That Ain't Workin'

"Money for nothin' and your chicks for free."

Mark Knopfler wrote those words about the ignorantly jealous who had no clue how much work it took to become a rock star.

There's plenty of people, unfortunately, who don't appreciate how much work is involved in healing people and making the industrial injury recovery system operate properly.

It's a workers' compensation stigma: fraud and work comp seem to go together despite so many efforts to eradicate that image.

So when stories come out, like today's news in WorkCompCentral about yet another major bust in Southern California involving a conspiracy of a dozen people raping the system (remember, claim costs are disproportionately higher in the SoCal area, particularly Greater Los Angeles), I fight the urge to get angry, vengeful, or sad. I don't gloat that these characters were finally caught.

Nope - I wonder how many more nonsocial personalities there are scheming to take from the poor and keep it.

The crime circle for which the San Diego District Attorney's Office on Thursday announced the indictment of 13 people was well organized. A self contained sphere of illegal referrals and kickbacks engulfed hundreds, if not thousands, of injured workers and the payer community with chiropractic and diagnostic services designed to take advantage of innocent unknowings and a bureaucratic morass that can hide greed through its complexity.

Many of the perpetrators named in the indictment or who have already pled guilty we have heard of over the years and are well known. If you do any claim work involving Southern California you likely have heard of them. Clearly organized, white collars and ties, with just a whiff of untrustworthiness air around them - you don't want to believe it, but then again you're not surprised.

In a paper on criminal psychological profiling, "Personality Characteristics and Criminal Behavior,"
author Cherie L. Griffith describes the profile of organized criminals:

"Organized crime is more ‘high end’ generally but still warrants priority due to the nature of the type of crimes that are committed under this umbrella style of behavior. The traits that are most prevalent for this type of crime are such things that are normally not politically motivated in nature, they have a hierarchal type structure with the strict behavioral pattern of limiting membership to those who’ve been granted exclusivity; members are required to be loyal and dedicated to the cause, and the governing body. This type of crime generally has their own governing codes in which to act or behave, and the crimes generally will have a ‘self-perpetuating’ element."

This is the manner of crime that is most pronounced when workers' compensation fraud is involved, whether it is medically based, financially based, legally based, or otherwise. There's nearly always a "family" with its own rules, its own morality (or lack of), and they're circular - spinning up and up until volumetric limits are reached. Sometimes these families involve small circles of like minded individuals, sometimes they are large corporations where only the top tier really understand the dynamics.

Illegal referral and kickback schemes are nothing new, unfortunately, in workers' compensation, because they are so easy to perpetrate - by the time anyone notices a few millions dollars are sucked out of the system.

The only reason these miscreants get caught is simple greed. There is never enough to satisfy greed. Those volumetric limits get reached because workers' compensation, seemingly a big pool of money, is still a limited pool of money.

So when greedy expectations aren't met, the ring implodes, stories leak, dissatisfied members squeal.

That is one common element we can count on time and again - the essential characteristic of these criminals is greed. And eventually that greed is the downfall of the organization.

But in the meantime a lot of damage occurs, and sometimes that damage is to human lives, which is a crime far greater than taking a few million dollars out of the work comp system.

Easy money and chicks for free. That ain't working...

The Tim Report

Every quarter or so, WorkCompCentral publishes a special report on the institution of workers' compensation.

I say "institution" because I believe that workers' compensation is not just an industry, or a program, or even a system, though it does encompass all of those elements.

Workers' compensation is an institution in the grandest sense - available to everyone and anyone that qualifies, with defined boundaries, rules, limitations...

Dictionary dot com defines "institution" as: "an organization, establishment, foundation, society, or the like, devoted to the promotion of a particular cause or program, especially one of a public, educational, or charitable character."

That pretty much defines workers' compensation no matter what your participation level is - worker, employer, vendor, government.

The institution of workers' compensation is constantly studied. There are lots of formal research organizations telling us what costs whom, where the dollars go, what the effect is.

Not too many look at the long term financial effect on the injured worker and his/her family when a lost time injury takes that person out of the productive work force.

WorkCompCentral released yesterday our independently commissioned study by Peter Rousmaniere on the topic: "The Uncompensated Worker: The Financial Impact of Workers’ Comp on Injured Workers & Their Families.”

This is the first report we know of that explores the risk of family instability while an injured worker recovers, and the conclusion is startling - an overall declination in the earnings of that worker to the detriment of the lifestyle of that workers' entire family, taking a large swath out of the recurrent economy.

This report examines a fictitious worker, Tim, that we would find any day anywhere in the USA - an electrician - who incurs a lost time work injury with attendant disability and indemnity.

"In 31 states, workers receive a reduction in take-home pay of 15% or more when they're injured on the job," the report concludes, "and in half the states, households with two median wage earners, one on work disability and the other working full time, cannot afford to sustain their basic budget."

Bottom line finding: regardless of indemnity, the financial impact on a regular middle class American of modest means (certainly not poverty level) is financially ruined for the rest of their lives regardless of domicile…

I, and my company, WorkCompCentral, may be criticized by the "payer" community for being too liberal, for pandering to injured workers. 

So be it. This report does not take a position, but simply points out a fact: in general, getting hurt while working can mean an irreversible lowering in the standard of living for most of the population, and this has serious consequences for that worker, his/her family, the employer, the local community and the larger economy.

The general media has taken the workers' compensation institution to task for failing to live up to promises made over 100 years ago. In my opinion, this industry can not stand by the wayside and defend an indefensible position: that the safety net of work injury protection is not meeting its obligation.

What we need to do as an industry in support of the institution is to recognize these shortcomings, learn from them, and assist our lawmakers in making wise decisions to ensure that Tim, and others like him, get the support necessary to make them a sustainable position in the economy.

Here's the deal - every Tim that is off work needs to be replaced, and every Tim that doesn't have the financial wherewithal to meet needs after a work injury plays a part in economic stagnation.

Our mission through workers' compensation is to stabilize the economy, and get people contributing to it, not taking from it.

This report should stimulate us to come up with solutions to this vexing issue.

The report is free, but you must either logon with your WorkCompCentral account to download it or register a new account.

Suits And Ties

I'm not a very good businessman.

Sure, I have a Masters in Business Administration, but that just means I could read books and pass tests. That doesn't mean I know anything about business.

About all I really know about business could be summed up in a single sentence in my first finance class by Professor Daneise: "Cash is King."

That's it. Assets, liabilities, balance sheets, project management, financing, mergers, acquisitions - all foreign to me.

I'm a simple guy really. Have a dollar, spend ninety cents, and I get to keep the dime - that's my profit for intervening in some process or product that someone else wants.

Big business is mystifying. Scale - it's all about scale. A small transaction, that dime, turns into billions of dollars if there are enough units generating that dime.

Which is why, I believe, the workers' compensation space is attracting outside investment.

The trend started a few years ago and doesn't appear to be waning yet - health care consolidating and moving into workers' compensation.

