am absolutely convinced that all of them, from Jeff Fenster on down, are highly dedicated. These are competent professionals doing the very best they can, but they are up against long odds. They are David with a broken slingshot, and Goliath is growing bigger every day. It does not appear that New York’s loggerheaded vested interests – lawyers, doctors, insurers, unions, the Legislature, employers, and more still – will come to any grand bargain anytime soon.
So, is there anything the Board or anyone else can do to create some positive, forward momentum? I think there is, and it involves what is known as Code Rule 60, which is the New York Department of Labor’s Workplace Safety and Loss Prevention Incentive Program. It’s sometimes known by its really catchy and memorable acronym, WSLPIP. Code Rule 60, which came into being in September of 2009, is supposed to help employers establish DOL certified and approved safety, return to work, and drug and alcohol prevention programs. Participating employers receive premium credits: 4% for safety, 4% for return to work and 2% for drug and alcohol prevention. The credits run for 3 years (but the two 4% components drop to 2% in the second and third years) and are renewable. Only employers with experience modifiers of less than 1.3 are eligible (although why the state prohibits employers who would seem to need it the most from participating is a piece of logic beyond my comprehension).
The premise of Code Rule 60 is that employers who establish these programs will have safer workplaces and, eventually, lower costs. Not a bad idea. The problem is that the DOL has made the program so ridiculously bureaucratic that it would be easier for a New York employer to find his way through a dense maze of thorns, blindfolded, than to negotiate the journey to Code Rule 60 certification. Don’t believe me? Here is the official Labor Law Regulation (PDF), in other words, the way through the thicket. It’s 20 pages of dense bureaucratese. Busy employers find it nearly impossible to wade through the legal Pig Latin.
Code Rule 60 is totally process driven. There is no performance requirement. No performance measurement. Just build a certified program, and good things will happen. Maybe. The New York DOL doesn’t seem to care if the program reduces loss costs. All the DOL wants to know is: Have employers built their programs the way we told them to build them?
With the preceding as background, you might be forgiven for asking how successful has the program been? Regardless of whether they’ve reduced loss costs, how many employers have succeeded in getting those precious premium credits? Even the New York Business Council couldn’t find out, but, anecdotally, the number is fewer than five. Since September, 2009.
So, here’s my proposal: First, scrap Rule 60. It’s not working, and it never will in its present form. Second, Jeff Fenster should pick up the phone and call Paul Meagher, the highly respected President of the Massachusetts Workers’ Compensation Rating and Inspection Bureau (WCRIB). Why? Because long ago at the height of the Massachusetts workers’ compensation crisis, when 65% of the Commonwealth’s employers were in the High Risk Pool, Mr. Meagher was instrumental in establishing the Massachusetts Qualified Loss Management Program. The QLMP (later replicated in Missouri, West Virginia and New Hampshire) is totally performance driven, and it played a big role in the Massachusetts workers’ compensation turnaround, the continued success of which was documented last week by the Workers’ Compensation Research Institute and last month in the Oregon study.
Here’s how it works. Premium credits accrue to Loss Management Consulting Firms whose Massachusetts customers the WCRIB certifies have reduced their loss costs in the year following engaging a firm. The greater the loss cost reduction, the greater the credit, up to 15%, which is then passed on to the Loss Management Consulting Firm’s customers in the succeeding year. Lower loss costs mean lower premiums for employers. The Loss Management Consulting Firms have to requalify every year. So, if a Firm’s results slip, it will see its credit, and probably customer portfolio, reduced. In the QLMP, all of the incentives are lined up so that everyone is motivated towards reducing costs, while providing safe workplaces and high quality care for injured workers. (Full disclosure moment: The QLMP was an idea I gave to the WCRIB and the Massachusetts Division of Insurance).
Here are the rules for the Massachusetts QLMP (PDF), with a Q&A at the end. Four pages, written in simple English that any employer or agent can understand.
Senior management of the New York Workers’ Compensation Board has told me on many occasions that their overarching goals are to reduce costs to employers and to see that high-quality care is provided to injured workers. It’s obvious that Rule 60 is doing neither. A New York version of the Massachusetts QLMP would be a good first step in that direction.

