Category Archives: Legislation

Trump Policies Bad for Workers’ Compensation

Dr. Richard Victor

Dr. Richard Victor, an economist who founded the Workers’ Compensation Research Institute (WCRI) 35 years ago, just presented a paper at the WCRI National Conference in Boston.  He indicated that federal policies on immigration and health insurance promise to make worse the challenges the United States faces by an aging workforce and a widespread labor shortage. He noted that workers’ compensation claims could double and overall costs could expand by over 300% in the next dozen years, without any increase in benefits to workers.  External forces could bring far more cases into the system because of a number of forces, including an aging workforce, labor shortage, slowdown in immigration, and more shifting to workers’ compensation claims that should be paid by group health insurance. Dr. Victor projected current claims out a dozen years to 2030 indicating that claims should actually be down to about ¾ of today’s numbers, but external factors will more than overtake that favorable percentage. Labor shortages caused by baby boomers retiring will increase injury rates.  Research indicates that the older workforce will mean an increase in lost work days and more injuries and a real impact on labor shortage as more baby boomers retire. Dr. Victor indicated “These labor shortages, which will be longer and deeper than anything we have experienced, will lead to significant increase in workers’ compensation claims and longer durations of disability.” During a period of labor shortages, employers relax hiring standards and hire workers they would not have hired in a normal labor market, including workers who are less capable. The overall labor shortfall leads to more workers’ compensation claims.

The Immigration Factor:

Economists have seen immigration as a factor that mitigates against the impact of the labor shortage. The Trump Administration, changing federal immigration policy, will further tighten labor markets and prolong the duration of a labor shortage. Moreover, Trump’s “anti-immigration rhetoric” also discourages people to come to America.  In health care, Victor noted that one in six health care workers is foreign-born including 27% of physicians and surgeons, 15% of nurses, and 22% of home health aide, each of which effects the workers’ compensation system.

Health Insurance

A shortage of people with adequate health insurance is also a problem for workers’ compensation. Health insurance deductibles have risen from the hundreds to many thousands of dollars, and this new reality causes more workers to go without or delay getting medical care for an injury or illness. When they can no longer ignore their condition, many claim it as a work-related condition and seek workers’ compensation (he cited a Rand Research study indicating workers with high deductible or co-insurance plan postponed care in over one-third of cases of the most common kind of workers’ compensation claims – soft tissue injuries.” As the number of workers who lose their insurance grows (since the Trump Administration and Congress ended subsidies and other aspects of the Affordable Care Act) case shifting form health insurance to workers’ compensation could have a major effect, ballooning workers’ compensation claims by as much as 35% in the next dozen years.

Victor’s conclusion: “You end up with a 300% increase in workers’ compensation costs without increasing benefits to injured workers.”

 

Limits on Medical Treatment Options for Injured Workers?

Doctor choice.  And choice of treatment.  The Wisconsin way.

Unlike systems in other states, an injured worker in Wisconsin has access to their own doctor and what that doctor recommends for medical care.  Wisconsin does not have specific directed care or a panel of worker’s compensation doctors. The choice of medical care and experienced practitioners produces some of the fastest return to work rates in the country, along with low costs per claim.

The only “limit” is the “two doctor rule,” where a Wisconsin injured worker has the right to see their own doctor or to get a second opinion from another doctor.  While any doctor beyond the “two doctor” limit would be excluded from coverage (unless mutually agreed to by the work comp carrier), a worker has the right to see any doctor that is part of the referral chain from the two doctors–making doctor choice virtually unlimited if the worker obtains an appropriate referral!

The recommended medical care should be covered by the work comp carrier is reasonable and necessary to cure from the effects of an injury.  Unless the insurance company has a contrary medical opinion (through an adverse, or “independent” medical evaluator), they generally are responsible for the medical treatment recommended, whether that is therapy, office visits, prescriptions, injections, surgery, etc. 

Other states place limits on the type of treatment a worker can receive.  A recent article revealed that Ohio legislators are limiting when injured workers can have certain prescription medications or surgery (Ohio Imposes Strict Rule on Workers’ Back Surgery, Opioids).  Ohio is required a worker undergo 60 days of “alternative care”, potentially without opiate use, before having a work-related back surgery.