The medical care world is talking about the purchase of Helios pharmacy benefit management company by UnitedHealth Group subsidiary OptumRx.

The transaction has been estimated to be valued in the one and a half billion dollar range.

That's quite a few dimes.

Rumors of talks between the companies had been reported by Bloomberg Business news service as early as last October. The deal was confirmed earlier this month.

Optum purportedly did about $67 billion in business last year, and Helios, formed just a couple of years ago through the merger of Progressive Medical and PMSI Group, had been owned by private equity owners, Kelso & Co. and Stone Point Capital. Obviously those equity groups made a wise investment.

I'd often thought that the logical step for group health was movement into workers' compensation, and that it would be this progression that would foster, ultimately, the consolidation of institutions: general health and workers' compensation.

I've heard all the arguments about why workers' compensation can not be a part of the overall health system in this country: health knows nothing of how to deal with disability (and I'd argue that work comp isn't much better, but that's another blog post...), there's not enough money in comp, the market sector is too small, group health has deductibles and other tools to regulate access while work comp is "first dollar," etc.

To me, none of the excuses or reasons why a universal health system for employed people present much of an obstacle.

Really, the only thing that is in the way of a "get hurt or sick and get treatment regardless of cause" type of system is just the law.

Workers' compensation was the first health care system, getting traction after the United States Supreme Court blessed it in 1917. There wasn't any medical insurance around until the Blues were taken to task for price fixing between hospitals, so they decided to become insurance instead in the 1950s. Medicare was right around the corner then too.

The two systems grew up independently because they were created, by law, independently at different times due to different facts and circumstances - certainly nothing that was logical. No one could have predicted when these institutions were created that they would become as big or as pervasive as they are now.

All of the major health companies now have occupational divisions: e.g. Anthem Blue Cross, Kaiser On the Job, etc.

If the law (i.e. our legislators) doesn't eliminate the medical silos that developed, business will. Consolidations, mergers, acquisitions - all of these will continue as the blend of work comp into the health sector moves towards a universal care system.

Henry Loubet, a former CEO of UnitedHealthcare’s Western operations and chief strategy officer at Keenan, told WorkCompCentral the Helios acquisition fits in with UnitedHealth’s strategy of diversifying outside of health insurance plans.

“They’ve been looking for a much broader reach,” said Loubet.

All health carriers are looking for a broader reach. The Affordable Care Act is pushing the growth in scale. Lots of observers think that there's bleed and shifting in services between group health and workers' compensation, though no one has yet to actually back up any claims one way or the other.

And those concerns may be irrelevant anyhow. I think that's what is really happening as the health market moves into work comp.

It really just comes down to a simple fact: sick or injured person needs care - who's going to pay?

Take the patient out of that question and everything else is a back room argument between suits and ties.

Same Song, Different Dance

In the face of last year's negative press about erosion of benefits through the constant "reform" of workers' compensation, New York Gov Andrew Cuomo released a proposed budget for fiscal year 2017 that is being pushed by the state's business interests to address escalating costs.

New York last went through the hemorrhaging effects of major changes to its business-backed workers' compensation reform effort under the disgraced former governor, Elliot Spitzer's, administration in 2007 - so the timing is about right for a new reform movement: every 7 to 10 years...

And in fact the Business Council of New York State, had been seeking legislative "corrections" to the inadequately implemented Spitzer reform package since at least 2014.

About this time last year, the Council released "Fix New York: The 2015 Legislative and Regulatory Agenda," it's architectural plans for curing what the business community sees as a system run amok with cost overruns and inflated benefits.

That document described seeking an update to the medical impairment guides used to calculate schedule loss-of-use awards, to require injured workers to use a doctor from panels appointed by employers for the first 90 days following an injury, add a comparative negligence standard to the state's unique Scaffold Law, "de-index" the maximum weekly benefit from the state average weekly wage or adopt regional indexes, cap temporary disability status at 2 years post injury, among other proposals.

Legislative attempts the past couple of years have not moved forward - lawmakers presumably having better things to do than to monkey with workers' compensation.

There are other avenues to reform, however, and one of them is through fiscal management; i.e. budget.

And like any other political strategy, there are provisions that neither business nor labor find savory, and there are provisions that either may find beneficial to their special interests.

Cuomo's proposed reforms include reducing the number of Workers’ Compensation Board commissioners from 13 to seven; extending to 120 days the period a claimant must wait until seeking care outside of a preferred provider network; and penalizing carriers with sanctions of up to 20% of unpaid compensation if the board finds an appeal was filed on frivolous grounds.

Additionally, the State Workers’ Compensation Board would create an authorization agreement with medical providers, which would give the board “broad authority” to bar any provider who breaches the authorization agreement - but operational details are left out of the package, leaving the Board to make up its own rules of engagement.

The proposed budget legislation would also allow the SWCB to reassign a workers’ comp case to a new judge at any time, regardless of reason, something critics say could result in an abuse of power.

But the Council's wish list isn't complete in Cuomo's budget - there's no cap on temporary disability.

The governor’s office, in its Budget Briefing Book (page 113), said the proposals were aimed at improving the workers’ compensation system, a “$7 billion program (that) is complicated and cumbersome, delaying claim settlements and payments, and increasing costs to employers.”

Same song. Different dance.

After all of workers' compensation's publicity in the general media (and ProPublica is based in New York), will New York's voting population even notice, let alone pay attention?

The Whole Picture

Applicant attorney Keith More asked the 800 or so attendees to our panel session at the California Applicant's Attorneys' Association conference Friday for a show of hands: how many had utilization review requests denied based on lack of, or missing, records? (LC 4062(g)(4))

Every person raised a hand. Every single one.

And that didn't count the overflow rooms where our session was broadcast via television to about 300 other attendees.

Sure the crowd represented outliers - litigated cases; less than 20% of all workers' compensation responsible, however, for more than 80% of all system costs.

Truth is, that observation should make one really cringe.

After all, if the system can't comply with the law to ensure relevant medical records get to the reviewing physician when the injured worker has someone looking out for them, then what about that majority who have no idea what's going on, probably don't understand the UR process, and likely aren't savvy enough to realize that the utilization review isn't complete?

We don't know how many unrepresented injured workers are the recipients of failed UR. Heck, we don't know how may represented workers are the recipients of failed UR (though the informal CAAA poll would peg it at 100%).

We don't know how many treatment requests are denied, ultimately, on lack of records, because there's no process in place for capturing such information when workers with or without an attorney are involved.

So while California administrators may be pugnacious in defending statistics favorable towards UR (and IMR) reducing medical costs, the truth is that no one REALLY knows because the vast majority of workers' compensation claimants - the unrepresented - aren't polled or studied.

It just may be that medical treatment savings are simply the product of people just giving up and going away.

The system is obsessive about costs. I'd like to say, let's forget about costs. After all, our cost neurosis is what gets workers' compensation into trouble in the first place.

But we can't. There's only so much to go around.

