Context?!

Attorney Loren M. Lambert of Arrow Legal Solutions in Utah told WorkCompCentral legal reporter, Sherri Okamoto, that over the past few years he's "been seeing a pendulum swing" in terms of the social and political climate in Utah, such that it seems "society doesn't like people who are injured or disabled" in general.

Lambert was commenting on the Utah Workers' Compensation Commission's propensity to write its own law reflecting its view of how things should be - in this situation inserting a standard that doesn't exist in statute, thereby denying an injured worker of benefits to which he otherwise is entitled.

Lambert represented Socorro Guzman, who had worked for Circle 4 Farms performing animal husbandry work. In August 2008, a large boar rammed him, causing him to fall to the cement floor of the boar pen.

He was able to continue working after this accident, eventually going to see a doctor about his back pain.

Guzman's back worsened with time, and he stopped working in July 2009.

After Guzman filed a claim for Permanent Total Disability benefits in 2011, the Administrative Law Judge referred the case to an independent medical panel.

The panel reported that Guzman had suffered a herniated disc, which limited him to lifting no more than 40 pounds on an occasional basis, and that he could not repeatedly bend, stoop, squat or perform overhead work, but he would be capable of doing light- to medium-duty work.

The vocational rehabilitation consultant on the case opined that Guzman was essentially unemployable because he was in his 70s, with a fourth-grade education, limited English proficiency and no transferrable job skills.

The ALJ awarded PTD benefits to Guzman, but a divided Labor Commission appellate panel reversed last June, writing that while the medical panel had identified a "clear set" of restrictions on Guzman's physical activities, he still retained a "reasonable amount of strength, flexibility and endurance" and so his condition did not "reasonably limit his ability to work in a broad range of jobs."

The Court of Appeals then reversed the commission because there's no "reasonable" in the law.

The governing statute, Section 34A-2-413, requires Guzman to demonstrate only that his work-related injuries "limit (his) ability to do basic work activities," the court said. Thus, by applying "the qualifying term 'reasonably' or 'reasonable' in evaluating Guzman’s limitations, the board improperly imposed a higher burden on Guzman than the statute dictates."

The court went on to say that it was "troubled" that the commission failed to assign much persuasive weight to the vocational assessment report just because the consultant did not testify during the hearing on Guzman's claim.

"This flawed reasoning implies that evidentiary reports only carry value if the author of those reports can be questioned," the court said. Such logic was also inconsistent with the commission's decision to place great weight on the independent medical panel report when there was no evidence that the panel members appeared at the hearing.

The appellate court said the commission decision was "riddled with inconsistencies that call its findings into question."

It seems the commission has been rewriting the law to suit a political agenda for some time. A couple of other cases likewise have been reversed by the Court of Appeals lately, and the employers have asked the state Supreme Court to review.

In addition to the Guzman case, the commission has been reversed on the same grounds in Oliver v. Labor Commission and Quast v. Labor Commission.

Jaceson Maughan, the deputy commissioner and general counsel for the commission, told Okimoto on Tuesday that the commission's imposition of a "reasonableness" element "was an attempt to create context," since commissioners had thought "there needs to be some sort of limitation" as to what is a "limitation" for purposes of Section 34A-2-413(1)(c).

Who asked them to do that? What "context" is missing?

The "context" seems pretty clear: A monolingual, uneducated, elderly Hispanic manual laborer in a conservative, principally white, state got hurt, and can't return to the labor market.

I don't think any further explanation is needed.

Another Quake

I've been of the opinion lately that workers' compensation in 10 years is going to look much different than it does now, if it is even in existence as "workers' compensation."

A bill just introduced into the California legislature would take huge steps towards that vision by creating a "24 hour care" model for agricultural workers.

Assembly Bill 1170, by Assemblyman Luis Alejo, D-Salinas, would create the Care of Agricultural Workers Fund, financed by assessments on agricultural businesses based on the number of workers they employ and the total amount paid for workers' compensation medical costs for agricultural workers.

A primary motivation for the bill is to give agricultural employers a way to comply with the Affordable Care Act's requirements to avoid penalties.

Under the federal ACA, which became law in 2010, employers with 50 or more full-time employees, or a combination of full- and part-time employees that the Internal Revenue Service determines to be the equivalent of 50 full-time employees, can be subject to penalties for not making affordable health care available to their workers. The penalty provisions went into effect at the start of the year.

There are 2.8 million undocumented workers in the agricultural industry in California. They are not eligible for benefits under the ACA nor can they purchase health care from Covered California, the state-run health exchange established under the act.

