Pain, MRIs and Disability

Another study sponsored by Liberty Mutual concludes that early magnetic resonance imaging for diagnosis of back pain leads to higher costs and poorer outcomes.

The study, published in the August issue of the medical journal Spine, showed that when back pain patients went through MRI scans within the first month after injury, they were between 18 to 55 times as likely as the reference group to receive more diagnostic and invasive procedures.

Glenn Pransky, a co-author of the study and director of the Liberty Mutual Center for Disability Research, said that that MRIs can put patients in a mindset of trying to find a specific problem in their back and then seeking to fix it.

“People get hung up on thinking, ‘Oh, I’ve got this ruptured disc. That must be the problem. I won’t be well until somebody fixes that ruptured disc,’” Pransky said.

As many of us know, herniated discs and other spinal "abnormalities" are actually quite common.

Pain is complex, and the cause of pain is often illusive.

In an Aug. 20 webinar from managed care company Paradigm Outcomes, two physicians pointed out that pain can come from many places.

"When you look at somebody’s pain, they have the pain sensation − there could be nerve pain, there could be soft tissue-muscle-tendon pain," said Steven Moskowitz, senior medical director of Paradigm’s pain program. "They could have pain because they’re deconditioned and out of shape and stiff, and so it hurts to be stiff and to move when you’re stiff. And then they can have the emotional components of catastrophizing and being fearful of activity.”

Bowzer's pain started bending over for his cigar.

In his most recent book, Living Abled and Healthy, Christopher Brigham, MD, no stranger to workers' compensation and lead editor to the AMA 6th Ed. Guide for Rating Permanent Disability, examines people that have had catastrophic injuries or who grew up "less than able" but overcame these difficulties, and compares to folks who can't seem to surmount such obstacles.

[Disclosure - Brigham is a friend and I contributed a small part to the book.]

Brigham argues that our mind-body connections are surprisingly strong and that people in general discount the effect our emotions, psychology, feelings, perceptions, affect our physical being.

"If we believe something is helping us we will likely feel better. If we believe something is hurting us we will likely feel worse. Our attitudes define who we are and the choices we make determine our destinies."

Robert Aurbach, an attorney, researcher and international work comp expert now consulting in Australia, has noted that neuroplasticity - the brain's ability to reorganize itself by forming new neural connections - can play a big role in one's perception of ability versus disability.

Essentially, continued "training" to be disabled, rather than abled, forms neural connections that reinforce negative associations with pain.

The extent to which early MRIs contribute to the perception and emotion of disability has yet to be fully quantified, but the Liberty Mutual study suggests that it is not insignificant.

According to a 2013 report from the Bureau of Labor Statistics, sprains, strains and tears made up 38% of work-related injuries in 2012, making those the most common source of claims. In that category, the back was the most-often injured body part, making up 36% of sprains, strains and tears.

Essentially that means that 1/6th of all work injury claims are comprised of back related pain issues. How many of those end up worse because of diagnosis and treatment fostered by early MRI findings that might have otherwise been adequately (and perhaps more effectively and efficiently) treated conservatively isn't known but I suspect it is considerable.

The authors of the Liberty Mutual study found that MRI use for lower back pain patients wasn’t distributed evenly across the U.S. and they hope to continue the study to determine whether certain states are more prone to improper use of the scans.

I think it would also be interesting and beneficial to correlate that study with data and information about disability rates; my guess is that we (the grand collective "we") make people more disabled than they otherwise would be in our zeal to use medical technology and attempt to find easy answers to complex problems, like pain and disability.

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I'm taking tomorrow, Friday August 29, and of course Monday, September 1, off for the Labor Day weekend and will return on Tuesday September 2. Remember that without the labor of the people in this country there would be no need for workers' compensation.

Drug Testing En Masse Risky

A federal appellate court gave a pyric victory to an employer in Tennessee, remanding a case back to the trial level because the reasons for mass drug testing of its workforce might have a reasonable basis and not be violative of the Americans with Disabilities Act; that it was an issue for the jury and not the judge.

Dura Automotive Systems is a manufacturer of glass windows for cars, trucks, and busses. Its facility contains a variety of heavy equipment and active machinery, including high-temperature injection molds, presses, air powered tools, cutting machines, die casts, fork lifts, tow motors, hi-lo lifters, and portable cranes.

Between the end of 2006 and early 2007, the company claimed, workers at its Lawrenceburg, Tennessee plant experienced substantially more work-related accidents than Dura's other facilities. Several employees allegedly also tested positive for controlled substances after their accidents.

Dura said that Lawrenceburg police had alerted its local management of illicit drug activity taking place at the plant.

The company decided to implement a new substance-abuse policy, which appeared in the March 2007 revision of the employee handbook and a July 2007 document issued by the company’s human resources department.

Pursuant to this policy, Dura reserved the right to conduct drug tests on its employees, and employees were expressly prohibited from “being impaired by or under the influence” of alcohol, illegal drugs, prescription medications, or over-the-counter drugs, if the use of such drugs endangered others or affected their job performance.

In May 2007, Dura ordered a plant-wide drug screening of the Lawrenceburg facility’s more than 400 employees. Dura hired Freedom From Self to administer the drug tests to its workforce.

Dura instructed FFS to test for 12 substances—amphetamines, barbiturates, benzodiazepines, cocaine, ecstasy, marijuana, methadone, methamphetamine, opiates,oxycodone, phencyclidine, and propoxyphene—some of which appear in prescription medications.

Velma Bates, Claudia Birdyshaw, Mark Long, John Toungett, Carolyn Wade, Richard White and Willarene Fisher had all worked for Dura at its Lawrenceburg plant.

Between them, Bates, Birdyshaw, Wade, White, Long, Toungett and Fisher, had prescriptions for oxycodone, Cymbalta, Didrex, Lortrab, Soma, and Xanax. They claimed that their use of these medications was what yielded positive results on the FFS drug test.

Dura placed all workers who tested positive on a 30-day leave of absence and instructed them to inform FFS if they were taking any prescription medications that contained the prohibited drug compounds.

An FFS employee then identified which of the medications carried a warning from the manufacturer for users not to operate dangerous machinery while taking the drug. FFS relayed this information to Dura, which informed the employees taking the medications that they would be terminated if they continued to use the drugs. However, if the employee tested negative after a second drug test, Dura said the worker would be allowed to return to work.

Wade and Fisher complied with the requirement and Dura reinstated them to their positions. But the remaining plaintiffs continued to take their medications and Dura fired them after they again tested positive.

After the drug testing, Dura claimed, the accident rate and amount of property damage at the Lawrenceburg facility decreased.

Bates, Birdyshaw, Wade, White, Long, Toungett and Fisher filed a complaint against Dura in May 2008 alleging the company had violated the ADA by subjecting them to an unlawful drug screening and then terminating them on the basis of their disabilities, or perceived disabilities.

There is some procedural history where the case goes back and forth between the trial court and the appellate court to resolve issues such as standing to sue, reclassification under different portions of the ADA and other issues.

Ultimately the trial judge found that Dura's drug testing of its workforce qualified as a medical examination or disability inquiry, in violation of Section 12112(d)(4), as a matter of law. The jury then returned a verdict collectively awarding the plaintiffs over $870,000 in damages.

On appeal, Dura argued that its drug testing had screened for substances that were "either illegal or, even if legally prescribed and used, may impair an individual’s mental alertness or motor skills" thus constituting an unreasonable business risk given the busy factory and heavy machinery, thus the drug testing was "job-related and consistent with business necessity."

