Missouri Closes Workers Compensation Loophole: Protecting Co-Workers from Lawsuits

[tweetmeme] The Missouri Senate passed legislation recently that would effectively close a major loophole in Missouri Workers Compensation laws.   The following the Missouri chamber of Commerce’s press release detailing the legislation.

Missouri Chamber pleased with passage of workers’ compensation reform that protects Missouri workers

Yesterday, the Missouri Senate passed legislation, House Bill 1540, on a unanimous vote and was adopted by the House with a vote of 122-29.  The bill was sponsored by Rep. Tim Jones specifies that an employee subject to workers’ compensation provisions must be released from all liability for personal injury or death to a co-employee due to an accident or occupational disease.

Following reforms to the workers’ compensation system in 2005, the courts began interpreting the law in such a way that co-workers were no longer protected as the exclusive remedy for workplace accidents.  Already, millions of dollars in lawsuits and settlements have been paid out as more and more trial attorneys find ways to leverage this loophole.

This comes at a crucial time as the Missouri Chamber has heard reports of trial attorneys using the loophole to go after the personal assets of co-workers of employees who were killed at a Joplin business during last year’s tornado.

“Every possession that these individuals own that wasn’t taken by the tornado is now at risk due to a flaw in the law that trial attorneys are using to get rich,” said Daniel P. Mehan, Missouri Chamber president and CEO.  “We are getting pleas from businesses that are being bankrupted by a rash of co-employee lawsuits, but reports of this flaw and the tornado being used to line the pockets of lawyers on the backs of innocent workers reaches an all-new low,” Mehan said.

“Workers’ compensation served as the exclusive remedy for co-employees for decades until the changes to the law in 2005,” Rich AuBuchon, general counsel for the Missouri Chamber of Commerce and Industry, said.  “This loophole puts Missouri workers in the crosshairs of trial attorneys seeking big payouts for a cause of action that was not intended to exist.  No employee should be forced to worry about losing their home to a lawsuit based on an unintentional workplace accident.  The passage of this legislation will protect employees and employers throughout Missouri.”

The passage of this legislation was extremely difficult.  Despite this success other critical issues impacting our workers’ compensation system remain including a loophole that allows employees to sue in court for compensation of occupational disease in addition to receiving workers compensation benefits.  Also, Missouri’s insolvent Second Injury Fund remains unresolved.  The Missouri Chamber of Commerce and Industry will continue to work on these issues but with only three days left in the 2012 Legislative Session the issues remaining may not be resolved this year.

Cost-Intensive Healthcare Providers and Attorneys Account for Majority of Worker Comp Costs

[tweetmeme]After analyzing five years of claim data from the Louisiana Workers’ Compensation Corp., or LWCC, from 1998 to 2002, the researchers found that a small group of physicians, only 3.7 percent, accounted for more than 72 percent of the workers’ compensation costs. These were termed cost-intensive providers, or CIPs.   This was the findings of a study by researchers at the Johns Hopkins School of Medicine, published in the January edition of the Journal of Occupational and Environmental Medicine. 

Amazing is the only word that comes to mind!  With all the talk of healthcare reform swirling this country, it seems that America would be taking a closer look at how worker compensation claims are handled.  Employers need to take note of this study and not simply read it in passing and shake your heads in disgust only to move on to the item in the paper (or online).  The study suggests that settling claims quickly is the best solution.  It is also important to realize that the researchers do say that “Across the board, we’ve found that most physicians practice prudently.”  Which is good news, but realize this; according to the study the involvement of an attorney and the duration of the claims—greatly impacted overall claim cost.   After analyzing 36,329 claims over five years, the study found that 2 percent of these claims accounted for 32 percent of the claim costs.

According to the Johns Hopkins Gazette article detailing this study, “A 2008 study found that attorney involvement was associated with consistently higher medical, indemnity and claim handling costs.  Of nearly 7,000 claims studied, 738 claims involved attorneys.  By the study closure, 97.7 percent of claims without attorneys had been resolved.  Of those with attorney involvement, only 57.5 percent had been closed. The study found attorney presence on a claim correlated with duration, and the duration correlated with higher cost.”

Moral of the story is to do everything you can to reduce the probability of injuries occurring in the first place, and if an injury does occur, stay in contact with your injured employees, ensure that they still feel like they are part of your corporate family!  Settle the claim, institute a return to work program and communicate with injured employee weekly.

Read more: http://gazette.jhu.edu/2010/01/19/workers%E2%80%99-comp-research-gives-insight-into-curbing-health-costs/#ixzz0hauhtCb5

The Importance of Pre-Employment Screening

[tweetmeme]By Teresa A. Long, Institute of WorkComp Professionals News Service

What you don’t know CAN hurt you when it comes to on-the-job injuries and workers’ compensation claims.  A company advertises a job opening for a worker to pack and load heavy boxes onto trucks. It would seem an easy position to fill.