Treatment for War Trauma: Just Say “Om”

Tuesday, October 30th, 2012

As we begin to survey the damage from Hurricane Sandy, a symptom of the global warming that has been religiously ignored in the course of the presidential debates, our thoughts turn toward the impact of trauma: Sandy’s trauma involves man’s influence on nature, but in war we have trauma that is purely the result of mankind’s inability to live in peace.
About 2.4 million soldiers have cycled through the wars in Iraq and Afganistan. One third or more of those returning from battlefields suffer from post-traumatic stress disorders (PTSD) or depression. Suicide has overtaken combat as the leading cause of death in the Army. [That stark statement is worth a second read.] To date, treatment of PTSD has centered primarily on cognitive processing therapy (CPT), a labor-intensive approach that places veterans in a one-to-one relationship with a therapist. But only 40 percent who enroll actually benefit from the therapy, and even if it were more effective, the vast numbers of soldiers in need would require thousands of additional psychologists.
Tina Rosenberg writes in the New York Times of new approaches to treatment. Instead of using the one-to-one model, these new therapies work in groups. And instead of rehashing the images that gave rise to PTSD, these therapies focus on the present moment, long after the trauma has occurred. The Washington-based Center for Mind-Body Medicine has designed a course that involves conscious breathing, meditation, mindfulness, guided visual imagery and biofeedback. Other therapies include acupuncture and yoga. The Center has a proven track record, working with Kosovo high school students and Gaza residents. The techniques appear to work: following the ten-week program, participants in Kosovo had significantly lower symptoms of PTSD than non-participants.
In Gaza, center staff trained over 400 group leaders, who were able to provide therapeutic interventions with 50,000 people. Because of its group approach and relatively short training cycle, large numbers of people can be reached quickly and at very low cost. And retention levels within the training are much higher than those for individual counseling.
Life Skills
In comparison to CPT therapy, the group approach stresses practical coping skills. While there may still be some social stigma attached to participation in individual therapy, there is no such negativity associated with group work – aside, perhaps, from its New Age aura. Most important, the tools being taught are universal: we all experience stress and some degree of trauma and we all need practical techniques to help us adjust to the pace of modern life. Teaching life skills such as mindfulness and meditation does not isolate PTSD sufferers from everyone else; to the contrary, the fundamental lesson is that we all experience suffering and we are all in this together.
Surely these same group techniques would be helpful to devastated citizens recovering from this week’s unprecedented natural disaster.
Teach Politicians to Breath?
I often wonder what would happen if our politicians were taught a few mindfulness exercises. Perhaps there would be more compassion in the world. Perhaps law and policy makers would pause a minute before they spoke, before they ridiculed their opponents or declared war on another country. Perhaps the elected officials who find life sacred at the moment of conception but insignificant once birth occurs would empathize with the plight of women compelled to carry a rapist’s child.
These are agitating thoughts, indeed. Time to take a deep breath, sit still for a moment, and just say “om.”