The plaintiffs said that Dura's "plea for safety inside the front door of the plant," was a merely a pretense for conducting a drug test protocol that "was designed to seek information on possible weaknesses in employees." Thus, they said, the "substance screen as practiced by Dura Automotive Systems was a medical exam."

The 6th Circuit said the issue was not so clear-cut and that the issue of whether Dura violated the ADA should have gone to the jury and could not be found as a matter of law.

"Much depends on Dura’s credibility," the court said, stating it was possible a jury could see Dura’s explanation as a pretext, or find that the drug test had targeted information about employees' physical or mental health, regardless of Dura’s stated intent.

But it was not a matter of law that Dura violated the ADA.

The case is Bates et al. v. Dura Automotive Systems, No. 11-6088.

The Word Didn't Get There

As you know I've been on a kick lately about professionalism in the industry and recognizing the good we do.

Then I get an email from a former claims professional turned auditor that completely deflates my enthusiasm and makes me angry.

The emailer has been in the process of auditing some cases on behalf of an insurance carrier whose cases are administered by a Third Party Administrator.

This is a pretty typical arrangement. Carriers are very good at "writing the paper" and all the processes involved from brokerage administration to determining the risk (underwriting) and marketing. Then the job of actually handling the claims gets outsourced to specialized companies: TPAs.

The auditor writes she's appalled; outraged at the lack of any sense of urgency, the lack of responsiveness to defense attorneys, not to mention applicant's attorneys.

She's astounded at the failure to pay temporary total disability, the failure to advance permanent disability a year after the Agreed Medical Examiner's findings are undisputed to a person who's getting $500.00 a month from Social Security.

She's offended that the TPA lets the defense attorneys handle the files, lets cases linger until a pinky finger from 2008 ends up turning into hand, arm, neck, back, internal, sleep, psyche, etc., etc. - on a case that was really ready to settle no less than 4 years ago. 

Yes Bowzer, it DOES stink...

She asks, "Why would these cases still be open (excluding those with obvious complex if not catastrophic issues) when the file reflects many opportunities for settlement that slipped away?"

Of course she also notes that the TPA, with its own Utilization Review and Bill Review service company has made as much as $50,000.00 in bill review charges on a single file.

$50,000 reviewing bills of it's own Medical Provider Network physicians and vendors.

MPNs have established fees by contract. There is no need, no reason, nothing to justify reviewing and then discounting your own provider's bills.

In the meantime, non-MPN providers, who more often than not shouldn't even be paid (how about an objection letter - a completely foreign concept it seems) will be paid at fee schedule or some percentage of the same at the end of a case where the claim had been entirely denied for lack of compensability.

It appears after all that it's not just the injured workers, their attorneys, and their doctors responsible for the high costs associated with California work comp, but perhaps to a greater extent, those foxes left to watch the hen house, sucking out undeserved, perhaps illegal, and definitely unethical, revenue from the system while nobody even seems to notice.

Or care...

She says, and I agree, that something's wrong with this picture, when there are $65,000.00 in expenses between defense attorney costs and bill review, etc., on a case where the applicant got a total of $26,000 in TD and PD via a Compromise and Release of the case.

She asks, "What do you think?"

So here's my answer - I think this is bullshit.

These are the kind of actions that take faith out of the system, creates mistrust, harms people, destroys lives.

Because some assholes have can't regulate their own greed.

And what is the penalty to the TPA that allows this misconduct and lapse in ethics and morals? Maybe some penalties, but probably not enough to quell this lack of professionalism and bad behavior. And if they lose the contract with that carrier, there will be others...

If we're going to promote the good in the industry, then we also need to expose the bad.

But here's the tough part - anyone that steps up and calls the spade gets blacklisted and ostracized, and will never work in this industry again, or perhaps anywhere.

Those seeking to do the good job and do the right thing end up crushed by the same system that destroys the lives of those for which it was created.

So here's my challenge to the leaders of those companies, the TPAs, the carriers, and every single vendor out there: create and enforce a "no consequences" forum. Names, dates and actions should be exposed with no consequence to the whistle-blower.

If YOU as an industry leader are truly about maintaining the highest standards, promoting work comp careers, seeking the best people, then there must be a mechanism for reporting on ourselves to shed the unethical and immoral.

Our failures will be the industry's undoing. 

I'm all for celebrating the good that we do.

And frankly we need to castigate those that foster ill upon others.

The Best We Can

Does this sound familiar?

“The rules and regulations that govern work with the elderly are extensive. Basically this equates to an extraordinary amount of paperwork. Social workers typically enjoy working with clients and their families, but almost everything they do involves a form.”

The quote is from Bev Guerin, a social worker who deals with elder care in an article about social worker stress.

I am continually amazed when I visit my mom at her memory care facility with the daily work that goes on and the social network that is part of life there. Memory care residents, particularly the elder, are a challenge because the mental processes don't work quite right, and combined with the physical frailty of age, accomplishing simple tasks becomes extraordinarily difficult.

Some Alzheimer's patients can be combative, and I've witnessed some care givers hit, yelled at, and challenged. Heck, even I have become the target of some poor person who just doesn't have the mental capability to regulate their own behavior.

I have made friends with many of the families at the care center, and many have shared their stories with me.

Imagine your husband, who at one point was a vibrant, intelligent, community leader and provider, no longer able to care for himself and unable to comprehend the world around him.

I've seen the toll on his wife who visits every day, trying to make sense of his illness; remembering what he was like, and helping to feed him, guide him, and to do some basic things for himself.

She tells me that the doctors have said he's in his own world - it looks painful and frustrating but he doesn't comprehend that.

Mom long before memory issues.

In workers' compensation we deal with many of the same issues. We have people who get placed into unfortunate situations because of the luck of the draw, and it is our job to make things better for them.

The front line workers in the equation have a tricky balancing act in making sure that benefits are delivered timely, accurately and in compliance with legal and regulatory mandates, and at the same time holding out compassion and understanding for the recipients.

It doesn't always work.

There are some workers' compensation "caregivers" that either lack adequate training, or are following rules that aren't applicable to a specific situation, or for some reason have developed a distaste for the injured worker and allow passive-aggressive behavior to drive the claim.

There are those that don't understand that workers' compensation is not a "full service" system, that there are restrictions, complications, deviations, and yes, many, many forms.

I'm reminded of this fact every once in a while when I get an inquiry from an injured worker who stumbles upon my blog or WorkCompCentral seeking answers. These are typically desperate people who have gotten wrapped up in their own cases.

Sometimes expectations of what the workers' compensation system is all about are unrealistic, and on the other hand sometimes the system doesn't meet sensible assumptions.

“There is nothing more stressful to a social worker than handling the family’s unrealistic expectations,” says Guerin. “Sometimes family members are so full of hope that they refuse to believe in the reality that their loved one is getting older.”

I think that sometimes workers' compensation parties (whether injured worker, employer, claim adjuster, etc.) refuse to believe in the reality that this is not a justice system. Some injured workers seek rectitude and want the workers' compensation system to punish the employer or the insurance carrier. Some adjusters seek to vilify a claimant, or an employer seeks to make an example.

I'm not trying to be smug, indifferent to these folks' situations, or insensitive - this is just a reality check: the workers' compensation dispute resolution system is ONLY about whether or not there was a work injury, and whether or not medical treatment is being delivered and indemnity paid within the boundaries of the law.

