Archive for the ‘Compensability’ Category

COVID-19: Two Updates

Tuesday, May 19th, 2020

Who pays?

The last question asked in our question-filled Post of 13 May was the same as the first question asked, namely: Who’s the guy at the end of the line left holding the bill for COVID-19 workers’ compensation claim costs?

Right now, as we have written here, each state is addressing this in its own way; fifty different plans for one national crisis.Thus far, workers’ compensation is the pot out of which, in one way or another, claims are addressed. Employers do not like this.

Employers of essential workers haven’t wanted to scream too loudly about being the last in line guy, what with so many of their  workers falling ill, even dying, every day. That kind of crass insensitivity would be bad for business. But inwardly, they have to be nervous about getting stuck with the check, the cost of which, as we have documented here, could be enormous.

Employers have already taken a high hard one to the side of the head with the complete and utter devastation COVID-19 has done to their economic well being, and the requirement to pay the workers’ compensation claims which are going to avalanche over the top of them is something with which they strongly disagree. For what it’s worth, I think they have a point.

Back at the state capitals, I would venture, governors don’t really care where the money comes from, just as long as it’s not coming out of their state treasuries.

And throughout history, insurers have resisted paying for occupational disease claims. Witness the 20-year fight to avoid paying the costs of pneumoconiosis, which resulted in the Federal Coal Mine Health and Safety Act of 1969, amended four years later by the Black Lung benefits Act, which created the Black Lung Disability Trust Fund.

So, if the states don’t pay and if insurers don’t pay and if employers don’t pay, who is left?

Brothers and sisters, the federal government is left, which is another way of saying we are left. We will all share the risk and share the costs. If you cannot bring yourself to believe that, you haven’t been paying attention.

In fact, a model exists: The September 11th Victim Compensation Fund, which:

…provides compensation to individuals (or a personal representative of a deceased individual) who were present at the World Trade Center or the surrounding New York City exposure zone; the Pentagon crash site; and the Shanksville, Pennsylvania crash site, at some point between September 11, 2001, and May 30, 2002, and who have since been diagnosed with a 9/11-related illness.  The VCF is not limited to first responders.  Compensation is also available to those who worked or volunteered in construction, clean-up, and debris removal; as well as people who lived, worked, or went to school in the exposure zone.

The wheels are already in motion. Last week, a bipartisan group in the House unveiled the Pandemic Heroes Compensation Act, a plan to compensate essential workers who fall sick or die from COVID-19. The Act is modeled on the September 11th Victim Compensation Act.

Senate democrats are also proposing legislation. Like everything else in D.C. these days, the road from here to eventual victim compensation will be tortuous, but I cannot see any other way of paying for this national catastrophe other than with a national program. Can you?

The Moderna results

For a number of years, I chaired the Board of a BIOTECH pre-clinical Contract Research Organization (CRO). We took compounds, whose makers hoped would become the next blockbuster drugs, and tested them in mice, rats, guinea pigs, rabbits, pigs and non-human primates (that’s right, monkeys). In the biotech business, everyone knows everyone else, and we certainly knew a lot of scientists trying to develop vaccines.

Yesterday, the Boston pharmaceutical company Moderna reported a vaccine it was developing for COVID-19 produced antibodies in humans. In vaccine development, this is the beginning of a Phase One trial, and its purpose is to confirm the vaccine is not toxic. Moderna’s Phase One trial is composed of 45 participants, eight of whom  Moderna says produced the antibodies. We know nothing of the other 37.

While encouraging, you won’t find respected scientists getting too excited yet. They know what Moderna has done is to take the ball out of the end zone and reach the one yard line. Nintey-nine to go.

Two things are exciting, however. First, Moderna was able to get to this point at light speed. What Moderna did in about 70 days usually takes three to four years. That is over the moon fast, but the other ninety-nine yards are going to be increasingly more arduous. Second, there are more than 100 other groups around the world, both pharmaceutical and academic, who are also going hell bent for leather to develop the vaccine that will eradicate COVID-19. Although I have every confidence one of these groups, maybe Moderna,  will cross the goal line at the other end of the field, it will take a miracle on the order of the Raising of Lazarus for this to happen before mid to late 2021.

