Thursday, July 2, 2015

ACE and Chubb - A Trend?

The business of insurance is big. Work comp is a small part of it, but still big enough to be enticing.

Yesterday it was announced that global insurance leader, ACE Group, was buying Chubb Corp. for a few billion dollars, creating the eight largest workers' compensation carrier in the nation based on premium.

Ace will get a 70% stake in Chubb, and the two corporations will merge under the Chubb name.

Based on data from the National Association of Insurance Commissioners, combining the two companies last year would have brought them from the 13th and 14th-largest workers’ compensation carriers by direct written premium to the eighth-largest.

ACE CEO is Evan Greenberg, son of Maurice "Hank" Greenberg, who founded and built AIG Insurance into a global insurance dominator, only to come under fire several years ago for alleged misdeeds (for which he sued and won sort of a pyrrhic victory, now under appeal).

The Chubb brand has been around for 133 years and is one of the oldest financial institutions in the world that is still operational.


The combined companies, based on last year's data, will have $2.3 billion in workers’ compensation premiums, or 4.3% of the market.

Chubb's overall combined ratio last year was 89.8%, and ACE's was 91.3%. Industry average was 98.8%. So on a cash basis both companies are very profitable. I don't know what the companies' separate workers' compensation combined ratios were, and likely they hover around 100% - still enviable in the financial community.

The key element in my mind to the deal is the commercial insurance power the deal brings to the market. Workers' compensation, at least for Chubb based on my conversations with executives at that company, is written as an accommodation to its large business customers in order to keep them happy buying the more profitable lines of the P&C line.

Both companies are broadly diversified in the risks they carry. The combined two will be able to offer even more product to their customers.

I would expect more consolidations in the P&C industry in the coming year. Interest rates remain at such historically low levels that traditional insurance investments remain unattractive. Pent up capital needs to be deployed, and frankly there's no better investment at this time than buying your rival because insurance regulations inhibit where, how much, and when more risky investments can be made.

That's not to say that monolithic financial institutions aren't without risk. Just look at what happened in the financial world in 2008!

Greenberg will serve as chairman and chief executive officer of the combined company, while Chubb CEO and Chairman John Finnegan will become executive vice president of external affairs for North America. The company’s principal headquarters will be in Zurich, Switzerland – the current home base for Ace – while Chubb’s headquarters in Warren, New Jersey, will become the main headquarters of North American operations. The board of directors will expand from 14 to 18, with four members of the Chubb board joining the existing Ace leaders.

Wednesday, July 1, 2015

Everything Passes

It was one of those rough, emotional visits with Mom yesterday.

She and Dad were married 70 years ago on June 30. I didn't think she would remember. I didn't know if she would even care. It would be interesting to see her reaction though.

Mom wasn't walking yesterday. She was sitting on the chair portion of her walker. She looked and acted slow. At 91, every day is a challenge, but this seemed to me more of a challenge than lately.

Robert was at another table with his wife, Virginia. Robert is a British author. Virginia has Alzheimer's. When I met them 16 months ago Virginia had notable memory impairment, but she could walk, and I could talk with her.

Robert sees her every day and pays incredible attention to her. Recently Virginia has been receiving hospice care and much of the time recently I had not seen her because she was in her room. Yesterday she fidgeted in her wheelchair, nearly emaciated, unable to control her movements. Robert attended to her with his cheerful attitude as best he could.

I don't know how he does it.

Bruno is from Austria originally, though he and his wife Yvette, a French native, had been living in the Escondido area for the past 25 years. Bruno moved Yvette into Mom's facility about a year ago because, at age 81, he could no longer provide her with the care an Alzheimer's sufferer needs.

Bruno was crying. Yvette would not wake up yesterday. She hasn't eaten anything in several days.

Mom seemed less cognizant than normal, and slower. She's never consumed food quickly, but yesterday was slower than normal ... much slower.

She had a haircut recently and her grooming was neat. She wasn't connecting though. She hasn't said my name in a very, very long time.

I showed her the engagement announcement and she stared at it intently. I'm sure she read every single word several times over, trying to make sense of it. She concentrated hard, her brow squeezed tight with effort. Occasionally a smile would emote. Mostly, though, she looked confused.