There are some elements of "fault" inherent in some justiciable issues, such as serious and willful misconduct or unlawful discrimination, but for the most part these are ancillary to the main topics of inquiry.

I understand that some want justice and due process. Some seek redress for the harm caused them. Some want to punish those perceived as responsible for the bad times.

I get that.

There are plenty of cases too where benefits have not been delivered to the injured worker appropriately, if at all. There are plenty of cases where the pennywise decision is actually a pound-foolish one.

And there are plenty of cases where the carrier or employer seems to taunt the injured worker with investigations and delays, or trying to put blame where none exists in order to escape liability.

What does all this have to do with Mom's memory care facility and care givers?

There are some at the residence that appear rather normal, and they behave nearly normal. It is only upon inquisition that you can see that something isn't quite right.

And there are others that are obviously quite afflicted with their Alzheimer's or other memory disease. Even out of that population there are very few that exhibit any challenging behavior. Most of the time these folks just need some assistance.

We can't right all the wrongs in the system. It's too big. It's too broad. There are too many cases.

We can do our jobs as best we can and we should have reality checks every once in a while.

Take a day and wear some other shoes. For example, claims folks should take a day to go to a workers' compensation court or hearing room and just observe what goes on; attorneys should take a day to visit a claims administration office and see how things get done.

It may seem trite, but education by observation is very powerful. You'll see that most everyone appears and acts normally. There are going to be some that seem to deviate but are no harm.

And there will be some that need much more attention and help than the system can deliver. We just have to help them the best we can.

Without Comp

I'll admit that I don't know much about the federal Jones Act that regulates injuries to maritime workers, except that negligence is an issue in such cases, as opposed to regular workers' compensation which is considered "no fault."

But a case pending in the U.S. 5th Circuit Court of Appeals gives us a glimpse into what the rest of the workers' compensation world would look like if there really were no workers' compensation - at least relative to causation and liability.

James Johnson had contacted PPI Technology Services in early 2010 to inquire about a position as a drilling supervisor. Ultimately, Johnson landed a $300,000-per-year job aboard the Transocean rig, High Island VII off the shore of Nigeria.

Johnson started his work in Nigeria in March 2010. PPI allegedly arranged and paid for his travel.

Johnson claimed that he was under the constant supervision and control of PPI employees while aboard the rig. He also had an intra-company email address and frequent conversations with Ron Thomas, PPI's president, about the drilling plans for the rig.

In November 2010, a group of Nigerian gunmen paddled out to the platform from the nearby coastline and gained access to the rig via stairs that had been left in the lowered position.

High Island VII rig.

During the assault, Johnson was shot in the knee and another colleague was wounded in the foot. The gunmen then took a group of workers and held them hostage for 10 days.

Nigeria had been, and still is, a volatile region where disputes over the country's oil wealth are violently contested and during Johnson's tenure the High Island VII rig had been the target of several assaults by militants. Worker kidnappings remain a danger there.

Transocean sold High Island VII and 37 other shallow water rigs to Shelf Drilling Holdings in 2012 for a total purchase price of $1.05 billion.

As a result of his gun-shot injury, Johnson spent five months in a London hospital. He has since undergone more than a dozen surgeries including two knee replacements, and he now has permanent limited mobility.

Johnson filed suit against PPI in 2011, asserting that the company was his employer for purposes of the Jones Act and is liable for damages to him based on its failure to provide him with a safe place to work. He further sought maintenance and cure benefits from PPI under maritime law.

PPI sought summary judgment dismissing his claims, asserting it was not Johnson's employer as a matter of law.

U.S. District Judge Sarah Vance disagreed, finding "myriad factual issues concerning Johnson’s relationship with PPI that make summary judgment on this record unwarranted."

The case was later transferred from Vance to Judge Carl Barbier. PPI renewed its summary judgment motion, and Barbier granted it.

Barbier also presided over Johnson's claims against Global Santa Fe Offshore Services.

Johnson had alleged GSF was vicariously liable to him under the Jones Act and general maritime law for the negligence of its employees in failing to properly secure the rig against an attack.

According to Johnson, Tim Ashley, the rig offshore installation manager, and Danny Ball, the barge master, were the individuals responsible for security aboard the rig.

GSF allegedly issued paychecks and W-2s to both Ashley and Ball. Johnson argued that this made GSF their employer. Since Ashley and Ball had allowed the rig hands to leave the rig's stairs in a lowered position, thereby giving the kidnappers a means of access, Johnson argued that GSF was liable for their negligence under the doctrine of respondent superior.

GSF countered that it was not the employer of Ashley and Ball, but simply a "paymaster" of the rig hands.

Barbier was persuaded and granted summary judgment dismissing GSF as a defendant.

Johnson appealed both of Barbier's rulings and the case is pending in the 5th Circuit.

Regular workers' compensation cases sometimes involve disputes about who is the employer, so this case isn't really all that different in that regard.

But I think it's interesting to us in the regular work comp field to see what life would be like if there were no "no fault" provision in our laws - an additional element of dispute to be resolved adds one more very big layer to the liability picture.

And that disputes go before a jury is what life was like before the administrative proceedings of nearly all work comp litigation now.

Perhaps to a maritime/Jones Act regular, this set of facts and this case isn't all that interesting or important, but those of us in the traditional work comp field should remind employers and workers that this is what life is like without comp's attempt to deliver quick and expedient benefits: four years just to find out who the correct employer is, and still there is the need to prove negligence before any benefit liability is due...

To read Johnson's petition in the PPI case, click here.

To read Johnson's petition in the GSF case, click here.

The Judicial Officer

Yesterday at the Workers' Compensation Institute's Annual Conference in Orlando, FL I had the privilege of addressing, along with Chief Judge of the Florida system, Hon. David Langham, workers' compensation judges from around the country.

These judges traveled to Orlando to get continuing education provided by the National Workers' Compensation Judiciary College. Perhaps some of them needed continuing education credits, perhaps some were there for the networking, but it was clear that all of them were there to further their judicial skills.

The presentation before ours was presented by the Hon. Roger Williams of the Virginia Workers' Compensation Commission, "Judicial Roles."

Not that our session was boring (Social Media Roundtable) but the presentation on Judicial Roles was fascinating to me because I'm not a judicial officer and quite frankly don't appreciate the task that workers' compensation judges face day in and day out.

Now I do.

Workers' compensation judges ("WCJs" from here on out to save my hands from some sort of repetitive injury - I've had enough workers' compensation troubles this year!) have, in my opinion, a tougher ethical dilemma than the standard municipal or superior court judge because the job is, essentially, to get ALL the facts necessary to make a determination that fits within the confines of the law, with the added difficulty of ensuring that a claimant gets all that the law entitles him or her to.

The liberality of evidentiary rules in administrative law proceedings makes the job so much more difficult than the disciplined and strict rules of civil or criminal procedure because the WCJ has to make that much more of a decision as to whether or not to allow proffered evidence, or assist in the foundation of evidence. It's not as cut and dried as in other law.

As a consequence WCJs find themselves with very real, very difficult, ethical and professional decisions to make and usually from the bench and without much time to reflect or research.

For instance, much of the discussion in the Judicial Roles session was about claimants who are in propria persona ("in pro per" or representing themselves for non-lawyers) - just how far does a judge go to ensure that the in pro per claimant has introduced into evidence sufficient material (if at all) to support his or her position on an issue?

