Labor and Industry Join Forces to Change the Path of Health Care Delivery

The United States is now facing a crucial change, necessitated by economics, to the health care delivery system. Not since the movement initiated in the early 1900’s to embrace a national workers’ compensation system, has the nation faced such a critical turning point in health care and the identical parties expressed such a keen interest in change.

The nation’s largest private employer, Walmart (non-union), and the nation’s largest union representing health care workers, SEIU, as well as the influential policy think-tank, the Center for American Progress, delivered a letter to President Obama today, endorsing a mandate for employer and employee contribution for a health care plan.

Citing the Senate Finance Committee (Max Bacus (D-Montana, Chairman) that “health care expenditures are expected to consume nearly 20 percent of the GDP” by 2017, the collation seek, “…an employer mandate which is fair and broad in its coverage.”

While the debate is being to flow in the direction of the adoption a “public plan” option, the “single payer system” has not yet been ruled out entirely. Funding continues to remain a concern.

It is anticipated that if a “public plan” is adopted, the workers’ compensation system will probably be targeted as an economic engine to contribute generated revenue through various reimbursement mechanisms in addition to outright payment reform including incentive based medicine. It is estimated that the plan's cost may amount to a $2 Trillion cost.

Cost shifting enforcement could be more strictly pursued. Additional fines, penalties and user fees, maybe assessed under the Medicare Secondary Payer Act. Even taxing workers’ compensation benefits may become an option if other employer provided health care benefits are also subject to tax.

OSHA Fines Metro North $300,000 for Retaliation Against Injured Workers

The U.S. Department of Labor's Occupational Safety and Health Administration (OSHA) has fined Metro North Commuter Railroad Co. for retaliation against four employees who reported work-related injuries. The railroad was ordered by OSHA to take corrective actions and pay back wages, fees and a total of $300,000 in punitive damages.

"Railroad employees have the right to report occupational injuries and illnesses without fear that doing so will negatively affect their jobs, their health or their income," said Jordan Barab, Acting U.S. Assistant Secretary of Labor for Safety and Health. "Retaliating against employees for exercising this basic, legally protected workplace right is unacceptable."

The employees were injured on the job in 2007 and 2008 and filed whistleblower complaints against Metro North Commuter Railroad Co. The complaints filed with OSHA alleged that the railroad disciplined them for reporting their injuries, interfered with their medical treatment plans and/or reclassified injuries from occupational to non-occupational.

OSHA investigated the incidents, held a hearing and fined the company under OSHA's The Whistleblower Protection Program.

Court Sets Proof Standard for Medical Bill Review

A challenging aspect of a workers' compensation hearing is the determination of what is the reasonable value of medical services.  The Indiana Appellate Court has now established proof standards to implement legislative criteria. Washington Township Fire Department v. Beltway Surgery Center, No. 93A02-0811-EX-1006 (Ind. Ct. Appeals 2009)

The Indiana Act provides for the valuation of medical services by using a billing review service to calculate the pecuniary liability to a medical provider based on the 80th percentile standard. Ind. Code Section 22-3-3-52.  The Court determined that the employer has the burden of proof to establish excessive charges,

Ind. Code Section 22-3-3-52:

(a) A billing review service shall adhere to the following requirements to determine the pecuniary liability of an employer or an employer‟s insurance carrier for a specific service or product covered under worker‟s compensation: 

(1) The formation of a billing review standard, and any subsequent analysis or revision of the standard, must use data that is based on the medical service provider billing charges as submitted to the employer and the employer‟s insurance carrier from the same community. This subdivision does not apply when a unique or specialized service or product does not have sufficient comparative data to allow for a reasonable comparison. 

(2) Data used to determine pecuniary liability must be compiled on or before June 30 and December 31 of each year. 

(3) Billing review standards must be revised for prospective future payments of medical service provider bills to provide for payment of the charges at a rate not more than the charges made by eighty percent (80%) of the medical service providers during the prior six (6) months within the same community. The data used to perform the analysis and revision of the billing review standards may not be more than two (2) years old and must be periodically updated by a representative inflationary or deflationary factor. Reimbursement for these charges may not exceed the actual charge invoiced by the medical service provider. 7 

(4) The billing review standard shall include the billing charges of all hospitals in the applicable community for the service or product. 

Mesothelioma Compensation Rate 32% in Canada

When combined with a history of occupational asbestos exposure, mesothelioma is often presumed work-related.

In Canada, workers diagnosed with mesothelioma caused by occupational asbestos exposure are often eligible for compensation under provincial workers' compensation boards. Although occupational asbestos exposure causes the majority of mesothelioma, Canadian research suggests less than half of workers actually apply for compensation.

Alberta's mandatory reporting requirements may produce higher filing rates but this is currently unknown. This study evaluates Alberta's mesothelioma filing and compensation rates.