Manuel Cunha, Jr., president of the Nisei Farmers League, the agricultural trade association that is sponsoring the bill, told WorkCompCentral the idea would be to have coverage that is at least as comprehensive as what is offered through Covered California for workers who "may have a document problem."

He said undocumented workers can't purchase coverage from a private carrier because they'd be required to provide a Social Security number and other information that could result in the carrier providing the employer with "constructive, actual knowledge" that the worker is in the country illegally, ultimately resulting in termination of the worker.

The bill does not state how to determine whether medical care is needed on an industrial basis or for other reasons. The methodology is left to the administration by the Division of Workers' Compensation.

DWC would be responsible for making assessments on agricultural businesses based on the number of workers they employ and the total amount paid for workers' compensation medical costs for agricultural workers.

DWC would then contract with one licensed health care service plan to be the exclusive provider of medical, surgical and hospital treatment for occupational and non-occupational injuries and illnesses incurred by its agricultural workers.

The bill further provides, "The health care service plan shall provide all occupational-related medical treatment coverage required by this division without any payment by the employees of deductibles, co-payments or any share of the premium."

But AB 1170 says nothing about whether the worker would be subject to a copay or deductible for non-occupational care. So there may still be an issue of "AOE/COE."

The bill would also require agricultural employers to make coverage available to workers' dependents, but would not obligate them to pay for that coverage.

Pacific Bell (before it became Verizon) ran a similar pilot program in 1996 and 1997. According to San Francisco-based Integrated Benefits Institute, the pilot reduced average medical costs by 21% and temporary disability costs by 41%.

Cunha told WorkCompCentral the plan is to provide coverage without a copay or deductible, but that will ultimately depend on how much it costs to put together a program that meets ACA requirements. There will be no cost of treatment of occupational conditions, but if the costs of the plan exceed the industry's total workers' compensation payments, the idea of deductibles or payroll deductions "might be an item of discussion."

There are many other unanswered questions for sure (not the least of which is how to deal with indemnity issues), and the success of getting the bill through the legislature and to the governor's desk is far from certain.

AB 1170 can't be scheduled for a policy committee hearing until 30 days after it was introduced. Alejo introduced the measure Feb. 27.

"24 hour care" has been explored before. There was a version that made its way through political circles during the Schwarzenegger Administration for workers enrolled in California Public Employee Retirement System, but ultimately died.

Still, the California Commission on Health and Safety and Workers' Compensation in conjunction with the University of California, Berkeley, managed that pilot project involving Service Employees International Union Local 1877, janitorial employer DMS Facility Services and Kaiser Permanente.

Their conclusion in 2008: the extent of integration is a significant factor when it comes to reducing costs and improving quality of care, but that lower medical costs and lesser disability is experienced the greater the integration.

How far will this go? I don't know.

It's estimated that the agricultural industry in California is $37 billion big, so there's some lobbying muscle available.

It's quite possible that this is a quake in the overall Seismic Shift that is going to shake the industry over time.

Work Comp Isn't Magical

"Enchantment" means of or having a magical influence or characteristic, but New Mexico isn't sure work comp the value and relevancy of workers' compensation is so enchanting - at least not the state's agricultural industry.

New Mexico farmers and ranchers have, so far, not been required to purchase workers' compensation insurance but pressure is on the agricultural sector to step up and participate.

At issue is whether the district court ruling in Griego et al. v. the New Mexico Workers' Compensation Administration applies to the three injured workers in that case alone, or to all agricultural workers in the state.

Bernalillo County Judge Valerie Huling ruled that the provision of New Mexico statute 52-1-6(A), excepting farm and ranch workers from the workers' compensation coverage requirement, violated the state constitution's equal treatment clause.

But Huling said in her decision that she didn't have the authority to hold workers' compensation judges and the state's Uninsured Employers Fund to her ruling because they are separate entities from the Workers' Compensation Administration.

Two pending cases in the state Court of Appeals, where injured agricultural employees have sued their employers for not providing workers' compensation coverage, may answer that question.

The cases - Rodriguez v. Brand West Dairy and Aguirre v. M.A. & Sons Chile Products - are dividing labor and business.

New Mexico Center on Law and Poverty Staff Attorney Maria Sanchez told WorkCompCentral that the Greigo ruling is applicable statewide, and not just as to the three workers in that case.

Sanchez said her law center plans to file an injunction for Huling to extend the decision at least to the UEF.

Land of enchantment?

An amicus curiae brief in the Rodriguez case argues that not only is the provision constitutional, but it shouldn't apply to the defendant relying on the interpretation of "equal protection" in precedent, asserting that the workers failed to prove that they, as farm workers, were in a similar situation to other employees whose employers are required to provide insurance.

