Possible Changes to Wisconsin’s Worker’s Compensation System?

Today, from Dee Hall at the Wisconsin State Journal: “Changes Coming to Worker’s Compensation System?” :

Labor representatives and attorneys say they are concerned about a report that Gov. Scott Walker’s two-year budget plan will call for “drastic” changes in Wisconsin’s well-regarded system for compensating injured workers.

An unsigned memo authored by a person with knowledge of the potential changes to the worker’s compensation program states that the Walker administration plans to upend the current one-stop-shop for injured workers, employers and insurance companies by dividing responsibilities among agencies — changes the author said will “clearly have a negative impact on our stakeholders.”

The article continues with input from an insurance company claims director and an applicant’s attorney, who agree that the worker’s compensation system is working well at the current time.  According to the article:

The cost of administering Wisconsin’s program is paid for by worker’s compensation insurers and self-insured employers who pay a yearly fee proportional to what they paid out in worker’s compensation benefits in the previous year. Taxpayers do not pay for the system, and any reorganization would not add or subtract from the 2015-17 budget’s bottom line.

Compensation is paid to injured workers regardless of who’s at fault, but in return, those workers cannot sue the employer for additional damages — such as pain and suffering — that go beyond the law’s limited benefits. Employers’ insurance premiums are generally based on size of payroll, risk of injury and past injury claims.

A 2013 study by the nonpartisan Worker’s Compensation Research Institute compared 16 states that handle 60 percent of all worker injury claims filed nationwide. It concluded that “compared to other states we looked at, Wisconsin’s costs were among the lowest,” said the study’s author, Sharon Belton.

Although medical costs in Wisconsin are higher than many other states, workers are back on the job faster. The result is that the median cost of a claim, including medical expenses and lost wages, was $7,118 in Wisconsin compared to the median among the study states of $8,973, said Belton.

 

This author echoes the sentiments of the article.  There is no rational basis for altering the current structure of the worker’s compensation system.  Some quick thoughts, based on information to date:

  • Currently the Worker’s Compensation Division resides within the Dept of Workforce Development.  Worker’s compensation has a strong and lengthy history in our state, dating back to 1911 (when we were the first state to have a constitutional worker’s compensation system in the country!).  We have an incredibly stable system that is the envy around the country.  It is stable because of the structure of our system.  The entire cost of the WC system is funded privately by assessments on worker’s compensation insurance companies and self-insureds (i.e., not state taxpayer money).  Additionally, we have an Advisory Council process that is a group of invested stakeholders in the system that produce an agreed-upon bill, which has prevented our system from being subject to potential instability.  (Stability in the system and premium structure is a huge issue for the insurance industry and employers).
  • The stability in the system is reflected by the huge amount of insurance companies that write insurance in our state–over 250 to my knowledge.  That is a huge number compared to the rest of the country.  Insurance companies write insurance here because of the system’s stability, which assists with known costs and allows known profits.  Worker’s compensation is a profitable business in Wisconsin.
  • We understand that major substantive and structural changes to the worker’s compensation system currently are being proposed as part of the Governor’s upcoming budget bill. This information is comes from solid sources.  Based on information we have received, the plan is to remove the Worker’s Compensation Division entirely from DWD, splitting some functions off to other agencies, while some hugely important functions of WC would just cease completely.
  • It appears the proposal is for the insurance bureau staff to go to Office of the Commissioner of Insurance (OCI).  The worker’s compensation specialized ALJs would go to the Hearings and Appeals section at Department of Administration (DOA), removed from the worker’s compensation division (No information is known as to whether the move to DHA will include court reporters, scheduling staff, health cost dispute staff  and administrative assistants who make up the remainder of the Bureau of Legal Services). Current claims management function in the WC Division – the claims staff, wage analysts, ADR personnel, the individuals that do all the worksheets– may or may not be retained, or where they would go if kept.  We are hearing there may be a complete dismantling of the claims management unit.
  • Currently, approximately 85-90% of work injuries in Wisconsin are not litigated; this is in stark contrast to the rest of the country.  The basis is that the Worker’s Compensation Division generally administers the worker’s compensation act.  Elimination of the claims management function could be hugely detrimental.  Insurance companies, self-insured employers absolutely rely on the Division in administering and paying claims.  Without Division claims management, litigation is guaranteed to increase—with corresponding increase in insurance costs and premiums.  In potential “benefit” in staff decrease will be unsustainable with the increased litigation of claims, even minor ones.  I’m sure employers will not be happy with the increased premium costs. 
  • If the Judges are moved to a new agency, it appears many of their valuable tasks/duties would be eliminated.  If Judges schedule their own hearings, this could result in significant delay in obtaining hearing dates.  It could also mean the removal of remote hearing locations.  Currently, hearings are held all over the state, for the convenience of the stakeholders (employers, carriers, workers). 
  • More importantly, this move of the Judges could mean an end to the statutory requirement that Judges approve and review all Compromises.  Judges review all compromises, even in the 85-90% of non-litigated cases.  That means insurance companies and unrepresented workers could privately settle claims—with no oversight.  The potential for abuse, error, or miscommunication is apparent.   The biggest issue is a shift of the liability for worker’s compensation medical expenses to the taxpayers, health insurance companies, and medical providers.  As opposed to our 12 year statute of limitations, an inappropriate claims close out means that all future medical expenses are through the worker’s own sources—generally Medicaid/Medicare.  The taxpayers are left covering the costs of these expenses that should be the responsibility of the worker’s compensation insurance company.
  • Also, the Division currently tries to protect the medical providers and health insurance carriers to make sure they are protected.  A private settlement means no Division protection.  We assume medical providers would like to hear about this potential change and the possibility that their bills wouldn’t be protected.
  • We can’t see any cost savings to the state here.  The Division is not funded by state dollars.  The agency move itself would create a very substantial one-time costs, with unknown ripple effects.  These moves would increase the litigation in the system—something no stakeholder wants.
  • All this makes no sense to the stakeholders and customers in the system—insurers, employers, injured workers and medical providers.  We are not aware that any stakeholders have been consulted on these changes.  Wisconsin has one of the best worker’s compensation system in the country, a system that has functioned extremely well within DWD, and it could be dismantled.  The current worker’s compensation system currently benefits its major players: insurance companies who profit from the sale of the insurance, employers with worker’s compensation insurance, and the injured workers who are provided benefits.