And imagine the constraint a WCJ must exercise to ensure that his or her appearance of impartiality stays intact when confronted with a litigant who just "doesn't get it."

The WCJs primary role is to be the primary arbiter of the facts - time and again you can read an appellate decision that affirms that the WCJ is often the sole determinant of what the facts really are because the WCJ is on the front lines able to observe and analyze the credibility of witnesses and controls what comes in to evidence for consideration.

But more often than not (by quite a bit) the in pro per claimant is at a distinct disadvantage because he or she does not have legal training, has not been through countless trials to practice oral skills, is not accomplished at determining what is or isn't relevant, and more importantly is way too connected to the case to make objective decisions, particularly during the stress of his or her own trial.

How far does the WCJ go in such situations to suggest or help out the in pro per claimant to ensure that the record is complete and that there is sufficient evidence before the WCJ to permit a reasoned analysis and determination of the facts?

Not surprisingly the answer is very complex. There are differences in state rules and laws, there are differences in personalities and skills, there are differences in perspectives and perceptions; all of these combine to create dizzyingly difficult situations for the adjudicator.

To make matters more difficult, WCJs have much more limited resources than their counterparts in municipal and superior courts. Their hearing rooms are typically spartan, their budgets subject to indiscriminate trimming, and often they must do clerical work that takes time away from their judcial functions.

And don't forget that WCJs are humans too subject to all of the human frailties that afflict mankind, from personal problems to illnesses.

Though exposed to only a couple of hours of the issues that confront WCJs I came away with a new found appreciation for the difficult job they do.

Next time you see a WCJ tell them "thank you" for the hard work they do, for the difficult job they have, for doing the best they can do with the resources they have.

And if they're a California WCJ, nominate them for a Comp Laude(tm) Award.

Cocktail Party Conversation

Yesterday I wrote about Recognizing Good. It's no mystery that much of what we "talk" about in workers' compensation has negative attributes: late payments, penalties, delayed or denied treatment, increasing rates, fraud, etc.

I'm certainly not going to deny that The Media contributes to this with daily news on these topics.

We all have opinions on what's wrong with workers' compensation. I get email, comments to blog posts and other communications, from injured workers and professionals alike, that decry all the various negative attributes of the system.

While many of these pessimistic observations have some validity, and while folks will disagree with each other on many of these points, the one thing that keeps coming back to me, regardless of where one stands on any particular issue, is that the vast majority of people working within, or serving, the workers' compensation industry really do care about "the system" and want to ensure it works as well as it can given the constrictions and limitations we face.

Most of us do not have the power or ability to make the radical, dynamic changes we think should be implemented.

Most of us don't understand the implications of change - how one small element in the law can affect many other elements up or down stream, or the unintended consequences that may follow.

"How about that Padgett case?"

Some at least do have the power to shape the conversation though - and the recent opinion by Florida Circuit Judge Cuneo in the Padgett case is doing that.

Legally the Padgett case is inconsequential - it is not binding on anyone other than the parties to that case, in particular the State of Florida.

And the likelihood of the Florida State Attorney General, who represents the state, appealing the ruling is very, very low - why invite appellate review unnecessarily and potentially disrupt the status quo?

After all, messing with the workers' compensation system is really a legislative function.

But, as was observed by many at this week’s Workers’ Compensation Institute Educational Conference in Orlando, FL, the fact that this ruling came out has opened up a big discussion, and not just in Florida but around the nation.

The top headline when I Google "Padgett unconstitutional workers' compensation" is the Miami Herald proclaiming, "Injured employees cheated by workers’ comp law, Miami-Dade judge says."

One legal journalist says that the Padgett case "outlines exactly how workers in the State of Florida have been slowly boiled to death."

Those are pretty incendiary words.

But that's okay because workers' compensation is getting attention by the public.

People out in the "real" world frankly don't give a rat's arse about workers' compensation until it affects them, and then it's too late - they become subject to the system and they either learn to get through it, or they have a difficult time and become scarred (not necessarily physically) for life.

The Padgett case, and a rumor that there are up to four other such cases pending in other circuit courts in Florida, is drawing public attention to our industry and we have the ability to use that attention to show what workers' compensation is about.

You know, and I know, but much of the public doesn't know, that workers' compensation does work for most people most of the time. That's why, in general, 20 percent of all cases generate 80 percent of all expense - because most of the time the system works.

And for those 20 percenters, some are "big" cases where really bad things happened and others are just situations where the system doesn't work very well. 

In some cases the law isn't flexible enough to "bend" to conform to those fact patterns. Some cases involve victims of bad things happening while in the system. And there are some who frankly bring it upon themselves.

But through it all, the vast majority of people that work in the system, that try to make things happen for the betterment of society and mankind, do so with the conviction that they are contributing to the bigger picture and doing the "right thing."

Sometimes I succumb to the negative pressure and frankly get down on myself for being a part of "the system." Sometimes it's difficult to rise above the bad noise and see that in the grand scheme of life we really do try to make things better.

So much of a workers' compensation cases outcome is dependent on personal factors: with the injured worker, with the employer, the claim adjuster, attorney, doctor and whomever else may touch that case.

When I talk to my colleagues, while we may disagree on how to accomplish the goal of ensuring work comp DOES work, the pervasive sentiment is all about "doing the right thing."

I still believe that workers' compensation is vitally important to an overall healthy economy. Sometimes it fails and we have discussions on why, who, what, how, etc.

Now the Padgett case gives US the opportunity to have conversations with the public about workers' compensation, and what it means.

Maybe Padgett isn't that important legally, but I think it carries a lot of conversational weight in and outside the industry and we should not discount that. The case empowers all of us to debate, to converse, to talk and listen.

Don't be threatened, and don't start celebrating, but do start talking. There's nothing wrong with outsiders hearing about workers' compensation. If nothing more, Padgett makes work comp great cocktail party conversation.

Recognizing Good

Scott Hudson gave one of the key note speeches at the Workers’ Compensation Institute’s annual educational conference Monday.

Hudson is the CEO and president of third party administrator Gallagher Bassett.

He surprised the audience in the Grand Ballroom, I think, by talking about something that is rather taboo in our industry - us old farts are dying and no one is coming into the industry willingly to pick up the slack and as a consequence our industry loses out talent to other industries such as banking, finance, technology and perhaps beer making.

And Hudson, in my opinion, is absolutely correct about the dearth of talent targeting workers' compensation as a career path.

Think about it - how any of you graduated from college and said to yourselves that workers' compensation is a cool industry that does great stuff for people and you want to make a career out of it so you can do good things for the world?

Right - not a one of you!

Why is that? Why is workers' compensation so off the radar screen for the next generation? Why can't we attract top talent into our industry? Why can't we have the big thinkers, people that go outside of the box to solve our problems, to bring good things to life?

Workers' compensation is, after all, as much of a people business as any industry and if you've been in the comp world for more than just a few months you absolutely know that it's all about relationships.

People make things happen in workers' compensation because the industry is all about taking care of people. This industry starts with people and ends with people.

We are as much about humanity as any other industry - we are charged with solving a huge social problem: doing as much as we can using the tools we are given to help people recover from bad things in life and carry on.

Hudson talked about rebranding the industry and that starts with the way we talk about our selves. And I will admit that I'm probably just as much to blame as anyone else.

