Living Longer and Working Longer

Rafael Gonzalez published interesting labor statistics on LinkedIn last week. He provided this link to the Bureau of Labor Statistics  (BLS). It provides some telling indication of where the American workforce is, and where it is going. 

One of the interesting points made by the BLS is the notable decline in youths participating in the workforce. The report notes that sixteen to twenty-four year old workers made up almost 17% of the workforce in 1992, and that has decreased to 15.4% in 2002, then to 13.7% in 2012. They predict that it will decrease to 11.3% by 2022.  

Another critical point of this analysis involves workers between 25 and 54 years old. In 1992, these workers were 71.4% of the American workforce. This decreased to 70.2% in 2002 and then to 65.3% in 2012. The BLS predicts that this will decrease further, to 63.1% in 2022. 

Where are the jobs going? Which demographic is increasing as a percentage of the workforce? Well, those workers over 75 years of age is increasing, but very little, from .4% in 1992 to a projected 1.6% in 2022. 

The real increase is in the workforce participants between 55 and 64. That demographic has increased from 9% in 1992 to 15.9% in 2012, and projected to be 17.3% in 2022. There is also significant increase in the 65 to 74 year old demographic; that has increased from 2.3% in 1992 to 4.1 % in 2012, and projected to be 6.7% in 2022. Workers in the 55 to 74 year old group are increasing as a percentage of the workforce.

Part of this is the natural effect of the baby-boom generation. These were born 1946-1964. This was a period during which many children were born in the post-World War Two era. These individuals began reaching 65, the somehow default or expected retirement age, in 2011. Their generational achievement of 65 years old will continue through 2029. As a natural effect of the lower birthrates that followed the baby-boom, there will be less workers in the generation that follows them. 

Why are the older workers remaining in the workforce longer? For one thing, life expectancy has changed significantly. In 1900, life expectancy for an American born that year was 47 years. For someone born in 1960, the life expectancy predicted at that time was 67 years. An American born in 2000, the expectancy at time of birth was 75 years. Americans are statistically living longer. Advances in medicine and the abundance of food available in North America are influencing this. 

It is not simply for sustenance that we work, but to give value to time. Humans like to achieve things, to be challenged, and to feel as if we are contributing something. This desire to have something to do with our time is an element. I know many who are working into their 70s and they are doing so because they enjoy what they do. 

The economy is another element. We have seen the failure of pensions. We have seen the loss of nest eggs, and we have seen devaluation of real estate and other investments. There are none left who continue to deny the impending bankruptcy of Social Security. That program could never have been sustained based on the simple mathematics of decreasing birth rates, the increasing retirements as the "boomers" reach retirement, and the increasing life expectancy. The concerns about economic futures is an element in people working longer.

Simply put, Americans will work longer. The workforce will be older statistically. This BLS prediction has been confirmed by the National Council on Compensation Insurance (NCCI). This may have implications for the workers' compensation market. NCCI concludes "overall, the data shows that both indemnity and medical severity have exhibited steady increases over time with severity for older claimants costing more." The changes in the workplace demographic may therefore have implications for workers' compensation premiums across the country. 

Overall, persons over 65 years old make up 13.7% of the American population. In Florida that demographic group makes up 18.2%. The impact of this longer workforce participation may therefore be of greater impact here than elsewhere. It will be interesting to follow this thought in coming years to see whether the anticipated workforce participation is fulfilled.  

Medical incentives in the news

Human beings have a variety of needs. Abraham Maslow helped us understand these needs with his hierarchy of needs, which is still written of and studied. As noted in the Business Case Study, "A reward package can be designed in such a way as to enable employees to meet a full range of human needs." In other words, an employer can address the employee's needs for basic, security, group, self-esteem, and self-fulfillment needs. Because people have these needs, rewards might be tailored to fulfill these needs.

