Posts Tagged ‘Pennsylvania’

News roundup: risk, happiness, state fund in Illinois, new hire compliance & more

Wednesday, March 20th, 2013

Risk Roundup – Check out this week’s Cavalcade of Risk #179 – March 20th, 2013 Edition posted at My Personal Finance Journey
Taking care of business – At WorkCompWire, Joe Paduda poses the question What business are you in?” He hazards a guess that most of us would say “the insurance business” but he argues that we are really in “the medical and disability management business – with medical listed first in order of priority.” He suggests that, “Senior management misunderstands their core deliverable – they think it is providing financial protection from industrial accidents, when in reality it is preventing losses and delivering quality medical care designed to return injured workers to maximum functionality.” We could quote the whole thing, he makes a compelling argument so be sure to check it out. It echoes one of the Lynch Ryan founding tenets. When many of us got into this business, we did not come with insurance backgrounds. We felt at its core, managing injuries required a focus on the human event and not the dollars. We believed then and still believe now that if you took excellent care of the injured worker, got them quality medical care and helped them get well and back to work, the dollars would follow.
Smile – it’s March 20 – Did you know that March 20 is International Day of Happiness? Now you do. It’s also the first day or Spring, and if, like us, you wondered why Spring isn’t commencing on the usual March 21 date, Joe Rao at SPACE.com explains Why Spring Begins Early This Year.
New State Fund in Illinois? – Illinois Bucks Trend in Other States; Looks to Establish Competitive Workers’ Comp State Fund – “Illinois state legislators are running counter to a national trend by proposing creation of a state workers’ compensation insurance fund that would compete with the private system. The development is generating deep angst amongst Illinois insurers and industry trade groups.”
Other state news

New Citizenship Verification form – As of 3-8-13, a revised US Citizenship & Immigration Service (USCIS) Verification Form I-9 has been issued. There is a 60-day grace period to come into compliance – new USCIS I-9 Formsforms must be in use by May 7, 2013.
When healthcare workers are unsafe, patient quality suffers – “Many medical work environments are unsafe for health professionals, adding stress and distraction that can expose patients to harm,” according Kevin B. O’Reilly who writes about a recent report by the National Patient Safety Foundation’s Lucian Leape Institute. In an article in amednews.com entitled Warning sounded on demoralized health care work force, he cites a high injury rate that is 33% higher than private industry as one factor, as well as “the lingering problem of disruptive behavior in health care, which can create a culture of fear and intimidation that inhibits safe, high-quality care.”
Fatalities Report – The March Monthly Labor Review has a report on Hispanic/Latino fatal occupational injury rates (PDF). The fatality rate for Hispanic/Latino workers is much higher than that of other demographic groups. Studies also show that, “… foreign-born Hispanic/Latino workers have higher rates than native-born Hispanic/Latino workers in certain occupations, a statistic that is explainable by differentials in employment between the two groups.”
Worker Costs – According to the latest Department of Labor report, the Northeast leads the U.S. in worker costs. “Hourly costs per employee in the Northeast – which includes the New England states, New York, New Jersey and Pennsylvania – averaged $33.10 in December, higher than the national average of $28.89. The next costliest region was the West, which consists of the mountain and Pacific coast states, at $30.29. The average hourly wage in the Northeast was $22.85, while the average per-hour employer cost in benefits was $10.25, both the highest in the U.S.”
More news of note

Tags: , , , , , ,
Posted in News roundups | No Comments »

