Its a Non-Final Order, that Matters in Workers' Compensation

In July, I ran across Empara v. New Rochelle School District. A New York case that makes for an interesting reminder of finality and appellate jurisdiction. In Empara, an injured worker’s claim for benefits was litigated as so many are, in multiple hearings. Workers’ compensation has been referred to as “serial” meaning that cases can be presented in a series of hearings. This is due in part to the manner in which workers’ compensation statutes provide benefits in stages, each based on specific pre-requisites. It can also be a conscious decision of employers and employees. 

As those statutory requisites occur, an injured worker may become entitled to benefits today that were not available yesterday. For example, an injured worker who is excused from work for the time being is not likely entitled to permanent indemnity (lost age) benefits. Permanent benefits are dependent on permanency of injury, which occurs after medical care, and attainment of maximum medical improvement (MMI). So, until MMI is reached the injured worker cannot seek permanent indemnity. That benefit is referred to as "not ripe" for payment and therefore not ripe for a claim or petition. 

So as an example, an injured worker might litigate entitlement to temporary total disability benefits before MMI, but any claim for permanent benefits might at that time be premature and thus not litigated. There could be a trial now on temporary benefits, and another trial in two years on permanent benefits. The entitlement to a specific benefit may be litigated at any time, and a particular worker might therefore be in and out of the litigation process repeatedly.

Likewise, the parties in a case may elect to only litigate certain issues, of all that are currently ripe. They "bifurcate" or separate some issues from the other(s) in an attempt to resolve certain differences. Their intention in doing so is usually based on a belief that resolution of some certain issue(s) will perhaps create enough certainty or predictability in a particular case to allow the parties to solve the rest of their disagreements or issues in that case without litigation, and the time and expense that entails. 

An example of this might be where a physician has recommended a diagnostic test such as an Magnetic Resonance Image (MRI) and surgery. The parties might agree to only litigate the MRI authorization if they believe that a decision on that point will give them the information they need. That is, they believe that if the judge denies the MRI then surgery will not occur and that if the judge orders the MRI that test will answer any questions as to whether surgery is appropriate. The accumulation and organization and presentation of evidence regarding the MRI may be easier, quicker, and less expensive that what would be required to litigate the surgery issue.  

One of the complications faced by a workers' compensation judge is the multiplicity of issues that may be possible when a case comes to trial. The judge must make findings, decisions, but is limited to deciding the issues that are ripe. Despite careful attention to this, findings required for one decision today may affect later claims that have as yet not been filed (not ripe) or which were not a subject of the present trial (they were bifurcated for another trial another day).

In Empara, the injured worker was initially found to have a 37.5% “schedule loss” of the left leg. After another injury, and a surgery on that leg, an impairment of 40% was rendered. A trial was held regarding the impairment, and the judge made a “finding,” that is a conclusion, on the impairment in an order issued in late November 2012. However, no benefits were awarded. Instead, “the matter was continued” for another hearing on various issues, including “consideration of an award of compensation.” So the judge decided the impairment that existed, but did not decide how much the injured worker should therefore be paid.

Thus, decisions were to be made in this case at a series of hearings. The judge decided not to determine the amount of compensation, and to instead decide only the impairment rating. This may have been because the parties asked for that bifurcation. This may have simply been the judge's decision.

Then in January 2013 the judge awarded benefits based on that impairment. The worker’s employer appealed that decision because it was based on the impairment after the left leg surgery, but the judge's decision (order) did not explain the interaction of the prior stated 37.5% impairment. In other words, there appeared to be a question as to whether the worker had a 37.5% impairment and another 40% impairment, or whether the later 40% impairment included the prior impairment. 

The worker objected to the appeal. He explained that the appeal was addressing the conclusion of a 40% impairment, a conclusion reached in November not in January. So, the worker argued, the appeal regarding that impairment, after the January 2013 hearing, was not timely. A critical side note, parties have a limited time to ask the appellate court to act on their case. In Florida workers' compensation it is 30 days. 

The New York appellate court concluded that the appeal after the January order was timely. It explained that the November decision was incomplete as it did not explain the interaction of the prior impairment. As such, “it was unclear from the November 27, 2012 decision whether any award would be made to claimant.” The Court therefore concluded that the November order was ambiguous” and therefore the employer was able to appeal when the ambiguity was clarified in the January order.

I was reminded of Empara recently, when the Florida First District decided Zavala v.Economic Development Commission of Mid-Florida, Inc. Interestingly, the news headline on this case was that the “1st DCA Dodges Constitutional Challenge to Statutory Limit on Indemnity Benefits.” There has been a fair amount of discussion of workers' compensation and the constitution in recent months. 

The court concluded that the trial judge’s decision in Zavala was a “nonfinal order that adjudicates compensability of her accidental injury.” The decision was “nonfinal” because “the JCC reserved for another day adjudications on claimant’s entitlement to medical benefits and other claims.” Thus, some issues were bifurcated from the others. 

Much as in Empara, the order entered by the trial judge in Zavala, made decisions and reached legal conclusions. However, the order neither awarded or denied specific benefits. This made the trial order “nonfinal,” and there will be another hearing in Zavala, as there was in Empara. Then a final order will be entered (going beyond the decision that the injury was in fact a workers' compensation injury, and ordering provision of some specific benefit(s)). When that order is issued, then the constitutional issues, and other specific challenges regarding those benefits will be ripe for determination by the First DCA.

Because the court determined that the trial order was “nonfinal” it concluded that it lacked the authority, or “jurisdiction,” to address the issue of whether a statutory provision regarding benefits is or is not constitutional. The New York court found that the first order was not subject to appeal because it was “ambiguous,” but explained this "ambiguity" was its incompleteness in not determining benefits due. The cases are explained differently by the two courts, but the results are consistent. 

The Florida court concluded that the incompleteness, not determining the actual benefits due, made the order non final. Not ambiguous, merely incomplete. The trial judge in Zavala reserved jurisdiction, specifically telling the parties there would be another trial on the question of actual benefits. With the lack of finality or the “ambiguity” comes the conclusion that it is not yet time for the appellate court to consider the case.