It's easy to publish bad news and it's easy to criticize what's wrong in the industry. It's much, much harder to talk about the good things because we get so consumed with what's wrong.

But we do make a difference and we do very, very important work.

I guess that last part gets lost in the conversation too often. When we're at a cocktail party and mention to some guest that we're in the workers' compensation business we often do so shamefully.

Like we're embarrassed that we help manage the largest privatized social benefit system in the world.

Or that we help people get back to work, help business manage safe practices, help the economy by spreading potentially catastrophic risk and keeping payroll tax dollars flowing.

"The way you define me is not how I see myself," Hudson said, and it's so true.

Get down to the basics: Our job is to provide comfort to injured workers, to get them healthy, to get them working again because work in the most primal way defines our existence (and this has been proven time and again through psychological studies).

WE DO GOOD THINGS.

There, I said it - we really do good things.

The trend in our favor is that the millennial generation is looking for meaning and social importance in their lives and careers, and that is what comp is all about.

But people don't know that. Even people in our own industry don't know that.

If we are going to attract top talent into this industry we need change the perception of work comp and the mindset of the public.

We need to be ambassadors of our industry and we need to share our stories of success, of helping that injured worker, of assisting that beleaguered employer, of making things right in this world within our own special way.

We are a caring industry and we should celebrate all that is right with workers' compensation.

In that vein I have urged my staff and colleagues to create something wonderful, something that celebrates the good in workers' compensation and recognizes the deep care and understanding that incredible PEOPLE bring to the lives of others.

I hope you will join me and WorkCompCentral to nominate recipients for the WorkCompCentral Comp Laude(tm) Awards.

Though nominees are limited to the State of California at this time, anyone involved in the workers' compensation system, inside or outside California, can nominate an individual or a company in one of eight categories.

We are going to be recognizing injured workers and their employers, case managers, claims adjusters and managers, risk managers and Third-Party Administrators (TPAs), doctors, attorneys, educators and others who have demonstrated to their nominators, and the industry, a high degree of integrity, understanding, education and commitment to doing good things for people via the work comp industry.

Start nominating qualified people and organizations now by selecting one of the categories listed at https://ww3.workcompcentral.com/events/nominations. You can also just call (805) 484-0333 and a WorkCompCentral account representative can take your nomination.

Nominations are due by October 12, 2014. Awards will be presented on Saturday, December 6 at the 3rd Annual Comp Laude Awards & Gala at the Sheraton Gateway Los Angeles Hotel. I hope you can join us to celebrate the good we do.

The next generation will join us if they see an industry of care. Let's show them we do.

Form (Literally) Over Substance

Shirley Hilton worked as a second-grade teacher for the School District of Philadelphia at Frances D. Pastorius Elementary School, overseeing a class of students with behavioral problems.

On March 3, 2009, Hilton went to see Dr. Wilfreta Baugh, complaining of heart palpitations, headaches, dizziness and nausea after a particularly difficult day with her challenging classroom.

The doctor's office then telephoned the school and informed the school that Hilton would not be returning to work due to the overly stressful environment.

In June 2009, the school district assigned Hilton to teach at the Jay Cooke Elementary School starting that September, but she did not report for duty as she was still undergoing treatment for her job-related stress from the Pastorius assignment.

Hilton filed a claim petition in October 2009, alleging that due to stress from an abnormal working environment at Pastorius, she was totally disabled.

She specifically alleged that she had sustained a vocal cord injury and had aggravated her pre-existing lupus and heart murmur in March 2009. Hilton requested payment for medical bills and the loss of wages from March 3, 2009, to May 21, 2009, and from May 28, 2009, into the future.

A workers' compensation judge granted Hilton's claim petition as to the period from March 3, 2009, until Sept. 30, 2009, which was the day the teaching job at Cooke would have become available.

The Workers' Compensation Appeal Board affirmed the WCJ's award of benefits, but reversed the part of the decision suspending benefits as of Sept. 30, 2009.

The school district then sought judicial review, and the Commonwealth Court in January ruled that the WCJ was correct in cutting off Hilton's benefits.

The court reasoned that Hilton was not disabled from working as a teacher “as long as she did not work somewhere like Pastorius school,” so she was not entitled to benefits after September 2009, when she could have begun working at the less stressful Cooke school.

The court also said that the school district did not need to issue Hilton a notice that it perceived her as being able to work at this new assignment since the reassignment had not been based on a change in her medical condition, and she was not yet receiving benefits at the time the district offered her the position.

Hilton appealed to the Supreme Court, arguing that she was entitled to get a Notice of Ability to Return to Work before her benefits could be suspended, and that the medical evidence did not establish that she was able to return to work as of Sept. 30, 2009.

The Supreme Court granted review of Hilton's case last Wednesday.

At issue is a conflict in the law.

The Commonwealth Court previously held that an employer must provide a worker with an LIBC Form 757 as a prerequisite to suspending benefits.

The form, called a Notice of Ability to Return to Work, informs the worker that her employer considers her able to resume some form of employment and advises her that she has an obligation to look for work if she is able to work, otherwise benefits may be lost.

Section 306(b)(3) of the Workers' Compensation Act requires an insurance carrier to issue a notice to an injured worker any time it receives medical evidence indicating that the worker is able to resume any form of employment. But it does not predicate an employer’s ability to suspend a worker's benefits based on her ability to return to work.

By contrast, Section 413(a.1) expressly says that a carrier must provide notice to a worker, on the form designated by the Department of Labor & Industry, before seeking a suspension of benefits based on the worker's return to work at her prior or increased earnings.

This is all very good and well from a technical legal aspect, but the case glosses over the fact that Hilton didn't go back to work in any capacity. And reading between the lines it doesn't seem there is any intention to do so.

The Supreme Court will review and decide a procedural matter, but the substance of the case - that a teacher did not go back to work even though medically there was a qualifying job - is ignored.

The story is in WorkCompCentral this morning (payment/subscription required).

And I'm On The Employer's Side

A LinkedIn member wrote to me the other day in response to a blog post about rewarding positive behavior.

He said in part, "David - This is a daily fight for employers who are trying to help their injured workers so they don’t hire an attorney... Who we kidding UR is a profit center for the carriers and Sandhagen [the California case that declared UR is "mandatory" but which also said that the "mandatory" nature of UR can be fulfilled simply by the claims adjuster making a treatment authorization decision him or her self] is the excuse that keeps on giving. Funny thing is I am on the Employers’ side having to fight for simple treatments even post surgery – what a joke!"

Listen, I don't know for a fact that utilization review is a "profit center for the carriers." I don't have any data or evidence of that, though I do suspect that many UR companies are financially tied to either carriers or claims administrators.

But the sad part of the commentary is that the employer, the one paying the premiums, the one that should be able to have some direction and control over the direction any particular claim takes, gets left at the sidelines once the kickoff to the carrier occurs.

One of the biggest selling points to Oklahoma opt out is that the employer, not the insurance carrier, has so much greater control over claims administration.

If you're big enough as an employer you're going to self insure because of the greater control you have over claim management.

Bowzer just wants to get back to work...

Self insureds routinely demonstrate that their claims management experience is vastly superior to the rest of the claims world with greater reduction in claims frequency, claims duration and ultimately the business cost of a claim, than the insured market.

