New Cavalcade of Risk – David Williams of Health Business Blog is this week’s host of Cavalcade of Risk. He offers a concise array of postings, including one method of improving immune response that you absolutely do not want to miss. While stopping by, check out his other posts – he always has the scoop on interesting new issues and trends in healthcare. Also, follow his Twitter feed.
Healthcare reform – The latest Kaiser Tracking Poll on attitudes to healthcare reform shows that while Americans are evenly split on health care reform legislation (43% for; 43% against), but agree on certain provisions. The poll also shows that if Congress decides to stop working on healthcare, 58 percent of Americans say they will be either disappointed or angry, with 38% saying they will feel happy or relieved.
There is support for several key provisions of reform that cuts across all political persuasions. Percent saying that it is extremely or very important:
76% – reforming the way health insurance works
72% providing tax credits to small businesses
71% Creating a health insurance exchange / marketplace
71% Helping to close the Medicare doughnut hole
70% Expanding high risk insurance pools
68% Providing financial help for low / middle income
Property-casualty trends – At the Insurance Information Institute’s Blog, Claire Wilkinson posts that the U.S. property-casualty rating trends are stable. She reports on the A.M. Best 2009 Rating Trend Review, which says that although the industry’s results are likely to be pressured in 2010, rating actions are not expected to move profoundly in one direction and the number of upgrades/positive outlooks and downgrades/negative outlooks will be fairly balanced over the next year.
California agriculture – According to a study conducted by the California Workers’ Compensation Institute, the state’s agriculture industry accounted for 5.5 percent of all injury claims and 5.9 percent of all workers’ compensation benefit payments over an eight-year study period. The three most common injury categories for these workers were medical back problems without spinal cord involvement; minor wounds and injuries to the skin; and shoulder, arm, knee and lower leg sprains.
Colorado Fraud surveillance – Pending legislation in Colorado would put new restrictions on insurers and employers use of surveillance of employees with workers comp claims. Before surveillance can be conducted, the insurer or employer must have a reasonable basis to suspect fraud, and employees would have the right to a hearing to learn why they are being investigated. Critics of the law say that, if passed, it would be the nation’s most restrictive surveillance law related to workers comp. At Comp Time, Roberto Ceniceros examines the issue of the dollar value of surveillance.
Medicare Second Payer deadline – The Centers for Medicare/Medicaid Services (CMS) advises that the deadline for non-group health mandatory reporting for secondary payer has been delayed from April 1, 2010 to January 1, 2011. “Medicare Secondary Payer reporting requirements are intended to ensure that Medicare remains the secondary payer when a Medicare beneficiary has medical expenses that should be paid primarily by a liability, no-fault or workers compensation plan.”
Health & Safety – Most employers know that good health & safety resources are avaiable from OSHA and the CDC. Don’t forget out neighbor to the north. The Canadian Center for Occupational Health and Safety has a wealth of information also. A few recent finds:
Vibration Exposure
Tips on handling negative interactions at work
Substitution of Chemicals: Considerations for Selection
Excavations: A guide to safe work practices – a 6 part video
Posts Tagged ‘California’
Cavalcade of Risk and News You Can Use
Wednesday, February 24th, 2010Instant Message, Instant Catastrophe
Monday, January 25th, 2010Robert Sanchez operated Metrolink trains in the Los Angeles area. By all accounts, he was a personable fellow. You might say, nice to a fault. He occasionally invited young passengers to take control of the train. He stayed in touch with train enthusiasts and friends via texting. Cool!
On September 12, 2008, he was operating a train near the end of an 11 hour shift. He was also sending and receiving text messages – 57 in all while on duty that day. Sanchez missed a red light signal and plowed without braking into a freight train heading in the opposite direction on the same track. Twenty five people died (Sanchez included); 135 were injured, many critically. For dozens of the survivors, life will never be the same. (You can attach faces to the numbers here.)
The National Transportation Safety Board (NTSB) has issued its final report. While criticizing the long shifts and the lack of automatic crash controls, the board has placed the blame squarely on the shoulders of the late Mr. Sanchez. Distracted by his texting activity, he failed to notice yellow and red signals, which should have alerted him to trouble ahead. As one board member put it, “his head was not in the game.” That’s an odd but apt metaphor for a tragedy on this scale, with losses totalling about $12 million, not to mention the random destruction of human life.
