The New Mexico Lesson

Workers' compensation has always been a legislatively gratuitous act - what the legislature giveth, the legislature can taketh away. Not always with clarity, a state legislature dictates the beneficence of a system and, ultimately, the cost of that beneficence.

Sometimes the lack of clarity causes the judicial branch to interpret legislative acts inconsistently with legislative desire, so the legislature steps in (after, of course, political pressure applied by representatives of the concerned constituency - lobbyists) to correct erroneous judicial interpretations, and sometimes the legislature just succumbs to the desires of powerful interests, rightly or wrongly.

New Mexico is a great present day example of those concepts in action, with a bill recently introduced to eliminate marijuana as a medical obligation under workers' compensation, but another seeking constitutional legitimacy of the state's long tradition of exempting ranching and farming from compulsory work injury protection.

The NM House of Representatives passed a bill that would allow workers' compensation judges to reduce indemnity benefits when a worker's intoxication contributed to the accident causing an injury.

And the House Judiciary Committee passed a bill that would prohibit workers fired for misconduct after returning to work post injury from collecting temporary disability benefits. The committee also heard testimony on a measure that would eliminate reimbursement for medical marijuana.

In addition, a bill introduced in the Senate on Monday seeks to refine the exemption of certain farm and ranch workers from comp coverage.

All four bills – and their three Senate companion measures – were introduced in response to NM state court decisions.

The state's medical marijuana conflict is well known in the industry. NM courts found pot to be a medically reimbursable item since it is otherwise legal in the state. The insurance industry objects because it forces them to violate federal law. Advocates say much more powerful, addicting medications that have less efficacy for certain conditions are legal, so weed, which is less harmful and purportedly more effective, should be reimbursed if workers' compensation is truly a compassionate system.

Less well known is New Mexico's farm and ranch exemption. The argument for the exemption is that the day laborers used in these operations are transient so it is difficult for farmers and ranchers to discern just where an injury originated. The counter argument is that it doesn't really matter - the purpose of insurance, and in particular workers' compensation, is to spread the risk among a large pool, so while THAT injury may not be your responsibility, eventually your injury will be someone else's responsibility; it all goes around.

Many states have laws punishing intoxication when it leads to a work injury. This may invite some litigation, but the public interest is to ensure that if someone is doing their job they aren't compromised by drugs or alcohol. In other words, don't go to work buzzed - this makes sense

I can't imagine the logic, though, of discontinuing temporary disability benefits if there's "misconduct" after return to work and a termination as a result. To me, this is just inviting employer abuse.

The New Mexico Legislature is scheduled to adjourn Feb. 18. At least we won't have to wait long to see where all this goes.

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.

The Nonsense of Pot in Comp

Marijuana for medicinal purposes is like prescribing alcohol for treatment.

It's just bullshit.

The real bottom line is that there are absolutely no scientifically controlled, peer reviewed, high quality studies that confirm pot is good at treating anything.

There just isn't.

There's anecdotal evidence of course.

Sure, it might make the "patient" feel better in the short term, but so does alcohol. Both have limitations on efficacy, both were illegal at some point, both gave rise to significant underground economies, both are highly susceptible to abuse, neither are controlled as to dosage, and both come in a wide variety of strengths.

New Mexico's experimentation with marijuana in the workers' compensation setting is providing a valuable lesson for the other states - write the laws now declaring pot un-reimbursable.

I'm all in favor of just legalizing pot for recreational purposes. The same scientific void as to efficacy for treatment also fails to show there is any risk to health greater than alcohol or tobacco, and the tax revenue potential could be enormous.

While New Mexico is going so far as to set up a reimbursement schedule, the fact is that none of the treatment guidelines that are widely followed in state work comp systems recognize weed as a valid treatment option.

New Mexico law is decades behind other states in describing what is "reasonable and necessary" medical treatment, which is how the courts surmised that if the patient says pot works then it must be paid for.

Which of course is ludicrous.

The same courts would not condone abusive dosages of opioids under that same theory.

New Mexico regulators figured they had better nip the issue at the bud (all pun intended) by coming up with a reimbursement schedule, which also includes an ad hominy dosage schedule (an allocation which, by the way, is unbelievably liberal - that much pot means someone's stoned 24/7/365...).

General health doesn't have this problem because there is no law out there that says a health insurance company has to pay for pot. The relationship is nearly completely contractually controlled, and in most cases those contracts provide for treatment per recognized guidelines.