There is news out of Daytona Beach of a neurosurgeon who worked for a local hospital. The rewards package that they offered included "incentive pay." Inexplicably, he was "nearly five times as busy as other neurosurgeons." According to the Orlando Sentinel, he earned as much as $1.9 million per year, and "the vast majority" of this came from incentive pay. These payments came in the thousands of dollars extra for "each procedure after a certain threshold."

The procedures? Many were spinal fusions. According to the Sentinel, this hospital charged about $80,000 for each fusion. According to the Washington Post, more than 465,000 such procedures were performed nationwide in 2011. They note that the rate of spinal fusion has multiplied "sixfold in the United States over the past 20 years." They also report that perhaps as many as half of these were unnecessary. A recent study of ten of this particular neurosurgeons' fusions were "deemed not medically necessary" by a company hired to review them. The hospital and doctor contest that finding.

The increasing volume of these procedures "has raised questions from experts about whether, amid medical uncertainty, financial rewards are spurring the boom."

If half of the 465,000 procedures were unnecessary, that is 232,500. If all of these procedures cost the reported average in Daytona Beach, $80,000, then the total spent on these allegedly medically unnecessary procedures across the country in 2011 was $18,600,000,000. Yes, that is eighteen and one-half billion dollars per year.

This is a significant amount of money by any estimation. Certainly, it is a small fraction of what is spent on medical care in this country each year, but it is still a significant amount. Is the growth in the performance of fusions a result of the incentive pay? Is there similar growth in other procedures that are subject to incentive pay? It would be very easy to figure this out, simply end the incentive pay and see if the rate decreases. If hospitals are confident that all of the surgeries are being performed because they are medically necessary, the lack of incentive pay will have no effect on their bottom line. If they are all medically necessary, they will all be performed anyway even without the incentive pay. That is what necessary means.

The monetary influence on American medicine has to be questioned. Are doctors prescribing particular medications because they are indicated, or because the manufacturer is providing incentive? If the allegations regarding spine fusions are true, is it possible that other surgical procedures are likewise incentivised? Is there another $18 billion to be saved on knee replacements, hip surgeries, etc."

Is there a healthcare instance where incentives should be allowed to influence the delivery of testing, care, or treatment? Stories like this cast doubt on the profession and the practice. Is the damage to the public faith, to the profession of medicine, worth whatever legitimate goal (whatever that is) is achieved by incentives?

A study on injuries

I recently received a copy of a study of workplace injuries. It is available in a summary form, but the full report is here. It made for interesting reading. I am chagrined that this July 2013 study has just made it to the top of my reading list. Time flies when you are having fun I guess. 

Unfortunately, the report notes that data is not available for all states. The report analyzes data from 41  states and the District of Columbia, for 2011. I was disappointed that Florida is one of the few states that is not included in the study, but I find the analysis interesting nonetheless.

The report is focused on the occurrence and severity of injury. There is discussion of injuries that are fatal and injuries that are not fatal but serious, described as result in "job transfer or restriction" (whether temporary or permanent). The states with the greatest frequency injuries/illness that resulted in days of  job transfer or restriction per 100 full time employees were Maine, Indiana, California, Kansas and Wisconsin. The five jurisdictions at the bottom (least) of this list in this category were Alaska, Louisiana, Hawaii, District of Columbia and New York. In addition to the variations among states, the study also illustrates variation between the public and private sectors within states.

The report states that, according to the U.S. Bureau of Labor Statistics, the ten occupations with the highest rates of fatal injuries are related to fishing, logging, aircraft piloting, refuse collectors, roofers, structural iron/steel workers, farmers/ranchers, drivers, electrical line workers, and taxi drivers/chauffeurs. I seems that these jobs would be reasonably represented in every state. Therefore, though Florida is not included in the study, one might reasonably infer these are the same or similar here. 

