Exploding Exclusive Remedy

What's better than exclusive remedy in workers' compensation?

Let's be honest, if you're an employer, not much.

Sure, one may quibble about the cost of acquiring the status of exclusive remedy, but when the claim hits the file, and the exposure is revealed, there is nothing quite as warming to Business as the doctrine that provides the basic guidance to workers' compensation.

We've all seen the reports this past year (more to follow) about the erosion of benefits to injured workers, and some legal challenges. Some are offended, some are circumspect - most don't know what to think.

The context of the challenges to exclusive remedy protection is that the balance that represented the Grand Bargain is no longer in the center, and that reform after reform in the various state systems has deteriorated benefits to the point that there is no longer a reasonable compromise.

That's the argument being played out in Nevada in the face of legislation recently introduced that would reshape one of the cheapest work comp states into, perhaps, an even cheaper state. Nevada ranked 46th out of 50 in Oregon's most recent cost survey.

Assembly Bill 229, introduced by the Assembly Committee on Commerce and Labor, seeks more than a dozen changes to Nevada's workers' compensation law, including when an employer can terminate benefits, changing from the 5th edition AMA Guides to the 6th, and the time for filing a claim from 90 days to 30.

Other changes proposed by the bill would:

• Expand the prohibition on paying benefits for an injury proximately caused by use of a controlled substance to also include injuries caused by a prohibited substance, such as marijuana, and require results of drug tests be provided to the insurer or employer upon request.
• Allow an employer to deny temporary disability and vocational rehabilitation benefits to a worker who is fired or resigns for misconduct. Under current law, an employer must demonstrate "gross misconduct."
• Declare the decision of an appeals officer is automatically stayed by the submission of a request for a stay that would remain in effect until the appeals officer or district court issues a decision on the request.
• Allow a carrier to authorize ongoing medical care after closing a claim. A decision not to continue providing medical care could not be appealed under terms of the bill. 
• Require an employer to pay temporary partial disability benefits, rather than 50% of wages, to an injured worker enrolled in a vocational rehabilitation program.

These proposals are in the best interests for Labor, the business lobby argues.

For instance, shortening the time for filing a claim from 90 to 30 days is to speed up the claim process, presumably so the injured worker can get medical treatment more quickly. The theory is to prevent injured workers from trying to "tough it out," forcing them to report earlier, which would lead to faster treatment and a quicker diagnosis.

Bowzer's embarrassed by the arguments...

That's about as facetious an argument as I've ever heard - what's keeping an injured worker from getting faster medical treatment now? The only reason to shorten the time in which a claim can be filed is to invoke the limitations period as a defense.

Changing to the 6th edition of the AMA Guides simply means that permanent impairment ratings go down, which means less money for permanent disability indemnity.

The National Council on Compensation Insurance in 2012 studied the effect of adopting the 6th edition in Kentucky, Georgia, Montana, Tennessee and New Mexico and concluded that "a decrease in the average impairment rating is observed in the years immediately after the implementation of the 6th edition."

As examples, the average whole-person impairment rating dropped 32% in New Mexico, 25% in Tennessee and 28% in Montana after those states adopted the 6th edition.

Rep. Maggie Carlton, D-Las Vegas, during a March 23 hearing on AB 229, said, "If we just want to get rid of the grand bargain, let's just do it. Let's stop wasting the time of this Legislature and all the money in drafting (bills) and just let the employees sue their employers. If not, let's be reasonable and have something that's on both sides."

I agree.

Maybe the only state that has this grand bargain thing figured out is the only state where workers' compensation isn't mandatory - Texas. The problem with that model is that the worker may not appreciate the grand bargain until its too late. Just ask the good folks after the West, Texas fertilizer plant explosion...

So just stop the charade. If Business doesn't want to adequately protect their workers with benefits that have some modicum of reasonableness, then just be willing to accept the alternative.

AB 229 is representative of what Padgett, ProPublica, OSHA, Burton and others have been arguing and will be one more example of the broadening gulf between the haves and have nots.

Exclusive remedy isn't eroding. But at some point in time enough pressure will mount and that concept will simply explode.