Entrustment: Risk on the Road

Wednesday, October 3rd, 2012

When risk managers scan the virtually infinite horizon of risk, they often overlook the single greatest exposure in the working world: driving cars and trucks on the roads of America. Today we approach the issue through the back door, wherein an individual killed in an accident was deemed not be in the course and scope of employment. It might be the backdoor, but it still leads to the same conclusion.
Linda Gadbois was a cook for the California prison system. She suffered a work-related injury and was sent to a doctor. When this doctor proved unsatisfactory, she was allowed to choose another medical provider from a list. After completing her appointment in May of 2008, she headed back to work. She was involved in an accident: Gadbois was killed; the other driver, Kenneth Fields, was seriously injured. Under the theory that Gadbois was “in the course and scope” of employment, Fields sued Gadbois and the state of California, her employer. No need to ask why: the state’s pockets were significantly deeper than those of the late Gadbois.
Going to Work
Field’s case rested on the interpretation of the “coming and going” rule: was Gadbois, leaving a medical facility after work-related treatment, inside or outside of employment? The court noted that she had requested the second treatment on her own. Her employer did not require her to drive to the appointment, nor was she required to drive as part of her employment. As a prison cook, the essential job functions were limited to her cooking: how she got to work was not her employer’s concern.
As a result, the fifth district appeals court concluded that the state was not liable for any injuries Gadbois caused while on her way to work. Field’s suit against the state was dismissed; the status of his suit against Gadbois is not known, though presumably he collected up to the limits of her personal auto insurance policy.
It is worth noting that Gadbois’s death was not compensable under workers comp. Gadbois was paid for the day of her death in accordance with a death benefit policy that covers all workers who die on a regular work day, whether at work, on the way to work, or on paid vacation or leave. Gadbois received her full salary for the day of the accident, but received nothing from workers’ comp. Had she received death benefits under comp, Fields would have had a stronger case.
Drivers: Good, Bad and Indifferent
While the specific circumstances proved Gadbois to be the exception, many people do drive in the course and scope of employment: obvious examples would be tradesmen, salespeople on the road and people whose customers are visited in their homes. But the circle of drivers must be expanded to include any and all employees who run errands or perform any aspect of their jobs in company cars or in personal vehicles.
Some employees do this company-related driving on a regular basis; others only sporadically. But any employee driving “in the course and scope” of employment is a representative of the employer. Whether consciously or not, the employer has endorsed the driving skills of employees whose work involves driving. Even if the employee is in a personal vehicle, the employer has, in effect, entrusted them with the keys. This “entrustment” may well comprise the riskiest part of the working day.
Basic Management
How should employers manage this risk? It’s really quite simple. Any and all employees who drive – or who might possibly drive – while working should be required to submit annual copies of their driving records. If there is a cost in obtaining the records, the employee should be reimbursed. The employer should review the records carefully and place restrictions on any employees with marginal or poor driving records. Indeed, the employer may well find that some employees who drive while working do not hold valid licenses. If these unlicensed drivers have accidents while working, the employer is on the hook for anything that happens.
In addition, employees should be required to report any moving violations, on or off the job. A speeding violation on the weekend might not preclude an employee from driving during work, but a formal warning would be appropriate.
Finally, prudent employers should have written policies on limiting the use of cell phones while driving and, needless to add, prohibiting texting. These policies should be enforced, with appropriate documentation and disciplinary action for any violations.
The risks of driving permeate our lives. When we drive in the course of work, the risks are shared by employee and employer alike, even if the latter is oblivious to the exposure. For the savvy manager, a well organized approach to the risks of driving goes a long way toward containing the ever-present perils of the open road.

Annals of Compensability: Heart Attacks at Work

Monday, October 1st, 2012

Over eight years ago, my colleague Julie Ferguson blogged on the issue of workplace heart attacks: compensable or not? (Workers Comp Insider just passed its ninth birthday, but we’ve been too busy to celebrate.) Heart attacks present a unique challenge to the courts overseeing workers comp. The general standard requires that something unusually stressful happened at work in the moments leading up to the incident; if people are doing their usual work in the usual manner, the heart attack does not arise “out of” employment. If, on the other hand, the demands of work are unusually stressful and beyond the ordinary, the incident might well be compensable.
Today’s case raises the isse of whether anything that happens on Super Bowl Sunday can be ordinary. Colleen Robert’s husband (no first name given in the court documents) normally worked as a receiver for Waldbaum’s Supermarkets in New York. While the 2010 superbowl did not involve any New York teams – the contest featured the Indianapolis Colts versus the New Orleans Saints – Super Bowl Sundays are always busy for super markets. Roberts was asked to manage the store during the unusually busy day. At one point, he engaged in a verbal altercation with a customer (which in itself may not be unusual for those working in New York). Later that same day, while still at work, Roberts suffered a myocardial infarction and died.
The case was first deemed compensable, then denied by an administrative law judge, and then finally adjudicated by the Appelate Division of the New York Supreme Court. The judges noted that any death at work is presumed to be work related, but they also looked for a causal connection between the fatal attack and the work being performed. The autopsy revealed that Roberts suffered from extensive cardiovascular disease and thus was a good candidate for a myocardial infarction. In arguing against compensability, the defense pointed to the lapse of time between the verbal altercation with a customer and the attack itself. However, the judges noted that the entire day was full of stress and excitement for Roberts, who was not performing his usual job in the usual manner. They determined that the fatal heart attack was compensable.
Best Practices
In a similar case involving a supermarket in Massachusetts, a 70 year-old man with a pacemaker collapsed and died on his break. Because he had a known heart condition, and because of his age, the market assumed the fatality was not work related and failed to report it to their insurer. Months later, the widow filed for comp benefits. Due to the absence of timely interviews with co-workers and supervisors, and due to the “death at work” presumption, the case was deemed compensable.
The lesson for employers is both simple and straight-forward: report any and all incidents of heart problems immediately. Regardless of the state jurisdiction, the courts are likely to apply the same standards as in New York. And if a heart attack occurs on Super Bowl Sunday, defense may have a tough time proving it was just another working day.

