Category Archives: Workers’ Compensation

WILG Turns 20! Worker’s Injury Law And Advocacy Group 20th Anniversary

I joined WILG in its 1995 inaugural year. At those early conferences, my colleagues around the nation were battling workers’ comp “deform,” and engaged in political battles in their respective states, lobbying legislators on behalf of injured workers’ rights.

I thought I was relatively insulated in Wisconsin, the national “model” state for workers’ comp, with an Advisory Council composed of management and labor which each biennium produced an “agreed-upon” bill that was accepted by the legislature.

The Republican ascendancy in Wisconsin (Scott Walker as Governor, and both Assembly and Senate controlled by Republicans) has decided to ignore 100 years of progressive legislation and ignore the Advisory Council’s recommendations. This dangerous precedent will make workers’ comp more politicized, and threaten the stability of Wisconsin’s workers’ comp system. Wisconsin, like other states, will be part of a “race to the bottom” in workers’ rights and benefits.

WILG’s current President, Matt Belcher of Illinois, provided this summary of the state of workers’ comp as WILG celebrates its 20th anniversary:

”We have never been better positioned as a national organization to advocate on behalf of the families of injured workers.

Recent success in reviewing courts have highlighted nationally the unconstitutional danger posed to the community when injured workers lose access to effective legal representation, have capricious benefit limits imposed upon them, or are disabled due to unfair medical treatment bureaucracies.

WILG and its members have been at the fore of litigation battles where catastrophically injured workers have lost their savings, been forced onto welfare rolls and into Social Security Disability plans while simultaneously being denied access to the civil courthouse and the free exercise of their 7th amendment right to a jury trial. See Wade v. Scott Recycling (Virginia); Malcomson v. Liberty Northwest (Montana); Pilkington & Lee v. State of Oklahoma (Oklahoma); Padgett v. State of Florida (reversed on procedural grounds), Westphal v. City of St. Petersburg, and Castellanos v. Next Door Company (Florida).

The United States Department of Labor in coordination with OSHA have finally “discovered” that employee misclassification and wage theft are rampant, and that the cost-shifting externalization of care for injured workers is as poisonous as it is pervasive.

Perhaps most fundamentally, ProPublica, bolstered by the imprimatur and audience of NPR, has created a national conversation and awareness of the oppressed plight of injured workers with its feature The Demolition of Workers’ Compensation which exposed to the public domain the travesty and arbitrary injustice we slog through on a daily basis.

If we are uncritical we shall always find what we want. -Karl Popper

Continual, constructive self-assessment of our organizational efforts is indispensable to the accomplishment of our mission. Are we really doing the best job possible and are we succeeding to our complete potential?

Governors in the traditionally blue states of California and New York have signed away the long term financial security of millions of families of injured workers while Texas and Oklahoma have essentially jettisoned workers’ compensation benefits, allowing indifferent employers to Bail-Out of their responsibility to provide for the safety and security of working families. Further corporate front group Bail-Out initiatives are fermenting in the legislatures of Arkansas, Kansas, North Carolina, South Carolina, Tennessee and Wyoming.

In my view, the state workers’ compensation system is in its most dire situation in at least the last half-century. -Prof John F. Burton, Jr.

Professor Burton is clearly referencing only the perspective of the injured worker and not the immense wealth of the $85 billion insurance industry where insurance carriers now earn $6.20 in profits for every $100 of net premiums; and, private employers on average pay only 44 cents per hour for each employee to be provided with coverage.

Empirical evidence reliably demonstrates that each reduction in benefits to an injured workers’ family subsequent to “reform” has not translated into lower premiums for small business but primarily in greater profit for the self-insureds and the insurance industry. From 2007 to 2012, workers’ compensation benefits and costs per $100 of payroll were lower than at any time over the last three decades, while insurance company investment profits in 2011, 2012, and preliminarily for 2013, have topped 14% annually.

According to OSHA, workers’ compensation benefits now cover only 21% of workers’ compensation liabilities–shifting 79% of the true cost to others, including the injured workers’ family and taxpayers–while our firsthand knowledge demonstrates the inadequacy of current benefit levels and the injustice of the AMA Guides, ODG Treatment Guidelines, Primary Cause, Medical Formularies and the literal evaporation of effective vocational rehabilitation for those injured workers who have lost access to their prior occupation.

Therefore, my beloved brethren, be ye steadfast, unmovable, always abounding in the work of the Lord, for ye know that your labor is not in vain in the Lord. -1 Corinthians 15:58

I believe it will be the exponential participation of you, the existing member, which fosters our mission as much as the sheer addition of new members. The existential purpose of the organization must always be vigorous and exigent advocacy, not just growth and the collection plate. We must collect accomplishments, not only numbers.

Together we can do that, but we must have an active outreach program that communicates to the public, to the media and to state legislators the value of workers’ compensation and the cost of its failure. If business can focus-group a new Doritos flavor, I am confident we can use a similar approach identifying crux “reptile” talking points, plus distilling and building upon the points raised in the ProPublica series to focus our messaging.”