Until then: Constant vigilance. Complacency will kill you. Really. Please keep this in mind as all the beaches and parks open this coming Memorial Day weekend. It will be highly tempting to revert to former form.

 

Important COVID-19 Workers’ Compensation Questions

Wednesday, May 13th, 2020

Economic chickens are coming home to roost all over America. Except for the one percenters, and I may be wrong about them, everyone is feeling it, the pain. Biomedical devastation is leading us to places we have never imagined, let alone seen. In the quiet little room called workers’ compensation where I have sat for some number of years, there are questions that are going to need answering. Let’s look at a few of them.

But first, a little background. A week ago we wrote about a recent National Council on Workers’ Compensation (NCCI) analysis of workers’ compensation cost projections due to COVID-19. NCCI’s analysis projected a best case scenario, in which loss costs increase $2 billion, and a worst case scenario, in which they increase $81.5 billion, or 250% more than current total loss costs. Willis Towers Watson also released a scenario-based analysis that suggested pretty much the same thing.

On 8 April, the California State Assembly Insurance Committee asked the the California Workers’ Compensation Insurance Rating Bureau (WCIRB) to project loss costs if conclusive (rebuttable) presumptions were provided to front line workers, something Governor Gavin Newsom actually did through Executive Order one month later, so the “if” became a “done.” Later in April, the WCIRB released the requested report and concluded:

…the cost estimates in this Research Brief are presented as a range of potential impacts based on varying assumptions of the number of COVID-19 claims filed. On this basis, the WCIRB estimates that the annual cost of COVID-19 claims on ECI (Essential Critical Infrastructure) workers under a conclusive presumption ranges from $2.2 billion to $33.6 billion with an approximate mid-range estimate of $11.2 billion, or 61% of the annual estimated cost of the total workers’ compensation system prior to the impact of the pandemic.

Note two things. First, for perspective, if California were a country, it would have the fifth largest GDP in the world. Second, regardless, the WCIRB’s best case scenario is $.2 billion more than NCCI’s best case scenario for all 38 states where it provides ratemaking services.

Clearly, whatever scenario happens, workers’ compensation losses are going to be cataclysmic.

So, about those questions:

  1. Who’s going to pay for all of this? In normal times, the answer is obvious: Employers and insurers (when losses exceed an employer’s liability). But if we know one thing for sure, these are not normal times. So, who takes the hit?
  2. What about secondary chronic conditions the virus has been shown to cause in some people? Many survivors of SARS (Severe Acute Respiratory Syndrome) suffered crippling ailments for more than a decade. We’re already seeing COVID-19 survivors come home from hospital with severe, possibly persistent, chronic conditions. Are these conditions covered by the initial claim? I can see the plaintiff’s attorney now. “Your Honor, but for the COVID-19 occupational disease, poor John here would never have immediately lost kidney function requiring dialysis three times per week, and would be the picture of health.”
  3. How will COVID-19 claims impact experience modification, which affects an employer’s premium for three years? It is only logical that if loss costs increase by billions in one year, an employer of essential workers, say a hospital, will see its experience modification factor take off like a SpaceX rocket. That is a recipe for economic doom and disaster beyond what we’re already seeing.
  4. What happens when an essential worker who has contracted COVID-19 and filed a claim infects other family members, or the neighbor next door, for that matter? Would they be covered by the claim, or by health insurance if they happen to have it? Keep in mind, job losses due to COVID-19 are now in excess of 20.6 million. Many have lost not only a job, they have also lost the health insurance the job provided. The Kaiser Family Foundation has said, “26.8M would become uninsured after losing job-based coverage during the coronavirus if they don’t enroll in other coverage.” Consequently, this question is very important, because workers’ compensation health care is totally free, unlike employer-based and nearly all other insurance options that all come with deductibles and co-pays.

