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.

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Lockout/Tagout Injuries and Fines Costly for Employers and Employees

[tweetmeme]OSHA announced it has cited Resource Management Cos. at its Earth City, Mo., recycling facility for 37 safety and health violations following an inspection opened after a worker died from injuries sustained June 12 when he entered a baling machine to clear a jam and the machine became energized.  Proposed fines total $195,930.  Twenty-two serious safety violations have been filed, including failing to lock out and tag out the energy sources of equipment and install adequate machine guarding; fall protection; exits; flammable liquids; fire extinguishers; powered industrial trucks; and welding and electrical equipment. Eight serious health violations were cited, as was a one repeat safety violation relating to defective powered industrial trucks that were not taken out of service.  The company was cited in April 2010 for a similar violation, according to OSHA.

This is but the latest fallout from the over 50,000 injuries that occur every year, including 120 fatalities according to OSHA.

What must employers do to protect employees?
OSHA has established requirements that employers must follow when employees are exposed to hazardous energy while servicing and maintaining equipment and machinery.   Here is the Top Ten critical requirements from OSHA:

  1.  Develop, implement, and enforce an energy control program.
  2.  Use lockout devices for equipment that can be locked out.  Tagout devices may be used in lieu of lockout devices only if the tagout program provides employee protection equivalent to that provided through a lockout program.
  3.  Ensure that new or overhauled equipment is capable of being locked out.
  4.  Develop, implement, and enforce an effective tagout program if machines or equipment are not capable of being locked out.
  5. Develop, document, implement, and enforce energy control procedures. [See the note to 29 CFR 1910.147(c)(4)(i) for an exception to the documentation requirements.]
  6.  Use only lockout/tagout devices authorized for the particular equipment or machinery and ensure that they are durable, standardized, and substantial.
  7.  Ensure that lockout/tagout devices identify the individual users.
  8.  Establish a policy that permits only the employee who applied a lockout/tagout device to remove it. [See 29 CFR 1910.147(e)(3) for exception.]
  9.  Inspect energy control procedures at least annually.
  10.  Provide effective training as mandated for all employees covered by the standard.

What do employees need to know?
Employees need to be trained to ensure that they know, understand, and follow the applicable provisions of the hazardous energy control procedures.  The training must cover at least three areas:

  • aspects of the employer’s energy control program;
  • elements of the energy control procedure relevant to the employee’s duties or assignment; and
  • the various requirements of the OSHA standards related to lockout/tagout.

How can you get more information?
Go to www.osha.gov to start with,  but don’t think you’re on your own.   Seek out a qualified Certified Safety Professional to help you review your current program or design a specific program that fits your needs and complies with OSHA.

Admitting you need help is the first step in creating a culture of safety

[tweetmeme]I have been engaged in several projects lately involving helping companies with their safety culture and thought I’d share some musings…

Achieving a safe working environment isn’t a neatly defined thing that can be approach with a cookie cutter mentality.  Because safety is primarily a human focused endeavor, it is important to remember that people will react differently to the same stimuli.  Some people for example will view peer to peer observations, as done in Behavior-Based Safety programs, as an intrusion or a violation of their perceived privacy.  Whereas others may welcome it as a means to achieve a greater good.  They aren’t threatened by it at all.  Trust is a key factor here, and it isn’t something to be taken lightly.

I have found that safetybehavior is a primarily a product of three considerations: 1) job or environmental factors, 2) organizational factors, and 3) human factors.  All three must be considered and evaluated if sustainable improvements can be made for attaining a safety culture. 

If safety culture is simply “an assembly of characteristics and attitudes in organizations and individuals which establishes that as an over-riding priority; safety issues receive the attention warranted by their significance”, as made popular by this quotation from the International Atomic Energy Agency.  Then it would seem pretty simple to attain a safety culture at most any organization.  Yet it remains elusive for many orgainzations.  With competing forces fighting for limited resources, safety has for many, slipped into the background.  But it need not be that way!

Beliefs, perceptions, recognition, and social pressures are just some of the human factors that can be, and should be addressed relatively on the cheap.  It doesn’t take a huge capital investment to be a champion for a safety culture and to be able to demonstrate a favorable return on investment.  Likewise, some organizational factors can be improved without drastic financial comittments.  Things like reviewing hiring practices, updating policies and procedures, implementing management systems that are top down, and implementing a return to work policy to reduce worker compensation costs can yield tremendous human factor benefits that will descrease your costs and improve safety.  Perceptions and social pressures aren’t to be ignored.

The first step is admitting that your orgainzation needs help.  Sometimes, that is the hardest thing to do to achieve meaningful change, and bring a culture of safety to any organization.

 

U.S. Chamber of Commerce says increased OSHA enforcement will NOT reduce workplace injuries

[tweetmeme]Jonathan Snare an attorney and partner with the DC office of Morgan Lewis & Bockius LLP law firm testified last week on behalf of the U.S. Chamber of Commerce, regarding the Protecting America’s Workers Act legislation (HR 2067; S 1580) to the House Subcommittee on Workforce Protections of the Committee on Education and Labor. 

Snare stated that he believes that the “goals behind the Protecting America’s Workers Act are laudable—this legislation is intended to enhance OSHA in its mission to assure a safe and healthy workplace environment and to reduce the number of workplace injuries/illnesses and fatalities.”  However he stated the legislation may have unintended consequences and may not achieve the intent behind this bill.

His main point was that penalties alone will not solve the problem.  Snare testified that because “penalties are imposed after the fact of an injury or fatality” increasing penalties may not decrease the number of injuries.   He reminded the subcommittee that the critical mission of OSHA is “to assist employers to make sure these injuries and fatalities never occur in the first place.”

Snare pointed out that OSHA demonstrated during the past administration that its “balanced approach” of using enforcement, compliance assistance and cooperative programs, and outreach and training to respond to the challenge of workplace safety and health was successful in its continuing mission of improving workplace safety and health.  Overall incident rates have declined steadily during from 2005 to 2009.   However critics charge that this may be in part to companies not accurately reporting injuries to OSHA.   Although this contention isn’t fully supported, in my opinion, based on the insurance data available.   However if injury rates were holding steady or increasing, then so should worker compensation claims frequency…right?  They aren’t! 

According to a 2009 National Council on Compensation Insurance, (NCCI) report, “over the last five years, there were significant declines in total lost-time claims frequency for all industries, geographic regions, and employer sizes.”  In 2008 claim frequency dropped 4%.

NCCI data

Workers Compensation Claim Frequency Continues Its Decline in 2008

Snare said that he wanted to “make clear that the U.S. Chamber of Commerce does not condone those employers who have intentionally flouted their obligations to protect their employees and fail to comply with their workplace safety and health obligations.”

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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