Tuesday, December 23, 2014

Rudolph's Claim

Rudolph the red nosed reindeer
Filed a workers compensation claim
Cause he felt that his red nose
Was mostly from the work it came

All of the other reindeer
Laughed at him and called him names
They made fun of poor Rudolph
So held his head in shame

Then one foggy Christmas Eve
Santa called to say
Rudolph I deny your claim
I am not the one to blame

Rudolph took Santa to court
Showed the judge medical ev’dence
Santa’s insurance company
Then put Santa out of bid’ness


And that, children, is why there really is no Santa Claus...

Shame on Bowzer

Thursday, December 18, 2014

Taking A Breather

"Sometimes I sits and thinks and sometimes I just sits" is a classic quote from baseball great Satchel Paige.

I opened up a blog post at the beginning of this year with that quote, so I'm concluding the year the same way, because it's time for me to at least sits, and maybe I'll do some thinking too.

I just realized, 352 days into 2014, that I'm exhausted!

I've published a blog post every single business day in 2014 to date - 223 inclusive of this one.

I've taken a lot of heat for unpopular opinions, and I've received incredible support for some of my more sober observations.

The most read post garnered over 2,600 page views, when I wrote about Trusting Mistrust.

There's been lots to write about for sure, in life and workers' compensation.

While on his last weeks of life Dad was recognized one last time as volunteer of the year by the Oceanside Police Department and then died in February. During that same period of time the California copy shop fee schedule was being bandied about - and it's still not final.

There were initial judicial rulings on the constitutionality of SB 863's lien activation fee; there was Dubon 1 that created a gaping hole in the utilization review/independent medical review process, which was closed when the Workers' Compensation Appeals Board reversed itself with Dubon 2 after some changes to Board composition.
Bowzer The Wonder Dog

Speaking of IMR, 2014 saw a deluge in requests, overwhelming IMR contractor Maximus Services. There were delays, failures in records transmissions, finger pointing, and ultimately a declaration of success, albeit in a rather self-serving statistically light report.

The national scene saw a trend towards more physician regulation, particularly regarding prescriptions, opioids, physician dispensing, and changes to medical fee schedules.

The National Football League faced crisis with head trauma litigation, pushed through legislation to limit jurisdiction for work injury claims, and set up a trust fund outside the system to resolve traumatic brain injury claims.

The economic recovery was reflected in increased payrolls, particularly in high risk classes such as construction and trucking, and increased productivity in manufacturing in the US occurred (and continues) as a consequence of automation and computers but at the expense of lower level jobs.

Speaking of jobs, a lot of the unemployed fell off the government's statistics on unemployment, but mostly because they never found jobs so recovery from the recession has been tepid unlike prior recessions which saw much more robust recoveries.

Terrorism abroad, and domestically, seems to have increased with new groups finding new ways to try and tell first world civilized nations that the world is not a safe place; and ultimately a threat from the property-casualty insurance sector that there may be a contraction in capacity due to Congress' failure to extend terrorism backstop laws.

I put Mom in a fantastic memory care facility and tried to keep up a pace of twice-per-week visits. I did pretty well with that schedule I might add. Those visits taught me a lot about dementia, Alzheimer's, aging, care, and a bit of my own mortality and well being.

While the rest of the nation's workers' compensation claim frequency continued to decline, California's experience was the opposite, largely attributed by system scholars to increases in the Greater Los Angeles area.

And the economy, or lack thereof in reality, helped push up insurance rates across the nation even though claim frequency declined and claim severity stayed flat.

There were the usual reports of criminals, of fraud, of delay and bad decisions.

So WorkCompCentral decided to buck the negative news trend and recognize the good things that the industry does (and will continue to do so with Comp Laude 2015 scheduled for Saturday, December 5, 2015).

There were motorcycles, bicycles, November 6641 Mike, and Bowzer The Wonder Dog.

Rules, regulations, court decisions, reports, opinions, business ... there was no shortage of topics to opine about.

All of this to say I'm taking the next couple of weeks off to catch my breath, get a little rest (though knowing myself, "rest" is a relative term), reflect a bit, and perhaps to just "sits."

Here's wishing all of you a Happy Holiday Season - I'll be back after the first of 2015.

Wednesday, December 17, 2014

Can't Stay Away

WorkCompCentral correspondent, Michael Whitely, has been following and writing about New York-based Oriska Insurance Company for nearly a decade. 

His story this morning about the principal owner's travails with regulators and the judicial system, and his new attempt to reenter the workers' compensation insurance market, show how enticing the work comp market, particularly California's "troubled" system, still is.

James Kernan was banned from conducting insurance business when he was sentenced in January 2010 in connection with a scheme by which Oriska was used as the principal underwriting agency to collect millions of dollars of premiums through bogus workers' compensation policies issued to professional employer organizations in states where it wasn't licensed to conduct business.

Whiteley describes in detail the allegations, the convictions, the statements and the positions of the government, Kernan, his colleagues and accomplices, prosecutors and a lot of other people touched by this story.

In a classic public relations move, the convicted blames others for duping him into illegal acts.

"Some of these unfortunate claimants waited nearly a decade," Kernan said in a recent press release. "Even though Oriska Insurance was victimized by con-men, we worked with the Department of Insurance to ensure duped employers or taxpayers didn't suffer. We took unprecedented action to see this process through and also to protect the Oriska insurance name."

The California Department of Insurance doesn't see it that way.

"The California Department of Insurance does not believe that Oriska Insurance Co.'s press release accurately portrays the events in the matter," Nancy Kincaid, press secretary to California Insurance Commissioner Dave Jones, said in a statement to WorkCompCentral. "Oriska issued insurance policies in violation of the California Insurance Code."

Kernan is contesting a New York State Insurance Department order that he divest his controlling interest in Oriska and hopes to re-enter the insurance business, according to officials.

And he is still embroiled in California claims, though Kernan's California attorney says those matters will be fully resolved and paid in short order.
Bowzer smells malarky...

The scheme was hatched nearly a decade ago, and continued on in several states - where Oriska was not authorized to write work comp insurance - despite several warnings, penalties and fines from state insurance departments.

