Friday, February 27, 2015

It Works Out

Nicolas Mercado will get his home modifications.

Bully for Mercado. And good for CIGA.

The California Insurance Guarantee Association has withdrawn its petition for review from the 2nd Appellate District, telling the court that that it was able to resolve the Mercado matter (which I interpret as meaning that Mercado will get the mods).

Nicholas Mercado had worked as a truck driver until a horrific accident left him a quadriplegic in 2011.

His employer had been insured by the Ullico Casualty Co., and CIGA inherited its liabilities after the carrier went insolvent in 2013.

When Mercado's doctor requested authorization for 66 modifications to his home in order to accommodate his wheelchair, CIGA submitted the request to UR, which was conducted by Dr. Phil Martin.

The doctor certified 31 of the requests as reasonable and necessary, but he modified nine and denied 26.

When CIGA failed to have the modifications approved by Dr. Martin made to Mercado's home, Mercado moved for sanctions. He also demanded payment for his wife's attendant care services, and a ruling on his need for further medical treatment, including additional home modifications.

In May 2014, Administrative Law Judge Paul DeWeese ruled that the UR decision was defective. Pursuant to the WCAB's en banc decision from two months prior in Dubon v. World Restoration, he could decide the disputed medical issues instead of IMR.

However, based on the record he had, DeWeese said he couldn't decide whether the disputed home modifications were actually necessary or not. He ordered the parties to further develop the record.

DeWeese also ordered CIGA to pay Mercado's wife for her attendant care services and to pay his attorneys $110,997.38 for their work.
Mercado in a TV inteview.

CIGA appealed, but the WCAB affirmed DeWeese's decision last September.

(One week later, the WCAB issued a second en banc decision in Dubon, which said that a UR decision becomes ineligible for IMR only if it is untimely. Dubon 2, as it is known, is pending before the Supreme Court.)

After the WCAB's Dubon II ruling, CIGA petitioned for judicial review of Mercado's case, arguing the WCAB's change in position meant DeWeese erred in finding Dr. Martin's UR decision invalid. It also challenged the imposition of penalties and the order to pay Mercado's wife for her services.

I applaud the parties ability to work out their differences, and get Mercado the modifications to his home.

But I also wonder whether home modifications really were what the dispute was all about, or whether the real issue was penalties and indemnification to Mercado's wife that was driving this litigation.

Because in my mind, home modifications to accommodate severe disability is not a medical issue, it is a disability accommodation issue. A physician might "prescribe" home modifications, but ultimately a physician is not an expert on disability or construction - this topic belongs to disability experts, and I still argue that is not medical treatment subject to utilization review.

Meanwhile, Don Smith's similar case, also with CIGA, about the need for home modifications, is still pending before the 3rd DCA.

If you recall, Dr. Samuel Hahn, CIGA's UR reviewer, had concluded that the modifications weren't necessary because there was no reason for Smith to be using a wheelchair to begin with.

Hahn wasn't asked to review whether a wheelchair was necessary - that point had been capitulated to by CIGA earlier.

The 3rd DCA granted writ on Jan. 22, and it received a certified record of the administrative proceedings from the board on Monday.

In an interview for the upcoming Seismic Shifts recorded webcasts, founder and CEO of the Integrated Benefits Institute in San Francisco, CA, Tom Parry, made an interesting comment - workers' compensation is an established integrated benefits system already, albeit within its own jurisdictional silo.

And these home modification cases highlight that point. Injury occurs, medical treatment is provided, disability money is paid, health services are established, and at least in Mercado's case, disability accommodations are (ultimately) constructed.

Workers' compensation has experience integrating disparate pieces of the puzzle (sometimes under acrimonious objection), so it's not a stretch to see this industry morphing into bigger, more consolidated, services that include other jurisdictional silos, such as issues under the Americans with Disabilities Act, the Family Medical Leave Act, the Affordable Care Act, and other laws affecting medical or disability issues.

When it comes down to it, this is what the trend of "opt-out" laws is about: control over the big picture so that integrated, and more efficient, service of injuries and disabilities can be provided by the employer which has the resources to tackle such complex combinations.

Cases like Mercado and Smith provide ammunition towards that trend. And the employers that don't have resources to "opt out" ultimately will demand and get law changes that help drive integrated services.