Annals of Compensability: Violence as a “Normal” Working Condition

Thursday, September 22nd, 2011

Here is a very interesting case from Pennsylvania, where the definition of “normal working conditions” is fraught with terror (and which, as a result, closes the door to comp compensability while potentially opening another to lawsuits). But in our excitement to discuss this intriguing case, we get ahead of ourselves.
Greg Kochanowicz worked as a manager for the Pennsylvania Liquor Control Board. That might sound like an enforcement job, but ironically, his job was selling liquor from a retail outlet. On April 28, 2008, a masked man entered the store, pointed two guns at Greg and a co-worker, and forced them to empty the safe and cash register. The robber prodded the back of Greg’s head with one of the guns. After getting the cash, the robber used duct tape to tie Greg and his co-worker to chairs in the office. There was no physical harm – just the threat of violence if Greg did not cooperate.
Following this incident, Greg suffered from anxiety, depression and flashbacks. He was too traumatized to return to work. Diagnosed with PTSD, he collected temporary total benefits under workers comp for what Pennsylvania calls a “psychic” injury. (It is worth noting that in 1981 Greg’s brother was stabbed to death in a robbery, an incident for which Greg received no counseling or support.)
Abnormal Justice
Greg’s employer appealed the WCJ ruling. A split panel of judges (4-3) reversed the finding of compensability on the basis that armed robberies were a “normal” working condition – and only “abnormal” working conditions lead to compensability for PTSD/”psychic” injuries. That’s a very interesting notion, indeed.
In its reversal, the appeals court noted that robberies were quite common among the Liquor Control Board stores: in the five county area, there were 99 robberies since 2002, an average of one a month. In addition, employees were acutely aware of the risks. They received a written pamphlet entitled “Things you should know about armed robbery.” Greg had read the booklet and received training related to it. In fact, he followed the employer’s written protocol to the letter, thereby avoiding bodily harm to himself and his co-worker.
The appeals court is saying that armed robberies should come as no surprise to liquor board employees. They have been forewarned. And in the view of a majority of the judges, forewarned is foreclosed: there can be no compensability for a psychic injury as a result of normal working conditions. (Had Greg been shot, however, he would have had a compensable injury.)
OSHA to the Rescue?
The appeals court states that having a gun pressed to the back of the head is a “normal” working condition. If this is indeed true, then the employer has put employees in a workplace that is fraught with risk. This is something employers are not allowed to do.
Here is OSHA’s General Duty Clause:

“Each employer shall furnish to each of his employees employment and a place of employment which are free from recognized hazards that are causing or are likely to cause death or serious physical harm to his employees.”

If the court is correct, if armed robberies are a “normal” working condition, then the employer has failed to eliminate an unacceptable risk. By leaving unarmed employees in high risk areas, they are out of compliance with OSHA standards. Given their knowledge of the likelihood of robberies, they should place armed guards in each store, particularly in evening hours. Their failure to protect employees from an all-too-routine hazard is unacceptable and may be grounds for lawsuits.
This case is wending its way toward the PA Supreme Court, where the arguments of the dissenting judges, led by Renee Cohn Jubelirer, are likely to prevail. Greg will probably qualify once again for workers comp. Yes, he received training in violence; he was well aware of the risks in his job; he even handled the situation with exemplary composure. But there is nothing normal about having a gun pressed into the back of your head, unless you are an actor taping a cop show for cable TV.

Tags: , , , , ,
Posted in Uncategorized | Comments Off on Annals of Compensability: Violence as a “Normal” Working Condition

Annals of Fraud: Pickells in a Pickle

Monday, August 15th, 2011

Kevin and Bob Pickell ran KDN Lanchester Insurance Agency in Sinking Spring PA. It’s not just the spring that’s sunk. The not-so-kissing cousins (bad day photos here) have been convicted of diverting workers comp premium payments from area school systems into their own pockets.
As fraud goes, agents pocketing premiums is pretty dreary stuff: it’s not a matter of if, but when they get caught. In this case, the carrier notified one of the schools that premiums had not been paid. In jumps the state attorney general, with the result that the Pickells are going to prison for over a year, followed by restitution and 20 years of probation.
The cousins do not appear to be planning a return to the brokerage business. They have offered the domain site (kdnins.com) for sale. Let’s see. Brokers in jail, a bit of bad press. Not exactly a once-in-a-lifetime business opportunity.
Many good folks testified to the character of the defendants. They were known for their generosity in the community, along with living the lavish life style that inevitably accompanies this type of crime: big houses, fancy cars, expensive wines…
Opportunities for Fraud
Agents are just one of a number of parties in the workers comp system who see opportunities for making money the fast and not-exactly-legal way. Along with agents we have:
Employees:
• Faking injuries
• Lying about health problems that impact their ability to perform jobs safely
• Exaggerating symptoms to prolong disability (malingering)
• Being injured away from work and claiming the injury is work related
• Working a second job (usually under the table) while still collecting indemnity
Employers:
• Under-reporting payroll
• Misclassifying employees as “independent contractors”
• Misclassifying employees into lower risk – and lower premium – job classes
• Failing to report injuries
• Threatening employees who do report injuries
Doctors:
• Billing insurance companies for treatments not provided
• Exaggerating the nature of services provided
• Performing unnecessary tests
• Selling drugs (pain killers) to injured workers
• Conspiring with attorneys by faking diagnoses of compensable injuries
Attorneys:
• Helping workers exaggerate medical symptoms to secure benefits (providing unnecessary neck braces, crutches, slings, etc.)
• Coaching injured workers on malingering
• Helping workers develop a false “injury narrative”
• Stealing settlement dollars (very rare)
Claims adjusters:
• Securing kick-backs on medical or indemnity payments
• Setting up phony claims and pocketing payments
Investment companies:
• Bribing public officials to secure dollars for investment (see the “Coingate” scandal in Ohio)
• Offering (illegal) perks to decision makers who manage public dollars
Despite the myriad opportunities for fraud in the comp system, outright fraud is still relatively rare. The vast majority of transactions within the system, involving all of the above players in every state across the nation, are carried out with integrity and good faith. Nonetheless, eternal vigilance is necessary to ensure that comp dollars are spent prudently, wisely and fairly.