"Mom, can you imagine that it was 70 years ago today that you married Dad and started a family?"

Her eyes said bewilderment.

We moved on to another topic of conversation as the opening course, a carrot and raisin salad, was served. I showed her pictures of my recent trip to Italy, again, and she smiled pleasantly.

I don't think she remembers Dad anymore. I don't think she understands she was married. She held my hand. Her's were cold and mine felt good against her arthritis. She looked into my eyes and smiled - a warm smile of trust.

I do think she feels I will be there for her. Because it's true.

California's recent copy service regulations and fee schedule should have leveled the playing field, should have evoked more trust between payers and vendors.

But it seems that is not the case.

Copy service vendors believe that payers are going to exploit loopholes created by the new regulations to deny paying for legitimate services.

Claims payers have commented that copy service companies can't be trusted to not abuse the new system and to seek payment for services never provided.

Both are saying that more lawyers are going to be necessary...

All this time, these many years of living together under the roof of the same system, and still no trust.

What's sad about the entire situation is that no one, not the copy services, not the claims payers, not the government, says anything about the injured worker or the employer.

It's a system that feeds upon itself, and that will be the destruction of it.

Like Alzheimer's and dementia.

While we're seeing blank stares from the people and companies that are to be providing the services and goods to make this system work properly, nourishment is ignored, relationships are forgotten, atrophy sets in.

Bruno, Robert, and others will try to keep their spirits up, hanging on to memories of 70 years ago.

Eventually, everything passes.

Tuesday, June 30, 2015

Nausea On Final


John Swan, Director of Sales and Marketing for DocuCents, flew home with me early Saturday morning from the Summer California Applicants' Attorneys Association conference in Las Vegas.

We had a dinner meeting the night before and of course drank more wine than reasonable people should - but this was Vegas...

The plan was to meet in the hotel lobby at 5:30 a.m., get a cab to Henderson Executive Airport, and be wheels up by 6:30 a.m. before the desert got so hot that density altitude would become a problem (for non-pilots, density altitude is how high the airplane thinks it is as a consequence of temperature and other factors; the higher it is, the less performance available to a piston aircraft so climbing becomes compromised).

I woke up with a slight headache, showered, and reported for duty. Swan was ready to go as well. Neither of us ate anything before take off.

Swan is an enthusiastic flyer. He likes small airplanes. I doubted his ability to stay awake during the flight because of altitude, consumption of alcohol the night before and lack of sleep. He discounted my concerns however, stating he would be awake the entire flight despite my opinion that altitude would deprive his brain of oxygen, already challenged by the prior night's activities.

I should have know something was up when we jumped the cab and the driver didn't know where Henderson Executive Airport was - oh boy...

We eventually made it to the airport, the long way due to the cabbie's reliance on unreliable GPS, and after a careful pre-flight we were on our way.

Swan passed out at about 5,000 feet en route to our cruise altitude of 8,500. He awoke momentarily a couple of times, but otherwise was snoring. I was dehydrated so I gulped a few bottles of water during the hour and half flight while Swan slept peaceably.

Oxnard was overcast as anticipated so I requested the ILS 25 approach.

"Bonanza Six Six Four One Mike, fly heading two one zero, descend to four thousand five hundred feet, expect approach clearance with the next controller," came the order from So Cal.

And then it happened - all that water I had gulped to cure my dehydration on an empty stomach wanted to come back up, probably with a few particles of undigested food from the night before.

I woke up Swan, and concentrated really hard, breathing deeply, trying to keep everything down. Of all the times to get sick, preparing for an instrument landing is NOT THE TIME TO GET SICK! I couldn't even reach the barf bags...

Fortunately my zen-like focus quelled the queasiness, and I made an otherwise uneventful landing, and I actually felt quite fine on final approach.

And yesterday the U.S. 9th Circuit Court of Appeals affirmed SB 863's imposition of a lien activation fee in Angelotti Chiropractic v. Baker.