 

The Cold Winds of Workers’ Comp Reform Are Blowing in Wisconsin

Today’s post comes from Bob Wilson at workerscompenstion.com.

I have it on excellent authority that major changes to the Wisconsin workers’ compensation system will be proposed with the release of the state’s budget bill on February 3, 2015. The rumored changes are said to be significant, with some viewing it as a complete dismantling of the current workers’ comp system there. In the absence of the release of the actual budget and proposals, it still sounds like the most dramatic reforms to hit a state since Tennessee and Oklahoma conducted complete overhauls of their WC systems.

Currently in Wisconsin, the Workers’ Compensation Division is part of the larger Department of Workforce Development (DWD). On January 12, 2015, WC Division managers apparently learned of this proposal from the DWD Secretary’s office. It is believed that the person behind this effort is DWD Secretary, Reggie Newsom. Under Newsom’s proposal, the Worker’s Compensation Division would be entirely removed from the auspices of DWD. Other agencies would absorb some of the functions, while some current practices and procedures would cease to exist.
One group that appears to be subject to the greatest changes would be Wisconsin’s current Administrative Law Judges. Under the proposed changes, they would only be responsible for trying cases.  They would not manage claims functions or act in any advisory role for industry stakeholders. They would also be barred from reviewing compromises in cases where attorneys represented the parties.

Other elements of the proposal include moving the insurance bureau staff to the Office of the Commissioner of Insurance (OCI).  Administrative Law Judges would report to the Hearings and Appeals section at Department of Administration (DOA).  Many of the proposed changes will require alterations to the Wisconsin Workers’ Compensation Act, and it is unclear what level of legislative support exists for those statutory changes.

From this point forward, this story will likely take similar trajectories to other reform efforts we have seen around the nation. Opponents will cite the relative stability and success of the Wisconsin workers’ compensation system, and object to the disruption of a system they view as working well. Proponents will claim that the changes are necessary to streamline operations and improve efficiency within an evolving work environment. The changes, which appear will lessen staff in the WC Division, along with a potential reduction in Administrative Law Judges by shifting responsibilities to other existing divisions, will be seen by some as a reduction in bureaucratic overhead.