The logic of this is simple. Though appellate courts recognize that the serial nature of workers’ compensation litigation is a fact of life, the courts strive to review cases when they are complete. This allows a single appeal to address a composite of issues at one time. In other words, accepting that the serial nature of this statutory program may inevitably lead to multiple appeals, the court strives to only review complete determinations so as to consolidate review and minimize the serial nature of dispute resolution at the appellate level. 

The time to seek appellate review of a trial decision can be tricky. This is discussed in Read the Rules, it is Critical. Knowing the Florida Rules regarding when to appeal is important. Knowing what kind of order can (e.g. final) and cannot (e.g. non-final) be appealed is also important. 

For the court to have authority, or “jurisdiction,” the Florida order must generally be a final order. There are exceptions to that general rule on finality. Rule 9.180 explains that non final orders may be appealed if they determine the authority to hear the case ("jurisdiction"), or the appropriate place to hear a case ("venue"), or "compensability" if there is an express conclusion that a work injury occurred, that the workers "is entitled to receive" benefits, and the Judge of Compensation Claims "certifies in the order that determination of the exact nature and amount of benefits due to claimant will require substantial expense and time."

The point of all of this is simply that litigation is a journey. It has a starting point and an end. Like many journeys in life, it may be traversed in a single sitting. Conceivably one might drive from Tallahassee to Burbank, California for the Comp Laude awards banquet this weekend. Or, one might drive from Tallahassee to Baton Rouge and spend the night, then from Baton Rouge to El Paso for a few days, then from El Paso to Tucson and spend the night, and then from Tucson to Burbank. Either way, the trip ends in the same place. 

In most civil litigation, like personal injury, the trip is a continuous journey. There is a single trial, a single verdict (decision) and then, if desired by a party, a single appeal. It is possible that some other decisions made by a judge along the way in a civil case might be appealed before the end of the journey, but those will more likely be about the procedure of the case, not about an award of some benefit for some part of the civil case. Workers' compensation is more like the second example with the overnight stops. The trip starts and stops. Benefits are claimed and determined. There are decisions along the way as to where to stop and how long to stay before it is appropriate to move on. 

Knowing when an appeal is or is not appropriate during either journey is important. For the workers' compensation example Zavala and Empara help us remember that finality is usually a critical question on this journey. 

Occupational Disease and the Zadroga Act

Most of us recently took a pause in our daily lives to be thankful for something. It is an annual ritual during which many of us eat too much, do too little, and hopefully take some time to reflect. 

In the days leading up to Thanksgiving 2015, a couple of minor headlines caught my attention, as did another headline from Joan Collier's blog regarding occupational disease. I have heard a great deal about occupational disease, at conferences, from lawyers, from doctors. 

On November 18, the New York Daily News published an update on the case of Diane DiGiacomo. She worked for the American Society for the Prevention of Cruelty to Animals (ASPCA). Following the terrorist attacks of September 11, this "single mother spent three month near the shadow of the smoldering footprints of the World Trade Center." Her assignment was to save "dogs and cats left behind in nearby apartments." 

On November 16, the News reported on DiGiacomo's efforts to have Congress act to reauthorize the James Zadroga 9/11 Health and Compensation Act. According to the News, this "provides medical treatment and compensation to Ground Zero workers." The story laments that this law included time limitations for seeking compensation. In the story, her sister asked "how could you put a deadline on people's lives?" 

The News articles were less than informative regarding the Zadroga Act. According to The Hill, "we now know 33,000 first responders and survivors across the country suffer from at least one 9/11-related illness or injury." The Hill asserts that as many as 4,000 of these first responders are suffering from cancer. Ms. DiGiacamo "was diagnosed with cancer last year" (breast) according to the News. in a very short period of time, it had spread to her brain and bones. When the stories were published in November, she weighed only 60 pounds and was essentially "confined to her bed." 

The Zadroga Act provided medical care and monitoring for first-responders, according to the Center For Disease Control (CDC). The proof required appears to be somewhat less than for workers' compensation. According to the CDC, care is available "As long as the reason you are hospitalized is for treatment of a strongly suspected or certified WTC-related health condition." The Zadroga Act was passed in 2010. By its language, it has now expired and there is a move afoot to pass the "Zadroga Reauthorization Act." 

The CDC provides a list of conditions that are covered, including: asthma, gastroesophageal reflux disorder, interstitial lung diseases. reactive airways dysfunction syndrome, sleep apnea, upper airway hyperreactivity, WTC-exacerbated chronic obstructive pulmonary disease (COPD), and chronic cough syndrome, laryngitis, nasopharyngitis, respiratory disorder—fumes/vapors, rhinosinusitis. There is also a long list of "covered" cancers, female breast cancer among them. 

On November 16, the News Reported, that Ms. DiGiacomo had lost her claim for workers' compensation benefits for her cancer. The News reports that "In his Monday ruling, Judge Marc Grodsky says there is 'no dispute in the medical evidence' that DiGiacomo’s breast cancer developed at least in part due to her exposure to the site’s toxic fumes."

The News provides little explanation of the judge's order beyond this quote. WorkCompCentral (WCC) had a brief report on November 20, in which some further details of Judge Grodsky's order were provided. According to WCC, "Grodsky concluded DiGiacomo did not suffer from an 'occupational disease,' because the exposure did not 'derive from the very nature' of her work as an animal rescuer." Instead, he concluded, "her exposure arose from ‘an environmental condition' specific to the place of work." 

Some contend that this logic could preclude any 9/11 first- responder from prevailing in a claim for workers' compensation benefits. They point to the judge's conclusion that “the dust and particulates were a result of the environmental conditions in the area in the aftermath of the attack. If she was doing her job in a different area, there would be no exposure.” Critics contend that this distinction would be as true for any firefighter, police officer or other professional responding that Tuesday morning 14 years ago. 

On the same day WCC provided these details of the order denying Ms. DiGiacomo's claims, the News ran another story regarding Diane DiGiacomo, reporting she had passed away.

There are burdens of proof for demonstrating that disease is in fact occupational. The 9/11 example provides an illustration, and the attacks are familiar to everyone. The general familiarity with the events that day provides a commonality within which discussion can be had. That is an academic exercise, which is interesting, but we all must remember that it is a debate which profoundly affects people's lives. 