Costs are important, of course, for budgeting. Budgeting is a necessary discipline anytime there is income and expense to account for. Someone along the chain of financial resources is going to demand an accounting and want to know why something is the way it is.

That makes sense. Money goes in, and money goes out, and someone, somewhere, has to be responsible to make sure that the flow of money is going where it is supposed to.

So be it.

Also along the chain of financial resources are people. Some are benefactors. Others are recipients.

Some are profiteers.

This is America, after all, and the world of workers' compensation falls within the ambit of a capitalist economy, which means along the chain of financial resources there are people that want or must be paid some of that money in order to make things happen the way they are supposed to happen.

Some overstate their value to the system, some understate it, and some don't care what their value is as long as they get a piece of the action.

The point is that there is no reason why there should ever be any lack of documentation to a reviewing physician, other than someone's decision that there's too much paper to copy, too much to mail, too much to review... too much cost in the process.

Editorial decisions on medical records are made by someone along the way to UR; editorial decisions that, in effect, becomes the practice of medicine ... illegally I'd say, if not done by a medical doctor or other professional recognized by the law as authorized to provide medical care and advise.

When I was taught how to cross examine physicians, albeit many years ago, the first and most important tactic was medical history - because medical history is paramount to diagnosis which is paramount to treatment decision.

Without an adequate, accurate, and complete medical history, any medical decision or determination that follows is subject to challenge. Challenge is another word for dispute, which is what causes "friction."

Medical records are the single most common, affordable, and accessible way of communicating past medical history. Failure in records is failure in history. And failure in history is failure in medical expertise. There's oodles of case law confirming this logic.

There's a simple legislative or regulatory fix to the inadequate medical records issue - mandate that all medical records be supplied to the reviewing physician and that failure to do so results in automatic approval of the requested treatment subject to disapproval upon subsequent receipt and review of records (if not too late by then).

In other words, remove the word "reasonably" from Labor Code section 4062. That word is subjective, and one person's reasonable is not another person's.

Whenever there's the possibility of subjective evaluation, there's the probability of dispute. So why do we insist on inserting subjectiveness into a process that clearly requires objectivity? And why do we allow non-medical professionals to editorialize on medical records?

If the reasons are all about costs, then we're not looking at the whole picture.

No Second Hand Remedy

Exclusive remedy has been under attack, critics say, putting the doctrine and employers at risk as avenues for civil action erode one of the basic elements of workers' compensation - except in California, where another case affirms the sanctity of the concept.

Cynthia Medina worked as a nurse at the Yountville Veterans Home of California for 20 years, between 1990 and 2010.

Medina claimed she encountered second-hand smoke for approximately 30 to 45 minutes per day at the facility because residents were allowed to smoke anywhere on the premises, and she claimed they would "intentionally blow smoke" at her while medications were administered.

Medina was diagnosed with lung cancer in February 2011. She immediately had surgery to remove a portion of her right lung.

Medina filed a claim, pursuant to law, with the state's Victim Compensation and Government Claims Board in March 2013, giving notice she held the state liable for $10 million for causing her cancer.

The board denied her claim as untimely - the Government Code sets a six month deadline for filing suit for damages against a public entity.

Medina then petitioned the superior court for leave to bring her suit despite its untimeliness. The state did not oppose her petition and the trial judge granted leave to sue.

Medina subsequently filed a personal injury complaint. She asserted claims for battery, assault, premises liability, negligence and violation of Labor Code Section 6404.5(d)(12), which addresses employers' obligations regarding workplace smoke exposure.

The state demurred, raising defenses of timeliness and exclusive remedy.

The trial judge sustained the demurrer.

The 1st District Court of Appeals, on Medina's petition for review, said her claim was untimely, but more important to us, said the exclusive remedy of workers' compensation bars the suit.

"There can be little question Medina was performing her job and acting within the course of her employment when administering medications to veterans," the court said. "Nor can there be any doubt that she claims her injury was caused by being exposed to cigarette smoke while she was on the job."

California's courts have treated workplace safety injuries as giving rise to workers' compensation claims, the court said, not private lawsuits, even when those injuries are not directly related to, or a normal part of, the type of work being performed.

To read the decision, click here.

Performance Perspective

"Will you decide to heal yourself and come back stronger? Or will you allow the injury to get the best of you? A great tool is to choose the best perspective and focus on what you want to happen," says Matt Belair, a sport psychologist in an interview in International Mountain Bike magazine. "I want to recover quickly and perform my best, I will continue to have total confidence in my abilities."

Athletes get hurt all the time. Particularly in the more "action" oriented sports more popular with the current generation, such as motocross, mountain bikes, parkour, etc.

Self belief is HUGE. The IMB article cited above is about accomplishing athletic feats at the very upper echelon of performance. There are lots of talented riders who are near equal in physical fitness and ability, for example, but only a very few have the mental horsepower to visualize and accomplish a world championship. or a double back flip with a twist over a 50 foot chasm...

That same mental horsepower is healing too.

Long time workers' compensation leader and expert, Robert Aurbach (now residing in Australia) has researched and written extensively on neuroplasticity - the ability of the brain to create new synaptic pathways in response to external stimuli, i.e. learned behavior.

This phenomenon works both ways - our brains can either learn to heal and overcome injury, or learn to be disabled.

Part of the external stimulus that affects neuroplastic response is system input - in our case how the laws, regulations and application of them to an injured worker's plight either stimulate, or depress, the healing forces.

It's sort of true that one can choose to be disabled, or not; but external stimulus plays a big part in that choice. And the starting point is the individual's own mental strength. If we are starting off with a person who's self picture is weak, then it is much more difficult to rewire his or her brain to overcome adversity than for someone who's mental picture of themselves is stronger to start with.

Founder of the all volunteer Work Injured Resources Connection (WIRC) in Adelaide, Australia, Rosemary McKenzie-Ferguson, sees the challenges on a daily basis. She deals with the people (not their cases) who are ejected from the workers' compensation system without the resources to find their new path in life.

She tells several stories in a recent publication of the Safety Institute of Australia about recovering injured workers, and she makes a very important distinction for those folks who are having a tough time finding normalcy in their lives: they need help understanding that they have an injury, and that they are not the injury.

This might be subtle, but it is an important distinction. One HAS an injury. When one BECOMES the injury, then they will not be able to overcome the injurious sequelae.

She writes about an injured factory worker who was earning $28,000 per annum and had to work endless hours of overtime to get up to $35,000 to support his family. His workplace injury meant he would never return to the factory floor.

WIRC first job was to get him to reimagine his life, reimagine his abilities, understand that HE was not the injury and that he had the power to change.

They got him started with a 12-week basic computer course and, according to Rosemary, "the last time I spoke with this injured worker he was based in Sydney, working between Sydney and New York, and earning many times the $28,000."

She writes about an enterprising engineering firm that turned a disused corner of the business into an area where their injured workers repaired wheelchairs and bikes for the community groups in a 50km radius of where they were based. This gave the injured workers something real to do, and it supported the injured workers as they regained medical capacity hours, but it also encouraged the rest of the workforce to get involved which improved the culture of the business.