Distractions
We live in a world where distraction is deeply embedded in our way of life. As the poet T.S. Eliot put it in his poem “Burnt Norton,” we are “distracted from distraction by distraction.” From moment to moment, one thing or another tempts us. Don’t like the music? Change the station. Wondering what a friend is up to? Fire off a text. No need to be bored when there are so many ways to engage our flighty minds. It’s deceptively easy to multi-task your way out of the doldrums. It worked for Sanchez – up to a very specific point in time.
Eliot’s poem ends with what might be an epitaph for the victims of this terrible incident, Sanchez included, who surely never intended any harm:
Ridiculous the sad waste time
stretching before and after.
Ridiculous and sad, indeed.
California Comp: Personal Responsibility?
Monday, October 5th, 2009Fernando Martinez worked for the D. H. Smith Company, as did his two sons. The company provided Martinez and his sons a Ford F350 flatbed to drive to and from work. Because Martinez did not have a driver’s license, only the sons were to operate the vehicle. In June 2007, Martinez and his sons were on their way to a construction site, with the elder Martinez behind the wheel. Martinez rear-ended another vehicle on the freeway, injuring himself and his son. At first, Fernando and his son lied to the investigating officer from the Califomia Highway Patrol about who was driving the company truck. However, marks on their bodies from their seatbelts showed that Fernando was driving and his son was a passenger at the time of the collision. They eventually fessed up to the fact that Fernando was driving.
Both filed workers comp claims. There is no doubt that the son’s injuries are compensable. But what about Fernando?
At first, Fernando’s claim was denied. Here is an excerpt from the initial ruling:
After consideration of all of the evidence, testimony at trial and in deposition, and the demeanor of witnesses, it was found that applicant’s conduct in driving the company truck to work without a driver’s license, against the express orders of the employer, was a cause of the injury, and takes the activity in which the injury occurred outside the course of employment. The conduct of driving the company truck on public highways against the express order of the company was more than the manner of performing duties. It was different duties than he was employed for. It appears that applicant did drive the truck before his sons were licensed, contrary to the testimony of defendants. However, on the evidence it is clear that he was not allowed to drive after they were licensed, and he and his sons were well aware of that…Applicant’s conduct in this case posed an increased hazard to his own safety and life, to that of his son and members of the public, and greatly increased the risk of liability to the employer for damage to property and injury.
Sounds reasonable, but remember, this is California. The review board overturned this decision. They found the injuries to Fernando were compensable, as he was in the course and scope of employment and furthering the interests of the employer, even though he was disregarding the employer’s instructions pertaining to his driving.
Golden State Precedents
The review board cited some fascinating cases to support their contention that the injuries were compensable:
Benefits not barred for injury incurred following a high-speed chase through heavy traffic after employee had run a red light [Williams v. Workmen’s Comp. Appeals Bd. (1974)];
Bus driver who sustained injury as a result of nearly hitting an oncoming vehicle while recklessly driving his bus not barred from recovering workers’ compensation benefits for the injury [Westbrooks v. Workers’ Comp. Appeals Bd. (1988)]
With precedents like these, it would be hard to come up with a case where employee misconduct resulting in an injury was not compensable. In California at least, virtually anything you do at work is compensable.
The review board goes on to say:
In this case, it does not matter that applicant may not have been authorized by defendant to drive the truck because his travel to the job site in the truck was authorized by the employer and was of benefit to the employer.
A distinction must be made between an unauthorized departure from the course of employment and the performance of a duty in an unauthorized manner. Injury occurring during the course of the former conduct is not compensable. The latter conduct … does not take the employee outside the course of his employment.
It is apparently not a concern to the review board that the “unauthorized manner” in this particular case involves an illegal activity (driving without a license).
The End of “To and Fro”?
Finally, California has interpreted the “coming and going” rule in the most generous manner. In most states, commuting “to and fro” is generally not compensable, even when the employee is operating a company vehicle. The workday usually begins at the worksite. Not in California: “When the employer provides the means of transportation, the course of employment begins when the employee begins to travel.”