This will come from the top down - yesterday, president and CEO of AIM Mutual Insurance Company in Massachusetts, Michael Standing, told me in an interview for Seismic Shifts that the most difficult thing for the executive suite to accept in making decisions about integrated services is that the return on investment isn't clear.

"Sometimes you have to make an investment without knowing what the return is going to be," he said, "because each case is different, even if the injuries are the same," commenting that its difficult for executives, trained analytically to make the numbers work, to make decisions based on faith and hope.

What Standing is really saying,, though is just do the right thing and it all works out.

I hope the parties in Smith are likewise able to resolve their differences.

Thursday, February 26, 2015

Bad Faith Followup

A couple days ago I asked whether workers' compensation claims payers should be subject to "bad faith" civil liability, or whether the cloak of exclusive remedy that employers and workers bargained for should also cover those tasked with administering claims.

As I noted, jurisdictions are split, though the details of those that do recognize bad faith liability vary quite a bit.

The responses to my highly unscientific, completely anecdotal, and purely sophomoric inquiry surprised me.

First a couple disclaimers. While the backgrounds of those who responded are varied and different, I don't know from which jurisdictions respondents are from or what political affiliations these folks harbor.

Also, my question was posted only two days ago, so it is likely that there is still some pent up response out there.

Bad Faith Followup

Nevertheless, I was still surprised that every single response, regardless of perceived orientation, was that exclusive remedy should NOT protect the payor, and that if egregious behavior was committed then liability for bad faith claims administration should be applied.

A risk manager said: Not only should they be held accountable for clear violations of Law but publicly announced. I will also suggest that directors of (Police, Fire etc) make sure that Risk Management is not buying their legal failures in their budgets and claiming that Workers Comp cost are too high for (Police/Fire) departments.

A California Qualified Medical Examiner stated: It is a sensitive question because what some of these carriers are doing to the IWs is horrible! They routinely DENY straightforward claims with no legitimate reason. You fall off a ladder in front of your boss, get taken to the ER in full spinal precaution and they very well may deny your claim! (My example isn't hyperbole, I have cases similar to that!) It's like, are you kidding me? Obviously, they must not even be getting a slap on the wrist...more like high fives and slaps on the back.

An injured worker's advocate (not an attorney) commented: Workers' compensation insurers routinely controvert claims in a manner that cannot be described in any other way -- the are clearly acts of legal "bad faith".

A Senior Claims Examiner noted: Sometimes in some companies the bad faith does exist. They should be able to bring a civil law suit against the carrier or TPA. They bring class action law suits. Why not ?

A Georgia injured worker's attorney said: If state statutes (like in GA) are not going to have any meaningful 'teeth' then yes, bad faith actions should be allowed. Perhaps it would encourage more ethical behavior from insurance companies.

And a Wisconsin defense attorney agreed: In Wisconsin bad faith claims are part of the workers compensation statute and allow recovery of the lesser of $30,000 or a 200 percent increase in benefits to be paid. Seems to be among the better equitable ways to deal with such situations.

I'm interested in more comments. Please post them or send them to me.

In the meantime, my colleagues and friends Mark Walls, vice president of communications & strategic analysis at Safety National Insurance Company and Kimberly George, senior vice president of corporate development, M&A and healthcare at Sedgwick Claims Management Services, Inc., are collaborating on a new initiative to further educate the industry, which I applaud.

From their press release, with a little editing by me:

They will be hosting a regular, complimentary webinar series and interactive forum called "Out Front Ideas with Kimberly and Mark." The series – sponsored by Sedgwick and Safety National – will be dedicated to covering important workers' compensation-related topics that are not receiving enough attention in the industry.

"Out Front Ideas with Kimberly and Mark" will provide a unique alternative to the traditional webinar format by including a mix of communication methods, such as podcasts and live interviews from industry events. The approach will be to collaborate on meaningful topics that are not discussed openly in the industry or, in some cases, not at all.

Both well-known experts and advocates in their fields, George and Walls plan to explore the perspectives of risk managers, brokers, third-party administrators, human resources professionals, carriers and other industry stakeholders. The goal of the series is to bring in a variety of experts to provide input from each thought-provoking angle to initiate or advance conversations.

"Out Front Ideas with Kimberly and Mark" will launch with its first webinar on the advantages of unbundled claims handling scheduled for March 31, 2015. Visit for more information.

So Mark and Kimberly, you both knew THIS was coming!