Workers' compensation does not have that luxury. Workers' compensation is statutorily controlled, and there is no room for contractual restriction or modification on a personal basis with the consumer.

Consequently, when the law is interpreted by the courts, particularly New Mexico courts, the conclusion is that if the injured worker says it works, and nothing else does, then it must be paid for.

New Mexico will have to statutorily define the role of pot in workers' compensation if the state wishes to put some boundaries around the issue.

All of the other states should do so now before they end up in the same vortex of insanity that New Mexico is going through.

Declaring pot unwelcome in workers' compensation will probably draw the ire of pot advocates, and they are a growing and vocal segment of society with some votes (and a lot of money) behind them.

But work comp, for better or worse, is a political football used to make deals in unrelated matters. The deal should be centered around the legalization of pot for recreational purposes, but also declaring that it is not a part of the workers' compensation system.

There's no place for pot in work comp and states need to declare that policy now before the issue finds a slippery slope in court rooms.

Haves Versus Have Nots

Disparity in treatment between people in similarly situated; this is one of the most fundamental constitutional analysis applied when a statute is tested.

It's a test of fairness, a qualitative test that may have some quantitative basis, but ultimately is a "touchy-feely" sort of test.

There were 38 states that exempt certain levels of the agricultural industry from workers' compensation.

Now there are 37.

The New Mexico Court of Appeals, in two consolidated cases, Noe Rodriguez v. Brand West Dairy and Maria Angelica Aguirre v. M.A. & Sons Chili Products, ruled that there can be no distinction between the people who pick crops, and those who bag them.

Since 1937 farmers didn't have to buy workers' compensation insurance for their field workers.

Workers who perform tasks essential to the cultivation of crops are excluded from coverage, as distinguished from those who perform tasks such as processing crops. The law also differentiates between people who care for and train workers as part of a farm and ranch operation - they did not need to be covered - and workers who care for animals and train them for competitions, who are covered.

Employers argued that the law exists to simplify the administration of the workers' compensation system and protect the agricultural industry.

The court rejected those arguments, and frankly they aren't logical. Seems to me that it's more complex to distinguish between classes of workers as to who is or isn't covered is more complex than applying work comp to all workers. And the state only has 15,000 filed workers - this isn't California after all; I don't see the big burden on New Mexico farmers beyond the fact that their onions are going to cost a couple more pennies per pound now.

The court saw it that way too.

"We conclude that there is no substantial relationship between the exclusion and the purported government interests of increased workers' compensation efficiency and lower costs for the agricultural industry," says the opinion. "There is nothing rational about a law that excludes from workers' compensation benefits employers who harvest crops from the field while providing benefits for the employees who sort and bag the very same crop."

And maybe the farmers affected directly by the case will encounter some hardship (the judicial change in the law is retroactive to March 30, 2012 on a procedural distinction), but the state provides uninsured employer protection to workers injured without coverage, and statutes of limitation are also going to significantly reduce potential claims from arising.

In addition, 5,000 of the 15,000 estimated population are voluntarily covered, so the claims population drops even further.

This may or may not start a trend - as noted, there are 37 other states with some sort of agricultural exclusion. Most of those exclusions are basically for mom and pops operations.

What's interesting to me is that, in contradiction to the rest of the nation, this case represents support FOR workers' compensation.

From Florida to California, there are, or have been, constitutional challenges AGAINST state workers' compensation statutes in one form or another.

The Florida Padgett case, decided by the Florida Third District Court of Appeals just days ago, found that Judge Cuetto's declaration that the state's laws were unconstitutional was procedurally flawed, leaving open the substantive issue.

In California several cases are pending testing the constitutionality of various parts of that state's system under the most recent reforms.

There is the nascent, yet real, trend of opt-out challenging the viability of work comp.

All of this demonstrates the schizophrenic personality of workers' compensation. When it's needed it's a godsend, particularly if it is executed properly. When it's not needed then it's a burden that should be somebody else's problem.

At times workers' compensation makes no sense. Other times it is irrefutably necessary.

There are people who can't access the system, or at least access it in any reasonable manner. And there are those who don't want to be forced into the system, or at least not within the particular boundaries declared by law.

It's all a compromise. Like life itself, there are always winners and losers and nearly no one is happy one way or the other.

Regardless, the bottom line, which I think the New Mexico Court of Appeals got right, is that there can not be an arbitrary distinction between the haves, and the have nots.