For non-fatal injuries, the most "work threatening" occupations across the country (measured by the rates of injury that result in "job transfer or restriction," (per 100 full time private employees) were amusement park/arcades, animal slaughtering, beverage manufacturing, foundries, nursing care facilities, alcoholic beverage wholesalers, motor vehicle/trailer body manufacturing, hog/pig farming, motor vehicle manufacturing, community care facilities, and poultry/egg production. Some of these seem intuitive, with significant lifting, twisting, etc. 

This report illustrates that different states have different experiences with work-related injuries and/or illnesses. It suggests that over a million Americans each year suffer a an injury that results in one day of missed work, or more. There are about 317 million people in the United States. About 243 million are in the working population. So the 1 million who are injured and miss at least one day of work amounts to about one-tenth of one percent. In that context, it sounds better perhaps, but a million people is a significant amount. It is about the population of Jacksonville, Florida. 

Workers' compensation is a vast system. Because of the nature of our federalist system, it is an amazingly diverse system based on the individual states' laws and regulations. Each state will undoubtedly face individual challenges, and each system will have distinctions and differences. All of the states will have some similarities. But reading about the overall statistics is interesting reading. The full report is here. 

The Handbone's Connected to the Leg Bone

A worker in China cut of his right hand in a workshop recently. He had the presence of mind to place the severed hand in a plastic bag, and later on ice in a cooler. He then began visiting various hospitals. His search was reportedly geographical, starting with hospitals close to his workplace and expanding to greater distances. Why the greater distances? According to news reports, local hospitals turned him away. They reportedly told him that they lacked the expertise to deal with his injury. 

At a hospital two hours from his work, he eventually found a hospital with the skills to render aid. With the unsuccessful stops in between, however, the hand was detached for about seven hours before the injured worker found this hospital. Physicians there concluded that the best chances for reattachment would involve partial healing of the arm first. Therefore, they faced a dilemma of restoring blood flow to the hand, while allowing time for the arm to heal sufficiently to allow reattachment. The solution was to attach the hand to the injured worker's lower leg, restoring blood flow. There the hand remained for a month, after which it was successfully reattached to the arm. 

The story makes a couple of poignant points that are worth consideration. 

First, in my estimation, is that any hospital in America would provide some level of initial care in a situation like this. While the reattachment surgery might need to be performed in a hospital with a higher level of sophistication, I hope that there is not a hospital in this country that would turn someone away in such a situation. 

As I understand it, hospitals in this country are obligated to stabilize a patient who presents, rather than turning them away to wander in search of  more sophisticated facility. The news reports have not been all that clear as to whether this worker was "stable" when he presented to these facilities. with a severed hand in a cooler and a fresh trauma to his arm, I tend to doubt he was stable. I remain unclear whether he was driving himself from facility to facility. But, I am confident (I hope not naive) that less delay and more rapid care would have occurred in the vast majority of American towns. 

Second, this process for keeping the tissue viable is simply fascinating. When I was a kid, I knew a man who was missing the better part of a finger. He had been involved in the sheet metal portion of a manufacturing business, had a bad day, and severed it in a metal press. I never perceived any limitation on his activities from the amputation and I never heard him complain. I always thought of him when adults warned me of the perils of power tools, knives, etc. I am not saying I did not do some stupid things over the years, but I did think of that missing finger. Just a generation ago amputation was permanent. Today, not so much.

Recently I heard a story of a head trauma that involved a piece of the skull being removed. The removal was necessary to relieve cranial pressure from swelling. The piece of skull was actually "stored" in the patient's abdomen for weeks while doctors treated the injury issues. The skull tissue remained alive in that host environment until the doctors removed it and replaced it on the patient's head. 

Is it not amazing that the modern world of medicine has figured out how to preserve human tissue in this manner? So much is advancing, changing, improving. Do we not have much for which to be thankful in terms of the medical facilities we have at our disposal in this country? There is much debate about improving medical care, and ample examples of problems to fix. But at the end of the day, some of the care today is simply fascinating, and we have much for which to be thankful for and amazed by. 