Meanwhile, back at the California Workers’ Compensation Insurance Rating Bureau, the organization has submitted a proposed rule to deal with number 2, above. It wants to exclude COVID-19 loss costs from the calculation of experience modification. Specifically, the proposed rule says:

Claims directly arising from a diagnosis of Coronavirus disease 2019 (COVID-19), reported with a catastrophe Number 12 pursuant to the Uniform Statistical Reporting Plan, shall not be reflected in the computation of the experience modification.

The proposed rule would also reclassify workers now working remotely from home as clerical – 8810, which is the lowest premium rate possible.

Let’s suppose for just a moment that the WCIRB’s proposed rule is approved, and California’s employers are off the hook with respect to experience modification. This presents another question: Will other states do the same? All of them? Some of them? None? Whatever happens, it seems to me we need a nationally consistent approach. Wouldn’t you agree?

Finally, this all leads back to the first question: Who’s the guy at the end of the line left holding the bill for COVID-19 claim costs?

More COVID-19 Quick Takes

Thursday, May 7th, 2020

Workers’ compensation and the disease

COVID-19 is presenting some interesting and perplexing issues for workers’ compensation. Among them are:

  1. Claims adjusters and Nurse Case Managers are far more familiar with injury claims than disease claims. Occupational disease claims are fuzzy, and work-relatedness is often difficult to determine. A broken arm on the shop floor is ever so much more cut and dried. Yesterday, Governor Gavin Newsom made this moot for California by signing an Executive Order that will make it easier for essential workers who contract COVID-19 to obtain workers’ compensations benefits. His order is in effect for 60 days and is retroactive to 19 March. Note Bene – his order establishes a rebuttable presumption and covers all workers deemed essential during the crisis; e.g., grocery workers, among others, as well as first responders and all health care workers. A rebuttable presumption means an essential worker who contracts COVID-19 does not have to prove work-relatedness. The burden is on the employer to prove the disease could not have been caused by work. California is one of a number of states that have taken action addressing workers’ compensation coverage for essential workers.
  2. But not all states have taken action in the same way. In fact, approaches vary considerably. Two issues treated differently among the states are: first, whether to establish a rebuttable presumption as described above; and, second, just who is essential. Some states say that while a number of occupations have been determined to be “essential” during COVID-19 (see Grocery Workers, above), only first responders and health care workers are essential enough to qualify for workers’ compensation if they come down with the disease. Labor unions say this is an issue of fairness, but since when has workers’ compensation been equally fair in all states? Consider loss of function awards, which vary tremendously across the nation.
  3. NCCI has jumped into the COVID 19 what if debate and projected various loss cost scenarios for the workers’ compensation insurance industry. All scenarios show increased losses, and some of the them are downright grim. In the worst case, 50% of all workers are infected and 60% of all claims are paid, in which case losses increase $81.5 billion, or 250% more than current total loss costs. Ouch! In the best case NCCI presents, there is no rebuttable presumption, only first responders and health care workers are eligible for workers’ compensation benefits, only 5% of them become infected, and only 60% of the claims are paid, which results in an increase in loss costs of $2 billion. The best case scenario is is not going to happen. See 1, above.
  4. And what about the poor employers and insurers who are going to foot the bill? Specifically, what about experience modification? One can almost say COVID-19 comes under the heading: An Act Of God. But the claims are going to be paid, so how does a confused insurer account for that in  the premium it’s going to drop on the head of John Q. Employer with a loud and painful thud?

Update on Long Term Care Facilities

I’ve addressed LTCFs here, here  and here, pointing out that there is no coordinated national reporting of LTCF COVID-19 cases or deaths. “One would think this cries out for federal data tracking conducted in a consistent manner across the nation.” Doesn’t seem to have happened yet.

The logical entity to track this is the Centers for Disease Control and Prevention (CDC), and maybe it is. But, then again, maybe it isn’t, because it won’t say. Yesterday, two Senate Democrats — Ron Wyden of Oregon and Bob Casey of Pennsylvania — called on the Trump administration to close this gap and commit to a timeline to release the information.

“There have been no signs that the Trump administration has an effective plan to address the tragedy that is taking place in America’s nursing homes,” they said in a joint statement.