It just doesn't feel right.

What Matters

It's a tale of contrasts in this morning's WorkCompCentral News.

There's joy and elation within the "opt-out" crowd that the Oklahoma Supreme Court denied taking on original jurisdiction in the constitutional challenge to that state's recent reform law, and in particular the option employers have to provide alternatives to The System.

Those challenging the law are more circumspect, saying that the court's decision at this time wasn't not expected and that they'll be back when the case is "ripe" for review.

Plaintiffs’ attorney Bob Burke says he understands that the court didn't think the case was ready for review yet but that he was trying to fast-track it, “Because it is a question that everybody needs answered.”

Opt-out proponent and president of non-subscription specialty broker PartnerSource, Bill Minick, told WorkCompCentral that "Oklahoma’s highest court has given the green light for a truly competitive marketplace for workers’ compensation.” Minick and proponents argue that opt-out and non-subscription actually provide better protection for injured workers than state work comp systems.

That point is highly debated by the opposition, largely on the grounds that in dispute resolution the cards are stacked against workers, and that the industry isn't very transparent, if at all, with work injury and recovery data - even resisting state efforts to expand reporting and data requirements.

While the debate about non-subscription continues in Oklahoma, and is off the table for this year in Tennessee, tribal compensation pacts tied to gambling continue to be controversial starting with New Mexico's recent extension of Indian Tribe gaming.

The challenge is comparing tribal compensation to traditional state based systems because of extreme variations and, again, lack of complete transparency.

As sovereign nations, tribes can enact their own laws and employee benefits as they choose, and if they have a complete infrastructure in place, there can even be a number of tribal courts and adjudicators to resolve workers’ compensation disputes. States that permit tribal gambling tie work comp protections into those compacts, but tribes, like opt-out employers, have great latitude in defining their systems, including dispute resolution processes.

It comes down to culture.

Dave Lundgren, a Washington-based attorney who specializes in tribal law, told WorkCompCentral, “They know their people and they know their customs, where non-Indian administrative structures do not.”

For example, for some tribes creating their own workers’ compensation ordinance means allowing them to add medical treatments from tribal healers or medicine men to their list of approved vendors, something most states don’t allow.

But the difference lies in sophistication of systems, or taken another way, system complexity that has creeped into workers' compensation statutes over the past 100 years.

“Administrative entities have had a century in developing workers’ comp, whereas tribes are in their infancy,” said Lundgren. “They’re trying to eliminate what they view as too much red tape and onerous over-regulation and simplify it so that they can streamline.”

That sounds like an argument out of the non-subscription playbook: employer control. Proponents rally around the claim that opt-out systems are simpler, handle claims faster, involve fewer lawyers and are more expedient as a result.

Injured worker advocates say all that these plans do is stack the cards against them.

One of the key arguments made by the plaintiffs to the Oklahoma Supreme Court was that the dispute resolution process provided in alternative plans limit judicial or administrative review of claim denials, requiring an appeal to a committee of three members who were not involved in the original benefit determination, and who can be appointed by the employers.

That is an issue with tribal gaming compacts as well.

A few years ago a California appellate court ruled in Middletown Rancheria v. Workers' Compensation Appeals Board, that the Workers' Compensation Appeals Board lacks jurisdiction over federally recognized American Indian tribes for the purposes of enforcing workers' compensation laws.

In the Middletown case, workers of the casino that disagreed with the way their workers’ compensation claim was handled could bring a dispute only before the tribal council, which was only comprised of members of direct lineage of descendants of Middletown Rancheria, with no specialized council for workers’ compensation.

The truth, I suspect, is somewhere in between. But we don't really know, because there isn't any systematic, objective survey of all of these different systems.

Nor is there any long term study on the impact such disparate systems have on injured workers, employers or the communities affected.

What we do know is that there is a publicly growing groundswell of criticism about standard workers' compensation from employers, injured workers, providers and many others. Most of that criticism stems from one simple failure: taking care of the injured worker timely, efficiently, fairly.

To win over critics, any alternative system, including opt-out and tribal compact options, is going to have to demonstrate with real comparison data, the superiority of these plans to standard issue work comp systems in terms of the one constituency that doesn't have much say in the matter - those subjected to the systems.

Not The Average Case

The workers' compensation system "efficiently disposes of the average case," claimant attorney, John Gibson, of Lubbock, told the Houston Chronicle. However, he said, "the system is not set up to take care of the more significant medical issues. The worse the injuries, the more hurdles there are, instead of the other way around."