Another injured worker came to WIRC with industrial emphysema from working in the coal industry. The message he got from the system was “just go away” (that is the polite version). He lost his ability to believe in himself. According to Rosemary, this man is now a mentor for others entering the construction industry, using decades of hands-on workplace knowhow.

There is a big push in the workers' compensation industry to reinvent itself. After 100 years we have learned quite a bit about ourselves, our mission, and how we impact people and lives.

For instance, at third party administrator, Gallagher Bassett, claims adjusters are "resolution managers," a title that denotes the important role the claims person has in resolving the ultimate conflict - that of self-belief.

This is a great start. We are in the people business. People have worth and that worth begins with the self. We can provide medical care, and a few dollars to help pay the bills, but the ultimate success is when belief in the self is restored - then the pathways to one's return to health, return to society, return to work, are opened.

It's a whole new paradigm, I believe. It's not one that is going to be filled by special interest vendors, though certainly there will be many entrepreneurial efforts towards this paradigm.

It's an entire cultural shift. I can see it happening all around us. It's part of the reason why we started Comp Laude - to recognize those that have been successful in helping, and actually achieving, the best perspective for resolving the work injury.

Restoring the confidence in one's abilities - that's a tough job, and a real goal. From there comes all other success.

Some folks will never be able to reach that goal for one reason or another, be it childhood psychology, drugs, whatever.

But most people have that power.

And I think a revolution in claims resolution is slowly taking place in our industry as we recognize that it's not all about bill review, guidelines, indemnity limits or any of the other artificial system contrivances in place.

There's always a passel of bad news about work comp. But I also know that there's big pride in most of us for doing a job well in restoring an injured worker's self-belief.

"Focus on what you want to happen." We don't have to provide psychological services to every injured worker - just help them focus on recovering quickly, performing their best, and having confidence in their abilities. It won't work for everyone, but it will work for most.

Colorado Balance

The intricacies of workers' compensation law are illogical to many, because work comp is not a logical system - it is a contrivance of fantasies designed to resolve a problem - people and families left without remedy following a work accident, and spreading that small risk (frequency rate is at an all time low - except for in the Greater Los Angeles area of course) to the business community so no single employer is disproportionately affected.

And because each state has its own political wind shaping its workers' compensation program, there are disparities that even the courts acknowledge are nonsensical, but are nevertheless the law.

The Colorado Court of Appeals last week presented a prime demonstration of this last week, ruling that the family of a deceased worker who had already collected benefits from Mississippi could also get Colorado benefits, and the carrier was entitled only to a 50% offset pursuant to Colorado law, but that interest on the award would be based on the Mississippi half, not the Colorado award.

John Eric Keel, a Mississippi resident, started working for TTS, a rail shipping logistics and engineering company, in March 2010. After seven months, TTS offered him a job in Colorado that paid substantially more.

Keel agreed to the transfer, but he was killed the day after he arrived in Pueblo while overseeing the loading of a wind farm tower onto a railcar.

The 21-year-old left behind a wife and young son.

After Keel's death, TTS' carrier, Ace American Insurance Company, began paying benefits to his family under the Mississippi workers' compensation system at a rate of $337.58 per week.

Two years after Keel's death, his family filed a claim for benefits in Colorado.

An administrative law judge determined that Keel's death was compensable under Colorado law, and that Ace owed benefits in accordance with Colorado's Workers' Compensation Act.

Under Colorado's comp system, Keel's widow and young son were entitled to weekly death benefits of $810.67. However, this amount was subject to a Social Security offset of $190.38, leaving Ace's future obligation to Keel's family at $620.29 per week.

Since the amount of benefits payable in Colorado was higher than the amount Ace paid Keel's family under Mississippi law, the carrier conceded that it owed the family additional compensation.

Ace calculated the amount of benefits due to the family for this 148-week period under Colorado law as $91,902.92. It then subtracted the Social Security offset and took a credit of $24,980.92 – representing one half of the amount the company had paid in death benefits under the Mississippi comp system. This left $66,822 as the amount owed to Keel's family.

Ace made payment of this sum to the family, plus $2,040.32 in interest, and the family objected to the calculation of interest.

Ace arrived at the $2,040.32 sum by subtracting the $49,961.84 in Mississippi payments from the $66,822 owed in Colorado benefits. It used the difference of $16,860.16 to when calculating interest at 8%.

An administrative law judge found the calculation of interest was appropriate, but the ICAO reversed.

The ICAO said Keel's family should not have been allowed to recover the Colorado past due death benefits that the employer paid, but since that was not an issue before it, ICAO concluded that Ace owed interest on $41,841.08.

It arrived at this sum by taking the amount of benefits due to the family under Colorado law for the 148-week period – $91,902.92 – and subtracting the Social Security offset and the full amount of the benefits the family had received under the Mississippi system.

The Court of Appeals said this was an error, because Colorado Revised Statutes Section 8-42-114 was applicable, and it limited the credit Ace could take to 50% of the benefits paid under the Mississippi comp system.

The court noted that Section 8-42-114 expressly applies when death benefits under a workers' compensation act of another state "are payable to an individual and the individual's dependents."

As benefits were paid to Keel's family under the Mississippi comp system, the court said that Section 8-42-114 came into play.

The court acknowledged that Keel's family had benefitted by filing a comp claim in Mississippi prior to Colorado because Mississippi law would have required the death benefit payments to be offset by 100% of the Colorado death benefits if the claims had been filed in reverse order.

But hey, that's the law and how it's supposed to apply. 

Besides, the probability of this occurring on a regular basis is very small, or as one commentator put it to WorkCompCentral legal reporter, Sherri Okamoto, the Keel case is an "unusual factual situation."

One other poignant observation: where a claim resides makes a huge difference in the amount of benefits, the premise of the original ProPublica story, "Insult to Injury."

The case is Misty Keel vs. Industrial Claim Appeals Office, 2016 COA 08. No. 15CA0466.

Separate Powers

One of the most interesting debates going on in the country about workers' compensation is the constitutionality of changes to state systems that delegate certain acts and authority in non-traditional ways.

A major tenet of Constitutional Law is the doctrine of Separation of Powers. In short, the founders of this country had the foresight to set up a tripartite government: executive, legislative and judicial branches which are not to intrude into the functions of the other.

This system of checks and balances was designed to prevent monopoly powers in any single governmental branch. If the legislature (or the executive for that matter) does something that The People feel is wrong, then the judicial branch is supposed to be able to review it.

How far that doctrine goes in the real world is subject to all sorts of different review standards and competing interests.

Who's got The Power?

In the work comp world, a prime example is pending before the California Supreme Court in the Stevens v. WCAB (Outspoken Enterprises) case.

Last year the California 1st District Court of Appeals upheld the constitutional validity of the independent medical review process, basically saying that the state constitution gives the Legislature the power to do whatever it wants with workers' compensation, including defining its own constitutional powers and limitations.