"Simply stated, the employer and UEF were not parties to the Griego litigation and, therefore, are not bound by that decision," the brief reads. "Employer and UEF were not parties to the Griego litigation and did not have the opportunity to be heard by Judge Huling in regard to the issues resolved by Judge Huling's opinion and in regard to the issues presented by this WCC."

The amicus brief also argues that administrating the workers' compensation insurance requirement for farm and ranch workers would be burdensome and costly to the system – particularly because of the challenges of working with agriculture employees who move frequently.

"If the worker is moving around regularly, where should the injured worker be provided medical care and treatment, i.e., at or near the town/city where the accident happened or at different location(s) where the injured worker may be living throughout the life of the claim?" amici say.

A lot of states have already dealt with migratory workers and the fact that when, where and by whom should a worker get treatment has not impeded mandatory coverage.

The real issue in my mind is not whether workers' compensation should be mandatorily imposed on all employers, but whether business finds value in the coverage.

Clearly, those ranchers and farmers that support the amicus filing don't believe that workers' compensation is of any benefit to them - but we have seen that before: business doesn't value the exclusive remedy of work comp until they get sued civilly and have to make good on a big judgment not covered by any insurance.

Just as clearly, the migratory farm workers, those at the relative bottom of the food chain in the economy, do find value in the protections of work comp. New Mexico's system is vastly more simple than big state systems so the deterrence to filing a claim and seeking benefits isn't as looming.

According to a Wikipedia entry, cattle, sheep, and other livestock graze most of the arable land of the state throughout the year and based on 2004 tax receipts the agricultural industry is the 20th largest grossing business sector, with about $72 million in taxable revenue.

Gross business taxable receipts for the state in 2004 were about $39.5 billion, so realistically agriculture is only about 0.18% of the total economy of the state - but the issue is whether workers in that small sector are entitled to the same protections as a worker in mineral extraction ($1.3 billion in receipts) or retail ($12 billion).

Obviously we in the industry find relevancy and value in work comp because it's how we make our living. Does the rest of the world see it that way? Oklahoma, Texas, and perhaps New Mexico may not.

Can More Paper Protect MA Temp Workers?

A while back I posited that most workers probably don't know what workers' compensation was, or cared, until they have an injury at work or unless they know someone who is "on comp".

Massachusetts is going to try to keep workers for temporary staffing firms informed about who the coverage provider with House Bill 4304, sponsored by Rep. Linda Dorcena Forry, D-Dorchester, called the "Temporary Worker Right to Know Act."

Proponents say the bill will help ensure that the more than 40,000 day laborers in Massachusetts are protected from injuries.

HB 4304 also requires temporary staffing firms to tell workers what safety equipment and training are required for the job.

The Workplace Safety Task Force of the Massachusetts Bar Association and the Massachusetts Coalition for Occupational Safety and Health (MassCOSH) has been pushing for passage of versions of HB 4304 for the past two years.

They argue that day laborers – primarily in the construction industry – are working without protection and often without knowing the identities of staffing company clients.

The bill exempts professional workers, secretaries and administrative assistants.

The bill requires staffing companies to provide a written job order that includes:

• The name, address and telephone number of the staffing agency, its workers' compensation carrier, the employer at the worksite and contact information for the state Department of Labor Standards.
• The type of job and any requirements for training, equipment or licenses.
• The designated pay day, hourly rate and anticipated start and end times for the job.
• Any meals or transportation provided by the staffing company or the worksite employer and associated fees charged workers.
• A multilingual notice that the job order contains important information and should be translated.
• The bill also prohibits staffing companies from charging workers for registering with the state or for procuring the job.

The opposition to HB 4304, the National Federation of Independent Business (NFIB) and the Massachusetts Staffing Association argue that the law may be unenforceable and will bury legitimate staffing companies in paperwork. They also argue that the bill would drive unscrupulous staffing companies underground.

"There's definitely a day laborer issue. These are the folks who are picked up for some job at 6 a.m. and don't know where they are going. They get hurt on the job and find out there's no workers' compensation," Bill Vernon, Massachusetts director of NFIB, said. "But what (lawmakers) have done is sucked in legitimate companies, and the bill may create a real problem with compliance."

I tend to agree with NFIB. I'm not sure employees really care about workers' compensation, safety or training. They might care about safety if the engage in an activity that they believe might not be safe, but most of the time those workers are too worried about getting paid and putting food on the table than whether a particular job is safe.

Likewise whether training is required, equipment, licenses - not particularly important when each and every hour worked means another step away from poverty.

I hope that the Massachusetts law accomplishes its intended purpose - to help protect the state's temporary workers from injury and ensure access to care and benefits if the unfortunate happens.

