Cost Shifting in Workers’ Comp a Concern

Workers Compensation began over 100 years ago with a simple premise: If workers gave up their right to a jury trial then employers would insure injuries regardless of fault. This is what is known as the “Compensation Bargain.”

100 years later, this Bargain has been broken. Seasoned attorneys know that politicians permit employers to use questionable tactics to limit exposure. The “neutral” decision maker in Ohio is the Industrial Commission. Sadly, this political agency hires decision makers who permit employers to purchase negative opinions from medical examiners. By paying a grand or two to purchase an “IME” opinion, an employer can save tens of thousands or more in medical expenses.

Sadly, these political operators fail to recognize the ultimate cost of this betrayal. When they deny medically necessary treatment the injured worker is left with no choice but to pursue other sources for care. These include health insurance, Medicare or Medicaid. Ironically, the Affordable Care Act limits the ability of health insurers to refuse payment for worker’s comp caused pre-existing conditions. This “cost-shifting” means that we all pay (as increased group health premiums and taxes) for medical expenses that should have been paid through the employer’s workers’ comp coverage.

OSHA issued a report in 2015 entitled “Adding Inequality to Injury: The Costs of Failing to Protect Workers on the Job.” This report found that workers’ compensation payments cover only a small fraction (about 21%) of lost wages and medical costs of work injuries and illnesses; workers, their families and their private health insurance pay for nearly 63% of these costs, with taxpayers shouldering the remaining 16%.

The Center for Economic Policy Research made a similar finding. The number of workers receiving Social Security Disability Insurance (SSDI) in the United States has gone from 25 per thousand in 1990 to 59 per thousand in 2014, bringing the SSDI trust fund close to depletion. Their report, entitled “Rising Disability Payments: Are Cuts to Workers Compensation Part of the Story?” found that more than one fifth of the rise in the percentage of workers receiving SSDI awards can be explained by cuts to workers’ compensation programs.

Work related injuries should be paid for through employer sponsored workers’ compensation insurance. This enables an employer to factor premiums into the price of goods and services. Sadly, the routine denial of coverage shifts these costs to health insurance and taxpayers at a cost to us all.

Volunteer service while receiving workers’ compensation temporary total disability?

According to the National & Community Service Corp., 63 million people volunteer a total of 7.9 billion hours of community service each year. This raises an interesting question: should you perform volunteer work while receiving workers’ compensation temporary total disability?

One does not need to be completely, utterly and abjectly helpless to qualify for disability. In order to receive temporary total compensation, one must be temporarily unable to return to the job held at the time of injury. Thus, the same shoulder sprain that would render a custodian disabled might not render someone like me – an attorney who performs desk work – disabled.

My colleagues recently discussed the advice to give to an injured worker on temporary total who wished to participate in a volunteer program teaching children to read. In exchange for their service, the volunteer received a stipend of $640 per month.

The consensus was to discourage participation. Every injured worker who receives temporary total completes a “C-84 Request for Temporary Total Compensation.” This form requests the worker to report all earnings “…to include full or part time, self-employment, including income-producing hobbies or commission work.” Obviously, even a small amount of volunteer or hobby income can produce a red flag inviting scrutiny. Thus, even a small amount of remuneration can jeopardize the injured workers’ compensation.

But what about volunteer service with no stipend? Even that can create issues. The Ohio Supreme Court has suggested that the demonstration of an ability to engage in activity that “could” be income producing may be enough to render an injured worker ineligible. State ex rel. Schultz v. Indus. Comm. 96 Ohio St.3d 27, 2002-Ohio-3316.

It is better to be safe than to risk losing your source of income. It is better to think twice and seek legal advice before performing even volunteer service while receiving disability compensation.

 

Win your claim or lose your job? UPDATE

In May of 2015 I wrote an amicus brief on behalf of the Ohio Association for Justice in the matter of Onderko v. Sierra Lobo, Inc. The issue: Can an employee sue for retaliation if terminated following the denial of a workers’ compensation claim? The Ohio Supreme Court’s answer is yes from a decision released last week.

In this case the plaintiff filed a claim for workers’ compensation benefits. At various levels of appeal his claim was denied, then allowed, then ultimately denied. Then, he got fired. There was no question that he was fired for pursuing workers’ compensation benefits. Yet, the employer asserted that his retaliation claim should fail because his workers’ compensation claim got denied.

Writing for the majority, Justice O’Neill stated, “…Interpreting the statute to prohibit retaliation against only those workers whose claims have been allowed misses the point of the statute, which is to enable employees to freely exercise their rights without fear of retribution from their employers…”

One can only imagine the consequences of a “win your claim or lose your job” type of setup. Some claims are not clear cut. A decision to deny a claim is merely a finding that the claimant failed to meet his or her burden of proof. A claim denial is not tantamount to fraud.

Injured workers can abandon the pursuit of their claims for a variety of reasons. They can grow anxious over the prospect of participating in unfamiliar legal proceedings where their veracity is repeatedly called into question. They can grow frustrated over the loss of more and more time from work to attend hearings and deposition. They can also, perhaps, grow fearful that their continued pursuit of their claim will cause their employer to manufacture a pre-textual basis for discipline and/or termination. The decision to abandon even a meritorious claim is even more likely in cases like this one where the time lost from work was very minimal.