It’s logical to assume that a disproportionate number of deaths would occur in LTCFs. The vulnerable elderly, many, perhaps most, with a number of comorbid underlying conditions, are packed together and present a breeding ground for the virus. Early on, this should have been apparent to the CDC. Why its talented scientists didn’t dive into this from Day 1 is beyond me.

We’ll continue to follow this.

Are We Learning From History, Or Repeating It?

Throughout history, infectious diseases have crippled societies. They have stymied progress and, in the best cases delayed, in the worst reversed, economic development and prosperity.

How have societies handled infectious disease pandemics throughout history, and are our actions in the midst of COVID-19 any better?

It’s true that our science puts us a quantum leap ahead of historical societies in terms of searching for therapies and a vaccine. Oh, the vaccine will happen, but between now and then are we dealing with our current infectious disease problem better than our ancestors?

Actually, no. Societies have long known that when a killing disease strikes on a grand scale the best thing to do is stay far away from other people. Quite literally, head for the hills. Trouble was, that wasn’t always possible due to urban densities and economic privation. Today, densely packed areas, especially cities, are the immediate hot spots, the poor and African Americans are disproportionately infected, and our mitigation efforts are the same as time immemorial.

Tomorrow, we’ll take a look at the history of pandemics, their societal effects and how we can learn from them as we move through and, we fervently hope, leave behind the scourge of COVID-19.

 

 

Fifty States, Fifty Different Laws: A Peter Rousmaniere Analysis

Monday, February 1st, 2016

According to the Bureau of Labor Statistics’ (BLS) Consumer Price Index calculator, what you bought for $100 in 1973 would today cost $533.82. Despite this, during that same period wage growth for the median hourly worker grew by less that 4%. 

Moreover, as the following chart from the Economic Policy Institute (EPI) shows, while wages flattened out after 1973, productivity continued to increase at a steady pace through 2010.

Everything seems to be going up across America except hourly compensation. That helps explain why our recent economic high hard one to the head, known as The Great Recession, has left so many families living paycheck to paycheck, one crisis away from living under a bridge. It also illuminates why the indemnity and medical benefits of workers’ compensation are critical to economic survival following a work injury.

In 2015, ProPublica and NPR published a series of exposès that showed widespread disparity in the way the various states deal with work injuries. Workers’ comp professionals didn’t like the series much, complaining en masse that it was biased, agenda-driven and just plain wrong. Silly me, I thought the series actually made some important points, especially around the level of compensation for loss of function.

Into this battle now rides Peter Rousmaniere, friend, colleague, Harvard MBA, WorkCompCentral columnist and all-around deep thinker.

Mr. Rousmaniere spent a good portion of 2015 researching the economic consequences to injured workers with respect to how the different state workers’ compensation laws deal with the early days of a work injury. He illustrates his findings in The Uncompensated Worker: The Financial Impact of Workers’ Comp on Injured Workers & Their Families, published as a workcompcentral special report.

In the Uncompensated Worker, Peter Rousmaniere creates the metaphorical Tim, a New York electrician earning the median wage for New York electricians. He then goes really deep into the take home pay hit Tim experiences following a work injury. He shows how Tim will always suffer earnings losses while injured regardless of how long he’s out of work, and he does it by considering the waiting period (the number of calendar days between the injury and when indemnity payments will begin), the “shortfall” (“The difference between a workers’ after-tax take-home pay and the amount of the replacement wages”), the “retroactive” calculation (the number of days an injured worker has to lose from work before being paid indemnity for the waiting period) and the maximum weekly benefit cap.

Here’s how Rousmaniere describes what happens to Tim if he misses three, six or ten days due to the injury:

While Tim’s 6% shortfall may not seem unreasonable, additional deductions further reduce his replacement wages. First, there’s a waiting period during which a worker receives nothing, a retroactive period (in most states) and a maximum weekly benefit cap. The amount Tim actually receives depends on the number of days he missed work. We can correlate work and calendar days for Tim by looking at a calendar and figuring his first lost work day on a Monday. If Tim misses three days of work, he receives nothing; losing six days of work yields close to one work day of replacement wages, and losing 10 work days yields five work days (seven calendar days) of replacement wages.