But what if that applicant shows up with two good, strong arms and appears to be a perfect candidate for the job, but has a history of back trouble that resulted in a number of previous Workers’ Compensation claims? Not as easy to make the call this time. And virtually impossible if no pre-employment medical testing is put into place, particularly by a medical practitioner who understands the job requirements and what it takes physically to accomplish them.

With budget and personnel cut backs, many companies are also cutting back on pre-employment practices. Five years ago investing $300-$400 in a pre-employment physical, blood work, and drug testing was palpable. Today, when a company is looking for money to fix the office copier machine, maybe not as much.

But employers are also aware of the high-cost of Workers’ Compensation claims, which have them doing a high-wire act to make sure they hire the right employee for the job, while protecting the safety of their other workers (and in some instances, the public). The latter is especially important because failure to do so sends a silent message to their other workers that the company doesn’t care whom they hire, even if it impairs job safety. And in the workplace, a silent message can sound like a jet plane taking off.

Obviously, no employer wants to inherit an existing injury when putting someone new on the clock, only to see a slight aggravation in the line of duty become totally their responsibility. But the possibility always exists.

A perfect example is an ice cream manufacturer in Pennsylvania who saw his Workers’ Compensation Experience Modification Factor skyrocket to more then three times what it should be. The elevated Experience Mod was caused by several open claims, which were a direct result of improper or non-existent hiring procedures. The company did not conduct pre-employment background checks and physicals. This opened the door for at least two employees to come on payroll with existing soft tissue injuries to the back and shoulder, a condition further aggravated by the cold temperatures they encountered on the job.

Each state addresses the aggravation or exacerbation of a pre-existing condition differently. In most states, if the on-the-job injury exacerbates a pre-existing condition (even by 1%) it is considered to be a part of the payable injury. This is conditional upon the physician being able to say that within “reasonable medical probability” the pre-existing condition was and still is aggravated by the on-the-job injury.

But this isn’t always the case. Some states have adopted a more definitive way of separating occupational (on-the-job injuries) from non-occupational (pre-existing conditions). In Florida, Oregon, Massachusetts and (to a lesser degree) South Dakota, for an accident or aggravation of a pre-existing condition to be compensable (payable), they have included the definition of “coverage” to include a provision called major contributing factor. This means the condition the physician is treating has to be at least 51% related to the on-the-job injury.

For instance, diabetes is a very common pre-existing occurrence. If an employee injures a leg on the job and also has diabetes, the physician starts treatment for the leg condition and is also monitoring the diabetes. As long as the majority of the treatment (51%) is for the leg pain, it is payable under Workers’ Compensation. If there comes a time when the leg pain subsides and the diabetes is getting worse (51% of the treatment is now related to the diabetes), it should no longer be considered payable under Workers’ Compensation.

This creates added pressure on the physician to accurately assess the percentage contribution of the occupational injury relative to any pre-existing condition. In the above example, before the major contributing factor cause was enacted, the entire treatment for the diabetes would be payable under Workers’ Compensation as long as the leg pain continued to aggravate (or exacerbate) the diabetes. This would include any hefty costs that may be incurred for amputation (which is a common complication for uncontrolled diabetes) and any resulting permanent impairment or prolonged disability.

Another tricky area of pre-employment screening is determining if the applicant has a history of filing Workers’ Compensation claims. And-news alert-people will lie on their application in order to get a job they really need.

Under the Federal Americans with Disabilities Acts (ADA), employers cannot inquire about past Workers’ Compensation claims, nor can they refuse to employ someone who has filed past claims or whose disability or impairment has no bearing on whether or not they can perform the essential tasks they are being hired for. The job interview can only determine if the person can perform essential job functions, with or without reasonable accommodation. But that doesn’t mean you can’t ask about prior injuries, you just can’t ask before you hire the applicant.

In the end, it’s important for the employer to take all steps necessary to make sure they hire the right person for the job. And this can only be accomplished by implementing the proper pre-employment procedures. This includes using “post” job offer medical questionnaires, making sure that a qualified medical practitioner who understands the job requirements performs all medical testing, and dodging a legal minefield by remembering that applicants should be assessed only by their ability to perform the essential tasks at hand.

Teresa A. Long is Director of Injury Management Strategies for the Institute of WorkComp Professionals in Asheville, NC, the largest network of Workers’ Compensation professionals in the nation. Teresa was claims manager for 14 years for Walt Disney World and later was Vice President of Risk Management for Sarasota, FL-based Unisource Administrators, Inc. She can be contacted at 828-274-0959 and teresa@workcompprofessionals.com, http://www.workcompprofessionals.com

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