Occupational disease in Florida is compensable as set forth in Fla. Stat. §440.151. This section provides the generality that "the disablement or death of an employee resulting from an occupational disease as hereinafter defined shall be treated as the happening of an injury by accident." 

The statute then defines restrictions on the generality, stating: 

"in no case shall an employer be liable for compensation under the provisions of this section unless such disease has resulted from the nature of the employment in which the employee was engaged under such employer." 

“'Nature of the employment' means that in the occupation in which the employee was so engaged there is attached a particular hazard of such disease that distinguishes it from the usual run of occupations, or the incidence of such disease is substantially higher in the occupation in which the employee was so engaged than in the usual run of occupations." 

The employee will have to prove that such disease "was actually contracted while so engaged." 

And that for such disease "the nature of the employment was the major contributing cause of the disease," which cause "must be shown by medical evidence only, as demonstrated by physical examination findings and diagnostic testing." 

The burden of proof is not a preponderance of evidence ("more likely than not"), but is higher in Florida occupational disease. The statute provides that "both causation and sufficient exposure to a specific harmful substance shown to be present in the workplace to support causation shall be proven by clear and convincing evidence."

The Florida standard is beyond "the strongly suspected or certified WTC-related health condition" which has been stated as the burden of proof regarding the 9/11 disease claim program.

There has been discussion of the burden of proof in occupational disease cases. This example provides a view of the law interpreted in New York. Would the result be the same using the provisions of Florida's law?

Misclassification and Regulation, Will Government be Nimble

The Federal Aviation Administration (FAA) recently announced that it will scramble to enact registration regulations for remote control aircraft, called "drones." It hopes to have these in place before the 2015 holiday season. Some report that holiday drone sales are anticipated to be over 1 million units this year; lots of gift-giving. These are not your remote-control helicopters for $19.99. These include four-rotor craft with cameras mounted beneath, selling for $600-$1,000 at your local home technology store. The law is struggling to keep up with this relatively new technology.

There have been model planes for years. Perhaps it is disingenuous to call drones "new." But model planes were a somewhat expensive hobby, engaged in by relatively few. Recent technology has not created drones, but has increased the capability of these devices while decreasing cost. Previously, there was apparently no perception of regulation needed for very small aircraft. In fact, the Delawareonline reports some believe the FAA lacks jurisdiction to regulate anything under 55 pounds. All of these new roto-drones seem to fit into that weight category. 

The FAA will now try to have regulations in place for drones by the 2015 holiday season. That is ambitious. When it announce plans for these rules there were only about 60 shopping days remaining until Christmas. DelawareOnline reported that the FAA goal was to have regulations submitted by November 20, 2015. It named a committee of "25 representatives from the aviation industry" to accomplish that regulatory feat in less than 30 days. The committee's final report was dated November 21, 2015. 

The FAA is reacting to this technology. It is likely that the outcome will be a requirement that owners of these drones will have to register them in a federal database. The government is seeking to adapt to the technological change with rules that acknowledge the challenge. The alternatives are to do nothing regarding these devices or to use existing regulation to deal with change, a more reactive approach. Technology is evolving and the government strives to keep up. The capability of various technology is repeatedly doubling, rapidly, as costs bring more and more technology into consumer hands. Regulation will be a challenge. 

Employment also continues to evolve in the United States. We look to regulation and legislation to provide parameters and consistency. But that appears to be a similar challenge. We see evolving relationships in the workplace. Seemingly gone are the career jobs that end with 30 years of service and a gold watch. It seems that employment regulation and definition is more reactive, with various jurisdictions facing challenges of misclassification independently and generally using existing law. 

Last November, I was introduced to the subject of Internet-based car ride services, with specific emphasis on Uber and Lyft. There is a great debate surrounding these two, and others like them. They are "disruptive" to the marketplace of existing alternatives, such as taxis and limousines. These traditional ride sources are resistant to the new Internet services. Taxi drivers see them as destroying their livelihood. They decry the taxes and licensing for which they are responsible, and which Internet ride services seem to avoid. 

In January 2015, I shared Misclassification - What is it? Msclassification is essentially where a workers' description is misrepresented. Someone who is an employee is labelled an independent contractor. There are multiple encouragements for this labelling. They include tax avoidance as well as reduced costs for both workers' and unemployment compensation.

Employers are responsible to collect and in some part match taxes for employees. Taxes represent a cost for employers. There is bookkeeping expense for income tax, but the FICA taxes have to be matched. Many people assume that their Social Security and Medicare taxes are about 7.5%, because that is what is withheld from their paychecks. But in most instances, the employer pays another 7.5%. Social Security and Medicare consume 15% of American payroll. Despite this there are solvency issues for these programs. 

Another misclassification motivation is workers' compensation. Employers are often (if the business is of sufficient size) required to provide workers' compensation coverage for employees. Employees are entitled to overtime and other wage protections by the Fair Labor Standard Act (FLSA), which does not provide that protection to contractors. As a company achieves various employee counts, other laws become implicated, such as the Americans with Disabilities Act, the Family Medical Leave Act, the mandatory health insurance law and more. Thus, an employer may have a variety of incentives to minimize the number of employees. 

Misclassification and Uber have both been back in the news recently. 

Federal Express was sued by a multitude of drivers. Forbes recently reported that one suit has been settled after "a 2014 Ninth Circuit ruling that FedEx misclassified drivers as independent contractors." FedEx is creating a $228 million fund to resolve claims by over 2,000 . . . drivers." It is possible that the money due to these drivers is compensation that would have been paid as wages had it not been for the misclassification. Will FedEx likewise be paying the 7.5% FICA tax to Washington on those back earnings?

FedEx is not alone. One website reported in May that Lowe's entered a settlement with home improvement contractors. Another reported a painters class action suit settlement earlier in 2015. Exotic dancers, restaurant workers, construction workers and more have been involved in litigation regarding allegations of misclassification, seeking overtime, workers' compensation, and other benefits.