With that New York backdrop, Rousmaniere then shows how Tim would fare in each of the other states. But he goes even farther. Drawing from Economic Policy Institute estimates, which create basic monthly household budgets based on household size and location “to attain a modest yet adequate standard of living,” he builds an EPI-estimated monthly basic budget for Tim and his family of four. He then lays out what happens to the family economy when Tim is out of work due to injury for an extended time, say more than a month. If Tim’s spouse works part-time, the family can’t afford the basic budget in 29 states; if the spouse doesn’t work, they’re under water to the tune of $2,200 a month in every state.

This is sobering stuff. The 50-state and District of Columbia chart at the end of the report is nearly totally comprised of negative numbers.

Reading the report, I’m left with this: Assume (as most claim adjusters tell me) that well over 90% of injured workers really are injured and want to get back to work as expeditiously as possible. Should those workers suffer economic deprivation simply because they had the misfortune to be injured at work? Does society have an obligation to ensure that families, already perilously close to the edge of the financial cliff, are not booted into the abyss because of that work injury? And, finally, is it time for indemnity and medical benefit parity among the states (for example, if Tim were injured in New Jersey he’d fare considerably better than in New York)?

Peter Rousmaniere has performed a valuable service with The Uncompensated Worker. When (it should not be “if”) you read it, you’ll come away admiring the level of research and detail that went into producing it. I also hope you come away thinking their just might be a better way.

 

Exclusive Remedy wins: Safe in Florida … for now. Also upheld in DBA suit

Thursday, June 25th, 2015

The big workers comp news of the week: A three-judge panel of the 3rd District Court of Appeal overturned a ruling that challenged the concept exclusive remedy: Appeals court tosses out key workers-comp ruling. Refresher: In the 2014 Florida case often referred to as the Padgett ruling, Miami-Dade Circuit Judge Jorge Cueto ruled ruled workers compensation unconstitutional, commenting that state legislative reforms had weakened the law to a point where the remedy for employees was no longer sufficient to warrant the loss of their right to sue employers.

But before exclusive remedy proponents break out the champagne to celebrate the victory, in Padgett Out, Now What? Dave DePaolo dissects the ruling, explaining why any celebrations may be premature.

“But the 3rd DCA set aside Judge Cueto’s ruling on procedural grounds, not addressing any of the merits. This leaves the question open.

The organizations pushing the constitutional challenge have vowed to continue the fight.

And those defending the system realize that the attacks will continue, particularly since there are still two cases pending in the Florida Supreme Court attacking smaller provisions of the law on similar grounds (Westphal v. City of St. Petersburg is about the statutory limits on the payment of temporary total disability benefits, and Castellanos v. Next Door Co. involves a challenge to the cap on claimant attorney fees).”

For the legal nerds in the crowd, a must-see analysis on the case can be found at Judge David Langham’s post It is Padgett Time, Third DCA Reverses. As Deputy Chief Judge of Compensation Claims for the Florida Office of Judges of Compensation Claims and Division of Administrative Hearings, Langham wields some expertise on the matter — his post is worth reading.

Exclusive remedy upheld in Defense Base Act ruling

In other recent exclusive remedy legal news, the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit) reaffirmed that the Defense Base Act (DBA) is the exclusive remedy for contract workers. See: The D.C. Circuit’s Message to Injured Government Contractor Employees: ‘There’s an Exclusive Remedy For That’ in National Law Review.

“Despite the Act’s broad exclusivity provision, in Brink v. Continental Insur. Co., an estimated class of 10,000 contractor employees who were injured in Iraq and Afghanistan brought a purported class-action lawsuit for $2 billion against dozens of government contractors, alleging that the contractors conspired with their respective insurance carriers to deny the workers DBA benefits. But a three-judge panel of the D.C. Circuit unanimously rejected plaintiffs-appellants’ claims and, in a 17-page opinion, made five key findings that will help government contractors defend similar lawsuits in the future.”