Tags: , , ,
Posted in Business, fraud | No Comments »

Pennsylvania Death: Work Related, Not Compensable

Monday, August 1st, 2011

David Little worked for B & L Ford in Ashland, Pennsylvania. He suffered a shoulder injury in October 2005. He worked light duty up until January 19, 2006, when the employer received a letter from his attorney stating he was unable to perform any manual labor. The employer advised Little to secure a note from his doctor regarding his ability – or inability – to work. His doctor gave Little a letter stating he was unable to work, but before Little had the opportunity to present the letter to B & L Ford, they sent Little a letter of their own, terminating him.
Little spent a weekend brooding over the termination. He called his wife home from her job on Monday. She found Little at the kitchen table, holding the termination letter. He stood up and then collapsed from a heart attack. Emergency workers had to pry the letter from his hand. Little died later that day at a hospital.
Was this a work-related fatality? Little’s widow filed two workers comp claims, one for Temporary total benefits up until the death, and one for death/survivor benefits.
Small Victory, Big Loss
A workers comp judge awarded temporary total disability benefits up to the date of Little’s death; once Little became “unavailable” for work (i.e., dead), the benefits ceased. On the issue of a work-related fatality, the judge found – and the Commonwealth Court of PA upheld – that the death was not work related, as it neither occurred “in the course and scope of employment” nor did Little’s activities on that fatal day “further the interests” of the employer.
There is no question that the loss of his job was a significant, perhaps predominant, factor in Little’s death. However, personnel actions (discipline, demotions and terminations) are generally excluded from workers comp coverage. The sequence of events that began with his attorney’s letter culminated first in the loss of the job and then in a fatal heart attack.
Given that Little had filed a workers comp claim and the employer apparently fired him because of his injury, the widow might be able to sue for wrongful termination. But the courts have made it clear that aside from a modest indemnity payment for lost time, workers comp will provide the widow no solace and no support for the work-related loss of her husband.

Tags: , ,
Posted in Compensability, Disability, State News | Comments Off on Pennsylvania Death: Work Related, Not Compensable

Independent Contractors in Pennsylvania

Monday, February 14th, 2011

If Missouri is the “Show me” state, Pennsylvania is in the running for the “show me the documents” state. They have a way of over-engineering solutions to what may or may not be problems. (See our prior post [“Blood on the Forms“] on requiring injured workers to sign 2 forms at the time of injury.) Now the Keystone state weighs in on the independent contractor conundrum through the recently implemented Construction Workplace Misclassification Act, also known as Act 72.
In tackling the problem of misclassification, Pennsylvania has done something smart: they have limited the scope of the law to the construction industry, where the worst abuses abide. (Massachusetts kicked a hornets nest with an expansive definition of independent contractor that extends well beyond construction.) The statute contains the usual and customary language requiring independent contractors to control the work, work for others and provide their own tools. But in its relentless need for documentation, Pennsylvania requires general contractors and subs to get out the pens and archive some paper. Independent contractors must:
– Have a written contract for every job
– Carry at least $50,000 in general liability coverage for the duration of the job (this requires a certificate of insurance from the agent)
– Document a proprietary interest in their business (how would a sole proprietor do this – tax forms?)
– Realize a profit or suffer a loss for the project (an interesting and potentially problemmatic issue for craftsmen whose spouses are not accountants)
Act 72 prohibits general contractors from forcing subs to sign any contract that results in misclassification. It also forbids retaliation against any person who files a complaint under the law.
The Amish Exception
As we pointed out in a previous blog, Pennsylvania’s Amish population (roughly 51,000 total) is generally exempt from insurance requirements. Amish employers are not required to provide social security or workers compensation coverage, and it appears likely that the Amish will be exempt from the new health insurance standards. When a need arises, they pass the (rather old fashioned) hat throughout their community.
So what happens when an Amish (or non-Amish) general contractor hires an Amish sub? Which of Act 72’s requirements apply to the Amish? Certainly not the general liability insurance. Perhaps not the “profit and loss” and “proprietary interest” documentation. While we are not suggesting that employers seek out Amish subs to avoid Act 72, it might simplify matters. For everyone else in PA, it’s time to focus on the paperwork.