The appellate court said that there was no constitutional issue and that SB 863's lien activation fee was not against the law. The court lifted the injunction and took the initiative to dismiss the Equal Protection claim.

Lien claimant representatives are stunned. SB 863 supporters are ecstatic.

Questions loom: What about all those pending liens that weren't activated during the injunction period? What about the payment system - will it be able to handle a predicted rush of backlogged payment requests? Are there going to be temporary rules to deal with this (at least Division of Workers' Compensation spokesperson Peter Melton told WorkCompCentral that there will be further announcement on some procedure in the next couple of weeks)?

Noted defense attorney, Richard "Jake" Jacobsmeyer in an email to interested persons summed it up nicely, stating, "Lien claimants are now in something of a no man’s land with the faint hope that a further appeal may save them from the lien activation cost but the compliance clock will probably be ticking and once it stops, the jig will be up on their liens."

So there's panic in the lien-represented community. The stomach full of gulped water is gurgling. It's feeling a bit uncomfortable.

Take a deep breath though, and exercise some zen-like concentration.

What has happened during these past 19 months that Angelotti was pending? During that time period pending liens could have (and should have) been activated without paying any fee and they would have been decided. We don't know how many cases have already been through the gauntlet and are now out of activation fee burden.

Indeed, post SB 863 medical bills are subject to Independent Bill Review. We know that IBR has been, compared to estimates, largely underutilized, suggesting that what gets paid is not worth appealing when there's a fee involved and unknown recovery prospects.

Will the Angelotti case further discourage medical providers from treating workers' compensation patients? I suggest that's not an issue and that any medical access problems have nothing to do with being able to prosecute a lien - those issues are much more complex than recouping an account receivable years after it was due...

Will there be any further lien-based system savings with the Angelotti decision? I doubt it. I think those savings have all been realized, and the actual filing fee for liens post SB 863 is more responsible for that cost containment.

In short, though the court's decision is perhaps surprising, in the big picture it doesn't really mean a whole lot except to a few vendors with small liens, such as photocopy services.

After we put Forty One Mike away in the hangar I took Swan to the parking lot to meet his ride, and I returned to the hangar.

As I pulled my truck up in front of the hangar the nausea returned in shockingly quick manner and I barely got out the door before expelling water and a few undigested chunks onto the ramp.

Yech.

But I felt better and went on a bicycle ride.

Monday, June 29, 2015

Dr Terrazas' Rebuttal


The following is a rebuttal submitted by Dr. Ramon Terrazas, reprinted in its entirety, to my post "Change the Ride."

Member, UMR Diversity Committe at University of Pennsylvania Occupational Medicine Residency


Sir,
I respectfully disagree with some of your points. I do not discount there that there might be some "rogue" claims adjusters who might also be incompetent, and then some who are nice and just plain incompetent, but there are some simple truths about the post-SB 899 paradigm. 

First medical decision-making was taken out of the hands of the claims adjuster only as far as denial of said treatment was concerned. The latter statement was an example of good reform. Yes it added a second bureaucratic and expensive administrative layer to determine medical necessity, but the intent was also to bring "rogue" physicians in line with evidence-based treatment of work-related injury and illness, to drive out the rogue physicians who enabled excessive treatment and unnecessary disability, and to take out of the courts adjudication for medical treatment.

SBC 899 also provided the overburdened adjuster a path to decrease their workload by sending all requests to UR, the path of least resistance, and created a path that allowed them to escape accountability of their work product. The claims adjuster could shift blame for denial of treatment to the UR people, whether UR was "inside" or a third party vendor, and whether or not UR "got it right". The adjuster was no longer accountable for medical decision-making.

There may very well be carriers out there who have an internal mechanism to perform UR and that system may be automated and computer-driven, but one unmistakable truth exists:
The treatment request must offer medical necessity, or contain the elements that demonstrate how the particular request for treatment for a particular patient in a particular situation meets MTUS guidelines.