In other words, because the state constitution gives the California Legislature plenary, or supreme, power on the topic of workers' compensation, that power exceeds any limitation the constitution may otherwise impose.

At least with regard to workers' compensation, the 1st DCA infers, the Legislature is not bound by the California Constitution.

Stevens is arguing to the Supreme Court that the Legislature is not so free to do as it wants with workers' compensation when it comes to violating the Separation of Powers doctrine, because by making Independent Medical Review a one-way process the judicial branch is usurped.

The flip side to that argument, and why this is such an interesting constitutional issue, is that there still is some judicial review, albeit limited, and that limited review is arguably balanced by the speed, efficiency and cost (financial and social) savings of IMR.

The justices in the 1917 US Supreme Court case of NY Railroad, which declared compulsory workers' compensation constitutional, said a review of workers' compensation statutes had to be done in totality - no single facet could be declared constitutionally erroneous without balancing against competing interests.

This is the sort of thing that drives engineers crazy - because the litmus test is vague. There's no clear yes or no answer. We can argue the merits all day long, and with good solid analysis for either proposition, but at the end of the day whether seven very intelligent, highly educated, people in robes agree is a gamble.

This is not a game, and certainly not made for TV entertainment - and the risk to a $30 billion system, and to the people it's to serve, puts the stakes high.

Which may be why this is so fascinating - the Stevens case has all the elements of high drama, and there's only three things the court can do: affirm, deny, or punt.

Just how much power does the California Legislature have? I reckon we'll find out soon enough.

Why For Attorneys

One of my wife's dear childhood friends grew up to be a local cop. If you met her it'd be obvious; she's a tough lady.

Cathy really likes police work, particularly on the street. She likes dealing with people, even those of criminal intent. Her passion is keeping the streets safe, thugs where they belong, and making peace in the face of threats.

She's a real cop.

And of course cops get hurt on the job. That's what they do.

When cops get hurt on the job it kills them to be taken off the streets, but they have to heal, and police departments don't want to risk further injury to their primary assets, the police officers.

To make sure that cops are ready to get back on the streets to engage in sometimes violent physical altercations, departments require they go through fitness for duty tests where the physical limitations of the officer are assessed. Sometimes officers who aren't quite ready to get back on the street get injured again.

It's part of the job, and those injuries are compensable under workers' compensation schemes. Departments don't like it because such events wreck havoc with budgets, but that's police work.

Cathy's original foray into workers' compensation challenges started a couple years ago with a knee injury incurred wrestling a thug to the ground and the ensuing altercation. Ultimately that knee injury required surgery and many months off work.

Eventually Cathy returned to modified duty behind a desk, which is a typical placement for injured officers. While in that position Cathy engaged in strengthening and rehabilitative exercises, cleared by her treating physician, on her own without reimbursement request or other interference from work comp, so she could get back on her normal beat.

Return to the streets; at 50-something years old, one doesn't just put on the duty belt and hop in the squad car - after physical rehabilitation the fitness for duty test is required before the department puts one of its own back into the danger zone.

It was during the fitness for duty test that Cathy sustained a new injury to her groin (I don't know the specific diagnosis). According to her treating physician, surgery is indicated, but the claims administrator is disputing the treatment request.

And this is where the 2015 Word on Work Comp gets implemented - Mistrust.

Because the third party administrator for the department has, like most claims systems, red flag alerts in its systems and procedures that call up certain services, like investigation.

I doubt the claims examiner on Cathy's case intends harassment or intimidation, or even to create this air of mistrust - but when someone is lurking outside your residence, which is in a gated community, following and taping her at the gym while engaging in the aforesaid physician recommended rehabilitative exercises, or is intently following you on Facebook, watching every post to see if there is any mention of engagement in physical activity contrary to stated disability status ....

It's bad enough that the tone and volume of paperwork sent to Cathy as mandated by California law and regulation is threatening and overwhelming, but add to that the personal intrusion by investigative services and it's very obvious why a legitimate injury incurred by a highly credible and (perhaps, now, formerly) dedicated employee seeks the assistance of counsel - because her trust in the fair and compassionate treatment of her case has been compromised.

Litigation involves a minority of claims - generally less than 20% in most states. Yet, litigated cases comprise nearly 80% of all claim expenses.

Why, then, does the industry push claims into litigation?

Fired For Pot

Despite the trend towards decriminalization, marijuana continues to generate substantial controversy, particularly in the workers' compensation field.

Unless you've been hiding under a rock the last few years, you know that New Mexico's courts have ruled in several cases that marijuana is a covered medical expense, the first, and I believe the only, state to so order.

But that doesn't mean that the actual employer has to tolerate marijuana use among its employees.

And when the conflict of state versus federal law occurs, the difference may be the court that makes the decision.

In this instance a federal court in New Mexico said it was okay to fire a medical marijuana worker who tested positive for the drug without evidence of impairment.

There are plenty of folks working on tests for marijuana induced impairment, but for the present the only test that exists determines the presence of cannabinoids in one's body, and does not test for toxicity.

Tractor Supply Co. terminated Rojerio Garcia for failing a drug test.

Garcia chose to use marijuana to alleviate the symptoms of his AIDS, but U.S. District Court Judge William P. Johnson said the fact of the matter was that the Tractor Supply Co. terminated him because he had used marijuana, not because he had AIDS.

Accordingly, Johnson granted summary judgment dismissing Garcia's complaint for wrongful termination last Thursday.

Marijuana proponents interviewed for WorkCompCentral's story on the case this morning, in general, decried the decision, calling it "asinine," "outrageous," and "absurd," but they also acknowledged that so long as the drug remains federally illegal, a federal judge is going to find legitimate purpose in terminating a worker for testing positive for pot.

Paul Armentano, the deputy director of NORML, told WorkCompCentral that employers should evaluate their drug-testing policies regarding employees' off-the-job cannabis use "to reflect both changing public attitudes as well as the rapidly changing legal landscape," noting that off the job use of alcohol or prescription medication does not result in work place discipline.

That's a nice sentiment, but not a realistic view. Social norms take a while to change. Though marijuana may have variable legal status in many states, that doesn't give people a right to go to work high, no more so than the legality of alcohol permits someone to be drunk on the job.

The risks to business and worker are too great.

What is missing is a standard for intoxication. There is no way, presently, to validate that someone is, or isn't, intoxicated from marijuana consumption - the big problem being that the active ingredients to the drug adhere to fat cells and remain in the human body for many, many days past a state of intoxication.

In the meantime, the vast majority of jurisdictions make it an employer's prerogative whether or not to hire or maintain the employment of any person, regardless of drug use or not. The determining factor is discrimination, and discrimination occurs when one class of drug users is allowed, and another class isn't.

That's what the courts have told us.

So, don't go to work intoxicated from anything and, if you use pot, don't work for a company that has a drug free policy and tests for the presence of drugs.

And in the meantime legislatures and courts will give me plenty to blog about in the coming years as this new social norm sorts itself out.