I will say that this news will be, for many, unexpected as Wisconsin hasn’t exactly been the bastion of controversy in the workers’ compensation arena of late. There are many other jurisdictions where needed reforms are more apparent – like California where reforming comp is seemingly a full time and permanent position…

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Injured Worker Stakeouts: Do Private Investigators Commit Fraud?

Today’s post comes from guest author Leonard Jernigan, from The Jernigan Law Firm.

Have you noticed a suspicious vehicle lurking in your neighborhood lately, or is there a stranger that seems to be everywhere you go? If you have an active workers’ compensation claim, then you may not be imaging things. More and more, we are seeing insurance companies willing to spend thousands of dollars to hire private investigators to conduct clandestine surveillance of an injured worker’s daily activities and documenting these activities with video cameras. This type of surveillance often comes as a shock to our clients.

When these situations arise, the question we hear most often is, “Can they do that? Is this legal?” The answer is yes. Private investigators may photograph or video people in their private residences so long as they are clearly visible to the general public and there is no expectation of privacy. They can also conduct a full background investigation and obtain information about any other claims you made for personal injuries or if you have ever been charged with a crime.

While there are honest private investigators in the field, there are also those who will cheat. One investigator deflated an injured worker’s tire and then videotaped the person “working” to fix the flat tire. Another investigator reported talking on the phone to someone who told him that an injured worker was working while also receiving workers’ compensation benefits. A follow up done by our firm proved that the person with whom the investigator claimed to have talked has a serious hearing impairment and could not use the telephone.  

Injured workers need to be aware that surveillance can happen in any case. It has become part of the workers’ compensation system. By the way, if you do notice a suspicious car parked near your home, call the police.

Workers Without Insurance?: Sign up for ObamaCare!

Enroll in ObamaCare

Worker’s compensation is not a guarantee of health insurance coverage.  At least not under Wisconsin law.  Many injured workers mistake worker’s compensation insurance for health insurance after suffering a work injury.  Not true.  Worker’s compensation is just insurance for the specific body part injured.  It is not general health insurance for any other illiness/sickenss, and it certainly is not insurance for the worker’s family or children.

There is no obligation under Wisconsin law for an employer to continue to pay health insurance premiums or provide health insurance coverage when a worker is out after a work injury.  A recent attempt to require an employer to continue its health insurance coverage while a worker is recovering failed at the legislative level.  Thus, a worker could be off work after an injury and find that their health insurance benefits have been terminated (or that the employer is not paying their premium portion…which could be cost prohibitive).

In many worker’s compensation claims, the worker’s compensation carrier sends an injured worker to an “independent” medical examiner who denies the injury or extent of disability.  The injured worker–still recovering from an injury–is then left without worker’s compensation coverage.  If the employer did not continue health insurance benefits, the worker then takes a double hit–no worker’s compensation covearge and no health coverage.  The injured worker then has limited means to obtain the necessary medical treatment.

As an attorney, we have the ability to file for prospective medical treatment and have a judge order the treatment be paid by worker’s compensation.  That process, however, could take a year or more.

The best practical route is for the worker to obtain the medical treatment through their own health insurance (and we have a claim for reimbursement to the health insurance company).  Thus, if a worker has no health insurance coverage, my advice is: get covered if you can.  In Wisconsin, that means applying for state insurance/Medicaid (eligibility based on income levels).  The alternative, is ObamaCare.

ObamaCare’s open enrollment period begin a few weeks ago and goes until February 15, 2015.  Wisconsin’s governor, Scott Walker, made the short-sighted decision to reject Medicaid expansion or create our own state exchanges, so Wisconsin residents need to obtain ObamaCare insurance on the federal exchanges.   If an injured worker has no health insurance, I strongly encourage them to get coverage.  Apply for ObamaCare right now.  Get covered.

 

 

 

 

 

Getting Rid of Old Medications

Today’s post comes from guest author Hayes Jernigan, from The Jernigan Law Firm.

       Flushing drugs down the toilet is the old way of getting rid of unwanted, expired or unused drugs, but recent studies have shown that this practice harms our environment. Low levels of drugs, such as birth control and anti-depressants among others, are being found in our lakes, rivers and streams and are negatively impacting fish populations and other aquatic life. Long term exposure in our waters can eventually lead to drug-resistant bacteria that will ultimately render our drugs ineffective.