At the end of the day the doctor's medical report must be read, and I don't care how good of OCR your computer may be capable of performing for doing the work of UR and letting a computer read the request and medical report, but the sad truth is that for most of the routine requests submitted to the carrier the doctor did not submit the necessary medical report. For most routine requests for treatment the treating physician does not know where to find the MTUS or how to check to see if their request meets MTUS criteria for medical necessity. Even for treatments that have been routinely authorized in the past because the injured worker has been awarded future medical treatment for an injury from before UR was codified, there has to be medical justification for the requested treatment and many physicians fail to document medical necessity.

Keep in mind that that community of attorneys and providers are by and large involved with the treatment of somewhere around 20% of all work-related injuries, and the perceived inadequacies your community talks about at your annual conference do not represent the tip of the iceberg. The other roughly 80% of injured workers resolve their industrial accidents and return to work. Their medications are authorized, their diagnostic tests are authorized, and they get better, but not because the system worked for them or got it right, but because they did not have serious injury and their treating physicians either documented how the injured workers' symptoms and findings met MTUS criteria for medical necessity, or the treating physician was willing enough to take the time to talk to the UR physician and discuss the medical necessity, and was able to articulate the medical justification that met MTUS criteria.

Yes I agree that some carriers are better than others and that some carriers blow it with some injured workers, but the system gets it right when everyone plays by the same rules. Everyone is accountable and it is easy to try to diffuse accountability, easy to shift responsibility to another party. It is easy for the treating physician to blame the carrier for denial of treatment, but did the treating physician submit in a timely manner the necessary medical documentation that showed how the requested treatment met MTUS criteria?

What about IMR? What percentage of reviews through IMR upheld the UR decision? IMR is demonstrating that UR got it right the first time around. Sure there was a backlog of requests for IMR, and one could also be critical of the 15-20% of IMR reviews that reversed the UR decision and led to unnecessary delays in treatment. What does not get published are the percent of IMR reversals where the carrier was procedurally at fault or incorrect, or the percent of IMR reversals where UR physician just plain got it wrong. But if 80% of the time IMR is validating that UR got it right, and most of those IMR decisions were for the litigated cases where the attorney pushed for IMR (thereby contributing to the backlog in IMR), something must be working in favor of the injured employee. Evidence-based medicine is prevailing.

Unfortunately currently there is no feedback loop from IMR that allows system errors to correct themselves through good case management, so the same faulty logic that denied treatment for one injured employee is likely to produce the same result for a different injured worker.

Yes the system is imperfect but the truth of the matter is that most workers' needs are being addressed through workers' compensation. All stakeholders need to be accountable to ensure that the 20% that end up as litigated cases also have their medical needs met and that their treatment follows evidence-based medical treatment guidelines. Just because you can order more physical therapy, chiropractic treatment, or acupuncture does not necessarily mean that it is medically necessary. Same goes for that prescription for OxyContin, topical compounded Lidocaine/Cyclobenzaprine/Amitriptyline/Gabapentin cream, or Valium.

****************

My reply:

Thanks for your opinion Ramon. I will post it for community response. 

But you only deal with UR and IMR - that was not the point of my post. Please read more carefully. The point of my post was that medical care is being unreasonably DELAYED and this drives up costs. 

Also you mention SB 899 - IMR was the product of SB 863. 

Finally, UR starts with the adjuster. There is no requirement that an UR company perform that service. 

DJD 

Change The Ride

I flew home anxious from the Summer California Applicants' Attorneys Association conference in Las Vegas Saturday; there were some tasty aftermarket parts to install on The Sewing Machine!

TSM is a 2011 Honda CBR250R. I bought it from a friend about 18 months ago with only 281 miles on it for a paltry $2,900. How could I go wrong?

All motorcycle owners modify and customize their machines. It's inherent in the gear-head mentality. It can't be helped - motorcyclists have an affliction called Compulsive Modification Disorder.

So I rode the heck out of it, resisting the CMD (though barely) until it was time to replace the tires at about 3,500 miles. I wanted to get a feel for the bike, understand its characteristics, and also understand what mission it would be fit for me.

Honda designed the CBR250R as a sporty beginner's bike, but in truth it has much more sport in it than beginner, particularly if you've been owning and riding bikes as long as me.