A Reuters story notes that California has concluded that the disruptive Uber drivers are employees, not contractors. The story says "classifying Uber drivers as employees opens the company up to considerably higher costs." These include "Social Security (the FICA mentioned above), workers' compensation and unemployment insurance." The New York Times cautions that Uber decisions currently affect small numbers of drivers, and that Uber plans an appeal. The Times reports that Uber has successfully litigated the question, and five states have conversely concluded that Uber drivers are contractors. 

With the cooperation of "check cashing" businesses, construction company misclassification has been labelled "A Made in Florida Construction Industry Rip-Off." In June 2015, according to WorkCompCentral, Florida CFO Atwater announced arrests in a "massive fraud ring," the purpose of which was to use "shell companies" and "check-cashing stores" to improperly "rent" workers' compensation insurance coverage. 

North Carolina focused legislative efforts on misclassification in 2015. The News Observer reported on the efforts, which some North Carolineans claim were not sufficient. In that opinion piece, the author claimed that North Carolina should look south to Florida for effective methodology for attacking misclassification. Some apparently see misclassification as created in Florida, while others see Florida efforts as the guide to battling it. 

The commonality of all of this seems to be imagination. The world is changing, with many seeking comparative advantage. Individuals and companies are trying to find ways to avoid regulation to increase profit, by leveraging technology, by creative use of legal definitions. 

Last May, I attended a presentation by Salim Ismail presented by the National Council on Compensation Insurance. A key point of Ismail's presentation was that the law will have trouble keeping up with disruptive technology. He contends that the law is too slow to effectively react in the paradigm of ever-changing terrain. He points out that the Google Car has rear-view mirrors, but no steering wheel. 

He explains that legislators thought to require mirrors, but none ever thought to require cars to have steering wheels. His point is that the legislative process did not predict the disruption or the technology and finds itself playing catch-up. Is that description any less applicable to misrepresentation; have legislators and regulators merely failed to anticipate the imagination and ingenuity of those that might seek to skirt the regulations? 

Recognizing the costs of misclassification, can the law effectively play catch-up on the issues presented by Uber drivers and the various other service-providing Internet applications? Is the FAA drone regulation process illustrative? The FAA cannot have been unaware of drones for the last several years of evolution. But the issue now becomes critical and thus the 2015 pre-holiday rush to regulate them. It seems unlikely that awareness is the primary issue. Drones have been a concern for some time, but their prevalence has led to dramatic and rapid action in the closing months of 2015. In short, the FAA decided to act. 

Has the time come to act similarly on misclassification? Will North Carolina and other states deal with misclassification? Are existing regulations sufficient, and it is a matter of deciding to enforce? Perhaps recent Florida successes support that existing regulation is sufficient. But, if additional regulation is required to deal with the misclassification problem, can blue-ribbon panels be assembled, actions taken, as the FAA recently did for drones? 

Maybe Ismael is wrong, and government can be nimble enough to keep pace with evolving technology and imaginative wrongdoers. Or will the misclassification issue linger, regulated by a multitude of federal and state laws that perhaps are not as imaginative as those who would seek to avoid them?

Interesting days are ahead.

It's not the Age, its the Mileage

Back in 1981, the Bangles released a cover of Simon and Garfunkel’s Hazy Shade of Winter. A memorable lyric is “time, time, time, see what’s become of me.” The song reminds us of our life changing and the passage of time: “seasons change with their scenery, weaving time in a tapestry;” “time, time, time . . ..” Also in 1981, the intrepid Indiana Jones brought context to aging. He noted “it’s not the age, honey, it’s the mileage.” We are all moving inexorably forward, aging every day. 

A very interesting story caught my eye on November 18, 2015, regarding a woman in Shenzhen City in Guangdong, China (just north of Hong Kong). I was drawn by the headline, "Overtime made me an Old Lady," and the link lead to Rocketnews ("Bringing you yesterday's news from Japan and Asia, today").

The 25 year-old pictured below was photographed on the streets with a sign that reportedly (I cannot read Chinese) said “overnight and overtime work has made me into an old lady. Both my love and work lives are miserable. I request approval for workers’ compensation.” One of my first thought when I saw this is whether such a sign would satisfy the filing requirement of Fla. Stat. 440.192 (the Florida petition for benefits statute)? Here, the law requires specific information in a particular format to claim workers' compensation. Would a sign suffice in China? But I digress, back to the story.

The story on Rocketnews said this “was an unusual yet straightforward demand that triggered debate and reflection on the state of working conditions in” China. The young woman reportedly “claims that working long hours and sometimes going without sleep have taken a toll on her physically. She says that this has led to rapid aging which she compares to a work related injury.” Would this be a repetitive trauma injury? After all, Phil McGraw reportedly once said "life is a contact sport."

This young lady is likely out of luck in China. Rocketnews apparently discussed this with Chinese attorneys, and the consensus seems to be that “her claims would not be covered in workers’ compensation.” But, they note that “her actions are indicative of an increasing awareness of workers’ rights in Chinese society.” 

As I write this post at 4:30 in the morning, focusing on the workday before me, I am wondering . . .. Nah, I guess the odds are probably not really any better for me making a compensable claim for this here. Though I sometimes feel worn-out from long hours, no one is making me. The state just expects judges to work 40 hours a week, and that is generally in the 9:00-5:00 world of daylight. 

Rocketnews reported that there were many comments in online discussions regarding her protest. They say that “comments range from support to derision.” In an indictment of the "world-wide" nature of the "world-wide-web," my several Google searches here in the U.S. did not yield any social media hits for this protester, or the comments reported by Rocketnews. But the issue there is likely that I am too "seasoned" to intuitively know (or not smart enough to figure out) how to access Chinese social media. In all likelihood, someone younger (or at least smarter) out there could probably find that material easily (if you do, email me the links and I will update this post). 

In a bit of a backhand at America, the Rocketnews author laments it is “too bad she (this protesting young lady) doesn’t live in the USA where the lawyer ecosystem is much lusher.” Ecosystem? American lawyers have an ecosystem? You can learn a great deal reading the Internet, either about the way things are or at least the way things are perceived. But, the article also notes that even in America, the case would be “tough though,” concluding that in the pictures she does not “look so old,” but merely tired and angry.