METHODS: Demographic information on all mesothelioma patients diagnosed between 1980 and 2004 were extracted from the Alberta Cancer Board's Cancer Registry and linked to Workers' Compensation Board of Alberta claims data.

RESULTS: Alberta recorded a total of 568 histologically confirmed mesothelioma cases between 1980 and 2004. Forty-two percent of cases filed a claim; 83% of filed claims were accepted for compensation.

CONCLUSIONS: Patient under-reporting of compensable mesothelioma is a problem and raises larger questions regarding under-reporting of other asbestos-related cancers in Alberta. Strategies should focus on increasing filing rates where appropriate.

Cree MW, Lalji M, Jiang B, Carriere KC. Am J Ind Med. 2009 Jul;52(7):526-33. PMID: 19484745 [PubMed - in process]

Defense Bar Floods the US Supreme Court With Amicus Briefs in RICO Case

In a RICO case which will have profound impact on the national workers' compensation system, the defense bar has inundated the US Supreme Court with applications to submit amicus briefs. Pending before the US Supreme Court is a petition for a writ of certiorari to review a decision where: the employer, insurance company and their experts were found to have conducted themselves in violation of the RICO Act.

Motions for leave to file Amicus briefs in support of the defense position have been filed by: MI Self-Insurers Association; Michigan Defense Trial Counsel; DRI - The Voice of the Defense Bar;  American Trucking Associations, Inc.;  Chamber of Commerce of the United States of America; and  National Council of Self-Insurers. 

The  US Court of Appeals for the Sixth Circuit denied rehearing on January 5, 2009 and a Petition for a writ of certiorari was filed on May 6, 2009.  On May 26, 2009 US SUpreme entered an Order extending time to file a response to petition to and including June 29, 2009.

Cassens Transport Co., et al., Petitioners v,  Paul Brown, et al.,  No. 08-1375.

California Governor Reportedly Wants to Sell The State Insurance Fund

California, with post reform claim decreases and facing an increase in workers' compensation premiums rates,  reportedly wants to get out of the insurance business. The San Francisco Business Times is now reporting that the Governor is attempting to sell the State Insurance Fund for $1 Billion.  The profits received are anticipated to help fund the State's budget gap.

US Supreme Court Bars Direct Asbestos Claims Against Travelers Insurance

The US Supreme Court ruled that the direct action claims against Travelers Insurance Company for its conduct in the asbestos conspiracy with Johns-Manville Corporation (Manville) were barred by the 1986 reorganization plan of the Manville.

"As part of the 1986 reorganization plan of the Johns-Manville Corporation (Manville), an asbestos supplier and manufacturer of asbestos containing products, the Bankruptcy Court approved a settlement providing that Manville’s insurers, including The Travelers Indemnity Company and related companies (Travelers), would contribute to the corpus of the Manville Personal Injury Settlement Trust (Trust), and releasing those insurers from any “Policy Claims,” which were channeled to the Trust. “Policy Claims” include, as relevant here, “claims” and “allegations” against the insurers “based upon, arising out of or relating to” the Manville insurance policies. 

"The settlement agreement and reorganization plan were approved by the Bankruptcy Court (1986 Orders) and were affirmed by the District Court and the Second Circuit. Over a decade later plaintiffs began filing asbestos actions against Travelers in state courts (Direct Actions), often seeking to recover from Travelers not for Manville’s wrongdoing but for Travelers’ own alleged violations of state consumer-protection statutes or of common law duties. Invoking the 1986 Orders, Travelers asked the Bankruptcy Court to enjoin 26 Direct Actions. Ultimately,a settlement was reached, in which Travelers agreed to make payments to compensate the Direct Action claimants, contingent on the court’s order clarifying that the Direct Actions were, and remained, prohibited by the 1986 Orders. 

"The court made extensive factual findings, uncontested here, concluding that Travelers derived its knowledge of asbestos from its insurance relationship with Manville and that the Direct Actions are based on acts or omissions by Travelers arising from or related to the insurance policies. It then approved the settlement and entered an order (Clarifying Order), which provided that the 1986 Orders barred the pending Direct Actions and various other claims. Objectors to the settlement (respondents here) appealed. The District Court affirmed, but the Second Circuit reversed. 

"Agreeing that the Bankruptcy Court had jurisdiction to interpret and enforce the 1986 Orders, the Circuit nevertheless held that the Bankruptcy Court lacked jurisdiction to enjoin the Direct Actions because those actions sought not to recover based on Manville’s conduct, but to recover directly from Travelers for its own.

Right To Know Hazardous Substance Fact Sheets

The State on NJ Department of Health has now made available hazardous substances fact sheets in a format for Emergency Responders. The sheets can be searched by DOT# or CAS# or in alphabetical sort. All the reference forms may be downloaded.