No more "Gravy Train"

According to the New York Times, drug manufacturers have paid doctors to "speak on their behalf at conferences and other meetings." The presumption is that doctors speaking highly of a medication will cause conference attendees to trust that medication and thus prescribe it. They note that "all such payments by pharmaceutical companies are to be made public next year under requirements of the Obama administration’s health care law." The new law is not precluding the activity, but will perhaps make the practice more transparent.

Thus, the announcement in mid-December that GlaxoSmithKline has decided to discontinue the practice or paying doctors may be of questionable importance, at least in this country. The recent Glaxo announcement says that it will cease paying doctors to speak “to audiences who can prescribe or influence prescribing.”

Another move announced by Glaxo will eliminate commission compensation for Glaxo sales representatives worldwide. The article says that Glaxo ceased using that system in America in 2011. Currently, some companies pay sales forces based upon how many prescriptions are actually written for a particular medication. It is unclear whether other pharmaceutical companies continue the practice in the United States.

According to the Times, some feel that commission compensation has "pushed pharmaceutical sales officials to inappropriately promote drugs to doctors." The Times article suggests that commission compensation encouraged sales representatives to promote prescribing various medications for "off label" uses. That refers to use for maladies or conditions for which the medication was not approved by the Food and Drug Administration. 

The medical new site Medpage Today, titled their coverage of this change by Glaxo as "GSK Halts the Gravy Train." In a second article the same day Medpage questions whether the Glaxo decisions/changes be the "tipping point" that will encourage change by other medication manufacturers. Both are interesting perspectives.

It will be interesting to see if other manufacturers follow the lead regarding payment to physicians for promotion of their medications. Is medication prescribed because it is the most effective or the most beneficial or because it is in someone's economic interest that it is prescribed?

Admission is Free, but You Pay to Leave?

There have been conversations over the years as to the process of funding the Office of Judges of Compensation Claims. During the OJCC history, funding for this Office and the Division of Workers' Compensation has come from the Administrative Trust Fund. See section 440.50, Florida Statutes. The OJCC does not use any general revenue tax funds. Our entire budget comes from assessments on workers' compensation premiums. This is a self-sustaining system.

The Trust Fund proceeds are primarily collected as assessments on the premiums collected by insurance companies. The Fund also benefits when fines and penalties are collected. In the past, there have been those who suggested that filing fees in litigated cases would be an appropriate alternative to the assessment process. That idea has never generated much serious discussion. For the most part, the belief has been that the industry should support the adjudication process without imposing costs on the injured worker.

The South Carolina Commission issued a December 17, 2013 Advisory Notice regarding "Relief of Counsel," which is their equivalent for our withdrawal of counsel. Their new policy requires any attorney who seeks to withdraw from a case to file a motion. When the motion is filed, it must be accompanied by a $25.00 filing fee. 

This made me curious. How many withdrawal motions are filed each year in Florida? The answer is somewhat difficult to discern, but what we know is how many orders are uploaded approving such motions. The answer might surprise you, but it was about 2,605 last year. I thought that it would be higher than this. A withdrawal might be filed in any case, whether the currently pending petition was filed this year or last, or before. However, comparison of the withdrawal volume last year, 2,605, to the PFB filing volume last year, 56,298, yields about 5%.

If this withdrawal fee policy were implemented in Florida, the revenue might be as high as $65,125.00. I say "as high," because the South Carolina notice has an exception for those Relief motions which only change counsel between attorneys within the same firm. Only transfer "between two different law firms requires a motion, proposed order and filing fee." Some volume of the 2,605 may fall in this category in Florida, but that is impractical to determine. So, the figure that could generate filing fees would be lower. 

Such a fee collection would not be significant in terms of the Florida OJCC. It is interesting to observe how other jurisdictions contend with revenue issues. 