Don't sugar-coat it folks, do I ever look tired and angry? I hope not! If I, or someone else you know, do sometime, please remember “it’s not the age, it’s the mileage," and remind us to relax and smile. You never know what kind of a bad day someone might be having and a kind word often works wonders. 

I hope you have a safe and happy holiday season. In the spirit of this Chinese protest, I will be working some half-days this week. I hope you also get some rest and relaxation!

The Bumped Knee Massacree

If it doesn't work, is it fraud? 

If the result of some accident turns out to not be an injury, is it fraud to visit the doctor to find that out? 

There was a story last spring in the Daily Republic regarding a man standing trial for workers' compensation fraud. Fraud is a common subject in the news. Many states are taking a harder position on workers' compensation fraud. Some are doing an amazing job of publicizing their efforts. This story is worth reading, and the comments that have been added since it ran may also be interesting. 

I am confident I see more fraud news stories from Ohio than any other state. I recently sat with a regulator from Ohio at the Southern Association of Workers' Compensation Administrators (SAWCA) Regulator Roundtable (TM) in Orlando at the #WCEC2015. I mentioned my perception of Ohio and he acknowledged that his agency does a good job of publicizing those convicted of taking benefits to which they were not entitled. This is an intended part of their deterrent effort. 

It is important to remember that there are a vast number of people who have workplace accidents. That the Internet reveals tens of cases of fraud allegation or conviction, compared to that vast number of work injuries, suggests that despite the seemingly significant volume of news stories, only a very small percentage of those injured are ever accused or convicted of fraud. But it is a problem for those with legitimate injuries. The fraudsters may cast doubt on the system, reinforce bias and suspicion, and potentially take benefits from deserving people. 

The Daily Republic piece was interesting because the accused there never received anything. It reminded me of the longest song of all time (I will get emails correcting me on that point), Alice's Restaurant by Arlo Guthrie. This was a Vietnam-era song essentially protesting the induction of young men who chose military service over jail. A complex subject, the song meanders for about 30 minutes to tell the folksy tale of a Thanksgiving dinner "that couldn't be beat." 

The Alice's Restaurant "Massacree" (phon.) involves the dumping of the resulting Thanksgiving garbage, after the meal "that couldn't be beat." Driving about town in a "red VW microbus," with a half-ton of garbage, Guthrie is helping his hostess by taking her garbage to the dump. They find the dump closed for Thanksgiving, and leave in frustration, "off into the sunset looking for another place to put the garbage." 

As they drive back from the dump, they see "another pile of garbage" at the bottom of a small ravine. They decided that "one big pile was better than two little piles" of garbage. Applying considerable logic, they conclude that "rather than bring that one up, we decided to throw ours down." The savvy reader has already noted that big pile or small, Arlo and company have just littered. Needless to say they are discovered and prosecuted. 

Towards the end of the song, our protagonist Guthrie sits on a bench in the police station and is approached by a man who "was mean and ugly and nasty and horrible and all kinds of things," who asked him "kid, what'd you get?" Describing his recent experience with the justice system, Arlo tells him "I didn't get nothin'. I had to pay fifty dollars and pick up the garbage." It is farcical and funny. If you have never heard it, and you have 30 minutes to kill (not kidding), give it a listen this Thanksgiving as you ponder the feast clean-up. 

Much like Arlo, the protagonist in this workers' compensation story likewise "didn't get nothing" except a preliminary medical exam, and prosecuted for fraud. 

The story reports that Deonte Walker "bumped his knee at work." He thereafter "limped into a NorthBay Healthcare medical clinic using borrowed crutches." Mr. Walker never saw a doctor, but was examined by "a physician's assistant who thought he was faking it." The clinic visit was "billed at $102 along with X-ray costs." 

Thereafter, he neither returned to the clinic nor to work. He received no "payments from anybody for the injury claim." His employer, though, referred the matter to their insurance company and surveillance was undertaken. Video demonstrated Mr. Walker "running up a flight of stairs a week after his injury," and the insurance company reported the matter to the District Attorney. 

The story says that by the time the District Attorney had been contacted, "Walker, who has no criminal history, had called his employer saying he wanted to drop the injury claim altogether." According to the story, after "medical, in-house reviews, billing and investigative costs," the initial $102 spent on the claim substantively had "added up to more than $5,000.00." 

Fraud charges were pursued "on the basis that Walker had lied to his employer and to the physician's assistant about his injury." Because funds were expended on "assorted medical, bureaucratic and investigation costs," Walker was also charged with theft. 

This story made me think of Alice and Arlo, see above. But beyond that it made me think of some broader questions. First, how does $102.00 in actual benefits balloon into $5,000.00? How prevalent is it for an employer to pursue surveillance regarding an employee who makes one trip to a medical clinic, and never sees a doctor? And finally, is it fraud to go to a clinic to be examined and to see if you are injured? 

Arlo makes some fun in his song. He says that the investigation of his littering offense was "the biggest crime of the last fifty years" and that the local officials "turned out in force." They were "usin' up all kinds of cop equipment" and "takin' plaster tire tracks, footprints, dog-smellin' prints" and they "took twenty-seven 8 x 10 colored glossy photographs." 

For the millenials, we used to take pictures with a camera, not a cellphone, and the results were often printed on special paper so "pictures" were viewed on paper, not on our computers or phones. clarity could be hoped for in printing the photos in a large format, and 8 x 10 was a popular, larger size. 

But back to the story. In other words, the police investigated Arlo's littering infraction like it was a federal murder scene. Arlo noted that "everybody wanted to get in the newspaper story about it." 

The Deonte Walker story made a small splash in workers' compensation news circles. It was featured on LexisNexis, the Daily Republic, and Thereporter.com last spring. I suspected this "bumped knee massacree" would return to the news so that everyone would by now know whether Deonte "had to pay fifty dollars and pick up the garbage." But the matter has not resurfaced to date. Perhaps like "how many licks it takes to get to the center of a tootsie-pop," (another boomer pop-culture reference you can Google) the "world may never know" how the prosecution concluded. 

Make no mistake, I am not advocating fraud. But this "Bumped Knee Massacree" made me wonder. Is it fraud to visit a clinic for an examination? The Massacree also made me think about Arlo, Thanksgiving, and all that entails. The case makes for interesting reading, and perhaps some conversation. 