In-Home Care by Spouse Constitutes Treatment

A claimant who suffered from cognitive problems and partial paralysis as a result of a compensable accident and required full-time supervision, was entitle to have his spouse reimbursed for palliative, in-home care, that she provided to him.  

"If an injured worker requires services compensable under § 23-1062(A), then the employer must provide them. If the employer fails to do so and thus puts that burden on the injured employee's spouse, compensation for the necessary services is required by the statute. Those services provided by Mrs. Carbajal that would constitute compensable palliative care if performed by the Carrier-paid attendants are thus compensable."

Carabajal v. Industrial Commission of Arizona

___ P.3d____, 2009 WL 1650428 (Ariz. 2009) Decided June 15, 2009

EPA Declares Asbestos in Libby Montana is a Public Health Emergency

An historic first occurred today with the announcement by the US EPA that the asbestos in Libby, Montana constituted a Public Health Emergency. The EPA stated, "Over the past years, hundreds of asbestos-related disease cases have been documented in this small community, which covers the towns of Libby and Troy. "

"This is the first time EPA has made a determination under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) that conditions at a site constitute a public health emergency. This determination recognizes the serious impact to the public health from the contamination at Libby and underscores the need for further action and health care for area residents who have been or may be exposed to asbestos. Investigations performed by the Agency for Toxic Substance and Disease Registry have found the incidence of occurrence of asbestosis, a lung condition, in the Libby area staggeringly higher than the national average for the period from 1979-1998. EPA is working closely with the Department of Health and Human Services, which is making available a short-term grant to provide needed asbestos-related medical care to Libby and Troy residents. "

WC Benefits May Be Heading for Retirement

The Montana Supreme Court heard oral arguments this week on whether workers' compensation benefits should terminate on retirement. Brief's available on the link below:

CATHERINE SATTERLEE, Petitioner and Appellee, v. LUMBERMSN'S MUTUAL CASUALTY COMPANY, Insurer for BUTTREY FOOD & DRUG, Employer and Appellee. --- James ZENAHLIK Petitioner and Appellant v. MONTANA STATE FUND, Insurer for EAGLE ELECTRIC, Employer and Appellee. --- JOSEPH FOSTER, Petitioner and Appellant v. MONTANA STATE FUND, Insurer for ALLEN ELECTRIC, Employer and Appellee.

NJ Budgetary Chaos Opens Court Without Cases

NJ is the mist of budgetary chaos and it continues to escalate. NJ decided at the last moment to cancel yet another furlough for state employees at the last moment resulting in the inability to list cases for hearing before the NJ Division of Workers' Compensation. Courtrooms were empty on Friday since no cases had been listed.

Originally, the administration called for yet another paid state vacation for employees because of budget shortfalls. Similar economic issues have frozen new hires, limited the use of durable resources and caused the elimination of printed court calendars. The NJ Division of Workers' compensation is funded substantially from the NJ Second Injury Fund as a line item on premium invoices.

In the recently brokered deal, Governor Corzine has negotiated 10 additional furlough days beginning on July 1st. and gather seven paid leave days for use after June 10th, 2010.

Vaccinating Workers’ Compensation Against Flu Claims

The spread of influenza A has now reached pandemic proportions. The focus has now been directed to creating a vaccine to halt the rapid community spread. The next challenge to workers’ compensation systems may be claims resulting from adverse reactions to employer sponsored vaccination programs.

The World Health Organization (WHO) had now declared the outbreak of the novel influenza A to be a world wide pandemic. Dr Margaret Chan, Director-General of the World Health Organization, announced today, “The world is now at the start of the 2009 influenza pandemic.” “The virus is contagious, spreading easily from one person to another, and from one country to another. As of today, nearly 30,000 confirmed cases have been reported in 74 countries.”

The need for the development and distribution of a preventative vaccine is of critical importance. Dr. Chan stated, “WHO has been in close dialogue with influenza vaccine manufacturers. I understand that production of vaccines for seasonal influenza will be completed soon, and that full capacity will be available to ensure the largest possible supply of pandemic vaccine in the months to come.”

Workers’ Compensation programs have been challenged by compensable claims in the past resulting from adverse reactions to vaccines. In many jurisdictions, vaccinations afforded to employees which provide benefit to the employer against possible disastrous business consequences have been considered to be a mutual benefit. Therefore any disease arising from such vaccination has been deemed compensable.

To shield both employers and pharmaceutical companies from liability claims, the federal government established a no-fault program entitled the Smallpox Emergency Personnel Protection Act of 2003 (SEPPA) in an effort to provide benefits and/or compensation to certain individuals, including health-care workers and emergency responders, who are injured as a result of the administration of smallpox countermeasures including the smallpox (vaccinia) vaccine. SEPPA also provides benefits and/or compensation to certain individuals who are injured through the result of accidental vaccinia inoculation through contact.