An employee’s right to file a workers’ compensation claim is not protected if an employer can directly or indirectly intimidate the worker not to file a claim. I am grateful for the opportunity given to me by the Ohio Association for Justice to defend this right.

The Ohio Supreme Court announces decision in  Onderko v. Sierra Lobo, Inc.,  2016-Ohio-5027.

The Ohio Supreme Court announces decision in Onderko v. Sierra Lobo, Inc., 2016-Ohio-5027.

Medical Marijuana and Workers' Compensation

Under existing law, intoxication (including marijuana) is a defense to a claim for workers' compensation benefits. Ohio's new medical marijuana law does not alter an employer's right to challenge workers' compensation claims where medical marijuana use results in injury and allows it to use a positive, post-accident drug screen for marijuana. In other words, if an employee is fired as a result of medical marijuana use, the discharge will be deemed "for just cause" and the employee will be ineligible for unemployment compensation. Similarly, an employee will not be eligible for workers' compensation if his or her injury was the result of being under the influence of medical marijuana.

Injured Workers' Score Victory Against Ohio Legislature.

The recent case of Kljun v. Administrator, BWC demonstrates how politics impacts policy. By law, an injured worker who suffers the amputation of a body part is entitled to receive an automatic award of compensation. For instance, one who loses a hand receives one hundred and seventy-five (175) weeks of compensation, a toe is thirty (30) weeks, a leg is two hundred (200) weeks, etc. This schedule is provided for in R.C. § 4123.57(B).

Prior to 2010, the injured worker received the entire award upon a demonstration of eligibility. Yet, under H.B. 487 the Ohio legislature revised the statute to mandate a weekly installment of payments, sometimes of up to a decade or more, instead of single lump-sum payments.

Why the change? An injured worker who died while receiving an installment payment would immediately cease receiving payment. Moreover, if the BWC or an employer wished to settle with a desperate worker, they would be entitled to reduce the value of these payments to their present value – a fraction of the full amount.

H.B. 487 was a back-door attempt by the Ohio legislature to reduce the benefits paid to injured workers. The Eighth District Court of Appeals commented “…The amendments…were tucked away in the lengthy enactment, ensuring they would evade public commentary…”

Many thanks go to the Ohio Association for Justice for doing the heavy lifting necessary to bring this matter to light and overturn this transparent effort to repeal the rights of injured and disabled Ohioans.

What to Expect at Your Ohio BWC Hearing.

BWC hearings can be unfamiliar and anxiety provoking for injured workers. Attorneys often lose sight of this. Your hearing does not need to be an angst ridden experience.

My first suggestion is to review my post “Top 10 Things to Do at a BWC Hearing.” It contains ten common sense -- but often overlooked -- suggestions that are helpful not only for BWC hearings, but also any time you are called upon to give testimony.

For BWC hearings, it is important to recognize that your hearing is before the Industrial Commission of Ohio. Therefore, you should be aware of two things. First, where within the procedural framework is the hearing situated? There are three levels of hearings: district (or first) level, staff (or second) level, and Industrial Commission (or third) level. I often will tell clients to think of a district (or first) level hearing as a “rehearsal.” While it is nice to win (since compensation will usually follow), you will ALWAYS have another chance if you are unsuccessful. More import, if you win, then your employer will almost always appeal. If you lose, then you should always appeal. The lesson learned: there will always be another hearing regardless of the outcome and the first level hearing is a helpful window into the evidence both for and against your case.

Second, know what issue will be decided at your hearing. Often an injured worker will presume that every pending issue will be decided at their first hearing. This is seldom the case. Some hearings will determine whether an injury occurred on the job (an “allowance” hearing). Some hearings will decide the payment of a particular form of compensation. Other hearings will decide whether a certain form of medical treatment can be approved (an “authorization” hearing). The list goes on and on.

Personally, I take a dim view of the practice used by some attorneys who only meet with their client in the twenty minutes preceding their hearing. It creates anxiety and fails to afford an opportunity for a full and candid discussion. I like to discuss these issues at least a day or two prior to hearing via telephone. This affords my clients the opportunity to ask questions and to adequately prepare for the issues to be decided.

Proper preparation is essential to the successful outcome of your case.

How is Permanent Partial Disability or PPD Calculated?

Permanent Partial Disability or “PPD” is one of the most misunderstood aspects of Ohio workers’ compensation. For a more comprehensive and general discussion of PPD click here. This article will attempt to explain how a PPD award is calculated.

Partial Disability compensation paid pursuant to R.C. § 4123.57(A). It is paid out as a percentage of whole person impairment. A one-hundred percent impairment is reserved for total incapacitation (think laying comatose in a hospital bed). Obviously, most injuries are far closer to 0% than they are 100%. Once that percentage is established (usually at a hearing) the injured worker receives compensation pursuant to the statute. Easy right? Wrong.