New Underwriting Workers’ Compensation Industry Rankings

Injured workers who have been denied benefits by Travelers, The Hartford, AIG, Liberty Mutual, and Berkshire Hathaway will be pleased to know those five insurance carriers are industry leaders in writing premiums for employers. Travelers has received $3,840,000,000 premium dollars (a 52.4% changes since 2009; The Hartford $3,012,000,000 (a 28% change since 2009). AIG and Liberty Mutual have lost market share but Berkshire Hathaway at $1,742,000,000 has increased its market share by 408.5%. Berkshire Hathaway and Travelers are among the insurance carriers that have posted the highest underwriting profits in the last five years.

Profits for workers’ compensation insurance carriers over the last five years have been significant, as has been reported in my prior blogs.  This news is small consolation for injured workers whose benefits continue to decline.

 

“Per Diem” Payments Latest Employer Fraud Issue in Workers’ Compensation

I have written often about the public’s perception that workers file fraudulent claims in workers’ compensation. The public perception (which ranges from one in ten to approximately one in three) is completely erroneous. The actual statistics indicate the incidence of employee fraud is as little as one-sixth of one percent, or two workers in ten thousand claims (based on the latest statistics available from the Wisconsin Worker’s Compensation Division).

Employer fraud, on the other hand, is rampant and grows daily into the billions of dollars. A recent report by the U.S. Department of Wage and Hour Division out of New Orleans indicated six Gulf Coast staffing agencies agreed to pay thousands of workers nearly $3.5 million in back wages after investigators found part of the workers’ wages were mislabeled as “per diem” payments as reimbursement for expenses they never incurred. The Labor Department indicated the recent investigations were part of an ongoing initiative aimed at ending an illegal and alarming trend of employers labeling part of employee wages as Per Diem payments, often to avoid overtime, payroll taxes, and other costs (such as workers’ compensation insurance premiums). The Department of Labor noted that companies break the law when they call part of a worker’s regular wages “per diem” expense reimbursement instead of wages. They do this in order to lower labor costs, avoid paying overtime, and avoid making payments toward federal and state taxes, workers’ compensation, unemployment insurance, and Social Security payments. These kinds of employers gain an unfair advantage over their competitors, some of whom are paying these taxes appropriately.

Walker’s Workers’ Compensation in Wisconsin

Mark my words, Scott Walker will use his attempts to revamp and revise Wisconsin’s workers’ compensation system in his national campaign for the presidency in 2016. 

He will tout attempts at “increased efficiency” and cost cutting when, in fact, these efforts are patently false.  His recent assault on workers’ compensation prompted me to revisit a review I wrote of the Center for Justice and Democracy Study “Workers’ Compensation: A Cautionary Tale,” now a decade old. When objective observers corroborate your own instincts, it is gratifying. The study on workers’ compensation, undertaken by the Center for Justice and Democracy, concluded that since workers struck their bargain with employers early in the 20th Century, legislators and administrators have cut benefits and ushered many injured workers completely out of the system. 

Particularly insidious has been the workers’ compensation insurance carrier’s malicious, relentless campaign to advance the notion of employee fraud. In Wisconsin, the aggressive insurance media blitz prompts a response (when I say that I represent injured workers) at every social gathering, wedding, birthday, or cocktail party, about  employees “ripping off” the workers’ compensation system. This, in the face of irrefutable statistical evidence that employee fraud is infinitesimally small is a boil on the butt of the workers’ compensation system.

On the other hand, employer fraud dwarfs employee fraud. Under-representing payroll, mischaracterizing heavy-lifting laborers as clerical workers or independent contractors, and forcing injured workers to claim work injuries against their health insurance is fraud, but not as “media-sexy” as filming an alleged injured worker bowling or rock climbing.

This media barrage of employee fraud has created a milieu in which some workers, legitimately injured, do not even report injuries. For immigrants with an already tenuous status in America, the Center’s study reports that just six in ten workers hurt on the job report their injuries for fear or retaliation. The Center’s study reports alarming national trends that I see in my practice daily, resulting in denials and delays of legitimate claims. These include stricter criteria for proving a workplace injury and insurance company efforts terminating benefits at age 65 (despite increasing evidence that the retirement age is increasing). 

Lastly, ubiquitous adverse medical examiners’ reports assigning causation to some pre-existing condition corresponds to an alarming alteration in the standard for causation. Legislation requiring “substantial” or “major contributing” cause or replacing “contributing” with “prevailing” factor makes workers jump over higher hurdles to obtain compensation more than ever before. Those of us who represent injured workers will continue to try to give injured workers a boost, despite Governor Walker and Republican legislators’ efforts to the contrary.

Article Published: Wisconsin and Minnesota Workers’ Compensation Claims Comparison

Tom Domer just published an article “A Comparison of Wisconsin and Minnesota Workers’ Compensation Claims” in the William Mitchell Law Review.

The article was prompted by calls from Minnesota colleagues asking whether Wisconsin or Minnesota jurisdiction would be appropriate for work injuries.  The article compared a hypothetical injury from Ole a 58 year old truck driver hired in Minnesota by a corporation registered in Minnesota and Wisconsin, who worked half time in Minnesota and half time in Wisconsin.  In route to Milwaukee for a delivery, he tripped in a pot hole at a sex shop in Wisconsin after stopping for lunch and drinking six beers.  He injured his neck, leaving a scar on his forehead, underwent neck fusion surgery with resulting permanent work restrictions.