A 2008 federal grand jury indictment says that Kernan, California PEO executive Robert "Skip" Anderson Sr., and several others conspired to engage in mail fraud for selling work comp policies in Arizona, California, New York and Pennsylvania through Oriska, even though the insurer was not authorized to write business in those states.

As of 2007, Oriska was authorized to write business in the District of Columbia, North Carolina, Pennsylvania, Tennessee and West Virginia only.

In the press release, Kernan contends Oriska was not aware of what he calls an "insurance-related Ponzi scheme that targeted Oriska" and stranded more than 350 medical and wage-loss claims based on "counterfeit coverages."

Kernan said California regulators and Oriska discovered the scheme when PEOs told employers with claims to contact Oriska.

"Oriska was victim of this Ponzi scheme and nearly crippled this company, but we wanted to be part of the solution," Kernan said.

Kernan is fighting regulators in New York to regain authorization to write insurance and is seeking to reverse an order that he divest his interests in the insurance company.

Whitely's examination of documents calls into question whether the ordered divestiture in fact has ever occurred.

The outcome of all this is, I'm sure, far from decided. But the story is a reminder that workers' compensation insurance is, at its heart, part of the financial services industry and all too often the numbers are just too hard to resist.

But from what I've read, frankly, this is an open and shut case. There weren't just appearances of impropriety - there was outright malfeasance. We don't need this in work comp.

Tuesday, December 16, 2014

Stop Trying to Sell

I read a lot of books and articles about selling. The topic fascinates me. 

One of my favorite quotes, by Jeffrey Gitomer who has written countless books on selling and lectures around the country on the topic, is, "people hate to be sold, but they love to buy."

The meaning of that quote is that "being sold" is a turn off because it's a forced relationship. People like to think they are making up their own minds. They need to have a conversation with themselves to understand their own needs. They don't want decisions forced.

A good sales person understands that and doesn't force any sale, but simply asks a lot of questions to help a person make up their own decision.

The people I know who are good sales people never seem to be selling. They have a great way of pulling data out of you that feeds them the information they need to assist you in making a decision.

Sales happen every day, in every situation, to every person. Many times we just don't know that a sales experience is occurring because we are too busy sorting information and making decisions.

Even in workers' compensation, a lot of selling occurs, and not in the traditional sense. We might equate selling with an agent or broker pitching an insurance contract. We might think of selling in the industry as a vendor seeking to make a contract with a buyer of services or goods. Or it could be me telling you about WorkCompCentral....

Broken down to the basics, selling occurs when someone wants something that someone else has and there's an obstacle to acquisition. Buying occurs when that obstacle has been removed resulting in an acquisition.

Many things in workers' compensation fail to achieve expected results because we're too busy "selling" instead of asking questions, finding out what someone wants, and then showing them what will work for them.

As I mentioned yesterday the California Division of Industrial Relations released its first report on Independent Medical Review just before the start of the weekend, largely calling SB 863's most controversial provision a success.

But, perhaps because the state is anxious to "sell" the concept of IMR to a challenging audience there are some holes in the report.

For instance, information about the average number of days it is taking Maximus Federal Services to issue a decision isn't readily available from the report, and the number of final IMR decisions issued last year is either more than 3,700 or more than 37,000, depending on which chart one looks at.

WorkCompCentral Western Bureau Chief, Greg Jones, notes that 53,951, or 73.6% of the applications received last year, were "closed" as of Dec. 31, 2013, and 19,331 remained open, and that the closed cases include 11,748 applications, and 4,698 cases that were terminated before Maximus issued a final determination letter, but there is no disposition stated for the remaining 37,505 cases that the report says were closed.

Figure 5 in the report shows that Maximus issued 37,505 final determination letters on these cases. According to the executive summary, "a total of 3,723 IMR final determination letters were issued by Dec. 31, 2013, each containing an average of two disputed medical treatments." The 3,373 figure appears again in a table reporting the number of applications received and closed each month.

However, Figure 4 reports 3,729 final determination letters were issued in 2013, and this number is repeated again later on in the report.

There are also many questions about the timeliness of IMR review decisions issued by Maximus.
Just a (wind)surfer dude ... not selling.
According to the report, Maximus, on average was unable to comply with regulatory requirements to issue decisions on standard cases within 60 days since September 2013. The longest average delay was in November 2013, when it was taking about 90 days for Maximus to issue a decision.

While the report deals mostly with 2013 data, the timeliness graph indicates that the average number of days to issue a standard decision fell to about 70 in December and remained about the same through February 2014. In March the delay increased to about 80 days and by June 2014 it was taking Maximus about 130 days to issue a decision, more than double the amount of time allowed by regulation in standard cases.

There is no indication in the report about any penalties assessed against Maximus. The DWC contract with Maximus contains provisions requiring the firm to issue 95% of decisions within the specified timeframes.

DWC had told WorkCompCentral previously that it had not assessed fines because it was slow in reviewing IMR applications that were forwarded to it for review, and that contributed to the delays.

When asked for this morning's story by Jones about fines the division deferred.

These are important questions because they test the credibility of the report, which in turn challenges the credibility of IMR.

If the state wants The People to buy into IMR it has to deal with these challenges up front, which means acknowledging the issues, and giving voice to both supporters and critics.

As one commentator to the WorkCompCentral story this morning about the report says, "We have created a miserable system that is only good for rationing care. Doctors, who should be in control are helpless. Yes, there are abusers. Just don't let them in your MON and trust the doctors you have."

An article I read yesterday was about the best sales advice ever received, and that advice came from a "surfer dude." The author was looking at backpacks and she became engaged in a conversation about hiking with the surfer dude. They talked about Yosemite, about bouldering, about the love of the outdoors.

She ended up paying $250 for a new backpack after a previous sales experience at a bigger store turned her off because it was a direct sale rather than the conversation "surfer dude" evinced.