Here's wishing you and yours a great November and a safe and happy Thanksgiving. For my part this week, I reflect today on this industry and the people I have met in it. I had the chance to see a fair number of them this year at confernces and events. I have learned a great deal from so many, whose patient professionalism contribute so much to workers' compensation. 

I am thankful for each of you and for the opportunities I have had to expand my knowledge of the law. Your suggestions and challenges make this job interesting and worth doing. In reflecting this week, I have much for which to be thankful. I hope you do too. 

#workerscomp
#workcom

A Reasonable Attoneys Fee?

There have been a couple of interesting decisions in and Oregon case styled SAIF v. Traner. The recovering worker suffered a shoulder injury, which was accepted. The recovering worker later made a claim for "arthralgia" which the Workers' Compensation Board concluded was "only a symptom of the accepted shoulder injury and was not a new or omitted condition." Thus, the arthralgia became part of the compensable injury, but the recovering worker was not therefore entitled to "recover compensation or a penalty," as a result of successfully litigating its inclusion/compensability. 

But, that did not mean that the carrier, SAIF, was off the hook. SAIF stands for State Accident Insurance Fund. It is "Oregon's not-for-profit, state-chartered workers' compensation insurance company," and "the market leader" in Oregon according to its website. Just because the recovering worker was not entitled to compensation or penalty did not mean that the attorney should not recover a fee. The Board concluded that SAIF's failure to file a formal denial within 60 days of the claim "justified an award to claimant for attorney fees." The Court agreed, concluding that the recovering worker "vindicated her procedural right to a timely response to her claim."

That was concluded by the Court in SAIF v. Traner, 270 Or App 67, 346 P3d 1248 (2015), the "principal case." Similar to what is common in our Florida process, the fee entitlement issue was thus decided, but the fee amount remained for determination in a subsequent hearing.

The attorneys then filed for fees of $16,800, citing two statutory sections: ORS 656.262(11) and ORS 656.382(2). The Court mentions ORS 656.382(2) somewhat dismissively ("SAIF is correct that the statute in its form at the time of this case provides no authority for fees on appeal in the absence of 'compensation.'"). And, turns its attention to ORS 656.262(11), which it notes "is an independent authorization for an award of attorney fees." The history of the two statutes is reviewed in support of that conclusion. 

The court describes a limitation on fees in ORS 656.262(11) as a "soft cap." This sounds similar to the presumptive fee which once existed in Fla. Stat. §440.34. The Court noted that this "soft cap" was $3,000 and had been increased during the recent legislative session to $4,000. The Court also noted that the legislature had contemplated future increases in that "soft cap," with "annual adjustments" under the statute.

The Court quotes ORS 656.262(11) at length in the opinion. This foundation for fee entitlement says "in assessing fees, the director, an Administrative Law Judge, the board or the court shall consider the proportionate benefit to the injured worker." Though this language is cited, the opinion provides little insight into the Court's analysis of this point, the benefit to the injured worker, the proportion, etc. It remains unclear from the opinion how those factors might figure in the calculus of a fee in similar cases. 

Another interesting concept is discussed by the court, in footnote 2. The Court notes that the legislature empowered the Workers' Compensation Board to "adopt rules for the establishment, assessment and enforcement of an hourly attorney fee rate specified in this (ORS 656.262(14)(a), a different) subsection." In Oregon, there is a method for establishing an hourly fee rate in some situations. While that section did not strictly apply to the case at bar, the Court noted its presence and procedure. 

Returning to the issue at hand of the ORS 656.262(11) fee, the court concluded that the $3,000 cap could be exceeded "upon a finding of 'extraordinary circumstances.'” Noting that the claimed $16,800 was sought as recompense for 48.9 hours (rate of $343.56), the Court concluded that the case was "not extraordinary, all in all." Unlike the multi-factor consideration for deviation from the statutorily presumed fee that was in Fla. Stat. §440.34, the Court's inquiry seems limited to whether the matter was "extraordinary." 

The conclusion was a holding awarding $3,334. For the time claimed, this results in an hourly rate of $68.18. Whether that rate granted, or the $343.56 sought per hour sought is a "reasonable fee" or not would be for the reader to conclude. However this case illustrates a method of fee calculation that is different from Florida's and interesting. The opinion is worth a read. 

First We Try, Then We Trust

The Claims Administration Committee at SAWCA's All Committee Conference Thursday (11.19.15) presented Steve Heinen with contributions by Bob Wilson and Wade McGuffey, Esq. It was an interesting mix of material. 

Mr. Heinen is an insurance broker and trainer. He missed his calling. He should be doing two shows a night in Vegas, it was that funny. Steve has a way of plucking a humorous anecdote from his life experience to add to the mix as he progresses through a presentation. Yesterday, he was on the subject of a safety culture in America and pointed out some challenges we will face.

He finds it ironic that most of our effort in this industry is focused on a very small number of claims. We have all heard this before, but Steve used a pyramid structure to illustrate. The top, very tip, of the pyramid is the litigated claims that consume so much resource and attention. Below this is the lost time claims, then the medical only claims, then the first-aid claims, then the near-misses, and the foundation is the safety culture. 

Just when you thought you had his pyramid analogy in focus, he switches rafts mid-stream and asks the audience to picture it instead as an iceberg where everyone is focused on the litigated claims "tip" visible to the world, and there is a very large portion of the iceberg that is under the water line and receiving little attention. He cautioned us that this is backward thinking, and that greater focus on the larger part of the pyramid might have a marked effect on the much smaller litigated claims portion. 

Mr. Heinen used an interactive PowerPoint that allowed the audience to participate in the program and add their perceptions and conclusions. This was in real-time and made for some interesting discussion. One example was was the physician choice variations among the states. He presented the question of whether the audience preferred employer or employee choice, tabulated votes, and presented a graphic to illustrate how the distribution is today. This generated thoughts and discussion from the audience. 

The consensus seemed to be that whichever party picks the physician, there is a good probability that the other party will have trust issues with that provider. Examples came from the audience, explaining individual state's selection process, from employer chosen doctors, or employer chosen doctor panels to employee choice. In each paradigm, there were descriptions of corresponding trust issues. 