NOTE to CA employers: you may want to bag it on the company cars.
Workers comp costs in California are the highest in the country, despite the fact that employee benefits are relatively stingy. The high costs derive from many factors, one of which is revealed in this particular case. There are embedded in case law deeply rooted concepts that tilt the interpretation of compensability in the direction of injured employees. In many states, defense could certainly raise the issue of whether Fernando’s insistence on driving the truck without a license crossed the line into “serious and wilful misconduct.” You know, the concept of personal responsibility. That might be a reasonable argument in some states, but it doesn’t hold any water in California.
California Scheming, Revisited
Wednesday, September 2nd, 2009State governments are scrambling for cash and looking, it appears, in all the wrong places. Back in April we blogged the abortive attempt by the state of Colorado to use the claim reserves from its state-run workers comp fund to plug the deficit hole: a bad idea that died a quick death in the thin mountain air.
Now California has its eye on a similar prize. They want to sell one billion worth of the best policies from the State Insurance Fund (SCIF) and use the proceeds to plug a bit of the $24B budget deficit. While nowhere near as daft as the Colorado plan, this one has its flaws, too.
Insurance Commissioner Steve Poizner is seeking a court injunction to prevent any sale of SCIF policies. Poizner, like Arnold Schwarzenegger, is a republican. Indeed, he covets the office that Arnold now holds, having set up a committee for a run in 2010. (Under California law, Arnold cannot seek another term.)
Poizner believes that the sell off would violate the state’s constitution as well as lead directly to higher workers comp rates for employers. With its 7,000 (!) employees, SCIF is the largest carrier for comp in the state. They insure roughly 200,000 employers (the total number of policy holders in many states).
While it’s not clear what effect the sell off would have on non-SCIF policy holders, it surely would mean trouble for the many companies insured by SCIF. You don’t peel off your best risks without impacting overall results. It’s safe to assume that the best risks in SCIF balance out the losses among the higher risk companies. The immediate effect of the sell off would be a serious erosion in SCIF’s loss ratio, inevitably leading to higher premiums.
California employers have experienced a painful rollercoaster ride in the price they pay for workers comp: their worst-in-the-country rates have moderated dramatically over the past few years, but once again are trending up. As pressing as the budgetary needs in Sacramento are, this one shot solution will only result in big problems down the road. This is one idea from the Terminator that deserves to be terminated.
Health and safety news from the blogosphere
Wednesday, August 26th, 2009Money-Driven Medicine – Maggie Mahar, one of the regular Health Wonk bloggers who we admire, is author of the book Money driven medicine: the real reason health care costs so much. Her book has been made into a documentary by Alex Gibney, the producer noted for his documentary expo Enron: The Smartest Guys in the Room. This Friday night, Bill Moyers Journal will preview excerpts of Money Driven Medicine, which Moyers cites as one of the strongest documentaries he has seen in years. It bears checking out. For more about the documentary, including a trailer, see moneydrivenmedicine.org. You can also follow Maggie’s blog posts at Health Beat.
Meanwhile, in Business Insurance, Joanne Wojcik writes that two surveys project that healthcare benefit costs will increase by more than 10% in 2010. Aon Consulting projects an average 10.5% increase, while Segal Co. sees cost increases ranging between 10.2% and 10.8% for managed care plans.
Nanoparticles – the NIOSH Science Blog highlights recent research related to occupational disease and nanoparticles. Nanotechnology is the discipline of technology that works at a molecular level with particles that are less than 100 nanometers in size. Earlier this year, the CDC released Approaches to Safe Nanotechnology (PDF), which offers recommendations for specific precautions to protect workers who are exposed to any level of nanoparticles. Learn more about research and risk management at the NIOSH Nanotechnology site.
Fatal Sunshine – Time recently featured an article on the plight of California farm workers, who frequently do not have adequate protection from heat stroke and basic precautions to prevent heat-related illness. While California state law mandates heat stress standards, many employers do not adhere to those standards. The ACLU and the law firm Munger, Tolles & Olson are suing California’s occupational health and safety agency on behalf of the United Farm Workers, workers who became sick, and relatives of workers who died from heatstroke.