To date, Wisconsin’s legislature preferred the medical expertise of its physicians and their treatment recommendations.  Relying on experienced, quality medical practitioners allows workers swift access to the necessary medical care and recommendations–and puts them back in the workplace fast!

 

Trump Dumps Workplace Safety

When FBI Director James Comey calls President Trump a liar, the world takes notice, but when Trump lies about workplace safety, the world takes little notice.  Trump’s administration has recently provided significant “relaxation” in the government’s approach to occupational safety.  The administration recently delayed action on a rule that would require the employer to electronically report workplace injuries so they can be posted for the public.  OSHA has also put off enforcement of an Obama-era standard for silica, a mineral linked to a disabling lung disease and cancer.  I’ve dealt with many silica exposure claims in Wisconsin particularly coming from the Kohler Corporation in Kohler, Wisconsin where silica is a necessary ingredient in many bathroom fixture manufacturing processes.  The administration has also proposed changes in beryllium exposure limits.  After 40 years of development a new rule under the Obama administration was set to lower workplace exposure to beryllium a mineral linked to a lung disease estimated to kill 100 people annually.  The nation’s largest beryllium producer had agreed to back the new restrictions.  A few weeks ago as the rule was going into effect the new administration proposed changes that many expect may exempt major industries from this tougher standard. 

When asked about the Trump administration’s approach to workplace safety a White House spokesman said “The President and his administration care very much about worker safety…”  Yet another lie.  See also Under Trump, Worker Protections Are Viewed With New Skepticism

Trump’s Budget Cuts and Social Security Disability: Is “Fraud Suspicion” Underlying the Cuts?

Budget Director Mick Mulvaney echoed the mantra of many conservative Republicans who suspect that folks who are Social Security Disability recipients are fraudulent.  “If you are on disability insurance and you’re not supposed to be, you are not truly disabled, we need you to go back to work.”  This conservative trope reflects, without any evidence to substantiate it, the same kind of misinformation about employee fraud that pervades perceptions of workers’ compensation fraud. 

As I have often written about in the past, the public’s perception of injured individuals (whether collecting workers’ compensation or Social Security Disability benefits) is vastly overinflated.  The statistics indicate only about one-sixth of one percent of injured workers in Wisconsin are fraudulent.  That’s about 2 in 10,000.

The Trump administration budget proposed up to $64 billion in cuts to Social Security Disability Insurance expenditures, directly contradicting Trump’s campaign promises not to cut Social Security.  The cuts stem mostly from new program rules and processes, and requirements for mandatory participation by program applicants to move disabled beneficiaries from SSDI to work.

While returning to work is always a laudable goal (for both workers’ compensation and Social Security Disability), the last eight times that budget proposals have initiated programs to promote return to work “none of the findings reported to date show they would likely lead to a substantial reduction in case load sizes.”  http://www.researchondisability.org/docs/default-document-library/ssa-back-to-work-06-2012.pdf?sfvrsn=2

Through their contributions to Social Security, workers earn a measure of protection against disability retirement and death.  (Disability insurance protects a worker against loss of earnings due to a significant work limiting impairment, and workers earn this protection by having worked and contributed to Social Security.)  Many of my work-injured employees ultimately end up on Social Security Disability and this protection is particularly important to older Americans.  Most people receiving Social Security Disability benefits are in their 50s or early 60s and most had only unskilled or semi-skilled jobs.  Without a college degree, benefits are not significant (averaging about $1,200 per month).  However, over half of Social Security beneficiaries rely on these benefits for 75% or more of their total income. 

The proposed budget cuts to Social Security are another slap in the face to injured workers.

Trump Lifts His Middle Finger to Injured Workers

It didn’t take long for Trump to deceive injured workers.  Despite campaign promises to help “middle class” workers,  Trump signed legislation relaxing the reporting requirements for employers when workers get hurt or ill due to their jobs.  Trump and the Republicans rolled back a rule issued by former President Barack Obama.  By ending the rule, Trump and Republicans effectively shortened the amount of time employers in dangerous industries have to keep accurate records of worker injuries – from five years to just six months.  The Republican-controlled Congress used a little-known legislative tool known as the Congressional Review Act to repeal the Obama regulation last month.  Democrats were incensed.  By signing the bill, Trump can legally prevent the Occupational Safety and Health Administration (OSHA) from requiring a similar rule in the future.