"As I was checking out I said to the surfer dude 'you’re good at this.' 'Good at what?' he asked. 'Selling!' I said. 'I have been selling for years and you are really good.' He looked confused, 'I don’t sell' he said, 'I just took my fathers advice and find out what people want. What they love about hiking or the outdoors, what their interests are, then I show’em things that work for what they want.'

I get the same feeling about this report. The state is trying too hard to sell IMR, to justify the system and the law, rather than finding out what the "interests are" and then showing what works for "what they want."

IMR is a huge culture shock. People don't want to be sold on it. But they likely do want to buy into it, if the conversation leads down that path. It's up to the state to guide that conversation, not force it.

Monday, December 15, 2014

A Cultural Challenge

Independent Medical Review is probably the most contentious change introduced to the California workers' compensation system in history because it upends, in dramatic fashion, The Culture.

Over the course of a hundred years physicians had sought, and were granted, great latitude to order up pretty much any "treatment" desired for an injured worker, and frankly there were many that abused this privilege.

Doctor's orders were sacrosanct - for instance, I recall when practicing law many cases where the physician ordered up a new, specific mattress, regardless of the cost and regardless of less costly alternatives, and the carrier/employer would be obligated to pay for it.

Any objection to such orders were stymied at the workers' compensation judge level because, the reasoning went, if the doctor ordered it then it must be necessary. After all, I wasn't a doctor, the claims adjuster wasn't a doctor, the judge wasn't a doctor. It didn't matter that the physician didn't have any evidence of treatment efficacy - he or she is a doctor!

There was a period of time when chiropractors ran amok, and it wasn't unusual to see "treatment" consisting of chiropractic adjustments and massage every week for years regardless of what published treatment guidelines said.

Again, objections to such over treatment abuse was stifled at the hearing level because doctor's orders trumped everything. A hard cap on chiropractic visits put the issue to rest eventually and survived judicial scrutiny and constitutional challenge.

There are many, many such examples where the medical profession's elevated status cleared the path for the provision of "treatment" that would not be tolerated in any other medical setting.

Guidelines didn't change that culture, push back from carriers/employers didn't change that behavior, Utilization Review didn't make much of a difference. The Culture remained - if a doctor ordered something called "treatment" then the carrier/employer was obliged to provide it.

It's very difficult to effect change to The Culture.
This is my preferred Culture.
Culture means a practice is deeply embedded and accepted by a large population.

If you're absolutely truthful with yourself, you'll agree that The Culture of medical treatment in workers' compensation had taken on preposterous qualities.

That's why we have IMR now - frankly because the people that could not behave themselves took it too far, for one reason or the other.

It's a huge, radical shift and resulted in a revolution. New rules, new mandates, new systems - old expectations, old operations, old sentiment: a confluence of mixed emotions seeking to either vilify or justify this new process.

And this is not to say that there are injured workers who are not getting medical treatment that they otherwise should be getting - because there are many case examples where reasonable doctor's orders aren't being granted now - a very public example is when Comp Laude Award winner Dwight Johnson, a double amputee, was denied handicapped modifications to his restroom so he didn't have to travel to the municipal gymnasium just to take a shower.

Those were doctor's orders that were initially denied in UR, but ultimately provided after a change in adjuster, a lawyer, and more well written orders from the doctor.

Late Friday afternoon the California Department of Industrial Relations released the first report on the IMR system, and declared it a success. Whether one agrees with that conclusion is dependent on your personal position relative to SB 863, of course.

And I'm not going to pass judgment at this time on whether IMR is a success or not, but there are some very interesting observations made in the report.

For instance, it seems that an unrepresented injured worker is more likely to succeed in an IMR review than one with attorney representation, albeit by a small margin.

And where additional consultation or diagnostic testing is involved, IMR overturns the UR denial over a third of the time.

Nearly half of all IMR requests involves pharmaceuticals, and most of those involve opioids. I would expect those numbers to ameliorate over time, bowing to the next medical trend that hits work comp.

Indicating to me an acceptance of restrictions in medical practice via treatment guidelines, the report says that UR was overturned more often by IMR in cases where date of injury was 2013. UR in earlier cases was more often upheld.

You certainly can draw your own conclusions from DIR's report, but I think DWC is correct in its analysis regarding the high rate of IMR upholding UR:

"Our analysis highlights two reasons for the comparatively high uphold rate in the DWC IMR program. First, disputed treatment requests that were not consistent with evidence-based guidelines were highly likely to be overturned. Additionally, medical records for IMR FDLs that upheld UR decisions frequently did not contain adequate documentation to justify medical necessity."

To state it more succinctly: doctors don't practice evidence based medicine and records aren't getting to reviewers.

Both are real problems. Docs that aren't following guidelines, or offering alternative evidence aren't doing their jobs. And we've all heard many anecdotes of records not making it to reviewers either intentionally or through gross negligence.

The real legal question of course is whether injured workers are getting the medical care that is guaranteed them via the state Constitution: "full provision for such medical, surgical, hospital and other remedial treatment as is requisite to cure and relieve from the effects of such injury."

The word "requisite" means necessary. This is tied to "cure and relieve." For many years this concept expanded, as noted above, to include many items that may not actually be medical, or even "other remedial" treatment, but the stated public policy of the state's workers' compensation laws were that they be liberally construed in favor of the injured worker. So if a doctor said it was necessary then it was...

Now, the First District Court of Appeals for California has agreed to hear a constitutional challenge to the IMR process.

A date and time for the oral argument in Stevens v. WCAB, No. A143043, has not yet been set. Briefing in the matter is set to wrap up next Monday.

All of the usual players have weighed in with predictable arguments: California Applicants' Attorneys Association, Division of Workers' Compensation, California Workers' Compensation Institute, Property and Casualty Insurers Association of America, California Chamber of Commerce, and of course defendant State Compensation Insurance Fund.

This is the second time the case has gone to the appellate court. The first time it was kicked back for failure to exhaust administrative remedies. Those remedies have now run the course.

Appellant's argument is that the IMR procedure codified in Labor Code Section 4610.6 violates the state constitution because of the anonymity of the decision-maker and the limited ability of an aggrieved party to appeal the decision reached.