Gibson was interviewed for a story about former Harrison County deputy sheriff Mike Freeman.

Freeman was gravely injured in a June 2007 high-speed chase. Due to alleged delays in his medical care, his condition deteriorated to the point that he is on a ventilator and the family is preparing for his death.

Gibson has sued the third party administrator in civil court on the grounds that they have a pattern of routinely denying or delaying required care and as a consequence induce needless suffering on those workers' compensation claimants with serious injuries.

We've seen that story before in other states.

Not coincidentally, in other news, a New Mexico appellate court last week ruled that the widow of an off-duty tribal police officer who died more than a decade ago after he rescued a child from the Rio Grande river is entitled to workers' compensation benefits.

"Because of the unique nature of law enforcement duties, we conclude that law enforcement officers may recover workers' compensation benefits in some instances for off-duty injuries occurring in response to circumstances reasonably calling for police officer assistance," the court said.

Kevin Schultz took Aug. 17, 2002, off of work in order to chaperone a church youth group fishing trip near the small community of Pilar, which is outside the boundaries of Pojoaque Pueblo lands. His wife and two other adults also came on the trip.

A 12-year-old boy from the group fell into the fast-moving waters of the Rio Grande, and Schultz leaped into the river to save him.

After pulling the unconscious boy to safety, Schultz collapsed in shallow water and drowned.

Though he was off work, the Schultz family was told by numerous officials of various agencies that they would do all they could to secure workers' compensation death benefits for the family since Schultz received accolades, commendations and awards, posthumously, for his heroic act "in the line of duty."

Despite these promises, officials failed to take care of the filing in a timely manner, and other delays ensued because Schultz' wife relied on the promises of these officials. She ultimately took care of the claim herself but had to overcome various procedural and substantive arguments related to statutes of limitation and compensability.

After going to the state Supreme Court, which remanded back to the Court of Appeals finding for Schultz on AOE/COE the appellate court overrode earlier rulings denying the claim.

"Given the unique nature of law enforcement duties, including the fact that in some circumstances an off-duty police officer may be required to respond in an official capacity to incidents arising in the officer's presence, courts have struggled with determining the compensability of off-duty police officer injuries using traditional interpretations of the 'arising out of and in the course of employment' test," Judge Cynthia Fry said, in writing for the court.

I remember Alex Rossi, risk manager for Los Angeles County, explaining to attendees of the annual California Workers' Compensation Institute meeting in 2012 several years ago that managing the risk of first responders is much different than for private enterprise.

Paraphrasing Rossi, when there's a fire privately employed employees run away. In public safety, when there's a fire, employees run to it.

Which is why many states have various laws with presumptions in favor of public safety workers.

Society has determined through its laws that those in the first line of emergency response get special treatment.

That philosophy needs to be carried through to claims administration.

Sure, there's always someone trying to take unfair advantage of the system - understandably those cases will be vetted, reviewed, denies properly, etc.

But there seems to be this overall theme that has developed over the past decade or so of deny first, until later reversed. There's seems to be a lack of sensitivity to the social promise.

In the Freeman case, no lawyer was necessary until the TPA cut off supplemental income benefits because his wife missed filing paperwork with it on time. In fact the paperwork was filed timely but the adjuster failed to notify Freeman's wife that the fax number had changed...

In the meantime, Freeman's serious injuries degraded to the point of numerous surgeries and hospital trips. Almost universally his various physicians prescribed specialize powered wheel chair, and bed, so that he wouldn't develop bed sores and require further hospitalization.

Those recommendations didn't pass utilization review so they were denied.

And Freeman ended back in the hospital, some 30 times.

Now he's on a ventilator awaiting death.

And in Schultz' case the widow was assured, not only by his direct employer, but also by various other governmental officials, that his death would be covered.

Until the matter got to the TPA. Then all bets were off and if it wasn't for the dogged efforts of Schultz' widow for over 10 years that she will get some closure.

These are both tragic circumstances, made unnecessary by insensitive claim handling.

Some call for stronger penalties in the wake of reforms that have shifted the balance of power.

Others call for better training and oversight.

Some say that these are just aberrations.

Regardless, Gibson has a point - workers' compensation remains pretty efficient at dealing with routine injuries.

But we need to get better at dealing with the tragic, catastrophic situations.

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