Employer Pandemic Planning – While there are dueling projections for the potential impact of the H1N1 flu this fall and winter, it pays to be prepared. Safety Daily Advisor offers an abbreviated workplace pandemic planning checklist based on CDC recommendations. For more detailed planning information for work and home, see Flu.gov.
More on work suicides – We noted last week that a recent Bureau of Labor Statistics report showed that workplace suicides increased by 28% in 2008. At Comp Time, Roberto Ceniceros looks at the issue of workplace suicide in light of a recent Indiana appeals court ruling in which a widow was denied benefits related to her husband’s suicide.
Taking the job home – Jon Gelman blogs about a recent CDC study showing that workers who are exposed to lead can transport it home. The CDC suggests certain precentive measures to minimize risk to other family members.
Fitness for Duty – Fred Hosier of SafetyNewsAlert posts about how to deal with employees who are consistently unsafe through a comprehensive fitness for duty program.
OSHA – Is OSHA back in the business of enforcement? The Safety Duck thinks that issuance of 142 citations and $576,000 in penalties against Sims Bark Co. and Sims Stone Co. signifies that it is.
California Fraud Bill: The Solution is a Problem
Wednesday, August 19th, 2009California has a California-sized fraud problem, with much of action in the medical arena. Unscrupulous providers are billing for services that are never provided, often under the names of people who have never been injured. It’s identity theft targeted at businesses, not individuals. In California’s $7 billion comp system (down from $21 billion just a few years ago), fraud is a significant cost driver.
Here is just one example of medical billing fraud, involving the Los Angeles Unified School District. In August of 2006 the district received a bill for lab services involving a principal injured in a fall the previous May. Unfortunately for the perpetrator, one James Wilson, the principal had died prior to the date of the lab test. (Comp is rarely interested in post-mortems.) Wilson was a financial rep at Cedars-Sinai Medical center – a highly reputable institution – and had access to patient medical records. He was convicted on five felony counts and sentenced to 4+ years in prison.
As we read in the LA Times, a task force of private and public employers, including the Walt Disney Co., came up with an intriguing solution: require insurers to send notices to injured workers to check whether they actually received all the medical services billed. To eliminate the suspense, I will tell you now that the bill died in committee, at the request of the insurance industry. As much as the Insider detests fraud, we’re with the carriers on this one.
Junk Mail?
The fraud problem is very real, but this particular solution is flawed. Too many assumptions are embedded in the approach. The bill assumes that:
– the carrier has a valid address for the individual
– the individual will read and understand the mailing, which is likely to contain technical information on treatments provided. (The claimant may be non-English speaking and/or illiterate.)
– the individual will take the time to fill out the form and respond, even though there is no direct incentive to do so
– the individual is not a willing participant in the fraud (having received a few bucks for the effort)
The fundamental flaw is that injured workers have no direct financial stake in fraud: they are held harmless in the comp system, with no co-pays, no deductibles and no premiums. The stake holders are the employer, who either pays for insurance or is self-insured, and the carrier/TPA, who under this bill is confronted with the significant cost of mailings (perhaps multiple mailings to individual claimants) and the arduous task of logging responses, which would be random: most would indicate no problems, while those pointing to fraud might well come from folks who simply did not understand the questions. This solution is equivalent to using a shotgun to eliminate a bunch of (very pesky and rather deadly) mosquitoes.
There may be a quick fix to make this approach somewhat more effective: send the confirmation of services to the employer. That way a vested stake-holder would be given useful information and would have an incentive to follow up on it. The employer could sit down with the individual and verify the treatments. Any problems could be relayed to the carrier. In this approach, the scale of the effort becomes more manageable, as the burden falls on hundreds of thousands of employers, as opposed to a few hundred carrier/TPAs.
A cost-benefit analysis would probably place this fraud buster where it currently resides, in the circular file. It’s always tempting to legislate solutions to intractable problems, but alas, mandated solutions often become a new set of problems. Administrators, employers and carriers need a variety of tools to tackle fraud. This aborted bill is not exactly what the prudent doctor would have ordered.