Injured worker Stevens tripped over an area rug and fell while carrying boxes of magazines while at work in 1997. She suffered a broken foot, but her recovery did not go smoothly.

Through the years, Stevens has undergone numerous surgeries and is now confined to a wheelchair. The combination of her chronic pain and lack of mobility has left her struggling with depression and unable to work.

In 2013, a workers' compensation judge declared her to be permanently and totally disabled. Following this decision, her doctor recommended she receive medication management and home health care assistance.

SCIF submitted the doctor's recommendations to utilization review and then denied authorization for the requested services.

Maximus Federal Services, the contractor providing IMR services to the workers’ compensation system, affirmed that decision in February.

DWC, in its report, says it will continue to maintain IMR program transparency, though their definition of transparency isn't the same as everyone's. But, I do believe that the division is being as transparent as the law permits it to be.

The 1st DCA may have a different idea on transparency.

Regardless, this much is true: liberal interpretation is no longer. Now there must be evidence, and it is reviewed in a stratified manner, with some evidence better than other evidence. That requires doctors, not used to following the rules, to change their practices.

That also requires claims payers to follow the rules and change their practices too - they are responsible for ensuring ALL records (some may not be "relevant") get reviewed.

The Culture change affects everyone, and everyone has to adjust.

Friday, December 12, 2014

Mom Guilt

The guilt yesterday was overwhelming.

I haven't visited Mom in over a week. Business, meetings, the Comp Laude Gala - all conspired to interfere with visitation.

I was going to head down to visit on Wednesday, but access to N6641M was blocked due to taxiway re-pavement (I knew that it was going to occur, in stages, but the Airport District didn't like the weather so they made it a bigger initial project than originally planned).

A big meeting was scheduled yesterday so I didn't plan on traveling. But then it cancelled in the morning because one of the key participants was sick - and I could have flown down to see Mom but I didn't like that big, nasty pineapple express of a storm in the forecast (there's a maxim with pilots: better to be on the ground wishing you were up in the sky, than up in the sky wishing you were on the ground).

And of course the weather today, while I have nothing on calendar interfering with travels, is that big, nasty pineapple express of a storm.

I'm on the ground...

Poor Mom - she gets so excited when I visit. She probably doesn't remember when I was last there, nor does she ever, so she's never disappointed when I don't visit.

But she surely does love it when I DO visit and it's that smile and warmth that she projects that gives me the knowledge that it is very important to her well being, both physical and mental.

That's the part I feel guilt about - bringing joy to Mom, one day, one visit at a time.

I think this is not unlike someone who's had a work injury and ends up sequestered on disability pending some resolution of either a medical treatment plan/decision or a return to work offer.

I think of how lonely that must be for most people - work is, after all, one of the most important identities we have. Many, many psychological studies affirm that we are what our work is.

To be taken off work, to miss the stimulation of our colleagues, to be without productivity, means a huge part of WHO we are is taken away, or at least muffled.

I go back to Dwight Johnson's motivational speech at the WorkCompCentral Comp Laude Gala - a big part of his being was his work. It was obvious to me and the 300 other attendees wiping tears from their eyes that traveling the world inspecting skyscrapers under construction was a very important part of his identity.

It was so important that he returned to that same line of work after only a few months of his first lower extremity amputation.

So important, that after his second amputation he felt so much less of a man, so much less of a provider to his wife and seven children, that death seemed a better answer than facing life without him SELF.

I wonder sometimes if we ever really get "that."

There are so many studies that urge early return to work, so many that espouse the virtues of a productive life and the physical and mental health rewards of work. It's our identity, our well being, that gets affected when we are removed from our occupations.

Just look at how many people failed to get back into the employment ranks after prolonged unemployment in this last recession, how many of those people just feel crushed.

Many articles have been written about return to work. I have written many myself. Now there is interpretation of the Americans with Disabilities Act that return to work is more imperative than ever, with potential employer liabilities for failure to accommodate even if the employee is not 100% capable of performing all of his or her prior job functions.

Those who work in claims must have a huge heart - how they maintain such compassion day in and day out is beyond the scope of my understanding. Heck, I can't be away from Mom for more than a week without feeling a tremendous guilt. I can't imagine the empathetic claims adjuster feeling entirely hopeless when circumstances inhibit humanitarian instinct.
Nicolas Santilli
The Comp Laude Awards recognized one claims adjuster who rose above the rest with his compassion, understanding, and huge heart - Nicolas Santilli of Sedgwick's Pasadena, CA office won the award on this nomination:

The claimant wrote Nick not one, but three, thank you notes. The most moving was a letter that the claimant wrote leading up to her 50th birthday and how she had decided to thank people in her life who had made a difference. Nick was the only person on her list that she had never met in person or didn’t know as a personal friend. She only knew Nick as the person who handled her claim. 

She wrote:

“Nick, you have the distinction of being the only person, of all the people I am writing letters to, that I have never met! But what you have done for me the past six months of my life has been such a great blessing. 

"I am so very grateful to you for all you have done for me, so I absolutely had to include you in this letter writing project of mine. 

"I was very, very, lucky to have you as the person handling my case. That first day you called me was my luckiest day ever! The genuine compassion you showed after I had such a terrible experience the first three weeks of my injury was such a gift to me and to my recovery; I am certain it is greatly due to your willingness to help me, that I was able to make such a great recovery and walk normally again, something I doubted, at one point I would ever be able to do. 

"I will be forever grateful to you because you gave me the gift of my health, the gift of doing everything possible to restore my health. You went above and beyond what you had to do.

"You could have easily said 'no' to the additional therapy and simply followed the rule book, but you chose to really help me. That is a gift I will appreciate the rest of my life. No, I sincerely and honestly know the meaning of the saying 'to count your blessings.' Well, please know that for the past six months I have counted you as a blessing and will continue to do so the rest of my life. I will never take your act of kindness for granted.”
Dwight Johnson
Mr. Johnson, in his speech, reiterated the same thoughts - the team of well caring, compassionate people that showed care for him and went that extra mile after such devastating losses is what made him come back to LIFE.

