Florida Workers' Comp: Nationalization, Participation, and Disease (9)

People are talking about workers' compensation, perhaps more today than ever. This is the ninth in an 11-post series (links to the first eight are at the end of this post), that attempts to overview various perspectives heard from system observers and participants. The point is that discussion is good, and if this series generates debate and interaction, all the better.

A new national commission?

Summit participants discussed recent events in the workers’ compensation marketplace, including criticisms published by organizations. In recent years, Propublica and others have been critical of the measure of benefits in various systems. They have also leveled criticism regarding the variety and distinctions between and among the various systems. Critics lament a perception of competition between states, each striving to minimize financial impact of particular jurisdictions’ system in order to accomplish comparative advantage over other states, and thus attracting employment and business. The process of minimizing cost in such a pursuit has been denigrated as a “race to the bottom.” Conclusions and reactions regarding these criticisms have been varied. To some degree, reactions to the criticisms may be influenced by individual perspectives and biases.

The National Commission was created by federal legislation. With a legislative mandate, structure, financial resources, and input, the Commission produced a report regarding recommendations for the future of workers’ compensation. As the marketplace questions whether a new commission would be helpful or effective, a common response is to highlight that none of these 1972 Commission strengths seem likely available today. Though there is some interest in workers’ compensation in the press, there seems little interest on the part of Congress. As such, there is a consensus that federalization of workers’ compensation (see #21) is unlikely even as a point of debate. In the absence of motivation to act on workers’ compensation, Summit participants are doubtful about the need or potential for a twenty-first century commission.

However, there is concern that federal action may nonetheless have impact upon workers’ compensation processes and benefits. A cited example is the impact that federal Medicare legislation has affected on the workers’ compensation marketplaces. In the 1980s, Congress charged Medicare with taking a hand in assuring that system’s financial success and survival. The conclusion was predicated upon belief that Medicare was financing care and benefits that was appropriately the responsibility of others. This was perceived as contributing to solvency issues for this federal program. The results were not immediate, but in the early 2000s Medicare’s interests became a critical analysis in workers’ compensation claims. Workers’ compensation payers were forced to accommodate those Medicare interests in payment and settlement. The effects of these interests have influenced multiple aspects of claims management, litigation and settlement.

There is therefore concern that other federal action could likewise have impact upon workers’ compensation, although it is not necessarily direct federal intervention. An oft-mentioned federal concern is the Social Security Disability program. This social program utilizes federal tax revenue to provide support for individuals that meet various definitions of disability. None of those definitions are dependent upon causation, in the manner in which workers’ compensation entitlement is dependent upon the disability or impairment being caused by work. Therefore, Social Security is a broader program than workers’ compensation. An effect of its broad application is that an injured worker might be simultaneously entitled to both workers’ compensation and Social Security benefits.

This potential led federal legislators to include an offset provision in the Social Security Act. Thereby, Social Security benefits in some instances may be reduced proportionately for the simultaneous receipt of certain workers’ compensation benefits. A compromise in that legislation also afforded an opportunity to state workers’ compensation systems for a similar reduction in state benefits, which became known as a “reverse offset.” Currently, there is some discussion of Social Security reconsidering the “reverse offset” in the interest of decreasing Social Security Disability payments as that system faces significant and chronic funding shortfalls. Certainly, this discussion is part of a larger conversation about the future of Social Security Disability. However, there are those Summit attendees who perceive these discussions, and similar ancillary federal concerns and issues, as having the potential to impact workers’ compensation.

Because of these concerns of potential federal impacts, and because of the other concerns documented in this report, the Summit attendees have reached consensus that there is a need for an ongoing national conversation regarding workers’ compensation. While this is not an endorsement for a specific format such as a commission, it is a call for ongoing intellectual consideration of the strengths and weaknesses of these systems that affect virtually every employer and employee in the country.

Employee participation in the conversation

Summit participants lamented the lack of employee engagement in workers’ compensation issues and processes. A perceived truth is that employees primarily become engaged in the “what” and “how” of workers’ compensation only following an injury. In this context, organized labor is seen as somewhat exceptional, perhaps most notably in the instances of “opt-out” (see #9).

There is a perceived value in greater employee participation in the development and structure of workers’ compensation (as a result) and workplace safety (as a preventative). Some contend that greater appreciation of the systems would be beneficial in systematic efforts toward simplification and restricting overregulation. It is also perceived that greater appreciation of the systems and their inherent shortcomings would be positive in developing and implementing more effective safety initiatives.

Some Summit participants lament the logistic and regulatory impediments on compensability and care. In pursuit of consistency and predictability, systems have resorted to definitions and time limitations. Failure under some constraints may be fatal to receipt of care or indemnity. Employees are generally informed at hire of the existence of a jurisdiction’s system, procedures for reporting accident or illness, and perhaps some constraints like statutes of limitations. However, at the time of hire, the employee is confronted with a multitude of other facts regarding benefits, leave, compensation, retirement, and more. Many, or all, of the other facts are more immediate and primary foci. The operation and effect of workers’ compensation, a resulting process dependent upon the occurrence of an event neither planned nor expected (“it can’t happen to me”), is easily ignored or at best unappreciated.

There is a value seen in engagement of all employees in the structuring and design of workers’ compensation. There is a value in employee appreciation for the legal and regulatory requirements of these systems. And, there is an expressed frustration at perceived employee ambivalence or skepticism (“it cannot happen to me”) in the greater employee population.

Occupational disease

Workers’ compensation was created to provide care and treatment for injuries resulting from accidents at work. At the inception of these programs, such injuries were largely free from the work-relatedness or “compensability” disputes that exist in the modern systems. Accidents in the early age of workers’ compensation, at least perceived in retrospect today, tended to be less subject to dispute as to occurrence or causal relationship. When a trauma occurs, whether through a vehicle accident or being struck by an object or a fall, the event and causation of resulting medical conditions are perhaps more readily apparent and thus accepted with fewer distractions or questions.

As workers’ compensation systems gained acceptance, the scope was broadened, encompassing more than the apparent results of traumatic events. Exposure to other work-place risks such as chemical exposure and repetitive trivial trauma entered the workers’ compensation realm and brought specific challenges for legislative and regulatory constructs. Causation of injury in such instances may be more difficult to perceive, accept, and prove. There are a variety of challenges to such causation analyses.

In exposure claims, an employee may face significant obstacles in establishing the presence, strength, and perniciousness of an offending agent. Exposure may occur over extended time and geographic expanses. Effects, though pernicious, may be difficult to perceive, document, and prove. Therefore, such risks may prove challenging for workers and carriers attempting to effectively underwrite the risks.

Systems have responded to the uncertainties of such exposure situations with specific statutory and regulatory parameters and constructs. The perceived effect is that such claims are more difficult to both prosecute and defend. There is a sentiment that issues and proofs in such claims require expert testimony to a greater degree than other claims and that therefore litigation is disparately expensive. The issues inherent in these claims have therefore likely contributed to regulatory complexity (see #2), system failures (see #4), worker beliefs (see #10), the adversary nature of the systems (see #6), and attorney involvement (see #25).

Thursday, December 21, 2017

Nationalization, Participation, and Disease (9)