Tags: , ,
Posted in Best Practices, Business, State News | Comments Off on Independent Contractors in Pennsylvania

Illiteracy has its Rewards

Tuesday, October 19th, 2010

When a laborer is unable to perform physical work, the options are limited, not only for the worker, but for the workers comp system as well. Meet Pennsylvania’s Sam Muzzicato. He came to America from his native Italy in 1969. He had only four years of schooling in Italy. He immediately went to work in America and continued working until January 2007, when he injured his back while employed as a laborer for Strow’s Plumbing and Heating Company.
Strow’s insurer hired a vocational expert to determine Sam’s earning power. The expert came up with five possible jobs in the immediate labor market:
– Cashier at a Jiffy Lube
– Teller at a local casino
– Dispatcher for a trucking company
– A customer sales rep
– Front desk clerk in a hotel
Do you see a common denominator in all of these jobs? Some degree of computer literacy is needed. The Administrative Law Judge dismissed the first four jobs as not within Sam’s capabilities, but for unknown reasons determined that he could perform the desk clerk position. With this theoretical job available, the ALJ approved a reduction in Sam’s weekly indemnity benefit.
Here is the theory in PA law behind the wage reduction:

“[A]n employer may seek modification of a claimant’s benefits by either offering the claimant a specific job that it has available that he is capable of performing or establishing earning power through expert opinion evidence.”

Sam appealed to the Commonwealth Court, where the judges determined that the inclusion of the single job by the ALJ was capricious, and that Sam was incapable of performing any of the jobs recommended by the voc expert. Sam, in other words, has few, if any, transferable skills. When his body broke down, he had nothing to bring to the marketplace. As a result, his full indemnity will continue.
Broken Bodies
Sam’s story is by no means unique. Many of the immigrants who came to this country to find work had limited education in their native lands. Once here, they were too busy or too indifferent to pursue educational goals. They gained a foothold through hard work, perhaps shifting educational goals onto their children. Now as they enter the waning years of employment, their bodies break down. Where once they recovered quickly from workplace injuries, now the pain lingers, eroding their capacity to work. And once out of work, there is literally no place to go.
What lies ahead for the Sam Muzzicatos of the world? While it sounds odd to say it, Sam is lucky that he was injured at work. His back problems will be treated through the comp system for the foreseeable future. He will collect roughly 2/3 of his average weekly wage, tax free, at least until his eligibility for temporary total benefits runs out. After that, he will probably qualify for some form of permanent partial award. Sam, in other words, will transition rather smoothly into retirement through the generosity of the workers comp system.
Strow’s Plumbing and Heating will foot the bill through the experience rating process for three years. After that, the insurer will be on the hook for whatever is owed to Sam. Is this fair? Does it make sense? Is Sam being rewarded for his failure over the years to improve his skills through education? Ironically, if Sam did have transferable skills, his benefits would have been reduced, despite the fact that he might not be able to find work in this troubled economy. Would that have been fair? Indeed, in the world of workers comp, as judges parse the letter of the law and and employers struggle to pay the bills and injured workers battle to survive, is fairness even an issue under consideration?

Tags: , , ,
Posted in Business, Compensability, Disability | 1 Comment »

Annals of Compensability: PT Stands for Pole Therapy?