Should claims payers be cloaked with exclusive remedy immunity from bad faith civil liability? Or should they be made to answer civilly for egregious claims handling behavior?

Wednesday, February 25, 2015

Who's To Blame?

I was talking to a physician friend of mine yesterday.

I know - the first thing in your mind is that you didn't know I had any friends and second question is why, assuming I did have friends, a smart guy like a doctor would talk to me.

Those are beside the point - the crux of the conversation centered on his clinical observation over the past 30 plus years of practicing orthopedic medicine in both forensic (including work comp and auto) and non-forensic settings is that the forensic medical complex routinely produces worse outcomes than the non-forensic setting.

My friend has done principally defense oriented forensic work, but is also widely used as an independent medical examiner and agreed medical examiner - he was speaking from a purely interested scientist's perspective.

He relayed a couple of clinical stories - stories that I think are all too common.

The basic theme is that Patient (I'll use that instead of injured worker, because I'm trying to relay this from the physician's view), a 60 year old female worker, complains of pain, tingling and numbness in her hands.

She makes a workers' compensation claim because she BELIEVES that her work has something to do with it (and yes, there are co-morbidities and other factors).

The insurance company denies the claim. She lawyers up, they fight over causation, insurance company loses that battle.

That process takes about four years.

This is after nearly every doctor that Patient sees, whether on "her side" or for the defense, opine that there likely is SOME industrial component.

The next battle is what to do about it. That takes another four years after rounds of physical therapy, drug treatments, and ultimately surgery.

My friend sees her as an independent physician - his opinion, ultimately, is maybe or maybe not work had anything to do with her hand complaints. That point is now moot.

The real issue, says my friend, is that the process itself absolutely contributed to her current state of injury and disability - and likely such would not be the case had the claim just been accepted right at the beginning, treatment provided, some indemnity paid, and the claim closed out.

My friend is now not so sure that our system of dealing with work injury claims (or any medical issue that is claimed the result of something other than a person's own doing) is much more than just a money shuffle.

Doctors, lawyers, adjusters, other vendors - everyone attaching to Patient's discomfort, contributing to the declination in health of a person.

They look at risk factors - namely centered on Patient's co-morbidities: female, over age 50, over weight, perhaps tobacco or alcohol intake, maybe some psychological issues.

In other words, Patient gets blamed for her condition.

In a "no fault" system.

"I'm not believed," is Patient's mindset. So her symptoms get worse. Someone MUST believe her at some point!

She gets coerced, essentially, into ineffective treatment. Ineffective because she'll never return to work, will never "get better," and forever to the end will be angry at her employer, at the insurance company/claims administrator; and in the meantime a whole panoply of financial interests are "circling the wagon" looking for another opportunity to strike for personal gain.

Coerced because it's treatment that she doesn't really want. She just wants to get better. But no one believes her. So she undergoes various treatments, procedures and time off that extend disability and make it worse.

In the meantime, the carrier/adjuster is paying far more in the denial and deflection of the claim than if it had just taken care of matters immediately.

The conclusion, says my friend, is that the PROCESS of dealing with the claim of injury ultimately causes MORE injury and MORE disability.

In other words my friend's experience affirms the immortal words of Walter Kelly's famous cartoon character, Pogo, "We have met the enemy, and he is us."

Christopher Brigham, MD, in his latest book, Living Abled, likewise makes the argument that our legal processes contribute disproportionately, and unnecessarily, to an unhealthy and more disabled America (actually, he makes the argument that this is an international issue).

And while the focus on work place safety in the past two decades has reduced claims frequency by some 35% (i.e. the number of people claiming that work hurt them), and while the work force has expanded by millions during that same time, the hard dollar costs to support the industrial accident complex has grown 65%.

In other words, even though much fewer people are claiming work injuries, the industrial injury system has expanded. This is counter-intuitive, but for the unaccounted financial self-preservation of an industry.

This can't, and won't go on. This industry is its own worst enemy, and ultimately social and legal forces will cause a tectonic change and I'm not talking about some little "reform" - I'm talking about a MASSIVE shift as employers become more savvy about the use of resources, and the law mandates ever greater protections for occupational issues (not injuries, but things like sick leave, parental leave, discrimination, job protection, etc.).