When I read about someone like Mr. Santilli, or hear a story like Mr. Johnson's, I know that good things can be, and are, done in the workers' compensation industry. We don't do everything right. Sometimes we make egregious errors (indeed, I took to task Sedgwick some time ago on a case that was badly botched) but the truth is that, for the most part, we're in this industry because we LIKE to do GOOD for PEOPLE.

I wrote some time ago about maintaining the Mom Standard when looking at a claim: if that were Mom, how would I want her treated?

If you don't feel guilty about not visiting Mom, then you might be in the wrong industry...

Thursday, December 11, 2014

The ADA and Work Recovery Liability

Jennifer Christian, MD, President, Webility Corporation and Chair, Work Fitness & Disability Section, American College of Occupational & Environmental Medicine, and Aaron Konopasky, JD, PhD, Senior Attorney Advisor ADA/GINA Policy Division for the Equal Employment Opportunity Commission, recently released an announcement about the broad reach of amendments to the Americans with Disabilities Act.

The bottom line - if an employer is waiting for injured workers to reach Maximum Medical Improvement before attempting an accommodation, then the employer is exposed to ADA penalties and liabilities; i.e., if an injury or illness is so bad that a person misses time from work then the veil of the ADA rises and it could be considered a disability under the ADA.

“Once you get into a place where you're talking about medical conditions that are so bad they actually prevent you from going to work in the first place, to me that says … we've already jumped the hurdle of (defining disability),” Konopasky said.

This doesn't apply to minor injuries or illnesses; a laceration that will heal in 7 days or a head cold.

“The person's not covered by the ADA if they have a laceration that's going to heal in seven days because that's essentially a trivial interruption in the person's ability to work,” Christian said. “But if on day one the person has a chronic condition they haven't revealed about themselves, that person probably is covered on day one.”
Dwight obviously would qualify.

And if there is some reasonable accommodation the employer can make to help that person get back to work, the ADA requires the employer to do it.

Flexible leave policies count as reasonable accommodations for employees with disabilities, Konopasky said. However, according to Christian, employers also need to understand that the ADA is a protection of the right to work – therefore, businesses still need to try to find a way to bring a person back to his job if possible.

There are two common myths:

1. FALSE: In workers’ compensation, the time to think about the ADA is at MMI; MMI is late among several points in the post-injury timeline when the ADA needs to be considered.

2. FALSE: The ADA's requirement for an interactive process doesn't apply in decision-making about transitional work assignments; In fact injured workers do need to be active participants in the workers’ comp stay-at-work and return-to-work process.

The ADA is about civil rights for people with disabilities, not financial benefits of one kind or another, say Christian and Konopasky. The fundamental purpose of the ADA's employment provisions is to help people with disabilities get and keep jobs, as long as they are qualified to do the work and can meet productivity standards. The cause of the disability is irrelevant. It does not matter what other types of policies or programs are also involved -- whether workers' compensation, FMLA, sick pay, or disability insurance programs.

A disability can be newly acquired, transitory, fluctuating, progressive, or longstanding and stable. It can be the result of injuries, illnesses, congenital conditions, or the natural aging process. The only relevant question is whether the disability is now or is perceived as potentially having a significant impact on someone’s ability to perform their job, take home their regular paycheck, and stay employed.

Christian and Konopasky highlight 5 practical implications for management of ALL types of health-related employment situations:

1. As the Federal agency that enforces the employment provisions of the ADA, EEOC's biggest concern in situations involving disability leaves of any type will be that someone with a disability is being forced to take leave even though he or she could do the essential functions of the job with a reasonable accommodation. Everyone involved in the decision to keep someone out of work -- doctors, third-party benefit administrators, managed care companies, workplace supervisors and employee program managers -- should keep that fact firmly in mind, so that people with disabilities are not needlessly forced out of the workplace.

2. Only the employer is accountable for complying with the employment provisions of the ADA. However, treating physicians and the employer's vendors (benefits claims administrators, managed care companies) who fail to communicate with the employer during the stay-at-work and return-to-work process may be exposing the employer to increased risk/liability. When a vendor or a doctor (especially one who has been selected by the employer) fails to notify the employer that an employee described difficulty working or an adjustment that might allow them to work, the employer could be held liable for failing to provide that accommodation -- even though the information was never properly passed along. Doctors and vendors also can help educate employees and small or unsophisticated employers to ensure that the law is followed.

3. Some employees may express the desire to remain on leave, rather than return to work with a reasonable accommodation. Of course, employees with disabilities must be allowed to use accumulated sick or annual leave, just like any other employee. And they may have a legal right to insist on leave if, for example, they qualify for FMLA. But if an individual with a disability has no discretionary leave, and a reasonable accommodation would allow performance of job functions in a manner that is safe and consistent with his or her medical needs, then the employee may be required to return to work with the accommodation.

4. Paying people money to sit home who are well enough to do something productive does not count as a reasonable accommodation under the ADA, especially when they were not part of the decision-making process that has put them out of work. The employee must be actively involved in arranging any temporary or long-lasting adjustments to their usual jobs in order for the employer to meet the interactive process obligation. With respect to specific cash payments made under workers' compensation--

A. Temporary Total Disability (TTD) Benefits - There is little difference between cash payments under workers' comp TTD and disability benefit programs for personal health conditions except how the amounts are calculated. Employees are usually receiving them for one of four reasons:

1. The doctor wrote "no work" because their patient's medical condition is so severe or unstable that it is unsafe for them to do anything except try to get better; 

2. The doctor wrote "no work" because of a perception that the employer cannot or will not provide safe and suitably modified work on a temporary or long-term basis; 

3. The doctor released their patient to work with restrictions, but state or federal law, or a union contract means that the employee cannot work until fully able to do the essential functions of their job, so the employee is put out of work temporarily. 

4. The doctor released their patient to work with restrictions, but the employer said they cannot meet those restrictions (cannot find appropriate work to assign them within their current work capacity) so the employee is put out of work. 

In all but # 1 above, the ADA may apply. However, the employee is often not consulted as these decisions are being made. As stated above, giving the employee money is not a reasonable accommodation, and the ADA requires that the employer interact with the employee in looking for a solution that will enable the employee to stay at work.