Labor leaders and workplace safety experts warn that the rollback of the OSHA recordkeeping rule will allow unscrupulous companies to cheat on their injury data and conceal ongoing hazards from OSHA regulators.  That concealment could make it harder for OSHA to identify recurring problems at certain employers and industries.  Debbie Berkowitz, a former OSHA policy adviser and advisor to the Workers’ Injury Law and Advocacy Group (WILG), now with the National Employment Law Project, indicated “This will give license to employers to keep fraudulent records and to willfully violate the law with impunity.” 

It was only a matter of time before Trump showed his disdain for injured workers and his true allegiance to business.

MORE changes to Work Comp: Elimination of Court Reporters & Appeals Commission?

Budget Bill Proposes Eliminating Court Reporters

Wisconsin’s Governor recently proposed significant changes to Wisconsin’s best-in-nation worker’s compensation system.  For the second budget cycle in a row, the Governor’s Budget Bill wants to drastically change the structure of worker’s compensation cases.

The Budget Bill, revealed on February 8, 2017, proposes two main changes : (1) the elimination of court reporters in litigated worker’s compensation trials; and (2) the elimination of the independent body that reviews judge decisions.

A base level concern exists, again, because these proposals were made outside the stabilizing force of the Wisconsin Worker’s Compensation Advisory Council.   As mentioned at length in this forum, the Advisory Council, with its balanced membership of labor and management representatives, has produced reasoned, incremental changes historically–creating a beneficial system for all stakeholders.  Hopefully the Advisory Council will weigh in on the other potential effects of the unveiled Budget Bill proposals.

Each of the proposals significantly impact the state’s work comp system:

Elimination of Court Reporters:

The Budget proposes eliminating the use of statutorily-required stenographic court reporters in worker’s compensation trials.  The specific proposal is to eliminate necessary court reporters (who ensure decorum in the court room, properly manage exhibits, make sure parties do not talk over each other, and create an accurate and legitimate transcript) in exchange for some type of ill-defined audio recording equipment.

Employers and carriers in our state—facing six to seven figure exposures—will have concerns about facing such liability based on questionable audio technology.  Imagine if at a critical point in trial, a witness talks to softly or inaudibly, resulting in a blank area in the transcript.  No stakeholder wants this, and our live court reporters ensure that it does not.

Also, the circuit court (and further appellate courts) want an accurate, undisputed transcript of the lower trial proceedings.   If the audio is poor, unclear or inaccurate, we may be forced to re-litigate the trial.  A redo will increase system costs.  Further, if court reporters are eliminated, the private parties will bear the costs by hiring their own court reporters.  We then may face disputes about the “real” transcript between the state’s audio recording (which will need to be transcribed for appeals) and the privately-hired court reporter transcript.

Wisconsin is not alone in its use of court reporters in worker’s compensation trials, as an informal poll revealed the use of court reporters in IN, PA, CT, IA, NC, MT, NE, WY, SC, CA, MA, GA, KS, IL, LA, NY, WA…and the list goes on.

Near universal opposition exists to this unnecessary proposal to eliminate live court reporters.  The State Bar litigation section board voted unanimously to oppose this proposal.  Moreover, all of the three main groups of attorneys that represent clients in worker’s compensation proceedings oppose this proposal.   The Wisconsin Defense Counsel (defense attorneys), the Wisconsin Association of Justice (injured worker attorneys), and the Wisconsin Association of Workers’ Compensation Attorneys (bi-partisan group) jointly drafted a letter to the Governor voicing their opposition (PDF link).

All parties to litigation want a fair and accurate depiction of the trial proceedings, and court reporters help secure that justice.  This proposal faces stiff opposition.

Elimination of the Appeals Commission

Traditionally, the Labor and Industry Review Commission (LIRC) is an independent body of three political appointees that rule on worker’s compensation, unemployment, and equal rights appeals.  The cases are litigated in front of administrative law judges and then the appeal is to LIRC, who have a virtual de novo review.  The appeal from LIRC is direct to circuit court, which has a very deferential standard and will uphold the LIRC decision if there is any “credible and substantial evidence.”  Barring a legal issue, the circuit court upholds the factual and credibility findings of LIRC.