In other words, the industry itself is in the process of changing, and radically. We have opt-out spreading, frankly, like wild fire. Large employers, those with the resources to avail the option, have weighed in mightily - Oklahoma's opt-out system, as you know, is only a couple years old and it already has 35 or more employers signed up even though the obligation is to meet or beat what work comp requires.

And Tennessee is next.

And so is YOUR state.

Because employers at that end of the spectrum don't like work comp. It is wasteful, it does not deliver as promised, and does not integrate at all with any of the other absence related legal and medical systems.

At the other end of the spectrum are the small employers; collectively they represent a HUGE market. Just as Uber has radicalized urban personal transportation, or Facebook has radicalized interpersonal relationships, or any other number of disruptions where technology has enabled new efficiencies, someone, somewhere, is going to knock down the walls and provide integrated services because the shrinking work injury population is running head-on into a growing employment population.

The numbers don't make sense any longer.

And this affects YOU. It doesn't matter if you're an attorney, a doctor, a claims administrator, a regulator, a risk manager, or a patient.

Work comp doesn't like change.

Too bad. It's coming.


Peter Rousmaniere, a Harvard MBA and consultant to the work comp industry for over 3 decades, has written a white paper, published by WorkCompCentral, "Seismic Shifts: An Essential Guide for Practitioners and CEOs in Workers' Comp." It is a free download. Printed copies can be ordered by contacting WorkCompCentral customer service.

There is also a five part recorded educational series based on "Seismic Shifts" that I host, narrated by Peter and guest speakers, in which the case of radical change is powerfully made. The introductory video is free; the balance of the series requires "tuition." You can register here.

If you don't at least read the paper, you're doing yourself a huge disservice. But only take the recorded webinar series if you're serious about the future of work comp and absence management - this is for professionals and executives only. And I'll be frank - if you don't care about the industry and what we do, then don't bother wasting your time and money.

Tuesday, February 24, 2015

Bad Faith or Not?

Here's a sensitive question for the workers' compensation community that I'm sure will provoke passionate debate: should workers' compensation insurance companies and/or third party administrators be subject to civil "bad faith" lawsuits?

Or should a state's workers' compensation system remain an exclusive remedy, even if a claims payer intentionally commits egregious acts such as denying benefits that it knows are due in order to "facilitate" a settlement?

WorkCompCentral Legal Editor, Sherri Okamoto, reports that about half of the states have done away with any civil bad faith remedy either through legislative or judicial actions, and the other half of the nation retains that remedy.

The contrasts are stark.

Okamoto cites an Iowa jury award an earlier this month of $25 million in punitive damages, along with $284,000 in damages, payable by his former employer's workers' compensation carrier for its bad-faith handling of his claim. The offense was failure to pay permanent total disability benefits after a 2009 accident left the injured worker with catastrophic injuries.

Other states where there is no civil remedy rely on administrative penalties and administrative judicial enforcement, such as California, which has been criticized because those policies lack sufficient deterrence to bad behavior such as wrongfully denying medical care to the critically injured.

Bad Faith?

Okamoto notes that the states that do allow for civil remedies vary widely in the standards and definitions for reprehensible conduct.

Alaska and Arizona, for example, define "bad faith" as a refusal to pay a claim without any arguably reasonable basis. In contrast, Arkansas requires a showing of "affirmative misconduct" or “dishonest purpose” to avoid liability.

Colorado, Maine and Michigan make a carrier's failure to act in good faith a breach-of-contract claim. Hawaii and Mississippi make carrier misconduct redressable in tort.

Texas used to permit bad faith actions until the Supreme Court's decision in Texas Mutual Insurance Co. v. Ruttiger, which held there was no common-law bad-faith action in the Lone Star State for workers' compensation claims handling.

Likewise, two months after Ruttiger came out, though, the New Jersey Supreme Court held that the state's injured workers do not have a common-law right of action for pain and suffering caused by an insurer's administration of a workers' compensation claim in Stancil v. Ace USA.

Last week, the North Carolina Court of Appeals ruled that an injured worker cannot bring a tort action to recover damages from an insurance carrier for its alleged bad-faith claims handling.

The split surely raises the passions in people: civil remedies fly in the face of the concept of administrative expediency that underlies workers' compensation; yet, administrative enforcement needs sufficient "teeth" to encourage compliance and deter bad behavior.

What do you think?