New Jersey: Usual, Customary and (Un)balanced

Monday, September 24th, 2012

Cooper Road in Middletown, New Jersey, is rumored to be haunted by strange, ghostly creatures. They jump out from behind trees and startle the drivers of cars traveling down an unpaved portion of the road. There are no street lights and the road has sharp turns, so the appearance of these apparitions is both sudden and alarming. Based upon the numerous oddities in New Jersey’s workers comp law, these ghostly beings might well be carrying sign boards that read “Ruined by balanced billing.”
From the perspective of virtually any other state jurisdiction, New Jersey’s approach to the reimbursement of medical providers in the workers comp system is demon-ridden and rather strange. To begin with, there is no fee schedule. Providers are entitled to their “usual and customary” fees. By leaving fees to the providers, the state creates an unusual level of tension between these providers and the insurance carriers and self-insured employers who pay the bills.
The tensions are not limited to the payers, however. When a payer refuses to cover all or part of the “usual and customary” bill, the provider has the option of billing the injured worker for the balance. The euphemism is “balanced billing” but in both concept and practice this is as unbalanced as a comp system can get.
The Broken Premise
The fundamental premise of workers comp is that the medical costs and lost wages of workers injured on the job will be covered by their employers. In return, workers have given up the right to sue their employers for work-related injuries and illnesses. In most states, the protective barrier between injured workers and the costs of treatment is absolute: there are no copays, no deductibles and no fees whatsoever for injured workers. Comp even covers the cost of travel to and from treatment. “Out of pocket” is a concept that simply has no place in workers comp.
Medical coverage under workers compensation is, in the words of my colleague Tom Lynch, “the best coverage plan in the world”: it pays for everything and includes indemnity payments for lost wages, too. The only catch – and it’s a big one – is that to qualify you must be injured “in the course and scope” of employment, with an injury “arising out of” employment.
Balanced billing is patently unfair to workers. Routine disputes between medical providers and payers spill over to injured workers. Unpaid portions of medical bills are sent to the workers, who are in no position to pay them. When workers routinely refuse to pay these bills, they may find themselves harassed by collection agencies. Not exactly what the doctor ordered when you are trying to recover from your injury and return to work.
Senate 2022 to the Rescue?
Senate Bill 2022 is wending its way through the New Jersey legislature. The bill recognizes the inherent unfairness of balanced billing and would put an end to the practice. Any disputes about payment would revert to the workers comp bureaucracy, but under no circumstances would the disputed portion of any medical bill become the responsibility of the injured worker.
It’s interesting to note that the bill explicitly avoids the issue of a fee schedule. Medical providers will continue to bill for their “usual and customary” fees, which, in turn, will keep the cost of medical treatment relatively high. But at least the injured workers will be exempt from the dispute. That’s the least the Garden State can do in its belated effort to restore fairness and equity to the comp system.
Here’s hoping that S 2022, in one form or another, finds its way to the Governor’s desk in time for Halloween. That would soothe the ghosts on Cooper Road and allow them to revise their signs to address some other glaring inequity in our imperfect world.