Football and Work Comp Politics

Bowzer knows...

In October, after the California Division of Workers' Compensation eliminated neuropsychology as a QME option, I said that Los Angeles would finally get it's football team.

Specifically I challenged commentary in the WorkCompCentral story about the neuropsychology QME elimination that it was about abuse by applicant attorneys. I said:

"That may be. But it is too simplistic. If applicant attorneys were routinely abusing loopholes and circumventing the psyche prohibitions by selecting neuropsychology for QME work (which the defense could oppose, by the way), then this would have surfaced as a problem long ago.

"Nope - politics is much more sinister than something with that easy an explanation. There's another reason, something that is much deeper, much more politically connected, involving much more money and power.

"Maybe I'm "out there." Perhaps my cynicism is way too obtuse, or my imagination too far afield from reality...

"There are three football teams in California. The NFL wants a fourth to satisfy the demand. Traumatic brain injury leading to dementia and Alzheimers has been scientifically and medically correlated and those diseases are very, very expensive over the lifetime of the sufferer...

"Los Angeles will finally get its team..."

My cynicism was based on the fact that an administrative agency, which has only the jobs of executing and enforcing legislative action, not only made new law (I don't buy that neuropsychiatry was accidentally left as an option for 20 years...) but was in fact politically active in opposing any attempt to recognize neuropsychiatry as a legitimate QME option - the timing was simply not just coincidental nor serendipitous; it was odiferously suspicious.

I told anyone that would listen that announcements would be made within 6 months of DWC's final action.

I was wrong. It took 5 months.

Maybe I wasn't obtuse, cynical or imaginative enough.

There's really not much more to say, except that attempts by psychology groups to reinstate neuropsychology QME as an available category for resolution of disputes will fail - at least until after the stadium is built and at least one team is seated there.

I've said it before, and I'll say it again, "workers' compensation is a political construct that obfuscates medical science in order to achieve a financial goal."

The proof is in the NFL and the California DWC.

The TTD Gap

Last month I pointed out a Missouri Supreme Court case that I thought highlighted why states have been imposing artificial limitations to temporary total disability status; there are some who never seem to get better in order to enjoy the higher indemnity payment of TTD.

But the problem is that artificial TTD limits ensnare folks who face a change in medical condition and legitimately are TTD, but the law doesn't recognize that exception creating a huge financial hardship on the injured worker and his/her family.

Oklahoma has been a hot bed of appellate litigation since "reform" a couple of years ago, and the issue of a "gap" being created as a consequence of TTD limits has been thrown to the state Supreme Court.

Darla Jean Camp had worked for Atwood Distributing, the operator of a farm and ranch supply store in Enid, Oklahoma. She suffered an admitted, compensable soft tissue injury to her back and hip in March 2014.

Section 62 of the Oklahoma act generally limits TTD compensation for soft tissue injuries to eight weeks, but it provides for an additional eight weeks of benefits if the worker receives injections as treatment. It also permits an administrative law judge to award up to 16 more weeks of benefits if a worker winds up needing surgery.

Since Camp received injections, Atwood's insurance company, Zurich, authorized 16 extra weeks of TTD.

Camp's doctor later determined that she would need hip surgery. The Administrative Law authorized the procedure and awarded an additional 16 weeks of TTD payments.

Camp had hip surgery last July. She then filed a request for more TTD, to compensate her for the entire period of disability between the date of her March 2014 accident and the July 2015 surgery.

Zurich objected, contending she had already received the maximum 32 weeks of benefits under Section 62.

The ALJ found Atwood was entitled to an additional 36 weeks of TTD. He opined that Section 62's cap applied only to "nonsurgical" injuries, and since Atwood had surgery, Section 45, which caps a worker's entitlement to 104 weeks of TTD, controlled.

Zurich appealed, citing a 2012 case from the Court of Civil Appeals called Scott v. Sprint PCS for the principle that statutory TTD caps for nonsurgical injuries will still limit a worker's entitlement to TTD even if the worker undergoes surgery, for the period up until the surgery.

The Scott case pre-dates the Administrative Workers' Compensation Act, but the 2009 law it was applying contained a restriction on TTD for soft-tissue injuries that is virtually identical to what exists now in Section 62.

However, the commission found the Scott case was not controlling on Camp's case. The commission said the court in Scott had been concerned with the legislative intent to encourage workers to not delay a surgery if surgery is necessary, and there was no indication of delay on the part of Camp.

The commission focused its analysis on the plain language of Section 62 instead. It concluded that Section 62 permitted the TTD restriction to be lifted once surgery is performed, because Section 62 specifically applies only to "non-surgical soft tissue injuries."

Obviously, the commission said, "once surgery has been performed, the soft tissue injury is no longer 'non-surgical.'"

The commission concluded that "a compensable 'surgical' soft tissue injury" is still subject to the limits of Section 45, but as long as the worker is unable to work after an injury, the worker is entitled to TTD benefits for up to 104 weeks, which would mean Camp would get an additional 68 weeks of benefits for TTD status both before and after surgery.

In its petition for review to the Supreme Court, Zurich maintains that a worker's surgery cannot somehow retroactively "transform an injury" and remove it from limitations for soft tissue injuries contained in Section 62.

To read the commission decision, click here.

Zurich's petition for review is here.

Camp's response is here.

Camp's motion for the court to retain jurisdiction is here.

PPD Philosophy

A recent Illinois case is exemplary of the kind of legal interpretation that drives employers and their insurance companies nuts, because there seems to be an illogical detachment from reality, even though legally justifiable.

At issue in Jackson Park Hospital v. IWCC (Jenkins) was how to determine a Permanent Partial Disability award - the single most litigious facet of workers' compensation law.

Kathy Jenkins had worked as a stationary engineer for Jackson Park Hospital, in Chicago. It was her job to address plumbing, heating, and electrical maintenance issues throughout the hospital facility.

Jenkins hurt her back in October 2005 while trying to climb into a locked office through a sliding glass window.

Her treating doctor authorized her to return to sedentary work in February 2007. The hospital offered Jenkins a clerical position in its accounting department. The hospital later moved Jenkins to another clerical position in its employee health department, and then to its security department.

Even though the hospital continued to pay Jenkins at the same rate she had earned as a stationary engineer in each of these positions, Jenkins still filed a request for PPD benefits based on Section 8(d)(1).

Section 8(d)(1) of the Illinois workers' compensation statute provides that a worker is entitled to a wage differential award when she is partially incapacitated from pursuing her usual employment, and there is a difference between the average amount that she would be able to earn in her time-of-injury job and in the average amount which she would be able to earn after her accident.

Alternatively, Section 8(d)(2) provides for a PPD award based on a percentage-of-the-person-as-a-whole when the worker is disabled from continuing to her time-of-injury job, but she does not suffer an impairment of earning capacity.

The arbitrator in the Jenkins case determined that Section 8(d)(1) was inapplicable because Jenkins had suffered no actual reduction in her income. He instead awarded her PPD benefits based on a percentage of the person as a whole under Section 8(d)(2).