Many questions remain unanswered including: the ultimate spread of the disease, the development of an effective vaccine, and whether the workers’ compensation system will need to absorb claims resulting from adverse reactions. One thing is for sure, as Dr. Chan declared today. “We are all in this together, and we will all get through this, together.”

For more on workers compensation and the flu pandemic visit the Workers' Compensation Blog.

GM To Honor Most Pre-Petition WC Claims

Under Motions filed and Orders entered in the GM Bankruptcy proceeding, most state pre-petition workers' compensation claims will be honored. There are 4 states where inclusion is questionable reports the IAIABC. An analysis is available on their website.

The Lack of Equality in the CMS Reimbursement Policy

The current debate on national health care has brought to the forefront some of the most glaring problems that are compounding the workers’ compensation medical delivery system. Since the enactment of The Medicare Secondary Payer Act (MSP) in 1980, the Federal Government has desperately tried to prevent cost shifting from the workers’ compensation system to the Federal Medicare program. The efforts of The Centers for Medicare and Medicaid Service (CMS) to seek medical reimbursement of past and future medical care costs from workers’ compensation beneficiaries, in a uniform fashion across the entire national spectrum, is plagued with equality issues.

In a very insightful article, Robert Pear of The New York Times on June 9, 2009 reported that costs of medical care were not uniform through out the nation and that an increase in expenditures for treatment did not improve the outcome. These “disparities,” as Pear points out demonstrate major fluctuations in the cost of Medicare payments for the same types of treatment. “Nationally, according to the Dartmouth Atlas of Health Care, Medicare spent an average of $8,304 per beneficiary in 2006. Among states, New York was tops, at $9,564, and Hawaii was lowest, at $5,311.”

The costs for medical care paid by Medicare based upon geographical jurisdictions are unequal. More specifically, higher costs states were reported to be: Florida, Massachusetts, New Jersey and New York. The lower cost states were reported as: Iowa, Minnesota, Montana, North Dakota, Oregon and Washington.

CMS has sought to seek reimbursement under the MSP Act for medical care, present and future, based on a nationally tailored program. Unfortunately, the benefits paid by each state program are not the same.

While the program to deter the shift of billions of dollars Medicare funds yearly to pay for work related injuries and disease is a noble goal and legitimate function, it is now unequally applied to beneficiaries across the country since all workers’ compensation benefit programs are not the same and the costs of medical treatment vary.

The need for uniformity and equality should be address by Congress as it debates the future of medical care legislation. The enactment of a single payer medical care system would be a good first step to leveling the playing field for both employers and employees.

Soldiers Exposed to Chromium in Iraq File Suit

Soldiers who have been exposed to hexavalent chromium, a carcinogen, have filed suit against a government contractor. The present and former soldiers have brought a claims against KBR (Kellogg, Brown & Root), a subsidiary of Halliburton, for concealing the contamination and knowingly exposing them to potential harm. The chromium chemical, sodium dichromate, was utilized to prevent corrosion.

The Oregon legislature has held hearings on pending legislation to assist the ill soldiers. One Oregon soldier has died of complications of leukemia at the age of 21.

Fixing The Broken Health Care System

This week President Obama reached out to Labor and Industry, employers and employees and Congress and the voters, in an effort to increase the momentum for repairing the medical delivery system. The problems are universal and the remedies will need to be global.

In his weekly address to the nation The President said, "Simply put, the status quo is broken. We cannot continue this way. If we do nothing, everyone’s health care will be put in jeopardy. Within a decade, we’ll spend one dollar out of every five we earn on health care – and we’ll keep getting less for our money." Furthermore, "That’s why fixing what’s wrong with our health care system is no longer a luxury we hope to achieve – it’s a necessity we cannot postpone any longer."

The delivery of adequate medical benefits is a metastatic problem that goes to the very heart of the ability of the network of State workers' compensation system to operate. The costs of the delivery, co-ordination and administration of benefits continue to strangle the system into growing stagnation.

In a noble experiment the State of NJ, in response to critical reports, has proposed new regulations to establish an administrative system to expedite "emergent" medical benefits if an "irreparable harm" can be established. The irony is that the standard and requirement is so stringent, that imminent death does not even meet the standard.

The workers' compensation system was enacted in 1911, when the path was simple and short to provide medical care to "relieve and cure." The complexities that developed into the highway of benefits, has brought the major vehicle producers into bankruptcy, ie. Chrysler and General Motors. New vehicles will now need to be manufactured to meet the new needs of today and tomorrow.

It is time that Congress looks toward the workers' compensation system to develop a new vehicle to provide innovative approaches for a better medical delivery system for injured workers. A single medical care program that provides universal medical care would be a wise and appropriate route for America.