Insured employers generally have brokers through which they purchase their insurance and the competitive broker market should provide that claims oversight - but while that's a great service, the monthly file review (or whatever time table is generally set for reviews) is insufficient because claims decisions are made daily.

Waiting 30 days to find out that some generally accepted, low cost medical treatment procedure was denied for whatever reason is 30 days too long.

The vast majority of employers in the United States are small businesses without the resources to have someone dedicated to overseeing their insurance company, let alone conduct a claim review every 30 days.

And that's a problem.

The consumer of insurance, in this case the employer, is the customer. If the customer doesn't dispute a claim, doesn't dispute a treatment modality, wants the employee out of the system and back on the payroll, then the employer should have the luxury of making that desire an instruction to the insurance company.

Too often, however, there either is no delegation of that authority or that desire is simply not an option.

I have been in claims review meetings in my past life as a defense attorney, principally representing an employer who was not happy with the claims management of their carrier.

The lack of authority that an employer has over the claims experience was quite apparent in many of these reviews - the carrier's representatives would basically, in so many words, tell the employer that they have no say, that once a claim comes into the carrier's arms it's their business and butt out.

In some states there are "employer rights" laws, but the fact is that small and medium sized businesses don't have the time or resources to avail the remedies in those statutes, and by the time the remedies are accessed it's too late for the injured worker - damage done...

It comes down to accountability. When all is said and done, who's responsible? Who can the finger be pointed at for results? And what are the consequences?

Sure there are administrative penalties based on performance numbers that are far removed from the actual day to day handling of human lives - they are neither deterrent nor incentive.

Insurance companies market to what sells - premium cost. When was the last time you saw an advertisement for an insurance company in any line of the industry proclaim superior claims handling?

Exactly....

Employers need to demand what they pay for - top quality claims management with input authority from the employer. If employers would shop for that, rather than the lowest price, the claims industry would "get it."

Risk managers shouldn't have to fight for treatment for their employer's workers.

Padgett is About Bigger Issues

Starting this Sunday thousands of people from the workers' compensation industry descend upon Orlando, FL. for the bacchanal otherwise known as the 69th Workers' Compensation Educational Conference.

I am on several panels at this event, but I suspect that, since the event is Florida based, one of the hottest topics is going to be yesterday's ruling by Miami-Dade Circuit Judge Jorge Cueto in Padgett vs. State of Florida, that the exclusive remedy provision of Section 440.11 is facially unconstitutional.

That a trial level judge would take the time and energy to write a 20 page opinion denigrating an entire legal operating system and throwing the door wide open for challenges is extraordinary. The fact that Judge Cueto even took an interest in workers' compensation is beyond extraordinary.

And knowing that the only resolution of such a conflicting issue is an appeal to the Third Circuit or directly to the FL Supreme Court is pure judicial chutzpah.

The basis for Judge Cueto's ruling is that over the years the Florida workers' compensation act's original grant of benefits for permanent disability, which was part of the "Grand Bargain," has been so eroded as to no longer serve as an adequate remedy.

Citing the original constitutional test of the exclusive remedy of workers' compensation in the United States Supreme Court case of New York Central Railroad v. White, 243 US 188 (1917), a case in which ironically the business community sought to declare compulsory workers' compensation laws unconstitutional, Cueto quotes one of the more powerful passages in that case:

Bowzer asks, "what is it?"

"One of the grounds of its concern (the workers' compensation act in question) with the continued life and earning power of the individual is its interest in the prevention of pauperism, with its concomitants of vice and crime."

For years attorneys representing injured workers throughout the nation have been saying that the compensation bargain has been eroded and one need only visit all of the various injured worker "forums" on the Internet to see that this particular demographic feels pushed into pauperism as a consequence of industrial injury.

Cueto is basically saying that if the remedy provided by the Florida Act is mandatory and exclusive, then it doesn't meet constitutional muster because there isn't enough money to keep injured workers from diving into pauperism, which harms all of society and places excessive burdens on other systems such as Social Security or Medicare (or what we like to call in our sanitized jargon "cost shifting").

Cueto teed up the ball and drove it way down the fairway with his analysis. He said that while the exclusive remedy provision has been part of Florida's Workers' Compensation Act since 1935, it wasn't exactly "exclusive" until 1970, when lawmakers eliminated the ability of employers to "opt-out" of participating in the comp system.

At that time, Cueto said, the "benefits provided by the act should have increased substantially to account for the change in the value of the trade; i.e., allegedly fast, sure and adequate payments in exchange for the tort remedy that was cumbersome, slow, costly and under which it had been legally difficult for injured workers to prevail."

Lawmakers again tinkered with the act in 2003, to eliminate the payment of any compensation for a permanent loss of wage-earning capacity that is not total in character, Cueto noted. And even if the loss is total, the act cuts off benefits once the worker hits 75 or after receiving benefits for five years.

The amended version of the act also apportioned medical care expenses for workers between an employer and the worker, and if the worker can't afford his share of the cost, then the worker can't get treated, Cueto said.

Cueto reasoned that if the Act would "provide full medical care and some compensation for total or partial disability, it remains constitutional." But as it now stands, Cueto said, "it is inadequate as an exclusive replacement remedy for all injured workers."

Chief Workers' Compensation Judge David Langham in his blog post this morning asks, "What IS IT?" In other words, what does this court decision mean to the rest of the workers' compensation world?

While there will be plenty of debate about procedure, where the appeal is going to be first heard, and how the various special interests are going to line up, this is what I take out of Cueto's ruling: the adequacy of benefits in workers' compensation is getting the attention of the judicial system from coast to coast.

In California the constitutionality of the state's system is being picked at piece by piece with the Angelotti case challenging changes to the lien system, and other cases taking on SB 863 provisions.

Last year the Texas Office of Injured Employees Counsel released a couple of reports suggesting the dispute resolution system lacked constitutional protections for injured workers.

There are other states where workers' compensation laws are being questioned as conforming to the original bargain in one form or another.

Plenty of speculation will be circulating this coming week and surely this case will be the center of debate at next week's conference.

Cueto's ruling opens the debate full fledged however and is the boldest trial level attack on the system I can ever remember. Even Florida's Westphal case about attorney fee caps lacks the sheer boldness of Padgett.

What's really going on around the country, with Oklahoma opt out, constitutional attacks, complaints about costs and inadequate benefits is a debate that I've been having for quite some time: Is workers' compensation even relevant any longer?

It seems to me this debate is getting louder and, as work comp is a microcosm of society, points to larger issues facing society - a huge discord between the minority of "haves" versus the vast majority of "have nots."

Cueto in the Padgett case is really opening up a debate about whether society is taking care of its own any longer.

The Padgett case is about social unrest. We are, indeed, meandering into challenging times where the nation's soul is being examined.

Listening and Touching

My daughter forwarded me this TED talk that was given several years ago, and I'm sure some of you may have already seen it.

The speaker is Dr. Abraham Verghese, a practicing infectious disease physician, writer and teacher at Stanford University.

It's about medicine losing the human touch and how important psychologically to the patient a simple physical examination is.

"We're losing a ritual that is at the heart of the relationship," he says, referring to the ritual of the physical examination.

It is RITUAL , i.e. routine, that makes us good at what we do and that's why it's called "practice" as in the practice of medicine or the practice of law or any other professional "practice."

While I don't really agree with his statement that the next big thing to come to medicine in the next "10 years is the power of the human hand to touch, comfort, diagnose and bring about treatment," Verghese in my opinion makes some powerful argument about the ritual, the practice, of medicine and it is particularly applicable to workers' compensation cases.