Jenkins appealed to the Illinois Workers' Compensation Commission. The hospital terminated her while her appeal was pending. She filed an emergency motion to remand the case to the arbitrator in order to reopen proofs to allow additional evidence of her termination.

The commission denied her motion, and later affirmed the arbitrator and adopted the arbitration decision as its own ruling.

Jenkins sought judicial review. The Circuit Court Judge reversed the commission, stating the commission's decision to award benefits under Section 8(d)(2) instead of 8(d)(1) went against the manifest weight of the evidence. He ordered the case remanded for the commission to issue Jenkins a wage-differential award.

On remand, the commission awarded Jenkins $389.60 per week, from Feb. 19, 2007, through the duration of her disability.

The hospital appealed, which was upheld by the Circuit Court, so the hospital petitioned the Appellate Court for relief.

On Friday, the Appellate Court said the "crucial issue" in determining whether an award is appropriate under Section 8(d)(1) or 8(d)(2) is whether the claimant has suffered an impairment of her earning capacity.

"Earning capacity" is not simply the amount that a worker is making.

Since a worker may not have any actual loss of income if she is receiving "an inflated wage in an employer-controlled job that does not otherwise exist in the labor market," the court said that an impairment of earning capacity cannot be determined by simply comparing a worker's pre- and post-injury earnings.

The relevant inquiry needs to be what Jenkins' actual earning capacity would be, in light of her physical limitations from a decade-old back injury and her 8th-grade education, the court said.

If another employer would not hire her for the $23.61 per hour that Jackson Park Hospital was paying her as a security guard, the court said Jenkins' post-injury wages could not be considered an accurate reflection of her earning capacity.

Judicial interpretations can be frustrating for employers in situations such as the Jenkins case, where they thought they were doing the right thing by maintaining an employee in a wage class higher than the replacement job duties dictate.

Business likes stability and predictability - cases like Jenkins are frustrating because there is neither.

And the judicial football that this case highlights challenges some of the basic tenets of the 1917 US Supreme Court's constitutional blessing on compulsory workers' compensation in NY Central Railroad vs. White: no protracted disputes about damages, limited and fixed obligation of the employer, and a speedy remedy.

The employee suffers too - I wonder if Jenkins would still have a job if this dispute about earning capacity had not dominated her case.

Work Comp 911

An episode of Reno 911 has a department psychologist taking officer mental healthy inventories. Each officer character in the cast is interviewed, and of course the satire is barely acceptable for prime time networks, but satirically accurate to experience.

For instance, Lt. Dangle asks when he will get the results of the evaluation, and the psychologist responds that it's not that kind of evaluation, and that, "It's mainly just there in the file so that if something happens we can just go and look at it and say, 'Yep, we should have seen that coming!'" (2:56)

Doesn't this remind you of the present day obsession with "compliance" and documentation - for no other purpose, it seems, other than to say at some point later down the road, "Yep, we should have seen that coming!" 

Or when Deputy Travis Junior is asked by the psychologist, "Have you ever considered suicide?" Junior says, "No, but I did shoot off a toe once as part of an attempt at workers' comp fraud. The argument was that it wasn't fraud because I was actually missing a toe, but, ah, the department didn't see it that way." (11:23)

Well, that workers' compensation reference is quite obvious. Perhaps it's why the psychologist told Lt. Dangle the for the evaluation ... should have seen that one coming.

And Deputy Trudy Wiegel talks about her addiction to prescription medication, admitting to what we like to call in our world, "doctor shopping". 

Psychologist: "Has a doctor prescribed all these medications for you?" Wiegel: "I have several doctors." Psychologist: "You have several different doctors... Are they aware of one another?" Wiegel: "You mean, do they all exist in reality?" Psychologist: "That wasn't one of my questions, but I'd love to know..." Wiegel: "One of them I met on the Internet, so I haven't actually seen her certificate. I have several kinds of doctors, sometimes they get confused. I just came from the podiatrist and he had me take my top off. You never know what the doctors are going to ask you what to do these days! He took one boob and he threw it around like a pendulum and said he was checking my cholesterol..." (17:40)

This is the kind of professional behavior that guidelines and utilization review were designed to squelch.

After Wiegel told the psychologist that the "podiatrist's" office was a van, he said, "This is not part of the evaluation, just some friendly advise - I'd highly recommend you not go back to that podiatrist." 

Wiegel responds like many who believe that the patient/physician relationship, no matter how toxic, is sacrosanct: "You know what, I don't really want to say, 'mind your own business...'"

-PAUSE-

"...Okay...," the psychologist capitulates.

There's a lot in work comp that is considered sacrosanct. The injured workers' relationships. Exclusive remedy... mind your own business ...

The protection against civil liability found in the exclusive remedy that employers enjoy has expanded through the years to nearly any vendor providing services or goods to the injured worker on behalf of the employer.

First it was the insurance company, because the employer cedes all control on a claim to the carrier via law and contractual relationship. Then it was the doctors, because without medical intervention provided by the employer there could be no treatment to the injured worker. And so on, down the workers' compensation food chain - anywhere a vendor touched an injured worker, or his file, the veil of exclusive remedy seemed to protect aberrant behavior.

Then last week the California 4th District Court of Appeals said maybe, just maybe, exclusive remedy may not protect an employer's vendor.

In King v. CompPartners, the court said that an injured worker could potentially assert a viable tort claim against a utilization reviewer for failing to warn about the potential risks associated with the withdrawal from psychotropic medications.

The court did not address whether the scope of the doctor's duty encompassed an obligation to advise Kirk King about what could happen if he wasn't weaned off his medication – it just said King should have been granted leave to amend his complaint to clarify whether this was the conduct for which he sought to hold CompParters liable.

The whole issue of exclusive remedy protection trickling down to providers is sort of like the dialogue between the psychologist and deputy Clementine Johnson:

Psychologist: "Have you ever considered suicide?"

Johnson: "For myself, no."

P: "I guess I have to ask the logical follow up question, have you ever considered suicide for someone else?"

J: "I've considered recommending it."

P: "Under what circumstances would you recommend suicide?"

J: "Two words, Trudy Wiegel."

P: "Your co-worker, Trudy Wiegel, Deputy Wiegel. You have recommended that she kill herself?"

J: "Do you know why? ... Homicide is illegal." (5:49)

What's In A Name?

About half of the United States have capitated limits on the duration that an injured worker can get temporary disability indemnity benefits.

The trend started about 20 years ago, when TTD duration was unlimited, and so was the open status of claims.

It is common knowledge - the longer a claim stays open the more expensive it becomes, and the less likely the injured returns to work.

In response, states started implementing caps on TTD duration. This, of course, was challenged in the courts and universally upheld as a legislative prerogative.

Since then, 23 states have capitated TTD status. The caps range from 104 weeks in California and Florida, and 105 weeks in Texas, to as many as 700 weeks in New Mexico.