Missouri: The Roofer’s Conundrum

Tuesday, September 18th, 2012

Five years ago we blogged Missouri’s tough-on-workers reforms that made it more difficult to collect benefits in the “show me” state. Among the provisions in the new law was a 20 to 50 percent reduction in indemnity for workers who are injured while wilfully ignoring the employer’s safety program.
Which brings us to Dennis Carver, a roofer who worked for Delta Innovative Services in Kansas City. Carver was carrying a 100-pound roll of composite weather barrier up a ladder – no easy task! – when he injured his back, resulting in a permanent total disability. The problem was that Delta had a safety policy that required three point contact with a ladder at all times: it would be physically impossible to carry a 100 pound roll and maintain three point contact. Because he violated the policy, Carver’s indemnity was cut in half, from $743 per week to $371.
Carver admitted that he went to work with the intent of violating the policy. He knew that instead of having the usual crew of 11 men on the job, the crew that day would total two people: himself as foreman and one other crew member working in a separate area. He knew full well that he was on his own. He also knew that company policy required that he use a hand pulley or power equipment – or request the assistance of a coworker – to lift materials to the top of a ladder.
Delta argued that Carver caused his own injury by failing to follow its “three-point” safety rule. Slam dunk for the employer? Here is the statute:

[w]here the injury is caused by the failure of the employee to use safety devices where provided by the employer, or from the employee’s failure to obey any reasonable rule adopted by the employer for the safety of employees, the compensation and death benefit provided for herein shall be reduced at least twenty-five but not more than fifty percent; provided, that it is shown that the employee had actual knowledge of the rule so adopted by the employer; and provided, further, that the employer had, prior to the injury, made a reasonable effort to cause his or her employees to use the safety device or devices and to obey or follow the rule so adopted for the safety of the employees.§ 287.120.5
“The burden of establishing any affirmative defense is on the employer․ In asserting any claim or defense based on a factual proposition, the party asserting such claim or defense must establish that such proposition is more likely to be true than not true.” § 287.808.

The Checklist
Thus the statute presents a checklist for reducing indemnity payments:
1. that the employer adopted a reasonable rule for the safety of employees; CHECK
2. that the injury was caused by the failure of the employee to obey the safety rule; CHECK
3. that the employee had actual knowledge of the rule; CHECK and
4. that prior to the injury the employer had made a reasonable effort to cause his or her employees to obey the safety rule. NOT SO FAST!
Theory and Practice
While Delta’s owner, Danny Boyle, testified that “[n]ormally our guys are trained ․ [that] the only thing that should be carried on a ladder is the person himself,” he then testified that employees routinely violated that rule:
Q. Does that mean nobody ever carries anything?
A. Not at all. Guys tend to do things wrong all the time.[emphasis added]
Q. And that’s what–
A. I’m just being truthful.
Q. Sure. It happens. It’s faster to carry it up sometimes?
A. Yes.
Q. Because you’re trying to finish a job and get something done, you may carry something up a ladder as opposed to using the beam?
A. Yes.
Q. Or the pulley?
A. Yes.
Even though Boyle was aware of multiple instances in which employees had failed to follow the three-point rule, he was unable to provide any testimony concerning discipline imposed on noncompliant employees. In other words, the policy was not enforced. And because it was not enforced, Delta must own the consequences of employees failing to follow it.
The Court of Appeals remanded this case back the workers comp commission, for a closer examination of whether there were grounds for reducing the indemnity payments. In all likelihood, Carver will collect the full indemnity.
Roofers at Risk
Boyle’s testimony that “guys tend to do things wrong all the time” reminds me of a telling moment in a training session some years ago. I was explaining the implications of implementing a drug testing program and the owner of a small roofing company responded: “I could never do that. Half my guys would fail.” [Need I add that, following the seminar, I alerted the underwriter to flag that account for non-renewal?]
Would it surprise you to learn that roofing is one of the most expensive job classes in workers comp? The rates can run as high as $50.00 per $100 of payroll and even higher. It is difficult, demanding work. In some respects, there is no such thing as a good day for a roofer: it’s either too hot, too cold, or too windy. The exposures are relentless and the work itself, especially on the commercial side with hot tar involved, can be noxious.
Owners of roofing companies like Danny Boyle are faced with a daily conundrum: do I enforce the rules and slow down the work? Do I discipline employees for violations or let the work flow, hazards be damned? In the course of normal employment, it’s tempting to ignore the finer points of safety. But that puts workers at risk for serious injuries – and owners at risk for footing substantial bills.

