WorkCompCentral reported last week that Oklahoma is considering
implementation of an administrative system for workers' compensation disputes.
The effort is being spearheaded by Oklahoma Senator Mark Allen, whose company
does business in both Oklahoma and Arkansas. He notes that his company's
activities are similar in both states, but that rates are about thirty percent
lower in Arkansas.
The article says
that only Oklahoma and Nebraska have separate court systems for workers'
compensation. They note that Rhode Island assigns workers' compensation cases
to its constitutional court system like all other cases, and Tennessee has a
"hybrid" system that involves the state's constitutional courts.
Though not mentioned in the article, Alabama has a similar process which
involves its constitutional courts, and which does not have a separate judicial
or administrative hearing process in place.
Workers'
compensation experts Greg Krohm (former director of the International
Association of Industrial Boards and Commissions) and John Burton (Professor
and member of the National Association of Social Insurance) believed that there
is no proof that administrative systems necessarily save costs. Mr. Krohm noted
that "there are so many variables" to consider. Professor Burton
noted that there are few "judicial based systems left" and so
studying the differences would be difficult.
I do not have any
basis to disagree with either Mr. Krohm or Professor Burton. Each is a national
leader in worker's compensation, and each has been exposed to a multitude of
issues over many years. What workers compensation adjudicators learn, however, is
that decisions in workers' compensation have to be made, and unfortunately that
is not always the best evidence. Sometimes this is because procuring the best
evidence is expensive, beyond the pale of what is justifiable in a particular
case. Sometimes this is because the best evidence is simply not available, such
as the injured workers' testimony in a death or brain injury case, as was
reported by the Workers'
Comp Insider in recent years.
When we do not have the best evidence, the show must go on, and we instead
struggle with making the best decision we can with the evidence the parties do
bring to us.
In this instance,
there is some evidence to support Senator Allen's effort. And before we discuss
the details of the evidence that is available, it is important that everyone in
the debate acknowledge that the ambiguous "cost" may include much
that is not measurable in dollars and cents spent by the workers' compensation
systems. While it is reasonable to consider those funds expended by a workers'
compensation system, it is ineffective to isolate the analysis to those direct
impacts.
The Florida Office
of Judges of Compensation Claims (OJCC) recently issued the 2012
Annual Report. Statutorily, the OJCC reports each December on a spectrum of
metrics, one of which is the cost of litigation resolved. Over the course of
ten years, the OJCC has reported (page 18) the "cost per claim" by
dividing the OJCC annual budget by the volume of petitions closed over that
year. Over the last ten years, the cost per closed petition has been $181.00.
The Annual Report contrasts that to civil filing fees in Florida, which range
from $55.00 each for small claims to as much as $400.00 for Circuit Court
filings. As the report notes, the Florida workers' compensation system cost
includes the clerk and adjudication services that the civil courts provide, but
also include mediation services that are not afforded by the Circuit system. In
short, the workers' compensation adjudication process in Florida is a financial
bargain.
The
"cost" of the workers' compensation system, though, includes the
impact on people in the system. This system is for injured employees and the
employers for whom they work. When an accident occurs, the employee is affected
through pain, loss of function, loss of income, and more. The employer is
likewise affected through loss of the advantage for which they hired the
worker. The employee may not be present, may be sporadically missing work for
medical appointments, and may not be at 100% when they are present. It is
axiomatic that the employer hired the employee to begin with because the
employer needed that person, her/his skills, etc. After an injury, co-workers
may be tasked to take up the resulting work-load, or the employer may have to
hire temporary help to accommodate the absence or decreased attendance of the
injured worker. In short, both the employee and the employer face issues
following a work accident.
According to some blogs on the Internet, it can take about a
year to get a civil case to trial. The web has included predictions in recent
years that budget cuts will lead to further delays in civil cases. Court
resources may decline, and the demands of the criminal justice system are
subject to Constitutional constraints that do not apply to civil litigation. An
injured worker should not be subject to such a delay, nor should that person's
employer. Policy makers should remember that workers' compensation disputes may
be focused on large issues that might be seen in civil lawsuits, such as the
compensation for total disability or attendant care for the rest of some
person's life.
However, many
decisions in workers' compensation are less monetarily impressive, such as an
authorization of a change in doctor, provision of a medical test, or
authorization of some discreet treatment such as a surgery. These medical
care issues may pale in monetary terms. However, these are critical decisions
in the diagnosis, treatment and recovery of an injured worker. The goal of
workers' compensation is coincidental for employer and employee. The injured
worker wants relief from symptoms and dysfunction and to return to work. The
employer wants their employee back with as little residual dysfunction as
possible. Unfortunately, there are disagreements in this process. When there is
disagreement, the speed of resolution or adjudication is critical. Physicians
will tell us that early medical intervention is beneficial and that delays may
detrimentally impact the efficacy of care. Delay may likewise negatively impact
the employee, who is receiving less than pre-injury wages during litigation, or
perhaps no income at all in a denied claim. The employer may likewise suffer
economic loss during such delay, in the payment to temporary workers, overtime
to coworkers, or training expense of new staff.
Certainly, there
are reasons for delay in decisions in particular cases. Some questions may not
be ready for an answer. But when those disputes are ready for an answer, there
is a benefit to both employee and employer in a process that is dedicated to
their disputes, focused upon their issues, and capable of bringing their
disputes to timely resolution or adjudication. In 2006, the Florida OJCC
averaged 485 days between the filing of a petition and the beginning of trial.
In 2012, the average was 166 days. In 2006, the Florida OJCC averaged 212 days
between petition filing and the first mediation. In 2012, that average was just
88 days. Along the way, the OJCC leveraged technology, brought innovation to
the attorneys and other interested parties, and deployed multiple processes
that enhanced transparency and therefore efficiency.
The
WorkCompCentral article quoted Oklahoma Senate President Pro Tempore Brian
Bingman as favoring the change to an administrative process, but saying
"the devil is in the details." Isn't it always? I would suggest that
those who will study Tennessee and Oklahoma should perhaps focus less on
whether there are sufficient "court" states remaining to study, and
instead make comparisons that are relevant to their decision. I would suggest
that those comparisons are essentially whether costs, in their broadest
definitions, can be reduced. This means deciding whether employees and
employers will receive more rapid and focused consideration than they receive
under the court system. Will the proposed process bring greater transparency?
Will the process make the dispute process more efficient, empower litigants to
make better decisions and resolve their own disputes through compromise? Will
the process deliver all of this at less monetary expense, measured per claim,
than the expense required by the court system?
There is plenty of
evidence in the marketplace in this regard. Certainly, it may not be the best
evidence. However, it is the best evidence that is available.