B. Other types of cash benefits: Temporary Partial Benefits, Permanent Partial Benefits and Permanent Total Benefits - These cash awards help compensate employees for economic loss as a result of their injuries. However, as stated above, giving people money is not a reasonable accommodation, and does not accomplish the public purpose of the ADA.

5. Employers sometimes limit the length of transitional work assignments (TWA) in order to avoid them turning into required permanent accommodations or becoming subject to union job bid rules. To avoid ADA liability, a "usual" 90 day limitation policy that provides for an individualized assessment of the individual's situation and possible extension is more appropriate. If there is a specific reason why extending a particular employee's TWA or granting extra (paid or unpaid) time off to heal more completely will allow them to keep their job, that might be a reasonable accommodation. Some temporary adjustments are reasonable accommodations (including, for example, temporary use of adaptive equipment or temporary relocation of a workstation to the ground floor) and may need to be extended unless doing so would involve significant difficulty or expense. However, TWAs may have other aspects that can be discontinued without fear of ADA liability, including temporary reductions in productivity requirements and elimination of essential job functions. These measures go beyond what the ADA requires.

Determining whether a person has a disability can be a time-consuming process by itself, Konopasky said. Because of that, he suggested it might be easier for employers to treat every employee missing work due to an injury as though the ADA applies to them.

“Practically speaking, you may not want to go through that because it's such a weighty exercise and so many things are disabilities now; why not just assume that it's a disability?” he said.

Wednesday, December 10, 2014

Ethics and IMR Transparency

California followed Texas' footsteps with SB 863's independent medical review process. Texas has had this for years, albeit with some significant differences.

One commonality though that was adopted from the Texas IMR process is reviewer anonymity.

In Texas there are multiple review organizations - I believe upwards of 40 or more. California has a single review organization, Maximus, which provides review services for multiple governmental health and disability systems.

Regardless, both states keep the actual reviewing physician anonymous, and in both states there are complaints about anonymity and attempts to lift the veil of secrecy.

Texas State Representative Bill Zedler (R-Arlington) has tried in the past to get legislation through the state House removing reviewer anonymity, and is trying again.
Tx. Rep. Bill Zedler

House Bill 180 would stipulate that once an independent review is complete, a party to the medical dispute that prompted the review “is entitled to the name and professional qualifications of any doctor or other health care practitioner used to perform the independent review” after making a written request to the IRO.

The bill would also require disclosure of the name and professional qualifications of a utilization-review doctor to a patient or the patient’s representative.

"Right now, if you go before a disciplinary committee in the hospital, you know who your peers are that are judging you," Zedler said. "You ought to know who's judging you in these cases, to make sure that it's transparent. Otherwise, we have no idea, when you have certain individuals who can remain anonymous, whether they're making judgments that are consistent."

The arguments in favor of transparency, or conversely, in favor of continuing anonymity, are the same in Texas as they are in California.

Those wishing to maintain the status quo argue that an independent reviewer can't remain independent if people find out who they are and put subsequent pressure on them in various ways: referral deferral, cocktail party conversation, legal threats, etc. This would result in a dearth of reviewers ultimately, the argument goes.

The argument in favor of transparency is that, ultimately, we're in the United States where legal processes should not be secretive, where parties have the right to confront those who make decisions affecting their lives, and that if there is a demonstration of bias or lack of qualification then those should be exposed to protect the public.

I get both arguments, and there is no easy answer.

But ultimately I have to side with transparency at some stage of the IMR process.

In both Texas and California, IMR is the end of the medical dispute resolution process. In both states an IMR might be challenged on issues of bias, discrimination, impropriety, etc. In both states those challenges are impossible unless the identity of the reviewer, in some fashion, is made public at some point in the process.

I don't think it's as simple as simply releasing the identity of the reviewer. There would need to be put into place certain protections that help maintain the integrity of the IMR process, assuming the public wants to continue with IMR, otherwise the system becomes a shambles and the goal of rapid medical dispute resolution gets trashed by lengthy legal interference.

But transparency is necessary to maintain integrity and faith in the process. It should be government's job to regulate IMR, but it is the public's right to know who's making decisions on their behalf and to call attention to the government to investigate and/or discipline those who fail ethical standards.

And then the government needs to take positive corrective action if its investigation uncovers impropriety.

There's a compromise that can work if given the chance.

Tuesday, December 9, 2014

Frequency and Posting

A funny thing happened in my travels yesterday.

It was reported that California claim frequency in the last measurement largely ameliorated and started reversing trend, albeit still growing compared to the rest of the nation.

The Workers' Compensation Insurance Rating Bureau's Actuarial Committee, the folks that crunch carrier supplied data to figure out things like recommended rates and for prognostications, said that claim frequency in the first nine months of 2014 grew at an annual rate of 0.9%, compared with an increase of 3.9% last year.

The greater Los Angeles area continues to fuel frequency, which is insurance geek terminology for the amount of claims.

“If you (take Los Angeles) out of the picture, California actually looks pretty close to the national numbers,” WCIRB Actuary and Vice President Tony Milano said in a presentation last Wednesday.

Milano said the committee didn’t identify any one industrial sector in the Los Angeles area pushing claim frequency, but that the trend appears to be coming from all sides.

The WCIRB said part of the increase is the recovery of the construction industry - a high hazard occupational group - as house building and the economy improved.

Also going up are the agriculture, mining, entertainment, hospitality and manufacturing sectors.

No other state has such a diverse economy and accounts for as many risks.

That entertainment and hospitality claims are increasing may be a signal, again, of a positive economy, though of course this doesn't exactly explain why the Los Angeles area bucks national trends.

According to reports, there is a corresponding increase in cumulative trauma injury claims, and carriers are denying those more aggressively.

Which also might explain the increase in attorney involvement in California claims - as I wrote yesterday, the usual reason a claimant seeks legal help is because someone on the other end of the claim said, "no."

The WCIRB reported that employers and insurers denied the compensability of injuries to all claimed body parts in 66% of cumulative cases last year, compared with 57% in 2012, 41% of which were from terminated workers, compared with 38% in 2012.