The article compares Wisconsin and Minnesota on liability, the involvement of alcohol, whether the injury arose out of employment and was in the course of employment.  It further compared benefits in Wisconsin and Minnesota including Temporary Total Disability, permanency benefits, vocational rehabilitation, Loss of Earning Capacity, disfigurement, Permanent Total Disability, and whether there was a Social Security offset for workers’ compensation benefits.

While some benefits were better in Minnesota, overall the likelihood for recovery was better in Wisconsin.

“Independent” Medical Examinations in Workers’ Compensation (Anything but “Independent”)

“I thought their doctor Independent Medical Report was the last word on my case. I didn’t know any better.” 

This statement from a client I just met sums up the experience of many injured workers unfamiliar with the workers’ compensation process in Wisconsin (and many other states).

An insurance company or self-insured employer may request an injured worker submit to reasonable examinations by a physician, chiropractor, psychologist, dentist, podiatrist, physicians assistant, or Advanced Practice Nurse Practitioner of its choice. Wis. Stat. §102.17(1)(b). This examination is usually referred to as an Independent Medical Examination or “IME” although “adverse medical examination” more accurately reflects the process.  An Independent Medical Examination may be requested by the insurance company or self-insured employer in order to determine whether the claim is compensable and the extent of the disability or the necessity and type of treatment. 

Since only about one in ten injured workers in Wisconsin is represented by an attorney, nine out of ten unrepresented workers are not aware that the insurance company’s “IME” is actually an adverse exam by a doctor hired by and paid by the insurance company to issue his report. Although IME examiners would deny they routinely render an opinion in favor of the insurance carrier, my forty years of experience suggests just that. For many years lawyers representing injured workers have been proposing the terminology “Adverse Medical Examination” apply to give represented and unrepresented workers a more fair assessment of the process. Many IMEs make hundreds of thousands of dollars annually performing these examinations. At one of these examinations, my client overheard the IME physician (who had rented a motel room) speaking to a prospective young doctor trying to convince that doctor to perform IMEs. “This is a great practice.” He said.  “All you have to do is review the medical records, meet with the worker for a few minutes, and deny the claim. And for that you can charge $1,500.” Although my client’s testimony to this effect was barred, the underlying accuracy of his testimony is undisputable.

Beware the “Independent” Medical Examination.

Legislative Changes To Workers’ Compensation – Wisconsin and National

As we in Wisconsin wrestle with Governor Walker’s ill-advised proposal to split up an efficient and time-honored workers’ compensation system (for alleged purposes of “efficiency”), it is instructive to reflect on the legislative proposals during the first quarter of 2015 across the nation in workers’ compensation. 

A National Council on Compensation Insurance, Inc. (NCCI) annual issue symposium in Florida reported that over 600 workers’ compensation bills were filed in the first quarter of 2015. Over 10% of these (65) deal with presumptive coverage for First Responders, giving First Responders the presumption of workers’ compensation coverage for their injuries and occupational exposures. (This is a topic that has come up a lot since the September 11 attacks, bolstered by other tragic news such as the 2012 Sandy Hook Elementary School shooting).

The next most popular type of bills filed during the first quarter of 2015 included bills revising the definition of an employee (37 bills), occupational diseases (36 bills), reimbursement and fee schedules (33 bills) and indemnity benefits (32 bills).

The definition of employee versus Independent Contractor or subcontractor has been a popular issue regarding lawsuits such as Uber Technologies and Lyft, Inc. and the self-storage and moving marketplace eMove, Inc. Interestingly, on the issue of benefits (and attorney fees that apply to those benefits) “If you increase attorney fees you are likely to increase attorney involvement,” aid Lori Lovgren NCCI Division Executive of State Relations . However, she also noted: but “injured workers are going to need assistance. If the compensation to attorneys is not enough for attorneys to assist, then there is going to be an access problem.” Her reference was to the Florida Supreme Court case Ciastellanos v. Next Door Company, which explores whether attorney fee caps were constitutional.

 

Illinois Facing Proposed Rollback Of Workers’ Compensation Law

Wisconsin is not alone. While Wisconsin is facing a proposed dismantling of the basic structure of its incredibly efficient worker’s compensation program, based on the Governor’s Budget proposal, the workers in Illinois are also facing major legislative problems. As part of a series of articles in ProPublica and NPR, which discuss the overall dwindling of worker’s compensation benefits, a recent story discusses the worker’s compensation deforms currently proposed in Illinois.

One of the foremost experts on worker’s compensation, Professor John Burton, testified at an Illinois legislative hearing on the issue. Of note is that Burton’s national research generally shows that whenever and wherever the worker’s compensation eligibility standards are tightened the Social Security Disability and Medicare/Medicaid rolls go up in virtual direct proportion. Legislatures should be wary off unintended consequences on the taxpayers of alleged worker’s compensation “reforms.”