Related

3rd DCA Reverses Summary Judgment in FWA Constitutional Challenge to Exclusive Remedy

Brink v. Continental Insurance Company, Court of Appeals

Appeals Court Tosses Out Key Workers Comp Ruling

D.C. Circuit tosses suit brought by injured military contractors

Workers Compensation & the Executive Order on Immigration

Wednesday, December 3rd, 2014

At his blog Working Immigrants, Peter Rousmaniere has been tracking various public policy, health and work issues related to the underground economy of undocumented workers since 2006. His blog is a go-to source for research, think tank studies, major reportage and more, with a heavy focus on workers’ comp. His topical expertise is good reason for you to follow him as this issue evolves and a good starting point is his recent analysis of the impact of the Executive Order on workers’ compensation.

“The Order will force the workers’ compensation field to address issues that have been lying in plain sight for some time. After all, one-fifth of work injuries are likely sustained by a foreign-born workers, 10% by undocumented workers, whether or not they are reported.

Will the administration’s policy cause a jump in claims? Will it close down grey market labor abuses or open up a Pandora’s box? Will it make it easier to enforce work safety standards or sow confusion?”

His analysis addresses the states that will see the greatest effect:

“According to the Pew Hispanic Center, undocumented workers form the highest share of workforces in Nevada (10%), California (9.7%), Texas (9%) and New Jersey (8.6%). California has the largest number of people in the labor force who are unauthorized immigrants (1.85 million), followed by Texas (1.1 million), Florida (600,000) and New York (450,000.).”

…as well as the industry segments that will be most affected:

Major sectors with undocumented worker employment are farming, construction, hospitality, and institutional (building and grounds maintenance). About four out of every 10 farm workers are undocumented, hence the expectation, of which we will hear more, that providing work rights to these workers will cause food prices (especially fresh produce) to increase. However, farming’s size is dwarfed by the combined size of these other sectors, in which an average 12% of workers are illegal.

Take construction. A fifth to one quarter of lost-time compensable injuries sustained by all undocumented workers are sustained in construction. The typical image of the illegal construction worker is the low skilled laborer. About a fifth of them are estimated to be unauthorized. But a fair number of painters and other skilled workers are also illegal.

Take hospitality, which includes lodging and restaurants. About 20%-25% of room cleaners and cooks are undocumented workers.

For every 10 lost-time compensable injuries sustained by undocumented workers, about five of them take occur in either construction or hospitality. Maybe only one takes place in farming.

He also discusses the potential impact on claims and on employers and insurers.
Here are other related recent blog posts from Working Immigrants:
Arguments pro and con re legality of Executive Actions
Pew Hispanic Center’s estimates for the Executive Action
Some specifics about the Obama Administration’s “Executive Actions”
How Obama devised his Executive Order
Reagan and Bush Sr. used executive orders for immigrants
Chronology of recent news about Executive Orders to come

Undocumented Immigrants In The Workers Comp Bullseye?

Monday, June 16th, 2014

This morning, Work Comp Central’s Mike Whiteley published a well-researched 2,500+ word article focusing on the plight of undocumented immigrant workers who get hurt on the job. His article, Immigration Reform Expected to Impact Comp Systems, highlights the attempt of the National Employment Law Project to push for passage of immigration reform legislation adopted by the U. S. Senate last year. The legislation would make it much easier for undocumented workers to collect workers comp benefits following injury on the job. It is unfortunate that, given recent political machinations (see Eric Cantor, John Boehner, et al), the Senate’s legislation has as much chance of being passed anytime soon as a thrown strawberry has of putting a hole in a battleship.

As of 2013, twenty-eight U. S. state Supreme Courts have ruled that undocumented immigrants are entitled to workers comp benefits. Only one, Wyoming, has ruled otherwise.
We’ve been writing about this since 2004 – ten years. In 2005 we wrote:

It’s one of our nation’s dirty little secrets: immigrant workers are doing some of the nation’s most dangerous jobs, are being injured and dying disproportionately in those jobs, and denied benefits when injuries and deaths occur. In a political climate where the rhetoric and emotions are high and seemingly getting higher by the day, a “blame the victim” mentality is pervasive.