Steve seized on that, and his presentation was intertwined with examples for building better trust in the employment relationship, before the near miss or accident, in the safety culture. 

Bob Wilson, from WorkersCompensation.com, followed Steve for a quick speech. Bob is a gifted speaker with an ability to find the tight humorous anecdote to slip into a theme. He spoke of a television show involving company CEOs that go "under cover" in their own companies to find ways to improve their business. He related that the show tends to reveal issues, which the CEO repairs and that each show includes both a raft of employee complaints and a happy-ending conclusion. 

He described one show in which the subject of a workers' compensation claim was mentioned. This company was led by the son of its founder. This son and CEO was undercover when a worker mentioned the work accident that occurred years earlier when the CEO's father was living and running the company. Bob said he momentarily expected a "horror story" such as those about other employment issues in various episodes.

Instead, he said, this employee described the time immediately after the accident. The CEO did two things that changed the course of that recovery. He called the injured worker at the hospital and the worker's spouse at home. His brief, simple message to each was in the same spirit: the company hates that you are hurt, the company values you as part of a team/family, the company is going to take care of you, and will see you back at work. 

Mr. Wilson then tied that back to Steve Heinen's message, trust. Trust can be difficult. In a 1999 movie, Entrapment, starring  Sean Connery and Catherine Zeta-Jones, the story of a master thief mentoring a young protege is told against the backdrop of stunning scenery and romantic tension. Early in the mentor/protege relationship, trust is discussed, and Sean Connery, in that trademark voice with eye-twinkling countenance says "first we try, then we trust." 

So, actions (try) perhaps are the key to trust? Perhaps actions speak louder than words?

Wade McGuffey is a defense attorney from Georgia. He took the stage and discussed mathematical issues for a time. He touched on major contributing cause, apportionment of pre-existing conditions and prior work injuries, and contribution among multiple employers for resulting disabilities and expenses. Then, true to Steve Heinen's theme of trust, he related some anecdotes as well. 

In one, he described an employer who has instituted a "warm up" program in which all employees before a shift do some stretching and preparation together. He said that this company used to provide his firm significant business as the result of accidents, but not so much since this program was instigated. The program builds trust as it demonstrates an interest in employee well-being. 

It is possible that the stretching better prepares those bodies for the tasks ahead on that shift. Is it also possible that there is value in the employees knowing that the employer cares about them and is willing to invest time and money in their well-being? Perhaps the attitude demonstration is as beneficial as the stretching?

These are a few memorializations of three hours of presentation and discussion. The theme of trust raised so many examples from the audience and the speakers. These were in various workers' compensation relationships between employer and employee, doctors, and more. The result was a conversational and intriguing discussion of where claims management, or perhaps just plain management, stands today in workers' compensation and through what successful courses that path to success might pass. 

Cost Shifting, the ACA, and Workers' Comp

In September, the Workers’ Compensation Research Institute (WCRI) issued an intriguing report titled Will the Affordable Care Act Shift Claims to Workers’ Compensation Payors? As most WCRI reports, this one is dense, packed with data and conclusions; more tables and charts than one could hope. After reading it, I concluded that the report is misnamed, and should perhaps have been How Much Will the Affordable Care Act Shift Claims to Workers’ Compensation Payors?

I find the study compelling. As I read the Introduction and Summary of Findings, I began to think of Captain Renault in Casablanca. In a classic scene, he sits at a table gambling. A raid occurs and as the other officials enter, he exclaims “I am shocked, shocked to find gambling is going on in here." Perhaps the WCRI report is not telling us something we did not know, but is merely making it more widely known?

The report supports that there will be cost shifting in the delivery of medical care. This will be an inevitable outcome of a few simple truths carefully laid out in the Introduction and Summary of Findings. First, health insurers exist to make money. Pause here and catch your breath while you wrap your head around that one. Before you get too distracted by that, let me just assure you that all car producers, software companies, dating apps, sports teams, and purveyors of fine or fast foods likewise exist to make money. It is capitalism, which in the near term may remain a driving force in this country's economy.

The next truth is that human beings react in ways that further their own self-interest. "Shocked, shocked I am!” People will actually take actions that work to their own personal advantage. Who would have thought it? Certainly, there are those who preach the common good, and there are even some who work toward the common good. But in the end many an environmentalist will elect the less expensive or higher quality or more comfortable car over the one that is the most environmentally friendly. 

Personal wealth, comfort, or happiness may trump the big picture aspirations. Think of the allegations that Hollywood elite fly about in private jets to give speeches and attend conferences on carbon emissions. While we would all like to believe in commonality and community, there is a pull toward selfishness sometimes. 

The WCRI report notes that group health is evolving to “capitated” care. This is a model in which your doctor gets a sum-certain each year to provide your medical care. If she spends all of her time with you, she loses money because that sum-certain runs out and care thereafter she is providing free. If she spends none of her time with you she makes lots of money because she receives the sum-certain nonetheless. 

Imagine that you convince a bunch of people to each give you $20 per year to answer all of their questions about “the price of tea in China.” If they all send in the money but none call with questions, you end up with their money and very little to do. A great gig if you can get it. But with no price disincentive to calling, what if all of your customers call every five minutes with a tea question? See, this illustrates one of the classic conundrums of insurance, which we will save for another day, the disconnect between the person seeking service and the entity paying the bill. If someone else is paying, might an individual demand more of a product than she or he would if personal expense were involved?

What is pushing capitated care? Well, as mentioned above, health insurance companies exist to make money. Recent federal legislation has changed the way health insurance must work. For example insurance companies cannot refuse to cover conditions that you had when you bought the insurance policy. This is the "no exclusion of pre-existing conditions."

This sounds wonderful, but like many things in life it will cost money. Cost who money? Some insist that it will cost the big insurance company, not “real” (our) money. Strange thing about people and companies alike, if you find a way to make their expenses rise, they will likely find some way to make their income rise or their other expenses decline. They will all act in their best interest. Count on it, we all do (though we hate to admit it and I will likely get emails and comments telling me how altruistic  and selfless certain people are).