What I discovered was probably the PERFECT Malibu canyon carving bike. With only 24 rated horsepower this bike isn't passing anyone unless it's a really tight corner, but with only 320 soaking wet pounds to throw around there aren't too many bikes that can stay with it in the corners, except for bicycles - and they can't keep speed up hill!

The weekend before I had already installed some excellent Bridgestone Battleax BT 090 radial tires to replace the trashed stock IRC rubber. Waiting for me in the garage upon return from CAAA were a set of Woodcrafter Racing clip on handlebars (1.5 inches lower than stock) and rearset foot pegs from Yoshimura Racing that put the foot controls 40mm rearward and 30mm higher than stock.

Then I went riding on Sunday afternoon.

Yahoo!!

I had a different bike. Wow. An already competent canyon carver turned into a cornering cue ball. The confidence of the sticky tires in combination with the new riding position put more smiles per miles on my face than ever; and this bike had already attained status as one of my all time favorites in 45 years of riding.

Just a couple of minor, and inexpensive, tweaks, and the entire character of the bike, and the grin on my face, changed in huge proportions. I'm glad I waited to find out what I had, what I needed, and what was available before throwing solutions onto something that I didn't understand.

Which brings me to the CAAA convention.
The Sewing Machine when it was "new".

There was, unfortunately, a recurring theme with everyone that I talked to there - and that included attorneys (both sides), doctors and vendors: Injured workers' medical care continues to be delayed and/or denied for no logical reason.

Remember the statistics from the Workers' Compensation Insurance Rating Bureau's annual meeting just a few weeks ago? Dave Bellusci, the Bureau's Chief Actuarial, showed us that California leads the nation, by a long shot, in delayed care. And that delayed care equated to costs that were oodles above the rest of the nation directly and indirectly.

That unfortunate statistic was born out by the anecdotal evidence I encountered at CAAA; whomever I talked to had the same basic story - there is a real problem getting doctors to treat workers' compensation patients.

Eventually some treatment occurs at some level, but the amount of delay and procedural interference in getting to a treatment status is causing a huge increase in compensable consequences (and some consequences that aren't compensable, at least in the eyes of the insurance industry).

One story that seemed to represent that common theme was of an injured worker that had been receiving consistent medical care for years. Same medication, same procedures, same everything. All had been authorized, all had been paid for, all was dependably provided.

The treating physician then retires. A new physician, not as adept at comp as the original treating doctor, takes over the case and prescribes the same treatment as before, albeit not as skillfully, negating some documentation or some other minor defect.

The request goes to Utilization Review and gets denied.

During the time period of the UR procedure applicant's attorney notes the defect in the treatment request, and asks the doctor to correct it. He does, it gets submitted, and that passes UR.

On the day that UR approves the second request (remember, this is for the same procedure as the first), a denial is issued from UR for that first defective request.

Now comes the galling part - the claims adjuster assigns the matter out to defense counsel to contest the treatment request.

ARE YOU FRIGGIN KIDDING ME?!

So now, not only does the injured worker NOT get the treatment that he has been receiving as authorized treatment during the entire pendancy of his claim, but his attorney has to go to court to get the treatment authorized.

Folks - that's just plain wrong. If that adjuster were under my supervision, he'd be no longer. That's what I call in my rough manner, A-hole Adjusting. There's no reason for that behavior, and there's no excuse.

Yet I heard tale after tale of similar stories while at the CAAA conference, from attorneys, from doctors, from other vendors.

There seem to be several underlying reasons for this malevolent behavior.

First off, UR seems to be cook book programmed. I don't know whether this is true, but from the evidence I have to assume that there are computer algorithms out there that dictate what the UR decision is without any human intervention, and if any element is missing from that algorithm then denial occurs.

Second, and related, claims has increasingly been taken out of human decision making. The logic has been ascribed to computers that can not connect endpoints if a dot is missing.

Third, the old guard medical providers aren't adapting well. The old saying, "you can't teach an old dog new tricks" has some truth to it. They just can't adjust to this new paradigm of medical treatment review and authorization.