I'm just not convinced that another couple of required pieces of paper are going to make a difference.

Follow The Money and Call the IRS

When we see signs on the side of the road soliciting workers' compensation claimants, or on buses likewise advertising free medical and disability income, we tend to think that it is some dirty lawyer engaging in ethically comprised activity.

We think that the individuals should be reported to the Bar Association, or in the least that the advertisement should be subject to tests against false advertising. At most we would think that the cases brought by the advertiser are probably suspect and worth nuisance value at best.

But the criminal mind doesn't work that way. The creative criminal mind knows that cases brought in the door through such advertisement schemes typically have very little value and likely would settle for very little money.

And they don't care.

Because once a case is brought into the litigation system all sorts of ancillary services can be billed for and there in lies (no pun intended) the profit.

For any of you who are my age you will remember the early 1990s of California workers' compensation and all of the rampant psychiatric claims. Every case that came in the door at our law firm at that time involved an interesting link between psychiatric, orthopedic, internal medicine and as many other specialties as could be involved in a claim.

These case proved to be of very little value on the front end. The reporting was terrible, rampant with error and illogical diagnosis - this despite the plethora of testing involved to support the diagnosis in each case: MRIs, blood tests, MMPIs, other psyche tests, etc.

But these cases churned up huge medical-legal bills and it was not unusual to see a "nuisance value" case with $20,000 - $30,000 in medical legal expenses (inclusive of hugely inflated diagnostics bills)... all going to the same group of providers. The medical reports all looked suspiciously the same but for some minor details, and sometimes even those weren't caught in the word processing system.

At first the bills were just paid because of the medical-legal fee schedule. Carriers would object to some of the diagnostic bills, and eventually would settle the bills for maybe ten cents on the dollar.

The medical-legal providers didn't care because nearly every penny they were reimbursed was pure profit since there was very little expense involved in the generation of these bogus diagnostics and they were getting legally mandated payment on the reports.

If you asked the claimant about the medical-legal appointments and the testing, testimony was vague and non-committal. Some who did not adhere to their coaching were surprised at some of the statements in the reports and/or testing allegedly done.

When the bills/liens settled, some of that wealth was spread down the line to the "doctors" whose names appeared on the reports.

In 1992 television reporter Harvey Levin did an expose series on these medical-legal mills and caught these enterprises red handed, and this evidence was presented to the California legislature which brought about Labor Code section 3208.3 - the infamous psychiatric threshold statute - and some other laws intended to curb illicit medical-legal activity.

The medical-legal mills disappeared almost overnight and I'm sure the operators went on to other nefarious enterprises, perhaps still within our workers' compensation system.

That's how these low-end legal services churn cases through the system driving back end profit centers bordering on legality until someone exposes the fraud.

The mole retreats then looks for another hole.

What we, as law abiding citizens lacking criminal creativity, fail to see or understand is where the holes are. By the time we get to closing up the hole it is too late - another lesson learned, but the education is expensive.

The worst part of these schemes is that ultimately the laws and the regulations that are put into place to control these abuses end up hurting the entire system, increasing complexity, friction and costs.

I think 1992 is happening right now, right in front of our faces, and we're just not astute enough to recognize it. It's not deja vu, it's history repeating itself and because our society emphasizes the short term we fail to learn from history. But trust me, we are being taken for a ride. We think we are in control, but we're driving down the wrong road.

Here's what I believe goes on - enterprising criminal opens up an advertising company and has one client: a legal referral service (owned by the same people that own the advertising company). The legal referral service has a circle of lawyers to handle the cases that are brought in by the advertising, and they know that most of the cases aren't worth much if anything at all, but volume can resolve the unit cost equation. The attorneys aren't doing anything wrong because they are not advertising - they're just representing people who have complaints of a workers' compensation nature that were enticed by the advertising company.

The referral service owners also own, let's say, an interpreting business or three. The referral service doesn't get paid directly - these low value cases don't produce sufficient attorney fees for there to be any split.

No - the deal is that the attorneys, in exchange for referrals, commit to using the interpreting service that is also owned by the referral service owners. In other words, the referral service gets paid in interpreting orders.

But what if no interpreting services are actually performed? What if invoices are generated without any work being done? What if a lien is filed with the Workers' Compensation Appeals Board and the carrier objects and doesn't pay? And what if the interpreting service accepts pennies on the dollar which the claims adjuster is happy to pay to close the file, seemingly a win-win?

The service provider doesn't care because the cost of "providing" the service (i.e. interpretation) is near zero so any money that comes in the door is nearly pure profit. The adjuster doesn't understand the enabling done - they're just happy to close the file so they can work the next one.