Monday, May 3rd, 2010

Christina Gamble worked at the family friendly Red Robin restaurant in Quakertown PA. She claimed to have fallen and hurt her back. She quit on the spot and went to work for Target, where she worked for two weeks. She filed a workers comp claim for the restaurant injury, which slowly wended its way through the Pennsylvania system until she was awarded benefits nearly a year after the initial injury. Gamble said she was unable to work because standing and changing positions was difficult. She collected over $20,000 in indemnity.
An anonymous tip sent investigators to C.R. Fanny’s Gentleman’s Club and Sports Bar in Easton, where Gamble worked out the kinks in her back by removing her clothing and writhing around a pole. C.R. Fanny’s (read the name aloud for full effect) is noted for its not-exactly highbrow entertainment such as applesauce and Jello wrestling, along with a “frozen thong contest” that is beyond the descriptive powers of this particular blog.
Gamble has been indicted for two counts of insurance fraud and theft by deception. She told investigators that she became an exotic dancer because she and her husband were under enormous financial pressures.
As is so often the case, a number of questions arise:

  • Why was the injury deemed compensable in the first place?
  • With Gamble quitting her job at the restaurant, did anyone at Red Robin or the insurance company pay any attention to this claim?
  • Did Gamble’s doctor attempt to test her physical mobility in any way – for example, using the unorthodox “sliding down the back of a chair” test?
  • Lastly, can Gamble find the proverbial Philadelphia lawyer to take her case, arguing, for example, that pole writhing might indeed be appropriate treatment for a gimpy back and that frozen thongs were an ingenious method of applying ice in the general vicinity of the injured body part?

    • Ms. Gamble should have followed immortal Will Rogers’s advice on gambling: “Don’t gamble; take all your savings and buy some good stock and hold it till it goes up, then sell it. If it don’t go up, don’t buy it.” (I wonder what Will would have thought about AIG…)
    NOTE: Thanks to Pennsylvania reader Rick G. for the heads up on this story.

    Tags: , , ,
    Posted in Compensability | Comments Off on Annals of Compensability: PT Stands for Pole Therapy?

    Health Wonk Review and other bloggy news notes

    Thursday, September 4th, 2008

    Hank Stern has posted a fresh roundup of news from the health wonkosphere over at InsureBlog – check it out: Health Wonk Review: Early September Edition.
    ADA update – The folks at George’s Employment Blog has been keeping an eye on changes to the ADA. In July, George Lenard posted on what the ADA amendments will mean if they become law, and more recently, Karen Tofte has posted a second part in the series. She examines how the substantial limitation of major life activities element of the ADA’s definition of disability would be altered.
    MA health care – Bob Laszewski of Health Care Policy and Marketplace Review comments on a recent NY Times editorial that looks at the Massachusetts health insurance experience and finds it less costly than expected. Bob points to some problems that must be factored in when assessing the program.
    Technology risks – Ergonomics in the News points us to the article The Downside of Mobility: Injury: “As Wi-Fi–and laptops and mobile devices–become more ubiquitous, users from kids to adults find themselves suffering from injuries ranging from carpel tunnel syndrome to “BlackBerry thumb.” The first in a series of features and reviews on the ergonomics of Wi-Fi-induced mobility, this article offers tips on how to prevent injuries.”
    Going and coming – Judge Robert Vonada of Pennsylvania Workers’ Compensation Journal reports that PA courts upheld compensability in the case of a home health nurse injured while traveling to her patient’s home. The case was complicated by the fact that she provided services to several employers in the course of her day.
    Safety – BLR’s Daily Safety Advisor offers tips on Getting the most from your safety committee.

    Tags: , , , , , , , ,
    Posted in News roundups | Comments Off on Health Wonk Review and other bloggy news notes

    State resources – Ohio, Utah, Pennsylvania

    Wednesday, March 17th, 2004

    Utah – David Fletcher’s Government & Technology Weblog is a weblog that describes itself as “news and perspectives from a long-time egov advocate.” Among other things, David tracks how technology is making the government in the state of Utah more accessible to the people, and how technology is being used by governmental sites in general.

    Pennsylvania – PAWC is a weblog by Judge Robert Vonada, a workers’ compensation Judge in the Altoona Field Office of the Bureau of Workers’ Compensation Office of Adjudication. He blogs development’s in the state’s workers’ comp practice and procedures.

    Tags: , ,
    Posted in Social media, State News, Tools & Resources | Comments Off on State resources – Ohio, Utah, Pennsylvania

    Pennsylvania WC resources

    Tuesday, October 28th, 2003

    Some useful PA resources – the Bureau of Workers’ Compensation Quick links page and the PA Employer’s Guide to Workers’ Compensation.

    Both of these pointers came from PA Judge Robert Vonada who has a workers compensation weblog worth checking out. While he covers WC in general, his main focus is recent PA court decisions related to WC.

    Tags:
    Posted in State News | Comments Off on Pennsylvania WC resources