LIRC has been in existence in some form since the inception of the worker’s compensation act in 1911.  LIRC actually serves to define much of the worker’s compensation case law—for over one hundred years.  When I look at our treatise, I’d guess 80% of the cited cases are LIRC cases.  Judges use the LIRC decisions in making determinations.

The current Budget proposal is the complete elimination of LIRC.  However, as opposed to a direct appeal from a judge determination to circuit court, the proposal is to substitute the Division Administrator for LIRC.  Thus, litigants would trial cases to the administrative law judge, with an appeal to the state Division of Hearings and Appeals Administrator (currently Brian Hayes) as the intermediate level of appeal.  Appeal from the Administrator’s decision would be to circuit court–with no apparent change in the standard of review by circuit court.

The upshot is to give much authority and discretion back to the actual administrative law judges–the ones who actually observed the witness and heard the evidence.  One of the statutory proposals indicates that the “findings of fact” by the judge “shall, in the absence of fraud, be conclusive.” That appears to give even less discretion to the Administrator’s ability to review judge decisions.

There is much ambiguity about the reasoning behind these proposals, as well as the potential impact.  I’ve already heard from a number of individuals that the proposal comes from issues within the unemployment insurance arena (and unemployment appeals fill up the majority of LIRC’s docket).  If true, worker’s compensation appeals are being swept up with the issues within unemployment.

However, if implemented, the practical effects are drastic.  Presumably, the Division Administrator would likely be more deferential to the sitting administrative law judges (i.e., approve more ALJ decisions) and probably produce a faster appeal turnaround time than the current LIRC process.   The catch is that it remains unknown how the Adminstrator would handle the influx of worker’s compensation appeals. Would there need to be additional staff?  (if so, budgetary costs need to be considered).  If no new staff, the simple time constraints lead to the likelihood of rubberstamping judge determinations.

In the future though, the Administrator position changes.  Future appointees could have their own political proclivities that could impact the system.  Also, the proposal may have just eliminated 100 years of case law as guidance for future judicial determinations.  The budget is devoid of what happens to the precedential value of past LIRC decisions.

Accordingly, further details really need to be revealed about the proposed plan before the stakeholders can weigh in.

One further item is known, based on the intersection of the two proposals.  If the system eliminates LIRC and provides more deference to the underlying judge determination, the value of court reporters increases exponentially.  If the judge factual determination is conclusive, a reviewing circuit court certainly wants an accurate, credible, and decipherable transript of those all-important findings.

We will explore the further Budget process and these proposals as they progress…

For further information:

The full statutory text of the Budget Bill (2017 Assembly Bill 64/ 2017 Senate Bill 30) can be found here, with a summary found here.

The Cancer Presumption in Workers’ Compensation

What is a legal presumption? 

Can a legal presumption be rebutted by sufficient contrary evidence?

Wisconsin workers’ compensation law contains many presumptions. For example, for firefighters, it is presumed that if a firefighter has cancer, the cancer is employment-related. The Statute applies to any State, County, or Municipal firefighter who has worked for ten years with at least two-thirds of the working hours as a firefighter who has cancer of the skin, breast, central nervous system, or lymphatic, digestive, hematological, urinary, skeletal, oral, or reproductive systems. For that firefighter whose disability or death is caused by cancer, the cancer diagnosis is presumptive evidence that the cancer was caused by employment. However, no presumption exists for firefighters who smoke cigarettes or use tobacco products for claims after January 2001. (Wis. Stat. §891.455 Presumption of Employment Connected Disease: Cancer)

Other presumptions in Wisconsin law include a presumption that a youthful worker (under age 27) is presumed to be able to earn the maximum wage rate by the time he reaches age 27, for purposes of Permanent Partial Disability, disfigurement, or death. For example, a McDonalds burger-flipper earning $10 per hour who has a severe burn is presumed (instead of the $200 or $300 he actually earns per week) to be earning $1,400 per week under the Youthful Age Presumption. Evidence of the worker’s likely inability to earn the maximum wage (due to cognitive or academic deficiency or similar lower earning work history) can be used to rebut the presumption and therefore limit the maximum Permanent Partial Disability or disfigurement award.