Workers' compensation, as we all unfortunately know, is all about numbers and volume. It is discount medicine. It is all about economies of scale. The basic economics of workers' compensation almost dictate this reality.

Verghese talks about how technology has come to dominate the "practice" of medicine - how physicians are quick to order tests, MRIs, x-rays and other technologically advanced diagnostic assists, and that we now have two patients: the one on the examining table and the one in the ether world.

The "iPatient" (the patient in the computer) is "getting wonderful care all across the country," Verghese says. But the REAL patient is left wondering "where is everyone? when are they going to come by and explain things to me? and who's in charge?"

Physician rounds used to be held bedside with the lead physician taking a troupe of others to each patient's bed and conducting inquisition and seeking answers, he notes.

Rounds now a days take place in private rooms far away from the patient - everyone looking at computers and data, but the one critical component missing is the patient.

Verghese gives an early practice anecdote about an experience he had with chronic fatigue syndrome.

He said, "they come to you thinking you will be joining the long list of people that are about to disappoint him."

Verghese thought he would do something a little different in the 45 minutes allotted for the initial exam - just listen.

So he invited the patient to tell his entire story and would try not to interrupt ("we know that the average physician interrupts his patient within the first 14 seconds"). He just listened to the patient give his entire life's history and set a return appointment for 2 weeks hence for the actual physical exam.

In the second visit, to Verghese's surprise, the patient continued to tell more of his story and voluntarily provide more of his history. But when Verghese started with the ritual of exam this "very voluble patient began to quiet down."

"And when I was done, the patient said to me with some awe, 'I have never been examined like this before.'" 

Verghese proclaims this a condemnation of the medical system, but really it is recognition that communication is probably one of the most important parts of the physician's role - and not communicating what the doctor knows, but listening to what the patient has to say.

It may not be profound and it may not lead to actually figuring out what is going on physically, but the psychological impact of a caring individual taking the time to HEAR what the patient has to say had remarkably powerful implication.

Verghese said he told the patient, "This is not in your head. This is real. The good news, it's not cancer, it's not tuberculosis, it's not coccidioidomycosis or some obscure fungal infection. The bad news is we don't know exactly what's causing this, but here's what you should do, here's what we should do." 

It was about wellness, about taking responsibility for one's own condition, regardless of the outside influences of illness, disease or injury. The doctor earns the TRUST of the patient by virtue of listening, and then conducting the ritual of the physical examination, which allows the patient to FEEL that there is a caring person in that smock.

Someone gives a damn...

As youngsters we are taught to trust our doctors - they have the gentle hand, know how the body works, have superior intellect.

Most of all, at least when I was growing up (and remember I was on a first name basis with my childhood orthopedist since I was such a frequent visitor!) we could tell the doctor things we would not tell anyone else.

Verghese says that the act of listening deeply first, and then conducting the actual physical examination, laying hands on the patient, palpating, rubbing, feeling, provided a transformative exchange:

"Rituals are terribly important. They're all about transformation. Well I would submit to you that the ritual of one individual coming to another and telling them things that they would not tell their preacher or rabbi, and then, incredibly on top of that, disrobing and allowing touch -- I would submit to you that that is a ritual of exceeding importance. And if you shortchange that ritual by not undressing the patient, by listening with your stethoscope on top of the nightgown, by not doing a complete exam, you have bypassed on the opportunity to seal the patient-physician relationship."

Verghese tells a story about a terminally ill patient who, even in his last hours of life, willing submitted to the ritual of the physical examination, that it was so important to that person.

"And the message, which I didn't fully understand then, even as I delivered it," Verghese says, "and which I understand better now is this: 'I will always, always, always be there. I will see you through this. I will never abandon you. I will be with you through the end.'"

Most of modern medicine misses this important message and certainly in workers' compensation that message is eviscerated.

The work comp system does not reward patience or communication. We look at numbers, lots of numbers, that we think describe different things to help us try and understand what is going on in this complex world and system.

But we do a miserable job of listening and performing necessary rituals that would gain trust, that would say "we'll be there for you."

Like Dr. Verghese, I submit that if we just listened more we could reduce the amount of unnecessary disability, reduce the expense of workers' compensation, and have a better, more robust, more credible role in the lives of injured workers, their employers and society.

Our challenge is how to reward positive behavior and allow physicians to listen, and injured workers to trust.

Employee? Not Employee?

The employment relationship is often defined by timing, and sometimes influenced by the potential dispute resolution forum. A recent Pennsylvania case is illustrative.

Paul Marazas worked for Vitas Healthcare Corp. in Pennsylvania.

After spending a weekend on call, Marazas reported to work and received his daily itinerary. His assigned route for the day included stops in New Jersey, Delaware and Pennsylvania, and was likely to take him until midnight to complete.

Marazas went to his manager's office and asked to have his schedule adjusted because he was still tired after his weekend on call. When his manager refused his request, Marazas stated that he could not continue to work under such conditions and quit.

His manager then told him that he needed to remove his personal belongings from the Vitas truck. Marazas did so, accompanied by his manager. After he had retrieved his effects and began walking back to the Vitas warehouse, Marazas tripped over a pallet jack.

His manager was with him at the time of his accident and saw him fall. She then walked with Marazas to his car, and he drove away.

A few days later, Marazas called Vitas and requested a referral to physician for treatment of his injuries from his fall. Vitas informed him that it only made referrals for its active employees.

Ouch - didn't see that pallet jack on my way out...

Marazas later filed a civil suit against Vitas in the Delaware County Court of Common Pleas, seeking damages for his injuries. He asserted that he had been a business invitee of Vitas at the time of his accident. Vitas countered that he was an employee and in the course of his employment when he fell.

Marazas then withdrew his civil suit and filed a workers' compensation claim petition for his injuries.

A workers' compensation judge found Marazas and his doctors to be credible, and she awarded Marazas benefits from Nov. 7, 2005 through July 9, 2008.

Vitas appealed, arguing that since Marazas had admittedly quit before he fell the accident was outside the scope of the workers' compensation scheme.

The Workers Compensation Appeal Board agreed and vacated the WCJ's award.

On remand, the WCJ again found Marazas had been within the scope of his employment when he fell because Marazas was furthering the interests of his employer at the time of his accident since the retrieval of his personal belongings that his manager had instructed him to perform was a task at the request of the employer.

The judge once more issued Marazas an award of benefits, and Vitas again appealed. The WCAB once again sided with Vitas, finding Marazas' injuries were not compensable.

On appeal to the Commonwealth Court, however, Vitas lost.

The Court said that while it was undisputed that Marazas had announced his decision to end his employment before his accident, this didn't mean that the scope of his employment had ended.

The WCJ had found Marazas was acting pursuant to his manager's directive in retrieving his belongings from the company truck, and he was under his manager's supervision while doing so, ergo Marazas was still under his employer's control when his accident occurred.

Still the case leaves a bad taste the employer first sought to avoid work comp liability until it realized that civil liability could be worse, and then tries again to deny work comp liability.

Seems there was some bad blood between employee and employer.

And though the Court said that judicial estoppel, which means that a party to a case can not in a different jurisdiction argue the opposite, is a bar only if the party has persuaded a judge that the prior position was correct. Since Vitas had obtained no adjudication that Marazas was its employee before Marazas withdrew his civil suit, nothing was stopping Vitas from changing its argument in defense of the workers' compensation claim.