At 8 a.m. this morning the pre-recorded introduction webinar to Peter Rousmaniere's ground breaking white paper, Seismic Shifts: An Essential Guide for Practitioners and CEOs in Workers’ Comp, will be broadcast on WorkCompCentral (click here to register to watch the introduction for free, or purchase one or all of the subsequent four parts of the series here, and click here to download the white paper).

Rousmaniere argues that the workers' compensation industry, despite rising costs, is actually shrinking. He explains why, and what industry executives and other professionals should be doing. If your job has anything to do with workers' compensation (and you wouldn't be reading this if it weren't) then you need to at least read the paper - better though, you need to "attend" the webinar series to get the most from Rousmaniere's work, including exclusive interviews with subject matter experts.

If this isn't convincing enough, read Tom Lynch's review of the paper and the series here.

Monday, February 23, 2015

It's Not Rocket Science

The Texas Supreme Court will hear Seabright Insurance Company's argument that Labor Code Section 401.011(12), as interpreted by the various district appellate courts, is ambiguous.

Here's the code section Seabright says needs clarification:

(12) "Course and scope of employment" means an activity of any kind or character that has to do with and originates in the work, business, trade, or profession of the employer and that is performed by an employee while engaged in or about the furtherance of the affairs or business of the employer. The term includes an activity conducted on the premises of the employer or at other locations. The term does not include:

(A) transportation to and from the place of employment unless:

(i) the transportation is furnished as a part of the contract of employment or is paid for by the employer;

(ii) the means of the transportation are under the control of the employer; or

(iii) the employee is directed in the employee's employment to proceed from one place to another place; or

(B) travel by the employee in the furtherance of the affairs or business of the employer if the travel is also in furtherance of personal or private affairs of the employee unless:

(i) the travel to the place of occurrence of the injury would have been made even had there been no personal or private affairs of the employee to be furthered by the travel; and

(ii) the travel would not have been made had there been no affairs or business of the employer to be furthered by the travel.

But 401.11 when taken into context is not ambiguous, as I'll explain. Seabright, in my opinion, is instead making a disingenuous argument to avoid paying a death benefit.

Here's the facts as we know them:

Candelario Lopez worked as a carpenter and foreman for Interstate Treating, an Odessa-based business involved in building and installing gas plants.

His work for Interstate always required him to travel away from his Rio Grande City home, which is near the Mexican border – to destinations such as Missouri, Virginia, Oklahoma and Colorado.

In 2007, Interstate sent him to work on a fabrication and construction project in Ridge, Texas, which was an almost seven-hour drive north from his home.

Candelario would stay in hotels near the site where Interstate had sent him to work. He would make his own lodging arrangements, though Interstate would pay him a "per diem" in addition to his hourly wage whenever he was away from home. Candelario's widow, Maximina, said he always used this per diem to pay for his hotel room and meals.

Interstate also provided Lopez with a company vehicle to use, and a company credit card to buy gas and supplies (though Seabright contends that the truck was provided as a gratuity, and Candelario's employment didn't require the vehicle's use).

While Candelario was working for at the Ridge job site, he stayed in a hotel about 47 miles away, in Marlin. He used the company truck to get to and from the job site each day.

While he was headed to work on the morning of Sept. 11, 2007, a vehicle traveling westbound on State Highway 7 crossed over the median and crashed into the truck.

At the time, two subordinate employees were riding with Candelario in the truck, and he was hauling company equipment to the job site.

The truck was propelled into a ditch, and Candelario, 57, died from his injuries.

After his death, Maximina filed a claim for workers' compensation benefits. Seabright denied the claim on the grounds that Cadelario was not in the course and scope of his employment at the time of the accident because he was traveling.

At hearing, the Division of Workers' Compensation found Candelario's fatal injuries were compensable because he "was engaged in or furthering the affairs or business of (his) (e)mployer" at the time of the crash.

An Appeals Panel agreed and Seabright sought judicial review; a Starr County District Court Judge granted summary judgment in favor of Maximina, and the 4th DCA upheld that decision last year.

Seabright then asked the Texas Supreme Court to review - all the while, I presume, holding on to the death benefit money.

Seabrights novel argument is that since the Supreme Court's 2010 decision in Leordeanu v. American Protection Insurance Co., "multiple courts of appeals have construed the statutory requirements of Section 401.011(12) in different ways," and that there is "continuing confusion over the construction of Texas Labor Code Section 401.011(12) as to travel in the course and scope of employment," and "substantial deviation in statutory construction between courts of appeal."