Another 20 states, including Illinois and New York, allow an injured worker to collect benefits for the duration of temporary disability, according to the Workers' Compensation Research Institute.

In Kentucky, workers can collect TD for the duration of disability or until they qualify for Social Security. Iowa allows injured workers to collect TD benefits for the rest of their lives.

Washington currently has no cap on TTD, but a bill proposed by Rep. Matt Manweller, R-Ellensburg, House Bill 2337, would allow workers to collect temporary disability benefits for as long as total disability continues, or 60 months, whichever is less.

At the same time, Manweller filed House Bill 2338, which would end TD benefits when a worker reaches maximum medical improvement. The bill would also authorize a reduction in TD benefits if the worker has not reached maximum improvement, but has recovered some earning capacity.

A worker not yet at MMI who has partial earning capacity would be entitled to 80% of the actual difference between present wages and earnings at the time of the injury, provided wages and benefits don't exceed 150% of the state's average monthly wage or 100% of TD benefits.

Washington's Joint Legislative Audit Review Committee published a comprehensive report on costs in the state's workers' compensation system, pointing to the lengthy TD duration as a key cost driver.

According to the report, the average TD duration in Washington state was 291 days in 2012, compared to an average of 140 days in 46 other states, as estimated by the National Council on Compensation Insurance. Average duration of TD benefits in Washington has exceeded the national average each year from 2001 to 2012, according to the committee's report.
The committee blames that duration on the fungible standard of "employable."

"This is different from the majority of states that terminate temporary disability benefits once maximum medical improvement is attained, regardless of 'full' employability; if there is 'zero' employability, then permanent and total disability benefits would be warranted," the report says. "This difference, at least in large measure, helps explain the longer average time-loss durations in Washington."

In general I'm not in favor of drawing artificial lines in the sand. Each case, each person, each injury, is different. What works in one situation may not apply to a similar, but different situation.

But temporary is temporary - it is not of unlimited duration. At some point there has to be a declaration that, while someone may continue to improve throughout their lives, a condition is no longer "temporary" - we all have to move on.

What's interesting to me is that Washington's JLARC seems to think that the "employability" standard is more subjective than the Maximum Medical Improvement standard used by other states as a determinant for ending TTD status.

"It is a matter of some disagreement between employers and labor advocates in Washington state as to whether the way 'employability' is assessed in Washington is fair and reasonable," they say about the employability standard. "Some feel that identifying that the person can get a common job making minimum wage (e.g. fast food, retail, delivery, customer service) satisfies the test. Others feel that employability must take into consideration the personal limitations of the worker that may have pre-existed the injury, e.g. prison record, substance abuse, extensive tattoos/body piercing."

But when it comes to MMI, "It seems logical that when most injured workers reach maximum medical improvement, often also called 'fixed and stable,' they are no longer temporarily totally disabled, since additional treatment will not help them recover any more," implying that MMI is a more objective standard.

It isn't. Both rely on an "expert's" opinion. While an opinion may be based on fact, it is still an opinion: "a belief or judgment that rests on grounds insufficient to produce complete certainty."

The only way to "produce complete certainty" is to make something certain - and a time limit does that if "temporary" is to meet dictionary standards.

"What's in a name? That which we call a rose
By any other name would smell as sweet."

Romeo and Juliet (II, ii, 1-2)

What's in "temporary"? "Lasting, existing, serving, or effective for a time only." Employability, MMI, or 60 months...

The Antithesis of Robin Hood

A lot of general media attention in the past year has been about how the workers' compensation industry absorbs money that could otherwise go towards medical or indemnity benefits to injured workers.

Implicated in the data and anecdotes are lawyers, doctors, brokers. Cost containment services such as utilization and bill review are targeted. Insurance companies and third party administrators have been taken to task.

Virtually any provider of goods or services in the workers' compensation world has come under attack for diverting funds from injured workers into the Industrial Injury Complex without returning any meaningful value to the system.

Except the government.

Yet, the government itself perversely profits from workers' compensation, the antithesis of Robin Hood by taking from the rich ... and keeping it.

The unfortunate story of Charles Romano acutely demonstrates the perversity of this arrangement.

Romano, if you recall, sustained an industrial injury and during the course of treatment incurred the infectious methicillin-resistant staphylococcus aureus that shut down his lungs and kidneys and paralyzed him below the shoulders.

The adjuster for third party administrator, Sedgwick Claims Services, overrode physician requests and a judge's order to provide appropriate medical care, and Romano died as a result.

The case sparked outrage. I blogged about it mid-2013, after the Workers' Compensation Appeals Board issued a scathing opinion:

“We have rarely encountered a case in which a defendant has exhibited such blithe disregard for its legal and ethical obligation to provide medical care to a critically injured worker. Sedgwick CMS, acting as claims administrator for the Kroger Co./Ralph’s Grocery Co., demonstrated a callous indifference to the catastrophic consequences of its delays, inaction and outright neglect. In light of defendant’s repeated, unreasonable delays and denials, and its willingness to ignore a 2006 finding and award issued by the Workers’ Compensation Appeals Board, we will refer this case to the Audit Unit of the Division of Workers’ Compensation.”

Indeed, the case was referred to the Audit Unit, and last week Sedgwick and the state entered into a $1.129 million settlement, along with agreeing to post-settlement review of procedures at the office where the claim was handled.

It's bad enough that an innocent injured worker succumbed to the IIC, and Sedgwick learned a very valuable, albeit painful, lesson.

But no one questions where that $1.129 million goes...

The answer is in California Labor Code section 129.5(i): "All moneys collected under this section shall be deposited in the State Treasury and credited to the Workers' Compensation Administration Revolving Fund."

What's wrong with that picture?

Everything.

Because even the State of California (and most other states because they too have similar penalty provisions for sloppy claims practices) takes money from injured workers and their families.

The state has two jobs: make the rules, and then enforce the rules.

That costs money, for sure, but those costs are paid for already by employers through insurance policy assessments and self insurance deposits. The Audit Unit is funded through those assessments and deposits.

The penalty payment in the Romano case is simply a pure windfall to the state. There is no value returned by the state with that money to the injured worker's family. Presumably, the system's benefits are sufficient...

Sure, the TPA got a bruising and embarrassing punishment. But the Romano family lost a husband, father, provider and community member. They got some relief from the death benefit and perhaps a bit more (that settlement is confidential), and while a million dollars isn't going to bring him back or make the pain of loss any easier, the fact that the state itself capitalizes from claims strikes me as irreverent, scandalous, and downright plain wrong.

The workers' compensation system is a creature of statute. What the Legislature giveth, the Legislature can taketh away.

And the Legislature can giveth back....

California's lawmakers need to revisit the entire administrative and civil penalty process, and in the least ensure that money collected from violators gets to the victims of the wrongdoing that led to the penalty.

The state makes all sorts of laws and regulations to keep intermediaries from wrongfully profiting off the backs of injured workers. 

That the state also profits is the height of hypocrisy.