So you tell me - who is responsible for enabling this situation? And you tell me, will a fee schedule on interpreting services rectify this?

We are the enablers because we are all to quite willing to settle cases for pennies on the dollar in order to close the file. We are the enablers because we misdirect our resources and focus on the providers who are not the problem, focusing on the low hanging fruit, because we are not criminals so we don't think like criminals.

A fee schedule (or any other remedy that attempts to treat the symptoms) won't work and in fact exacerbates the problem because such regulation introduces another layer of complexity behind which the criminal can hide.

I've said it before - follow the money ... if you can.

And don't mess around with weak workers' compensation laws to correct problems like this. It has been shown time and again that trying to bust criminals for the most offensive acts via the most obvious offenses nearly never works.

What works is the same tactic that brought Al Capone down - tax evasion. That's easy to prove: income is to be reported and unreported income is tax evasion. Simple, direct, easy to prove with VERY effective penalties.

I'm willing to bet that each of these enterprises and the individuals behind them are engaged in tax fraud because criminals don't pay taxes - it's against their moral fiber. There's records to prove it because one other thing about criminals - they're greedy and consequently they will keep track of the money in some fashion to make sure everyone gets their slice of the ill-gotten pie, and no more than that slice.

Get the Internal Revenue Service involved - they have the resources, and the incentive, to investigate these cases.

In the meantime, when there is a nuisance type of case, follow the money. Don't settle. Review databases to determine commonalities and come to an understanding of the enterprises involved. Put the case together, then call the IRS...

The same type of scheme that produced bogus med-legal mills in the early 90's is at large right now, before our very eyes and right under our noses - and we're letting them run our system into the ground and taking legitimate businesses with them.

If something looks wrong, it probably is.

NM Case Makes Clear Work Comp Can't Discriminate Arbitrarily

Workers' compensation is a creature of statute. We're constantly reminded of that. But even though statutorily created, rules of fair play and application still apply - in other words the laws of any particular state must still meet constitutional standards.

In New Mexico a court ruled that a statute enacted in 1917 that excludes farm and agricultural workers from the New Mexico Workers' Compensation Act is unconstitutional.

New Mexico 2nd Judicial District Judge Valerie Huling said Dec. 27 in an opinion in Griego et al. v. New Mexico Workers' Compensation Administration that agriculture is the only industry allowed to shift the burden of injured workers onto taxpayers by not providing workers' compensation coverage.

The distinction used to define who is exempt and who is not exempt comes down to whether the worker is directly involved in harvesting crops or working with animals. For example, a worker picking onions on a farm would be excluded from coverage, but a person who is packing those same onions inside a building on the same farm would be covered by the Act.

The court found this distinction arbitrary and thus unconstitutional.

"Although the legislative intent of the farm and ranch exclusion, protection of the agricultural industry, is a legitimate goal, the exclusion is an arbitrary classification plainly at odds with the articulated purposes of the Act," Huling wrote.

This all came about when three dairy workers filed the lawsuit in 2009, after legislation failed that would have eliminated the farm and ranch workers' exemption from the Workers' Compensation Act. Similar legislation failed in 2007.

The three had worked as farm and ranch laborers for dairies and had received injuries in the course and scope of their employments. They sought workers' compensation benefits but the cases were dismissed under the 1917 law.

Judge Huling, finding the distinction between farm workers and dairy workers capricious and arbitrary, took on big ag business in the state noting in her opinion that the agricultural industry has reported average profits of $667 million over the past eight years, yet eliminating the exclusion would require coverage for about 10,000 workers, and the cost of providing workers' compensation insurance to the additional employees would be between $5 million and $7 million, less than 1% of annual profits.

Gail Evans, legal director for the New Mexico Center on Law and Poverty, filed the lawsuit on behalf of the workers and told WorkCompCentral that this conclusion was important because it stands in sharp contrast to what lobbyists for the agricultural industry told lawmakers in 2009.

"The fact that this will cost less than 1% of profits, that fact was not presented to the Legislature," she said. "The agricultural lobby presented incorrect information at the Legislature that it would cost $90 million."

The Workers' Compensation Administration argued what I consider to be an irrational point, and one that is largely moot after 100 years: that many agricultural workers are seasonal and earn varying wages working for multiple employers. The administration said it would be difficult to trace an injury to work performed for a specific employer, demonstrating that agricultural workers present challenges to the efficient administration of the system.

Lots of other states have been dealing with this issue, as I said, for nearly 100 years. New Mexico certainly has many models to choose from to comply with the court's ruling. The administration's argument lacks substance.workers compensation, work comp, injured worker