Commentators on the opinion disagreed with the Court's reasoning on estoppel, but the result is the same: employee and employer don't have a good relationship and it spills into a dispute resolution mechanism - in this case both civil and work comp forums.

And while work comp for most employers gets distasteful, potential civil liability tastes worse.

The case is Marazas v. WCAB (Vitas Healthcare), No. 337 C.D. 2014.

Increase in Frequency or Paper?

Last week the California Workers' Compensation Insurance Rating Bureau issued a report on the state of the industry.

Noting that California, and more particularly the Los Angeles area, continues to buck the national trend of decreasing claim frequency, various theories abound.

Some speculate that increased permanent disability indemnity benefits are motivating more claims.

Others think that the high rate of litigation in the Los Angeles area (according to the WCIRB report, Los Angeles County was responsible for the highest rate of claim frequency growth in the state − 19% since 2009 − compared with the statewide increase of 9%) is to blame.

Still others hypothesize that the pace of economic growth since the recession ended is responsible.

Or perhaps it's a combination of all three.

Or maybe it's just the way "injuries" are measured...

According to one claims chief that I exchanged emails with, his front line people believe that some of the frequency is due to a change in how Applications for Adjudication of Claims are filed at the Workers' Compensation Appeals Board district offices due to changes in procedure introduced by SB 863.

"You mean I'm drawing the wrong conclusion?"

The explanation is that claims used to be filed as "skin and contents" within a single Application. Now, the theory goes, several Applications are being filed for a single individual breaking out separate claims for specific and continuous trauma injuries.

I haven't seen any studies or reports to validate this, but it would seem reasonable that the measuring methodology may be flawed in that we're counting "injuries" rather than "injured" and that the "increase in claims frequency" is really just an increase in the amount of paperwork being filed.

Take a look at SB 863 and what it attempted to do - eliminate various "add ons" as body parts to a claimed injury.

If those "body parts" aren't "added on" but rather are pled as separate "injuries" then a single injurious event may give rise to four or more Applications for Adjudications of Claim forms.

And I haven't done permanent disability ratings lately, so this might be completely off base, but the indemnity value of a string of "injuries" arising out of a single injurious event may be more than if a single pleading were used to cover all claims (particularly if there are no "add ons").

The rise in "claims frequency" has surprisingly (or not) correlation to the passage of SB 863.

Prior to 2012 California tracked the nation in claims frequency decline very closely.

But in 2012, the year that SB 863 became law, California's measured rise in frequency was 3 percent which contrasts with the national decline in frequency of almost one percent (continuing the measured trend).

2013's frequency in California increased about five percent while the national average went down that same number.

And although "frequency" increased in California during this period, ultimate claims count for indemnity claims continued to decrease according to WCIRB's end of year numbers for 2013.

This phenomenon of the data not making sense in the initial review isn't really any different than the estimates that were used to determine the volume that would be expected to go through the Independent Medical Review process - researchers likely counted how many cases went before a judge for adjudication of medical treatment requests.

There was no accounting for all of the many cases for which judicial intervention was sought but which never got to the a judge because the matter settled.

My take-away is that this industry does a lot of measuring and analyzing, but often enough we either measure and analyze the wrong thing, or don't interpret the results correctly, or fail to account for reasonable and obvious explanations.

And the problem with that is we end up trying to "fix" something that isn't broken in the first place.

So California claims frequency is up, and it is more concentrated in the Greater Los Angeles area - calm down. We may not have a "crisis" and the sky may not be falling.

Up A Tree Without A Ladder

Business owners often complain about workers' compensation and this story from Oregon highlights exactly why.

A tree trimming and landscape maintenance business was started by Robert and Jannai Cornett in 1998 with a pickup truck, "a chainsaw and a rake, a little blood and a lot of sweat."

R&R Tree Service grew from there to a 30 employee company with trucks, equipment, and an office.

At some point in time the company switched from a private workers' compensation carrier to SAIF Corporation, Oregon's state fund.

The company had a program by which volunteers would come out and collect the wood from trees that R&R had cut down to give to the needy to use as firewood.

As in many things in life, trying to do good just results in trouble, and that's where the trouble started for R&R - SAIF didn't like this arrangement and smelled "underreporting" of payroll.

Up the proverbial tree...

It should be noted that the volunteer program had started long ago and R&R's prior carrier had no issues with it...

So SAIF started auditing the company's payroll with multiple audits of records from 2007 until 2011.

Robert Cornett had kept a daily log of employee hours based on verbal reports from each crew at the end of each work day. For each job, Robert would record the person or business being billed, the crew members assigned to the job, the number of hours worked per crew member and whether the work performed was "above ground" or with "boots on the ground."

He made this division because SAIF had assigned two risk classification codes to R&R for its non-office and sales staff. Workers doing tree and shrub pruning above ground level were assigned code 0106. Workers doing lawn maintenance performed from the ground level were assigned code 9102.

The above ground ("AG") and below ground ("BG") designations were then input into the payroll records on a weekly basis - but there was no other "verifiable" payroll records to support this input.

It should be noted that SAIF didn't have an issue with this system during four audits between 2002 and 2007. In fact, one auditor even said R&R had "an excellent system of tracking work and time."

But later SAIF assigned a particularly aggressive auditor to review the company's records for years 2007 and 2008, and he took issue with the payroll tracking methodology.

That auditor found R&R's records did not meet the requirements for verifiable records under OAR 836-042-0060.

Under OAR 836-042-0060(4), payroll records are "verifiable" if they establish the time worked and duties performed by each employee, and they are supported by original entries from other records, including but not limited to time cards, calendars, planners or daily logs prepared by the employee or the employee's direct supervisor or manager.

Based on the auditor's findings, SAIF assigned the entire payroll to the highest rated classification.

For the year audited, 2007-2008, this raised the company's premium by over $67,000.

The company objected, and of course this incited further auditing, ultimately resulting in a claim by SAIF of over $386,000 in additional premiums.

R&R went through all of the appellate procedures for contesting the additional assessments and lost all of them all the way to a state appellate court.

According to WorkCompCentral's news report on the story, R & R likely will close its doors and terminate all of its employees, putting another 30 people on the unemployment rolls.

And that's a shame.

Sure, those of us up in the ivory tower of workers' compensation insurance compliance will say, "that's the law," or "they should have hired an expert to help," or "where was their broker in all of this?"...

That's besides the point. Here we have a well intentioned, seemingly compliant business taking care of people, putting value into the economy for 15 years, and they're taken out by The System.

What's wrong with the picture is that what should be a cooperative relationship turned adversarial.

I'm sure SAIF has its own position on the matter, but all they said to WorkCompCentral was that they were "pleased with the ruling" and the Court of Appeals' determination that "SAIF followed the correct process and acted appropriately in determining the policyholder's premium."

SAIF's media relations department needs some lessons in how to conduct good public relations. Their response exacerbates the adversarial perception of business versus carrier and the industry doesn't need that.

Maybe SAIF was legally correct and that it's auditors and employees were doing their jobs.

But maybe at some point a senior executive could step in and see the PR mess this kind of case creates, figure out a compromise and then media relations could proclaim the carrier's great willingness to help small business comply.

Instead, like most large corporate bureaucracies, nobody really cares - and if a customer goes out of business, there will be plenty more in the pipeline to collect premium from.