       The U.S. Drug Enforcement Administration has recently released recommended ways to dispose of controlled substances including take-back events, where pharmacies, hospitals or clinics allow you to bring them your unused medications for them to dispose of properly, or mail-back programs and also collection receptacle locations, where you can drop off your unused medications. You can ask your pharmacist about whether any of these programs are offered in your area or contact your city or county’s trash and recycling services. If none of the recommended take-back programs are available in your area you should follow these 3 simple steps to dispose of most medicines in your household trash:

  • Mix medicines (do NOT crush tablets or capsules) with an unpalatable substance such as kitty litter or used coffee grounds; and
  • Place the mixture in a container such as a sealed plastic bag; and
  • Then throw the container in your household trash.

(Before throwing out your empty pill bottle or other empty medicine packaging, remember to scratch out all information on the prescription label to make it unreadable).

 Sources: http://www.fda.gov/Drugs/ResourcesForYou/Consumers/BuyingUsingMedicineSafely/EnsuringSafeUseofMedicine/SafeDisposalofMedicines/ucm186187.htm

http://www.deadiversion.usdoj.gov/fed_regs/rules/2014/2014-20926.pdf

http://www.dec.ny.gov/chemical/45083.html

Photo source: http://www.citizenscampaign.org/campaigns/pharmaceutical-disposal.asp

 

Refusing Medicaid Expansion Could Hurt Wisconsin Financially

Check out this brief article about the financial impact for states that are refusing Medicaid expansion.  The summary:

“In other words, the non-expansion states really are shooting themselves in the foot. They’re enrolling fewer people, but paying more to do it. They actually prefer spending more money if the alternative is spending less but helping their own poor with medical coverage.”

Wisconsin is a non-expansion state.  Ouch.  That hurts.

Jury awards $7M in New Fairfield Boy Scout trial

Today’s post was shared by The Workers’ Injury Law & Advocacy Group and comes from www.ctpost.com

Siegfried Hepp, right, arrives in Court accompanied by an unidentified man. Photo: Carol Kaliff / The News-Times

WATERBURY — A state Superior Court jury awarded $7 million Friday to a man who claimed he was sexually abused by the leader of a New Fairfield Boy Scout troop when he was a boy in the 1970s.

The $7 million is the largest compensatory damages verdict ever against the Boy Scouts of America and the first such verdict in the northeastern United States, the plaintiff’s attorney said.

In addition to the verdict for compensatory damages, the jury, after seven hours of deliberation, found the Boy Scouts of America should be held liable for punitive damages, in an amount to be determined by the trial judge in a separate hearing to take place in the near future.

"It’s very important to our client both that the jury has publicly said the Boy Scouts should be held accountable for keeping this important information secret and also that the jury recognized how much his abuse has impacted his life," the plaintiff’s attorney, Paul Slager, said Monday.

During the two-week trial, the plaintiff, who was 11 and 12 at the time of the alleged abuse, testified that he was sexually molested three times by Siegfried Hepp, a long-serving Boy Scout troop leader from New Fairfield. Evidence in the case showed another boy in the troop also claimed to have been molested by Hepp around the same time.

In 1993, Slager said, a parent sent a letter to the local Boy Scout council expressing concern that Hepp was a pedophile. He remained a troop leader until his conviction.

In 1999, Hepp pleaded guilty…

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CRPS : Systemic Injury?

This blog previously discussed the legal issues related to workers suffering from Complex Regional Pain Syndrome (CRPS).  Under Wisconsin law, there is a vast difference (in effect and value) for an injury to a worker’s “body as a whole” (spine, head) versus a limb injury.  CRPS can fall into either category–making it an extremely difficult issue in litigation.

A recent California case provided an interesting case study.  While this case involved the use of AMA guides-which Wisconsin does not use–the medical discussion is interesting.  Most notably, a section of the AMA guides indicated that “the pathology in CRPS is currently believed to occur in the central nervous system.”  A nervous system condition certainly looks like a systemic issue–a “body as a whole” condition.  

If CRPS is viewed in that light in Wisconsin, it would open to the door to loss of earning capacity claims involving a CRPS diagnosis.