Fourth, the new medical professional is of the Millennial Age - they don't have the patience for this BS. If it's not a push button system then it isn't going to be in the treatment arsenal. And they're certainly not going to put up with multiple levels of review without compensation for the effort.

The doctors that are left, and who are doing it right, still won't see a patient if the claim is older than six months. I had one doctor specifically tell me that - the reason: she doesn't get paid to review volumes of medical records to figure out what is going on. So she just doesn't take on any patients with dates of injury more than six months prior to appointment.

Oh, and there has to be prior approval on procedure and cost before committing to that patient.

So as a consequence there really is a medical access problem! There are doctors. But the patients can't get to them. And when the patients actually do get to a physician the delays in treatment approval are ridiculously lengthy.

Here's what's going on - injured workers, bottom line, aren't getting the medical treatment they should, and as a consequence the vast majority of EMPLOYER'S costs (those that participate in the the insured market) are going up.

SB 863 was a radical reform. SB 899 was a radical reform. Both occurred just a few years from each other. Both were supposed to reel in costs while providing better benefits to injured workers. Both have not succeeded in that mission, in my humble, albeit anecdotal view point (with some quantitative support from the industry).

Instead of waiting for the tires to wear down, and to understand the character of what we have and our mission, we changed everything. And now we're finding out that there are attributes that aren't so savory.

You might argue that my sampling is a small cross-section of claims that is overrepresented because I was talking to litigators. But the truth is that if the injured worker were treated quickly, efficiently, and without unnecessary interference from procedure and process, then most of those litigators would not be telling me these tales.

The system pushes claimants to attorneys, who still can't help their clients. The cards are stacked, and in the wrong direction.

All of us, every single one of us, will ultimately act in accordance with what is in our own best interests. If the law provides a system where an insurance company can save money on a claim then that is what the carrier is going to do. If the system promotes excessive disability to determine compensation, then that's what will happen.

The next modification to TSM is some front suspension tuning. I now understand that how and where I ride my bike overtaxes the forks; they are both underdamped, and under-sprung.

California workers' compensation is both OVER-damped, and OVER-sprung. But I don't think we need more radical solutions.

We've ridden the machine now for nearly 3 years. We know what needs to be done.

But it will take everyone to set aside their own, personal, self-interests.

Friday, June 26, 2015

Haves Versus Have Nots


Disparity in treatment between people in similarly situated; this is one of the most fundamental constitutional analysis applied when a statute is tested.

It's a test of fairness, a qualitative test that may have some quantitative basis, but ultimately is a "touchy-feely" sort of test.

There were 38 states that exempt certain levels of the agricultural industry from workers' compensation.

Now there are 37.

The New Mexico Court of Appeals, in two consolidated cases, Noe Rodriguez v. Brand West Dairy and Maria Angelica Aguirre v. M.A. & Sons Chili Products, ruled that there can be no distinction between the people who pick crops, and those who bag them.

Since 1937 farmers didn't have to buy workers' compensation insurance for their field workers.

Workers who perform tasks essential to the cultivation of crops are excluded from coverage, as distinguished from those who perform tasks such as processing crops. The law also differentiates between people who care for and train workers as part of a farm and ranch operation - they did not need to be covered - and workers who care for animals and train them for competitions, who are covered.

Employers argued that the law exists to simplify the administration of the workers' compensation system and protect the agricultural industry.

The court rejected those arguments, and frankly they aren't logical. Seems to me that it's more complex to distinguish between classes of workers as to who is or isn't covered is more complex than applying work comp to all workers. And the state only has 15,000 filed workers - this isn't California after all; I don't see the big burden on New Mexico farmers beyond the fact that their onions are going to cost a couple more pennies per pound now.

The court saw it that way too.

"We conclude that there is no substantial relationship between the exclusion and the purported government interests of increased workers' compensation efficiency and lower costs for the agricultural industry," says the opinion. "There is nothing rational about a law that excludes from workers' compensation benefits employers who harvest crops from the field while providing benefits for the employees who sort and bag the very same crop."

And maybe the farmers affected directly by the case will encounter some hardship (the judicial change in the law is retroactive to March 30, 2012 on a procedural distinction), but the state provides uninsured employer protection to workers injured without coverage, and statutes of limitation are also going to significantly reduce potential claims from arising.