In fact, the Workers Compensation Research Institute found in 2012 that about a third of all California applicants hire legal representation.

The WCIRB Actuarial Committee showed that 81% of cumulative injury applicants used lawyers in their cases.

And the how and when data is gathered, crunched and then reported as statistics distorts the picture a little bit. As Dave Bellusci, Chief Actuarial for the WCIRB, said, "These are often added late, they’re typically litigated, they’re just a different animal and they’re a big issue in California."

The pessimist will note that claims frequency still grew while the rest of the nation continued trending downward. The optimist will note that while there was frequency growth, it was very small compared to the past couple of years (see chart).

In the final analysis, though, my travels (see beginning) had nothing to do with the WCIRB report or my consumption of the news. It was just an easy way to open this post.

Which is another way to say that the news isn't terribly disconcerting because, other than the Los Angeles area, California trends just like the rest of the nation.

Why Los Angeles is so special is likely fodder for another study, another report and another post.

Monday, December 8, 2014

The Word: Uncertainty


That was the "Word on the Industry" that WorkCompCentral editors decided what best describes California workers' compensation at present.

It was the theme of my opening presentation at the WorkCompCentral Comp Laude Awards and Gala Saturday at the Sheraton LAX Gateway hotel where I summarized this comprehensive "story behind the story."

About 350 people from the industry, or affected by the industry, attended to hear not only the Word, but to hear panelists Christine Baker, Mitch Seaman, Sean McNally, Robert Rassp, and Bill Zachry discuss and debate SB 863, its status and whether it was meeting expectations (James Butler unfortunately was unable to participate because of an untimely injury).

A 2012 Workers’ Compensation Research Institute study found that nearly 30% of injured workers in California hired an attorney. That's more than any other state except for Tennessee and Maryland, and those systems aren't even close in size or expense.

The California Workers' Compensation Institute found that permanent disability claims filed between 2005 and 2010 were more than twice as expensive when lawyers were involved. Average cash and medical payments for permanent disability claims increased to $61,092 with an attorney involved, compared to $24,874 without a lawyer.

Attorney participation in claims has been growing.

In 2003 the CWCI found that attorneys were involved in 76.2% of all permanent disability and 29.9% of all indemnity cases. In 2014 CWCI found attorneys were involved in 80.4% of PD cases and 38.3% of indemnity claims.
Attorney involvement greatly increases costs.
And it's not just about attorneys - when cases involve attorneys medical bills inflate, as does duration of disability thus inflating temporary disability indemnity numbers and time off work costs.

Though it's easy to blame attorneys for all that ills California's system (where gross fees for counsel on both sides of the fence totaled nearly $1.2 billion in 2013) this fact is simply a symptom and not a cause.

Most of the panel members defended SB 863, saying it needs time to work out, and that it was designed to remove uncertainty.

But Rassp said that SB 863's complexity is frustrating and confusing to injured workers, and drives them straight to attorneys.

With this latest reform effort, Rassp said, "what we're seeing is a sea-change in our law practices," and a lot of workers walking into our offices, "frustrated as hell."

He opined that workers hire an attorney for the simple reason that "someone said no."

Motivational speaker at the Gala, Dwight Johnson, after everyone wiped the tears from their eyes hearing his strong story about two separate industrial accidents end in two separate amputations of both legs, summarized it best in first person experience: the whirlwind of laws, regulations, people, and decisions on top of the fear of an insecure, precarious future, drives the California injured worker to seek counsel.

And it was a "no" that drove Johnson to an attorney - utilization review denied Johnson's request to outfit his bathroom with disability hardware so he could take a shower forcing him to travel to a community pool to utilize facilities there just to clean up every day.

"To be as diplomatic about it as I can," Rassp said, "the more laws and regulations that exist on a given subject, the less common sense applies."

Uncertainty - the law is unsettled, people don't know where to turn, nonsensical decisions are made, inappropriate communications occur...

Maybe 863 needs time. Maybe folks need to step back a bit and understand what it is they're being asked to do. Maybe people need to pay attention to what is actually happening.

In the end though, as Johnson concluded, "be gentle, be kind."

That mindset could go a long way towards softening uncertainty.

Friday, December 5, 2014

They Didn't Riot

With all of the racial tension in this country tied to police activity and grand juries waiving indictment of officers blamed for excessive force against blacks, the Commonwealth Court of Pennsylvania overturned a Workers' Compensation Judge's finding of mental injury from a combination of racial and sexist harassment.

In Frog, Switch & Manufacturing Co. v. WCAB (Johnson), No. 149 C.D. 2014, Lindora Johnson was one of only two women and the only African-American female in a workforce of approximately 200 employees at the Frog Switch manganese steel castings manufacturing plant in Carlisle, Pennsylvania.

She claimed that she suffered repeated incidents of harassment at work during a five-month period in 2009, where her male colleagues made disparaging remarks about her gender, used a racial epithet in front of her and hung a noose inside an office where it was visible from the women’s locker room.

Johnson stopped going to work in September 2009 after she burst out crying in a meeting with management and a coworker who had complained she didn't operate her overhead crane safely.

A workers' compensation judge found Johnson had developed atypical depression as a result of her exposure to abnormal working conditions at her job. The judge awarded her TTD from Sept. 30, 2009, until April 19, 2010, when Johnson returned to work.

The WCJ's award was based on three separate medical evaluations who found that Johnson had, "job-related stress," that was suffering an emotional stress reaction, and that she had depression based on “her stressful and overwhelming work conditions.”

The WCJ did not find credible Johnson's coworkers testimony that the noose was a joke directed at a coworker who had said he was "going to hang himself" because of things that kept going wrong. The judge also gave weight to Johnson's testimony that her colleagues had used "the N-word" in her presence, had said females shouldn't be working at the foundry and warned each other not to work below her crane.

"It should be abundantly clear that any reasonable person, let alone a reasonable African-American female in an all-male and virtually all-white environment, would perceive references to the ‘(N-word),’ a noose, and comments about refusal to work under her crane, or that women don’t belong, as degrading and hostile," the judge opined.