Annals of Compensability: Confusion and Death from an East Texas Cocktail

Monday, September 10th, 2012

We have been tracking the compelling issue of compensability in drug overdoses within the workers comp system. We have blogged drug-induced fatalities that are compensable (Tennessee) and non-compensable (Ohio and Connecticut). Given the prevalence – make that rampant over-use – of opioids in the workers comp system, prescription drug abuse is an issue with profound implications for injured workers, their employers and the insurers writing workers comp policies across the country.
Which brings us to the saga of Bruce Ferguson-Stewart. He was injured on May 25, 2004 while working for AltairStrickland, an industrial contracting firm in Texas. A bolt weighing several pounds fell from above, striking Ferguson-Stewart and injuring his shoulder and neck. The MRI showed “minor disc bulges” at three levels on his cervical vertebrae. His treating physician diagnosed him with a left shoulder contusion and prescribed hydrocodone as part of the treatment plan. The doctor also recommended surgery to repair the shoulder.
Denial and its Consequences
For reasons that are not clear from the trial documents, the claim was denied by Commerce & Industry Insurance, the employer’s carrier. The carrier lost the initial appeal and then lost again. The insurer then sought judicial review of the Division-level finding of compensability.
Meanwhile, with his shoulder untreated and in extreme pain, Stewart continued to take his prescribed Hydrocodone, known locally as an “East Texas cocktail.” At every level of appeal, the compensability of the claim was upheld, but the surgery was delayed – with apparently disastrous results. (The delaying tactics may have been related to Stewart’s alleged history of abusing prescription drugs.)
On October 3, 2004, while his worker’s compensation claim was still being contested, Ferguson-Stewart died from an overdose of hydrocodone. His blood contained a hydrocodone level of 0.38 mg/L, which is consistent with acute severe toxicity. The blood also contained carisoprodol, a prescription muscle relaxant, and marihuana.
Trial by Jury
Ferguson-Stewart’s widow filed for death benefits under workers comp, but the case was denied. The widow appealed.
At trial, Ferguson-Stewart presented two theories as to how and why Stewart might have unintentionally or unknowingly ingested a lethal dose of hydrocodone. First, in what CIIC describes as the “accidental overdose” theory, Ferguson-Stewart alleged that the overdose must have been accidental because her husband did not intentionally or knowingly commit suicide.
Tommy J. Brown, a forensic pathologist who performed an autopsy on Stewart, concluded that the cause of death was hydrocodone toxicity and that the manner of death was “accidental.” Brown’s testimony is right out of central casting:

Well, I–I see it a lot. I do autopsies on people with chronic pain a lot and
this–like before I see them, start out with their drugs and then they
increase the drugs, and then to try the [sic] alleviate the pain more, and pretty soon they’re taking more than prescribed, and pretty soon they will
overdose theirselves [sic] or they will overdose theirselves [sic], some
people do. And then they die and it’s usually in a low lethal range [like
that observed in Stewart]. So I consider that an accidental death because
they were overdosing due to the chronic pain.