In addition, 5,000 of the 15,000 estimated population are voluntarily covered, so the claims population drops even further.

This may or may not start a trend - as noted, there are 37 other states with some sort of agricultural exclusion. Most of those exclusions are basically for mom and pops operations.

What's interesting to me is that, in contradiction to the rest of the nation, this case represents support FOR workers' compensation.

From Florida to California, there are, or have been, constitutional challenges AGAINST state workers' compensation statutes in one form or another.

The Florida Padgett case, decided by the Florida Third District Court of Appeals just days ago, found that Judge Cuetto's declaration that the state's laws were unconstitutional was procedurally flawed, leaving open the substantive issue.

In California several cases are pending testing the constitutionality of various parts of that state's system under the most recent reforms.

There is the nascent, yet real, trend of opt-out challenging the viability of work comp.

All of this demonstrates the schizophrenic personality of workers' compensation. When it's needed it's a godsend, particularly if it is executed properly. When it's not needed then it's a burden that should be somebody else's problem.

At times workers' compensation makes no sense. Other times it is irrefutably necessary.

There are people who can't access the system, or at least access it in any reasonable manner. And there are those who don't want to be forced into the system, or at least not within the particular boundaries declared by law.

It's all a compromise. Like life itself, there are always winners and losers and nearly no one is happy one way or the other.

Regardless, the bottom line, which I think the New Mexico Court of Appeals got right, is that there can not be an arbitrary distinction between the haves, and the have nots.

It just doesn't feel right.

Thursday, June 25, 2015

Padgett Out, Now What?

The big news that I'm sure will be circulating the workers' compensation world of information this week is that the Third District Court of Appeals in Florida reversed the Padgett decision.

Recall back in 2014 (seems so long ago!) that a trial judge in Florida wrote a lengthy opinion about the inadequacies of that state's system, opining that reforms had so decimated benefits that the system no longer met constitutional muster.

The state took that case up on appeal, I presume to set the record straight.

But the 3rd DCA set aside Judge Cueto's ruling on procedural grounds, not addressing any of the merits.

This leaves the question open.


The organizations pushing the constitutional challenge have vowed to continue the fight.

And those defending the system realize that the attacks will continue, particularly since there are still two cases pending in the Florida Supreme Court attacking smaller provisions of the law on similar grounds (Westphal v. City of St. Petersburg is about the statutory limits on the payment of temporary total disability benefits, and Castellanos v. Next Door Co. involves a challenge to the cap on claimant attorney fees).

I'm headed to Las Vegas this morning to attend the California Applicant Attorneys' Association's annual summer conference. Padgett isn't on the agenda, but I'm sure there will be plenty of discussion around the exhibit floor, and perhaps even in the sessions, on the case.

When we pull away all of the emotion though, the question, really, is: if workers' compensation (in any jurisdiction) is unconstitutional, then what's the alternative?

Do the plaintiff lawyers REALLY want workers' compensation to go away?

Or are they using a big club to get the attention of lawmakers to get back to the bargaining table and take a look at whether or not there is some validity to their cause in seeking a better system?

Do employers REALLY want to face a jury of their peers, or are they comfortable with the risk that they are just one injury away from financial catastrophe?

I find it hard to believe that, but for a few rogues, the plaintiff lawyers REALLY want to do away with workers' compensation, and likewise I find it hard to believe that employers are comfortable with the risk. 

When work comp operates well it does what it is supposed to do and everyone makes out okay.

And when it doesn't work well then there are tragic stories to tell.

Sam Miller, the executive director of the Florida Insurance Council, told WorkCompCentral, that his industry needs some reflection.

"So far we've dodged a bullet," Miller said, but if either Supreme Court case results in parts of the comp system being invalidated, employers and their insurance carriers are likely going to have to contend with increased costs, and groups like his are going to have to put pressure on lawmakers for a legislative fix.

Perhaps when that happens those who represent injured workers will have greater a louder voice when the sausage is made, from Florida to California, and all the states in between.