This is why Seabright's cloak of legal basis is disingenuous - the analysis of the law and in particular 401.11(12), is very, very simple: was the worker injured while benefiting the employer?

There is no confusion in this case. Apply the standard and, as applied to Maximina, pay the damned benefit.

Seabright doesn't like that the court used the "but for" test: but for his employment Candelario wouldn't have been where he was when he was killed.

Too bad - that's a proper analysis of the law as applied to the facts of this case.

Seabright will lose at the Supreme Court, and perhaps the court will clarify the standard. But I doubt it.

The LEGAL standard is already clear, as it is in countless workers' compensation cases throughout the country, not just in Texas and whether or not death is involved; it's the FACTS that will always be different.

Which is why a basic analysis is required and that basic analysis comes down to whether or not the employee was doing something that he or she otherwise wouldn't be doing if not for the benefit of the employer.

Conservative insurance folks will argue that's too loose - What about parking lots? What about personal errands? What about idiopathic injuries?

This is not rocket science. It's not even first year law school case analysis. Strip away all of the legal mumbo jumbo and the result is obvious.

Interstate paid for insurance. Seabright took that money. Now it's time for Seabright to make good on its contractual promise.

The petition for review in the Seabright case is available here.

The opposition to the petition is available here.

The reply is available here.

Seabright's petition on the merits is available here.

Maximina's petition on the merits is available here.

Seabright's reply is available here.

Hey, maybe I'm wrong - it's happened before. My suspicion, however, is that you'll read my vindication here in a few months...

Friday, February 20, 2015

Buffalos in Illinois

My daughter and I flew N6641M to Catalina Island yesterday.

Catalina/Avalon airport is 24 miles as the Bonanza flies from Los Angeles Harbor and is, I think, one of those magical places that few ever get to experience.

My daughter was excited to see a few of the famous Catalina buffalo. She asked the airport manager on duty when we checked in if there were any around.

"There were quite a few roaming near the airport yesterday," he said. So we paid our fees and hiked the Airport Soapstone loop - a short 2.3 mile walk without a whole lot of elevation change.

The airport is at 1,600 feet above mean sea level, so the vistas are spectacular, and the nearly unspoiled environment served up red tailed hawks feeding, wild flowers blooming, and a soapstone quarry.

But no buffalos. There was plenty of buffalo evidence and a couple were large enough for discus throws, which of course was tempting, except for the relative freshness of the discs.

In workers' compensation several states serve up more buffalo discs than others.


Illinois is the one state that has a workers' compensation system as much maligned as California's.

And like California, political attempts to "reform" it focus on costs arising out of the symptoms rather than the underlying "disease" that gives rise to the symptoms.

Newly-elected Republican Gov. Bruce Rauner made workers' compensation reform a center-piece of his campaign, albeit with little detail, but his fellow Republicans in the legislature have some ideas.
In search of buffalo.

A legislative package, filed by Sen. Kyle McCarter, R-Decatur and Rep. Dwight Kay, R-Edwardsville, would, among other things, tighten the rules governing compensation for travel-related accidents, place a 500-week limit on cumulative awards for partial disabilities, reclassify shoulder and hip injuries and define the term "injury" so that claimants would have to prove they are medically impaired to "a reasonable degree of medical certainty, based on the medical findings."

The new definitions are included in Senate Bill 770 and its companion, House Bill 2421, and some companion bills (see below).

Supporters of these bills refer to them as the "causation" bills because the bills try to more tightly define what a work injury is by calling an "accident" an "occurrence arising out of the employment, resulting from a risk incident to the employment, and in the course of employment at a time and place and under circumstances reasonably required by the employment."

SB 770 and HB 2421 also would require workers to show that an "accidental compensable injury" was a major contributing cause of the injury – meaning it was more than 50% responsible for the injury compared to all other causes combined for which treatment and benefits are sought.

The two bills also provide that injuries would be deemed to include the aggravation of a preexisting condition only for as long as the aggravation continues to be the contributing cause of the disability.

Also included in the Kay/McCarty package are:

SB 769 and HB 2419 , which covers instances in which an employee is working for multiple employers and the employers named as a respondent in the claim is aware of the worker's other jobs. Under the bills, the worker's wages from all of the jobs would be considered as being earned from the employer deemed liable for the injury.