With its pathos and illuminating detail, the widow’s testimony reads like a monologue from a Faulkner novel:

The day before or the day of–that he died. They say he actually died
early in the morning; so, I guess the day before. He was really disoriented. He was not acting normal or the way he had been acting since he was hurt. He wasn’t acting normal at all. His speech was slurred. He was stumbling and falling all over things. I remember–I think I remember one time he actually falling [sic] out of a chair and–in the yard
because he was trying to get up and he tripped over a root and he fell on
the shoulder he had injured. And that made it even that much more
painful for him. He was–he was very–he was crying about it. He really
had hurt himself.
. . . .
He was–in the last couple of days before he died, he was getting really
bad about forgetting that he had already taken his medicine and taking it
again; and you know, sometimes I would have to tell him, “Hey, you
already took it. You can’t take it again.” And usually he would agree with me; but there were times when he would say, “No. No. No. I didn’t take it. I’m sure I didn’t take it. I’m still hurting too bad, and I don’t remember taking it.” So, he’d take it again.
But especially the day of [his death], he was entirely too confused. He
wasn’t–like I said, he wasn’t himself at all.

The jury charge instructed that “[a] claimant’s death does not
result from medical treatment instituted to relieve the effects of his compensable injury if the death results solely from a claimant intentionally or knowingly failing to comply with his doctor’s instructions[emphasis added].” The jury concluded that Ferguson-Stewart’s death was unintentional, resulting from the treatment for his compensable injury. The widow was granted death benefits.
Intention, Confusion and Compensability
Under Texas law, compensability hinges on Ferguson-Stewart’s intent: was the death an intentional suicide or was it an accident? He had no intention of killing himself, so the death was compensable. In a somewhat similar Connecticut case (see above), the overdose was the result of the deliberate (and illegal) act of using a needle to ingest drugs. That case was denied.
Behind every death due to prescription drugs lies a story worth telling. Powerful and effective pain killers are transformed into instruments of death. When it comes to the compensability of these cases, disorientation and confusion are not limited to injured workers experiencing pain. The medical and workers comp systems struggle with the ambiguous legacy of medications: while opioids offer immediate, short-term relief from pain, the relief is followed all-too-often by a downward spiral of addiction and dependency.
I truly wish the testimony of Ferguson-Stewart’s widow could be played in the examination room of any doctor about to write a script for an “East Texas cocktail.” The doctor just might consider a more benign and less toxic alternative.

New York: A Micro-Step into the Electronic Age

Monday, August 27th, 2012

Last month, Tom Lynch posted a concise and rather devastating macro view of workers comp costs in New York. Today we revisit an issue that illustrates the difficulty of lowering costs in the Empire State: the use of stenographers in each of the several hundred thousand hearings that take place every year in New York. With some reluctance, we will set aside the question as to whether the 300,000 hearings and the 30 million scanned documents are actually necessary in overseeing comp in New York. (They are not, but that is fodder for another day.)
As we read in Work Comp Central (subscription required), New York employs over 100 stenographers, along with their supervisors, to generate an “accurate record” of comp hearings. The staunch defenders of these stenographers – they are legion in the legislature – believe that the only way to secure an acceptably accurate account of a comp hearing is the use of a live stenographer. Electronic devices will miss the nuances, will mess up the occasional non-English word, will make unintentional errors, and will be flummoxed by occasions where more than one person is talking at the same time. In other words, without stenographic documentation, courtroom justice as we have come to know it in the Western world will cease to exist.
Best Practices
When the New York Workers Comp Board proposed a program to test digital recording of hearings, 67 comments were generated. Would it surprise you to learn that 66 of the comments objected to making any changes in the way hearings were documented?
As is often the case, the only reasonable context for examining the Byzantine construction that is New York comp is a comparison to other states. Do other states conduct hearings for any proposed change in each and every claim? Do other states scan every document moving through the comp system? Do other states require stenographic documentation of every comp hearing? Do other states prohibit the use of digital recording in the courtroom? Clearly, New York is out of step with the nation in these areas. Thus it should come as no surprise that the only aspect of comp where New York is a pace-setter is in the spiralling cost of comp to its employers.
One Small Step for Man…
In response to the NYWCB’s plan to introduce digital recording into some of its hearings, the legislature passed Assembly 7508, which made explicit and absolute the requirement to use live stenographers. The Insider is pleased to report that Governor Cuomo vetoed the bill. This green – or should we say yellow? – light to proceed with a testing of digital recording will begin to align New York with other states in its approach to courtroom transcripts.
It’s Not About the Jobs
In the context of a faltering economy, it is important to note that court stenographers are unlikely to face any layoffs. They are union employees, covered by a five year contract negotiated last year. The pilot use of digital recording is not aimed directly at them. So how does the new program, made possible by the Governor’s veto, save money? By gradually shifting away from live stenographers to the use of cheaper – and comparably accurate – technology. As the current incumbent stenographers retire – or move on to new careers – the vacancies will not be filled. In all likelihood, these $60K per year jobs will eventually disappear.
With all the humongous cost-drivers in New York workers comp, the stenographers are a very small part of the problem. Nonetheless, there is significant symbolic value in taking on this miniscule stake holder. The long-standing problems in New York stem from a system that has made very little movement away from the bitter labor environment of the early 20th century. A profound lack of trust permeates the system.
The Governor, the legislature and the comp board need to evaluate each and every proposed comp initiative from a simple and fundamental test, based upon the essence of comp: does the proposed action improve benefits and conditions for injured workers? And does it lower costs for employers? Other considerations – politics-as-usual, stake holder leveraging and sheer bureaucratic inertia – should no longer be part of the discussion.