The statute is incomprehensible. I will not, therefore, refer to its’ text. Instead, I will use plain and simple language to explain how PPD is awarded. For each percentage point of disability, the injured worker receives two weeks of compensation at his or her average weekly wage at the time of injury. That is, of course, UNLESS the average weekly wage is greater than one-third of the average weekly wage for employees statewide. Unless you earned very little at the time of your injury, you are likely to get two weeks at the maximum rate for your year of injury. Those figures can be located by clicking here (and find the column entitled %PP maximum for your own year of injury).

In most instances the injured workers receives the maximum rate. This is usually far lower than their own average weekly wage. Why is this so? The short answer: because the legislature of the State of Ohio says it is so. There is no rhyme or reason other than our legislature feels that the victims of on-the-job injuries should receive this limited sum for any permanently disabling effects of a work-related injury.

Another reason to vote every November.

Does your attorney take your medical treatment seriously?

If you have spent time waiting for an Industrial Commission hearing, you might have the opportunity to eavesdrop on conversations between attorneys. A familiar topic is the frustration with what are known as “ADR Hearings” – otherwise known as “alternative dispute resolution hearings.

What is an ADR hearing? In 1993 the Bureau of Workers Compensation delegated its authority to approve or deny medical treatment to third party managed care organizations or “MCOs.” While this was touted as an attempt to streamline authorization it introduced multiple layers of appeals. A cynic might suspect that this was done to discourage injured workers – particularly those who are unrepresented and unfamiliar with the procedure.

Why then is this frustrating for workers’ compensation attorneys? It all boils down to a question of fees. The typical injured worker is represented by an attorney who works on a contingent fee basis – if you get paid, then so does your attorney. ADR hearings do not involve the payment of compensation. They are not, therefore, fee generating.

A shortsighted attorney may be tempted to place a lackluster effort toward these hearings. After all, he or she will not see any direct revenue from the successful outcome. I strongly disagree with this approach. In fact, treatment issues can and do bear a direct impact on future awards compensation – especially PPD or permanent partial disability.

The injured worker should recognize the three issues relevant to any issue involving medical treatment. Are the medical services (1) reasonably related and (2) reasonably necessary for treatment of the injury? (3) Are the costs reasonable? An injured worker should come to their hearing prepared to discuss the beneficial impact of the same or similar treatment in the past.

While the assistance of an attorney can be crucial to securing authorization, it is often the sincere and credible testimony of the injured worker that makes the difference between approval and denial.

Win your claim or lose your job?

108,549 workers filed claims with Ohio BWC in 2014. Of those, 10,977 were dismissed or disallowed by BWC. In a recent lawsuit, an Ohio employer argues for the right to fire any employee whose claim is denied.

In Onderko v. Sierra Lobo, Inc. the injured worker failed to mention the work related nature of his knee injury at the emergency room. His family physician – who refused to accept BWC – also did not record a work related component to his injury. He filed a claim and attended a hearing where his employer was represented by counsel. A few days later he received an order denying his claim. He dropped the matter since his knee was doing better and he had returned to work.

That, unfortunately, was not the end of it. His employer fired him a few days after the deadline for filing an appeal had expired. The stated justification -- his filing of a “deceptive” claim for workers compensation benefits.

Ohio Law states: “[n]o employer shall discharge, demote, reassign, or take any punitive action against any employee because the employee filed a claim or instituted, pursued, or testified in any proceedings under the workers compensation act for an injury or occupational disease which occurred in the course of and arising out of his employment with that employer.” Clear right? Guess again.

In this case the employer argues that this section applies only when an injured workers’ claim is ultimately allowed. I have been asked to assist the Ohio Association for Justice by filing a friend of the court or “amicus” brief with the Ohio Supreme Court in support of the injured worker. Click Here for a copy of the brief.

Keep watching this space for updates when the Ohio Supreme Court weighs in.

How much is my Ohio BWC claim worth?

Perhaps the most common question I receive is: What is my workers compensation claim worth? For how much can I settle? The answer is not as straightforward as you might think.

It is always important to remember that there are three parties to any workers compensation settlement: you (the injured worker), the employer, and the BWC. Settlement occurs only if all three parties are in agreement. The motivation of all three parties can drive the value of any settlement.

Timing can play an issue. If your claim is with a state fund employer, and is less than five years old, then your employer must sign off on the terms. If it is older than five years, then BWC will negotiate with you directly. Self-insured employers are always involved.

An employer may have less obvious motivations to settle. Some employers with a history of multiple claims can face what is known as a “penalty rating” by Ohio BWC. If so, they may be inclined to settle to remove some claims from their “experience rating.” It works similar to auto insurance – the more claims the higher the premium.

As a general rule it is best to ask the following question: How much is my claim likely to cost both BWC and the employer over the rest of its lifespan. You must consider both future awards of compensation as well as the anticipated cost of future medical treatment.

Settlement can provide the injured worker with a unique opportunity. I typically discourage an injured worker from settlement if they anticipate the need for costly future medical treatment. On the other hand, if they are certain of their prognosis, then settlement can provide a great opportunity to receive top dollar for a claim by potentially including the value of medical treatment that the injured worker may never need or receive. Fortunately, the injured worker, in consultation with their medical provider, is in the best position make this evaluation.