SB 771 and HB 2420 would bar temporary partial disability benefits to workers discharged for cause. Claimants would be entitled to a hearing to restore benefits before the Illinois Workers' Compensation Commission and would receive retroactive benefits if the commission rules that worker was not fired for cause. "Discharge for cause" is defined as a discharge resulting from an employee's voluntary violation of a rule or policy not caused by his or her disability.

SB 772 and HB 2422 would limit the maximum cumulative compensation for workers receiving partial disability to 500 weeks. Awards for partial disability would be deducted from any award for a subsequent injury to the same portion of the body. In addition, injuries to the shoulder would be considered injuries to part of the arm and injuries to the hip would be considered injuries to part of the leg.

Seems to me that these bills would simply invite a large dosage of litigation to define what the definitions actually mean when applied to real live facts of a case.

But this is politics, and the point of politics is to propose something that might be distasteful to some in order to get an advantage on something else that may or may not be related.

And with Democrats solidly holding majorities in Illinois' Senate and House, Republican's know they have an uphill battle if they don't compromise on some other topic.

The opinion from business groups is that Rauner may offer an increase in the state's minimum wage as a bargaining chip to pass workers' compensation legislation. Rauner also announced a budget Wednesday that calls for cutting state spending by $6.7 billion, which also may enter into the political debate over business reforms according to sources interviewed by WorkCompCentral.

And we also know that what gets introduced into a legislative session is far different than what ultimately makes it to the governor's desk, if at all. Similar legislation has failed to clear the General Assembly since 2011.


We didn't see any buffalo on our hike and I didn't toss any discs.

So my daughter and I lunched at the DC-3 restaurant at the airport.

We both ordered buffalo burgers.

They were good.

Thursday, February 19, 2015

Why It Is The Way It Is

A couple of weeks ago Joe Paduda in his Managed Care Matters blog posted that there was a suspicious upcoding of physical therapists billings by some networks using the "59 modifier."

It seems there are some medical networks that are adding the 59 code to bills without a) telling the actual provider of the services, and b) automatically and systematically without supporting documentation.

And they have been getting away with it.

Paduda states that there is a concerning lack of appreciation for what this means - the actual providers, the physical therapists, aren't too concerned as long as they get paid, despite the fact that someone or some entity is modifying their billing without their knowledge against professional protocol.

The modifier is typically used when two procedures are used on the same patient within 15 minutes. In some cases, those services would be bundled together and reimbursed as one item. But for others, the provider appends the number 59 to the code to indicate that they should be reimbursed separately.

Paduda, a principal in the firm Health Strategy Associates, says that some of his clients have seen modifiers on more than 40 percent of their bills, but also notes that there is some official documentation floating around that indicates that the 59 modifier shouldn't be seen on more than 10% of the bills.

Something is amiss.

"I think I'll take a mile..."

One commentator to Paduda's blog post states, "I am in CA and this is on my radar. I am concerned. Several of my colleagues can confirm what you are saying is 100% true. I have seen the smoking gun. In this case, the gun is still red hot and has not come even close to cooling down. The gig is up…"

What is the gig?

The motivation on the part of the networks and the third party administrators they are tied to, it seems, goes to their marketing and reimbursement practices whereby the TPA gets a percentage of billings saved.

Inflating bills creates the illusion that the network is saving payers more than it actually is. Because a network might reimburse for 80% of a bill, it would show the payer that it saved $20 off a $100 bill for physical therapy. But if the bill was $120 because of a 59 modifier, the network would report to the payer that it saved $24.

In an interview with WorkCompCentral, Paduda wouldn't identify who is doing what, and clearly these bad apples are the exception.

And it comes down to transparency, which is tied to the number of entities through which a bill is passed until payment is rendered.

“The only way we could show that this has been done is if we were able to get the bill that was sent on to the third-party administrator or the employer and compare it to what we've originally sent in,” Jeffrey Hathaway, president of the Physical Therapy Business Alliance, told WorkCompCentral. “So there's no transparency. We have no idea what the network is getting paid, we have no idea what the network is telling the third-party administrator.”

So, once again, give someone an inch and they'll take a mile - which is exactly why work comp is the way it is today: because people can't behave themselves without someone overlooking them with baseball bat in hand to keep things in check.

You don't have to wonder why work comp is the way it is. Just open your eyes (ears and wallets).