What’s the Real Workers’ Comp “Secret Sauce?”

Tuesday, July 31st, 2012

“An educated consumer is our best customer.” – Sy Simms (a really smart retailer)

In the mid-1980s and early 1990s, our nation was in the midst of an awful workers’ compensation crisis. In my home state of Massachusetts, the cost of workers’ comp was approaching $2 billion dollars annually. Employers were looking for straws to grasp. Associated Industries of Massachusetts, the leading employer organization in the state, held quarterly seminars in large hotel ballrooms and filled them every time with CEOs, CFOs and HR VPs, all wanting to know what they could do to stem the tide.

Often, I was a keynote speaker. Why? Because my company, Lynch Ryan, had figured out that even though, as Peter Rousmaniere, my CFO at the time, put it, the crisis was “a horrendoma of the first order,” employers who were committed and driven to reduce their costs could do so if they instituted real, systemic programs with roles, responsibilities and accountability throughout the organization. These employers learned that time was their enemy and that when safety failed and injury resulted, they needed an urgent sense of immediacy to take hold of the injured person and keep him or her as close as possible to the bosom of the workplace. They didn’t just report the injury to their carriers and return to business as usual.

Relative to their peers — their competition — these employers shone like bright stars in the clear night sky.

In 1992, Massachusetts enacted far-reaching legislation to significantly improve what had become a woebegotten state system. This reform legislation produced results that still echo today as Massachusetts continues to have among the very lowest costs in the nation, but among the highest benefits. The big national bugaboo, medical costs, are about 40% of the total spend, as opposed to around 60% nationally. The $2 billion has shrunk to around $600 million.

Yet, even now, employers who treat workers compensation as they would treat any other important business function (time to repeat – with written documentation, roles, responsibilities and accountability established throughout) still outperform their competitors. I’ve worked with many of them who managed workers’ comp well and were proud of the results they’d achieved.

And that, to me, remains the secret sauce.

Yes, the Great Recession has caused terrible damage to the nation and, by extension, to the workers compensation system. Yes, the combined ratio is unsustainable (and may be understated). Yes, we’re in the middle of an epidemic of opioid abuse, enabled, for the most part, by doctors who long ago forgot their Hippocratic Oath and who now bow to Gordon Gecko. And, yes, workers’ comp, especially with respect to medical claims management, has gotten much more complicated over the years (and the Medicare Secondary Payer Statute hasn’t helped). But in the midst of all this, you will still find employers who are so serious about safety and injury management, that their workers’ compensation costs, relative to their peers, give them a significant competitive advantage. All things being equal, their boats are in a safe harbor, waiting to sail when the storm lifts.

In many cases, these employers who “got religion” long ago are large organizations, at least upper middle market. They have the resources to institute systemic programs. But what about the other 80% of American businesses? These companies need help. How do we bring them the education they sorely need to weather the market vagaries?

I think that’s the bull’s eye challenge.