A split Commonwealth Court found Johnson's medical evidence didn't establish an industrial cause for her distress.

The the record must contain unequivocal medical testimony to establish the causal connection between a psyche injury and employment for the injury to be compensable, the majority, in an opinion by Judge Anne Covey, said.

"Due to the highly subjective nature of mental injuries," she said, "an injury’s occurrence and cause must be specifically delineated" by the medical experts.
From http://www.blackactivistzine.org/

A claimant further bears the burden of proving that the psyche injury was "more than a subjective reaction to normal working conditions," Covey added. However, she said there was no reason to decide whether Johnson's injury was the result of an abnormal working condition since Johnson couldn't even prove her condition was work-related.

Two justices dissented, stating that the record was "replete with testimony from both sides that these reprehensible incidents did occur and that claimant became upset to the point where she lost control at work and left to see a doctor."

From the time Johnson first sought medical treatment for stress, she indicated that it was due to continual harassment at work based on her gender and race, Justice Bernard McGinley noted. Even though Johnson's care providers didn't specifically mention the "noose incident" and "the N-word" in their reports, McGinley argued that "the only reasonable inference to draw" was that these events were what the doctors were talking about.

The argument among experts interviewed for the WorkCompCentral story on the case opine that either the Commonwealth Court was engaging in inappropriate fact finding, or conversely, that they correctly noted there was no nexus linking the work incidents and Johnson's doctors conclusions in the various reports.

Maybe they're both right. Fact finding, which is the sole province of the trial judge, includes making ultimate findings of fact; i.e. factual conclusions. In this case, that there was a connection between work place harassment and the claimant's mental injury.

Likewise, though, there must be substantial evidence to support an award, and part of that is an expert's opinion on causation; while a physician may conclude that there was a mental injury related to the occupation the doctor should be connecting the dots with specific factual references in the report.

Unfortunately we don't know what happened after Johnson returned to work.

And so far there are no reports of rioting in Pennsylvania.

Thursday, December 4, 2014

The Long Tail

It's been nearly 22 years since "open rating" was brought to California, supplanting Department of Insurance mandated minimum rates.

SB 30 dramatically changed the landscape in California. Oodles of small, specialty carriers writing very niche industries disappeared almost overnight.

Bigger carriers with national footprints used their financial clout to compete on price, creating a relatively short term boon for employers as premiums plummeted.

Underlying a big part of this pricing bonanza for employers was the reinsurance scheme brokered by Unicover Partners, which I and the national business press have written extensively about.

While employers enjoyed unprecedented savings, the trouble brewing within the carrier markets was starting to cause indigestion. Ultimately, around 1997 or so, the carriers that relied on the Unicover brokered reinsurance started coming up short on cash because the reinsurance companies weren't paying claims.

It seems that as these reinsurance treaties were sold up the chain until ultimately someone figured out what the liability was going to be. Those companies returned premium and denied the risk.

One of the biggest primary carrier participants in the scandal was work comp stalwart, Reliance Insurance Company, which had been in business for a 184 years. Unicover ultimately took down that great company.

It's said that workers' compensation is a long tail beast, but this is generally in reference to claims.

But the aftermath of Unicover on the industry shows that the long tail follows the business side of comp too.

Reliance didn't just write workers' compensation insurance, so its demise meant the disintegration and restructuring of several lines of insurance.

To say that work comp disrupted an entire property & casualty business is an understatement - in the case of Reliance, it was devastating.

The Pennsylvania Insurance Commissioner, tasked with the liquidation of Reliance (since Reliance was domiciled in that state) is still working towards settling the estate.

Reliance owed $10 billion in claims and was insolvent by $1.1 billion when it went under.

At the time there were about 144,000 claims pending with various reinsurers, most of which undertook those obligations under the Unicover treaties.

Part of the effort the commissioner's office has undertaken is to get settlement agreements with the reinsurers involving commutation of future claims to liquidate those debts and finalize the estate of Reliance, and to bring in cash needed for administrative expenses as the firm is wound down.

Last month, Insurance Commissioner Michael F. Consedine reached two settlements with Swiss Re, which had provided reinsurance for several Reliance coverage obligations, to commute its reinsurance obligations.

The first settlement covers a group of workers' compensation policies that Reliance had issued between 1996 and 2000 for a payment of $6,590,080. The second settlement commutes Swiss Re's reinsurance obligations for a group of Reliance workers' compensation, general liability and auto policies issued between 1988 through 2000 in exchange for payment of $7 million.

These deals are pending court approval.

The court overseeing the Reliance liquidation has approved multiple commutation agreements submitted by Consedine and his predecessors over the years. It has been taking the court an average of about 30 days to rule on each application for approval.

Two years ago, Swiss Re agreed to settle its reinsurance obligations for policies Reliance had issued to Administaff, Catholic Health East, Labor Ready, Lowe's, the May Department Store and Waste Management for $23 million.

It paid another $19.858 million in January 2012 as a commutation of its obligations for a group of Reliance health care liability policies, and last year, it shelled out $7.750 million to free itself from future obligation for 98 reinsurance policies covering workers' compensation policies that Reliance wrote between 1993 and 2001.

The insurance commissioner has also reached commutation agreements with Munich Reinsurance America, the SCOR Reinsurance Co., Centre Reinsurance (U.S.) Limited,Hannover Rueckversicherung AG, the Connecticut General Life Insurance Co., the Phoenix Life Insurance Co., C.S.C. Assurance, Swiss Re Life & Health America, the Finial Reinsurance Co., and the General Security National Insurance Co., in the past three years.

In 2000, Forbes business writer Robert Lenzer wrote of Unicover as it unraveled, "The potential fallout is huge: the possible disintegration of Saul Steinberg’s Reliance Group, the potential bankruptcy of several California insurers, numerous credit downgrades and the likelihood of big charges to earnings in several widely held insurance companies."

Lenzer was dead on. What he didn't count on, however, was just how long this mess was going to take to clean up.

14 years, and still counting.

Long tail indeed.