Health Wonk Review’s Confederations Cup Edition
Thursday, June 25th, 2009The most recent edition of Health Wonk Review – the Confederations Cup Edition is freshly posted at Jason Shafrin’s Healthcare Economist. Where else can you get the week’s highlights of soccer and health care policy all in one place? Quite appropriate because as the health care issue heats up, the debate is getting to be more and more like a contact sport. Keep score with posts from the blogosphere’s best & brightest health care policy wonks.
Fire sale – Want to buy a book of workers comp business? Ante up your billion dollars and it may just be yours. According to a story by Patricia Anne-Tom In Insurance Journal, Gov. Arnold Schwarzenegger is proposing to sell a portion of California’s State Compensation Insurance Fund. The SCIF wold remain as the insurer of last resort.
Summer reading – We are happy to learn that Risk Management Magazine recently began offering free online access to their excellent publication. May and June issues are now available online. And as we’ve previously mentioned, you should also check out their blog, Risk Management Monitor.
And for another free read, the School of Business Law, Curtin Business School of Perth Australia has announced that the first edition of The International Journal of Social Security and Workers Compensation is published and can be downloaded at no charge. This is an online double-blind peer-reviewed journal which focuses on strengthening international discourse in the areas of social security and workers compensation, including the provision of disability support. The publication is edited by professors Robert Guthrie and Marius Olivier.
PTSD – Dispelling the Myths About Post-Traumatic Stress Disorder (PTSD) & Other Psychological Health Issues – about 8% of the U.S. population (approximately 24 million people) will develop PTSD at some point in their lives. Among military veterans, PTSD is quite common. Approximately 30% of Vietnam War veterans experience PTSD over the course of their lifetimes, and recent data compiled by the Rand Corporation suggest that approximately one in five service members who return from deployment operations in Afghanistan and Iraq have symptoms of PTSD or depression. Learn more about the myths associated with PTSD and review common employment questions.
Forensic accounting – How are property, casualty, and fidelity claims being influenced by the credit crisis? In an article in this month’s issue of Claims Paul McGowan discusses the role that forensic accountants are playing during the credit crisis.
Barnyard animals, gang members and comp – In a recent post on his blog, Roberto Ceniceros reminds us of the vast array of work-related issues that workers comp addresses – including such wildly disparate issues as gang shootings and farm animals run wild.
Annals of Fraud: Trifecta for Bay Area GC
Friday, May 29th, 2009In the world of workers comp, there is no lack of opportunity for fraud. We’ve seen doctors rip off the system by billing for services that were either never provided or not needed. We’ve seen employees fake injuries (relatively rare) or malinger on comp long after injuries have healed. We’ve seen insurance agents pocket money intended for insurance premiums. We’ve seen insurance adjusters embezzle claims funds. We’ve seen state comp bureaus (Ohio) engage in fraud. And we’ve seen employers rip of the system in a number of ingenious ways.
Which brings us to the saga of NBC Contractors (presumably no relation to the television network), a California general contractor. Three owners of the company – Monica Mui Ung, 49, of Alamo; Joey Ruan, 31, of San Leandro; and Tin Wai Wu, 28, of Millbrae – have been charged with 48 counts of insurance fraud, labor code violations and tax fraud. Bail was set at $535,000 for each of them. (You can check out their bare-bones website here.)
With Ung listed as the (minority, female) owner, NBC Contractors qualified for preferential treatment on public projects. Between 2003 and 2007 they successfully bid on 27 public works projects, including El Cerrito City Hall and Piedmont Elementary School.
Cheater’s Delight
According the indictment, NBC used a trifecta of cost cutting measures:
1. They underpaid workers comp premiums a total of $1.45 million, by misclassifying their workers into lower risk occupations and by under-stating payrolls
2. They violated fair labor standards, by failing to pay for overtime or sick leave, impacting 19 workers a total of $3.6 million
3. They underpaid payroll taxes on workers, depriving state and federal government of tax revenues
With these (criminal) “cost savings,” NBC was able to underbid their competitors. These business practices cheated a lot of people: NBC’s own workers, their insurance carrier, their competitors, and all law-abiding businesses who played by the rules. We can only hope that the quality of their work was up to standards, which would at least keep their customers off of the long list of parties directly injured by their actions.