Unfortunately, the only thing that seems to have changed in ten years are those court rulings. But just because a worker is entitled to benefits doesn’t mean the worker is going to get them. And that, I think, is the primary thrust of Mr. Whiteley’s article.

In addition to the quite understandable fear of undocumented workers that if they report an injury they’ll likely face aggressive retaliation, there is the little problem of a social security number (SSN), which, by definition, undocumented workers don’t have. At least, not legal ones. In any event, an SSN seems to be required on the First Report of Injury (FROI). And that’s where the trouble begins, because as soon as an injured undocumented worker gives a fraudulently obtained SSN, ICE, Immigration and Custom Enforcement, comes calling.

I say, “seems to be required,” because, although the FROI does have a block for the SSN, more and more states are allowing workers to choose to have a random number assigned to them, rather than the SSN. Trouble is, many workers don’t know this. It will take time for this to catch on.

Meanwhile, as Mr. Whiteley reports, many workers get caught in the Catch 22 of the “seemingly required” SSN. Moreover, it is not unusual for ethically compromised employers to do everything in their power to prevent benefits being awarded to undocumented workers they have hired. I call these employers American Predators, because they hire workers they know to be in the country illegally and then kick them smartly to the curb when they get hurt on the job. This is probably why experts think that only a small percentage of undocumented worker injuries ever get reported into the workers comp system.

There’s an interesting twist to this story. In addition to Mike Whiteley’s article, Peter Rousmaniere, working independently, published his own column in Work Comp Central this morning on the same subject. Peter has long advocated for better treatment of undocumented workers, even going so far as to create a blog in 2006 on the subject – Working Immigrants.

Immigration reform seems to be a bridge too far right now. I fear that undocumented workers will continue to be workers compensation’s bastard stepchildren. And that is shameful.

Where’s Aristotle When ABC Needs Him?

Friday, April 18th, 2014

This morning, ABC’s Good Morning America shone its media arclight on Cathy Caswell as she spun the great big wheel on The Price is Right, not once, but twice. But while doing so Ms. Caswell was drawing $3000 per month in workers comp indemnity payments, according to ABC. And she was collecting those payments because of a shoulder injury, which prevented her from standing, running, reaching or grasping, as reported by ABC’s eagle-eyed Cecilia Vega. Vega “reported” that Caswell was one of “the countless people accused of faking an injury” to the tune of “hundreds of millions of dollars.”
The report then cut to some fraud words of wisdom from private eye, “master of disguise” (not my words; they’re Vega’s), Bob Keane who fancies himself cut from the James Bond cloth. Keane claimed that if you’re committing fraud the only way to avoid being caught by him is “by completely staying in your house for three to five years,” because if you venture outside he’s going to “get you.”
By using phrases like “countless people” and “hundreds of millions of dollars” ABC implies that Ms. Caswell is merely the tip of a very big iceberg. Frankly, I think Ms. Vega skipped Philosophy 101 – Aristotelian Logic. You know, the part about faulty inductive arguments going from the particular to the general? But I digress.
We all know that there are people who commit workers comp fraud. In fact, some of them are workers who fake injuries or malinger trying to milk the system. But the fraud committed by workers is dwarfed by that of many others in the system.
Consider Devon Lynn Kile and her husband Michael Petronella. In 2010, while Ms. Kile sought to appear on the Bravo TV series “The Real Housewives of Orange County,” the couple gained a different kind of notoriety when federal authorities, after raided their three roofing businesses as part of a two year probe, charged them with 31 felony counts involving tens of millions of dollars of underreported workers comp premiums. Petronella went to jail for 10 years, and Kile was sentenced to 10 years probation and ordered to make $2.8 million in restitution.
There are many dimensions to fraud in the workers comp system. While many people think of fraud primarily as a problem involving employees, in dollar terms most fraud is committed by other players in the system. There are opportunities for wrong-doing in virtually every financial transaction within a system that generates multiple billions of dollars every year.
Just to be clear, fraud can be committed by, yes, employees, but also by employers (see Devon Kile), attorneys, medical providers, claim adjusters, insurance agents and even investment firms (see the “Coingate” scandal in Ohio).
Despite the many opportunities for fraud in the comp system, outright fraud is relatively rare. The vast majority of transactions within the comp system, involving all of the above players, are carried out with integrity and good faith. Nonetheless, vigilance is always necessary to ensure that comp dollars are spent prudently and wisely.
ABC has scheduled an expanded report on Ms. Caswell, et al, this evening on its World News Tonight program. It should make for some interesting, if infuriating, entertainment, faulty logic and all.