In a recent cancer case, the Pennsylvania workers’ compensation board found a firefighter cannot receive workers’ compensation benefits for prostate cancer because he failed to show his cancer was work-related despite a statutory presumption for firefighters. The firefighter began working for the City of Philadelphia in the 1970s and retired in 2006 after a diagnosis of prostate cancer. He filed a workers’ compensation claim saying his cancer stemmed from carcinogens he was exposed to while working as a firefighter, such as diesel fumes from fire trucks, second hand tobacco smoke from co-workers, and smoke from burning debris he encountered while fighting fires. Note he also acknowledged he smoked an average of a half pack of cigarettes daily since the 1960s. His doctor’s testimony that his carcinogen exposure caused the prostate cancer was rebutted by the City’s physician indicating that prostate cancer is typically more of a “disease of aging than it is of external influence.” The Judge, in denying the claim, noted “Any elevated risks for prostate cancer among firefighters might also be explained by other factors, such as detection bias, ethnicity and geography.”

The cancer presumption in Wisconsin (for non-smoking firefighters) would be more difficult to rebut, but factors such as family history may prove the “other evidence” necessary to rebut the presumption.

Fault: Creeping Back Into Workers’ Compensation

Workers’ Compensation is a compromise. As originally crafted in 1911 and as interpreted, Wisconsin Workers’ Compensation is a compromise in which both employers and employees surrender certain advantages in order to gain others that are deemed more important. Employers give up the immunity that would otherwise apply in cases where they were not at fault and employees surrender their former right to full damages in the few instances when they could recover under tort law and instead accept more modest assured benefits for injuries and deaths (without having to prove fault).

The concept of negligence should play no role whatsoever in the workers’ compensation system. The doctrine of liability without fault is part of the compensation system; the 1911 legislature attempted to guarantee payments by the employer for injuries arising out of and in the course of employment. The economic burden shifted from the employee to the consuming public.  

Traditionally, the only vestiges of fault and negligence that remained in Wisconsin involved penalties involving employer or employee safety violations. If an employee was hurt because of the employer’s safety violation, the benefits to which the worker was entitled were increased by 15% and paid directly by the employer. Similarly, if the employee committed a safety violation causing injury, benefits from the insurance carrier or self-insured employer could be reduced by 15%. 

Recent revisions in the law, effective March 2, 2016, chip away at the “Grand Bargain,” the legislative deal made in 1911 where workers surrendered all rights to sue their employers for negligence in return for which the employer paid for work-related injuries regardless of fault. 

An employee who had sustained a work-related injury and would return to work for an employer has always received the protection of the Workers’ Compensation Statute. Even if the employee was terminated for good cause during a post-injury healing, he was entitled to continued receipt of Temporary Total Disability benefits (2/3 of time-of-injury wages). However, effective March 2, 2016, a new Statute now states that if an employee is discharged or suspended for misconduct or substantial fault, as these terms are defined by the Unemployment Compensation statutes, the employee’s Temporary Total Disability benefits could be suspended. The legal standard for what constitutes “sufficient grounds for termination for misconduct” and “substantial fault” will be defined by the Unemployment Compensation Law (These are employer-friendly changes that were implemented in the UC system in 2014). 

Going forward, administrative hearings in both the Unemployment Compensation and Worker’s Compensation forums will occur. The issue of whether a decision binding on one forum will be binding on another remains to be seen.  A worker could face the “double whammy” of being denied benefits in both the workers’ compensation and unemployment compensation case.

Additionally, the new law indicates that an employee who violates an employer’s drug and alcohol policy at the time of injury (where the violation is causal to the injury) is not entitled to anydisability benefits under the Workers’ Compensation system. This harsh 100% penalty is a substantial change from the now pedestrian 15% diminution that formerly applied to injuries before March 2, 2016.

Lastly, the new law allows apportionment of Permanent Partial Disability in cases of traumatic injuries between that permanency caused by the work injury and that “caused by other factors.” The statute is silent as to the meaning of the term disability, or “other factors,” and the problems raised by the possible interpretations of these terms will be determined in subsequent court decisions.

The net result will clearly be more disputes in the supposedly “no fault” compensation system—likely resulting in more litigation and potentially raising the cost of workers’ compensation for all stakeholders.


1. 2015 Wis. Act 180 (effective March 2, 2016) made significant changes to the workers’ compensation law—for employers and employees.  This blog will explore those changes in a series of upcoming posts.