A Firefighter Fights Back
Wednesday, May 6th, 2009Over the past year, we blogged about a couple firefighters who abused the workers comp system. First there was the muscular Albert Arroyo, a Boston firefighter who participated in body building competitions, while collecting comp for a work-related disability. (Due to adverse publicity, he eventually lost both his job and his disability pension.) Then there was triathlete Christina Jijjawi, who parlayed a thumb injury into temporary total disability, during which she swam, cycled and ran for glory. Yes, I know, she was simply having an exceptionally good day.
Albert and Christina give firefighters a bad name. So it’s a pleasure to introduce you to Scott Miller, an apparatus operator with the LA fire department. He not only restores the good name to firefighters; he is an inspiration to any and all who believe in returning injured workers to productive employment.
Answering the Call
Seventeen years ago, in the middle of the Rodney King riots, Scott was racing toward a fire when a vehicle pulled along side his hook and ladder truck and fired a handgun. A bullet entered Miller’s cheek angled down through his body and severed a carotid artery in his neck. Given the quick response of his fellow firefighters, doctors were able to save his life, but a blood clot on the brain had left him paralyzed on the left side and unable to speak. (By the way, the shooter got 16 years – a bargain, considering that Miller “got” life.)
Miller was in rehab for over a year. He overcame the speech and many of the mobility problems, but never recovered fine motor skills in his left hand. He knew he could never do the physically demanding work of fighting fires, but he was determined to make it back to work. So he joined the Fire Prevention Bureau, where he eventually became a captain in charge of a crew that inspects commercial buildings.
He says of his prevention role: “It’s an area of work that I’ve come to respect. I realized that I had to move on and refocus on the more important things of life, that I can’t drag my dream with me until it becomes a nightmare ruining other positive things in my life.”
One of the ironies of this story circles back to Albert Arroyo. He, too, worked in the prevention bureau, but he used the excuse of a questionable injury to go out on disability, so he could pursue his dream of winning a body-building competition. Scott Miller’s dream was a little simpler and much more moving: he just wanted to be a firefighter again.
Setting Limits in California
Wednesday, June 4th, 2008California had a long-standing reputation as a workers compensation nightmare: not because injured employees received generous benefits – they did not – but because doctors and lawyers exploited the system to generate enormous fees. Governor Schwarzenegger, AKA the Terminator, put an end to that with his extensive 2003-04 reforms. In the effort to contain costs, the reforms for the first time brought managed care tools into the comp system. The bottom line for employers has improved dramatically.
Among the many provisions of the reform was a limit on physical and occupational therapy treatments for an injury. Injured workers are now limited to 24 visits. Jose Facundo-Guerrero, a worker at a nursery in Half Moon Bay, challenged the limits on constitutinal grounds, alleging that he was entitled to the “full provision for such medical, surgical, hospital and other remedial treatment” promised in the CA Constitution. Jose had visited his chiropractor 76 times and he wanted the carrier to pay.
The First District Court of Appeal in San Francisco has upheld the limits in the comp reform package. They found that the Constitution does not require “unlimited” treatments and leaves the details up to the legislature.
Arbitrary Limits
There is no question that the 24 visit limit is arbitrary. This one size does not fit all. On the other hand, chiropractic treatment can be addicting. It feels good. Jose went 76 times and might well have continued on indefinitely, had the treatments been compensable.
One aspect of the reform language caught my eye: the 24 visit limit can be exceeded if the employer agrees. This raises an intriguing possibility. If valued employees require extensive physical therapy that goes beyond the arbitrary limit, enlightened employers might well authorize the carrier to cover a specific number of additional visits. This makes sense as long as it keeps the employee happy and productive.
As with so many workers comp issues, law makers struggle to find the middle ground between no limits and severely curtailed treatments. What’s missing is reliable and effective lines of communication among employers, their employees, medical providers and insurance carriers. The rigid limits on treatment in California are apparently legal, but that does not mean they are fair. There is no question that the reforms of 2003-04 have reduced costs. Ironically, injured workers were not the primary beneficiaries of the state’s pre-reform, out-of-control comp system. And it now appears likely that these same workers will pay the price for reforms as well.