Next, the report notes that there are some workers’ compensation injuries in which causation is reasonably simple. It notes ”a patient presents with a fractured tibia – the cause of the fracture is usually identified with a specific event, and determining whether or not that event was work-related is also relatively straightforward.” Just imagine an employee whose arm is caught in a machine and broken, or whose vehicle is struck by another and suffers a broken leg, or who twists to tighten something and falls from a ladder resulting in a broken wrist, all at work, all witnessed, and all pretty simple causation issues. 

But other injuries and their causation are perhaps not as apparent. The report notes as an example “a patient presenting with a soft-tissue condition (e.g., non-specific back pain or strain/sprain of knee or shoulder).” The report seems to conclude that the injury from a specific event will be deemed compensable or not factually, was the patient at work and doing work when the tibia fractured, wrist broken, etc.?

The causation of the soft-tissue injury, however, is ”often uncertain," according to the report. For determining causation, or “responsibility” regarding these, it claims that “the professional judgement of the treating physician is heavily relied on.” The authors suggest that when this judgement is required, the physician’s self-interest could direct the outcome in a direction that provides financial reward to the doctor. 

In other words, for a certain population of injuries, causation is up to the opinion of the physician. This has some other interesting implications. If this is true, does that mean that there has been cost shifting away from workers' compensation during a non-capitated group health model, when that benefited doctors? That is a question worth pondering. So, says WCRI, there is a population of injuries that present upon physical examination that could be workers’ compensation or not.

There have been complaints in the past that some population of claims presented as workers’ compensation because that medical coverage was the only medical coverage this particular person had. If there is no group health coverage available for a patient, then the choice in that setting might be between workers’ compensation pays, the patient pays, or no one pays. Any provider of services will not be enamored with the concept of “no one pays.” 

Of course the provider or facility can afford some instances of “no one pays,” they simply charge more for services to those who do pay. Trust me, this explains why a single Tylenol in the hospital might cost $35.00 when a bottle of 500 generic acetaminophen costs $10.00 at the store. There is a markup on some things.

There is therefore a history (at least the perception) of shifting to workers’ compensation. Given the choice of a corporate payor responsible for the bill and an individual, there might be some inclination on the part of the “professional judgement” to lean toward the path of least resistance to reimbursement/payment. Some have suggested that this is a truth, others claim it is a possibility and still others deny it occurs. 

By the same token, there have been anecdotal complaints of cost-shifting to group health from workers’ compensation. This highlights one of the other interesting implications. Workers’ compensation is statutory. Rights and responsibilities are defined, regulations describe the processes and the application is generally state-wide. One key point upon which states are compared is “physician choice,” that is, who picks the workers’ compensation doctor? There are “employer choice” states and “worker choice” states.

In either type of state, ancillary services may likewise be under the control of the employer (or its carrier). Even if the worker picked the doctor, s/he may nonetheless be limited to a specific facility for obtaining an MRI, a surgery, therapy or other services.

In either type of state, there may be statutory punishment for illegal drug use. A group health system is unlikely to check for such substances in evaluating an injury, but many workers’ compensation systems do so. The implications of a positive drug test might affect the care and treatment under workers’ compensation. But, in a far broader context, a positive test might mean the end of the employment relationship. In other words, if I report this as comp, knowing I smoked some pot last week, I might lose my job in seeking treatment.

Indemnity is a great benefit. I know only a few people who pay for personal disability insurance. I had a friend years ago whose son found great joy in experiments. I have lost track, but suspect that young man is in a lab somewhere today doing really interesting stuff. One night, years ago he lit the garage on fire with one of his experiments. My friend, hearing the cries, ran to his aid and tried to extinguish the flames (by stomping with his feet). This was not a good idea as the material on fire was a polymer, which stuck (still burning) to his feet. The result was serious burns to both feet.

He was at work the next day, on pain medication, using a wheelchair. When I asked why he did not take a few days off, he explained that his leave was exhausted, and he had no disability coverage. For him, not working meant no income for his family. Thus, he worked in circumstances that were not ideal.

So, a patient might pick workers’ compensation or not because of the perceived benefit of indemnity, to choose their own doctor, to have easier access to medical testing, and many more reasons. Likewise, a patient might pick group health or not for better choice of a variety of doctors, greater access to testing, or avoiding the “stigma” of workers compensation (there are some employers who donot like to hire people with a history of workers’ compensation claims).  

So the concept of “shifting” is nothing new. “I am shocked, shocked to find cost-shifting is going on in here."  There have been anecdotal examples of it explained to me for as long as I can remember. As group health becomes less and less "generous," there may be some inclination for the close calls to be shifted to workers’ compensation. Instead of the captitation limit of group health, a provider may instead elect pay for services in the workers' compensation system.

How much? The question will be fluid. The first elements of cost containment are hitting group health in America now with these capitation plans under the "affordable" Care Act. Elements of society are frankly tired of people being allowed to buy the coverage that they want at the price they or their employer is willing to pay. The “Cadillac tax” is phasing in, which will cost employers money, perhaps significant money, and the health plans may become less generous. Some argue that health insurance will become more egalitarian not by bringing everyone up to the highest level, but by bringing everyone together at the lowest. Time will tell.  

Will health care be sustainable in America? Will those who pay little to nothing for group health under Affordable Care, or those  who pay a great deal in order to subsidize it, be good consumers in the system? Will medical care costs decrease as we experience the great savings that have been promised? How tight will the capitation become in group health? These questions will have to play out in coming years. 

The suggestion is that the tighter the group health reimbursement, the more attractive workers’ compensation may seem in some “professional judgement.” The higher the price of beef, the more chicken we might consume as we look for alternatives. The cost shifting is perhaps no different, except perhaps on the grandness of scale. 

I cannot claim to be shocked that cost-shifting exists. Economics are real for people, companies, and countries. Incentives drive people (I bought two cans of pumpkin for Thanksgiving, though I needed one; there was a price break on that second can I could not resist). I think we will see cost-shifting continue in both directions depending on the comparative advantages people and doctors perceive in each depending on circumstances and specifics of plans and laws. The WCRI report is dense and full of information. It is well worth the time to read.