Dying On The Job in Boston

Thursday, March 27th, 2014

We lost two firefighters in Boston, yesterday.
A 9-alarm fire on Beacon Street in Boston’s Back Bay, aided by 45 to 50 mile per hour winds off the Charles River, took the lives of Lt. Edward J. Walsh and Firefighter Michael R. Kennedy. Walsh, 43, was married with three children; Kennedy, 33, was a Marine Corps veteran. They were trapped in the basement of the four story apartment building when a window blew out, the winds rushed in and part of the building exploded.
Deputy Chief Joseph Finn said, “In 30 years, I’ve never seen a fire travel that fast.”
Once again, we are reminded that firefighting is a lot like combat, a lot of waiting for something to happen, and then the world falls in.
This, from today’s Boston Globe, should give one a sense of the emotional trauma of the event:

After the seventh alarm sounded, all firefighters were ordered from the building through a haze of screams and sirens. But when word came that some firefighters were missing, some vowed to go back in.
“No companies should be going in anywhere; stay away from the building,” firefighters were instructed in the mayday call.
“We are aware of the potential we see in front of us; we’re going back inside the building,” came the reply.
But the firefighters were told, “Stay out of the building.”

It took five hours to recover Walsh’s body. As he was carried out on a stretcher, all the firefighters formed an Honor Guard line. “Everyone saluted him, and Eddie was taken for his last ride,” said Steve MacDonald, a Fire Department spokesperson. If that doesn’t stir emotions inside you, then you have something other than blood coursing through your veins.
Reminiscent of the 1972 Hotel Vendome fire just a couple of blocks away that killed nine firefighters, and the 1999 Worcester Cold Storage Warehouse fire that took the lives of six, yesterday’s inferno sledgehammers us with the understanding that firefighting is a deadly business.
Seeing the soot-covered, teary faces of the men and women who watched Lt. Walsh take his “last ride” made me think of the other end of the pole, the sometimes messy business of workers comp.
In most states, injured workers are given two-thirds of their average weekly salary (60% in Massachusetts), tax free, while they’re recovering and unable to return to work. Police and firefighters, on the other hand, public sector employees, receive 100% of their average weekly salaries, also tax free. In essence, it’s a promotion.
This different treatment can sometimes anger taxpayers, usually when abuse occurs. And abuse does occur, not often, but when it does it can make headlines. In Massachusetts, we vividly remember the case of Albert Arroyo, a 20-year veteran of the Fire Department, who, after being deemed “totally and permanently disabled,” which allowed him to receive 100% of his salary, tax free, made the Boston Globe front page when he finished eighth in the 2008 Pro Natural American Bodybuilding Championship, with a picture to prove it.
Although Arroyo was acquitted of fraud charges in 2011 by a federal jury, the whole thing left a bit of a stink. US Attorney Carmen Ortiz, Boston Mayor Tom Menino and just about everyone else in authority complained loudly and in print that justice had not been done.
We all want our tax dollars spent well, but every once in a while, like yesterday, we come up against two truths that won’t go away: First, protecting the citizenry can be a tragic and deadly business; and second, with the exception of soldiers, I don’t know of any other occupations where people give their lives in the line of duty to protect others. Do you?

Pike’s Pique: The Stress of Behaving Badly

Monday, July 29th, 2013

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.