Allegations of First Responder Social Security Fraud

Fraud is in the news. There are more than 100 charged with fraud in the news yesterday. That is a significant headline in its own right. That 70 of these are retired police officers would make a compelling headline itself. The remainder of those charged includes firemen. The fact that this alleged fraud netted as much as four hundred million of dollars makes for a catchy headline also. Add in that these individual's disability claims were related to the tragedy of September 11, 2000, and this is a story that would make an editor struggle in selecting the most catchy headline. 

And these potential headlines all ignore the additional announcement yesterday that the investigation remains ongoing and that as many as 1,000 individuals may ultimately be charged. 

The allegations are interesting because they assert that these individuals sought Social Security benefits based upon their faked claims of mental illness. New York Police Commissioner Bratton released a statement in response to yesterday's indictments "the retired members of the NYPD indicted in this case have disgraced all first responders who perished during the search and rescue efforts on Sept. 11, 2001.” 

The story outlines some curious points as well. It is only 13 years since the attack of 9/11, but the story says this is "a scam that spanned 26 years." The story explains that this all allegedly began in January 1988, which long predates 9/11. A CNN story says that only half of those indicted related their claims to 9/11. So this fraud has been going on for some time, was allegedly engaged by some following that tragedy.

The volume of income is also curious, the allegations are that "each beneficiary receiving between about $50,000 to almost $500,000 a year in disability payments." I have been around the disability business for a few years, and have never heard of $500,000 per year benefits.

The allegations are that four individuals played a central role in this alleged fraud, "John Minerva, an official of the union representing New York City police detectives; Raymond Lavalle, a lawyer; Joseph Esposito, a retired police officer; and Thomas Hale, a pension consultant." An attorney for some of these was quoted in the CNN story asserting that 

Mr. Esposito allegedly "“coached” them on how to appear properly mentally unable during interviews with Social Security workers." He is accused of instructing disability applicants on what to say, how to feign lack of knowledge or make intentional errors in interviews. He allegedly told benefit applicants to "claim a fear of planes and entering large buildings." 

According to CNN, "the applicants were coached to tell Social Security Administration they were unable to perform basic life skills, like cooking for themselves, grooming themselves, paying bills and socializing,"

The police officers and firefighters claimed inability to work. Some claimed to be unable to manage their personal finances or even drive as a result of their debilitating claims. However, the investigation that led to the indictments revealed these "disabled" first responders boasting of their "full lives" on Facebook. Photos were posted of the disabled on jet-skis, motorcycles, and fishing boats. 

According to CNN, pictures included in court documents show "one man smiled behind shades and flipped the bird aboard a Sea-Doo personal watercraft. Another sat at the controls of a helicopter. A mixed martial arts instructor posed with arms crossed. They're seen riding motorcycles, hauling in massive sailfish, slugging softballs for the "NYPD Blues," taking jump shots, running half marathons and golfing, and even giving television news interviews while selling cannoli at Manhattan's famed San Genaro festival."

According to the Social Security Administration they have found multiple instances of inappropriate or even illegal behavior since their "Office of the Inspector General (OIG) was established in 1995." Multiple examples are cited at their website. 

The news currently affords readers in many instances the opportunity to leave comments. As I read various accounts of these allegations on the web, I read a small sample of those comments. I am left with the impression that many are angered by the allegations of fraud, but there is little expression of surprise. Whether correct or not, there seems to be a population that believes Social Security fraud or abuse are commonplace. 

What will these beliefs mean for the future of Social Security? We have been hearing for years that Social Security will become insolvent. To what extent do fraud and abuse contribute to the demise of the system?  These are questions with which America will struggle. The existence of a valid and healthy safety net for those who legitimately need it may be jeopardized by the impact of others who are allegedly abusing it. 

In all, a troubling story. Time will tell if the indictment brings convictions, and if so whether there will be meaningful punishment and repayment. Time will tell if there is criminal penalty for "coaching" applicants on what to say or not say in order to obtain the Social Security benefits they seek. 

Can We Help Each Other

A new calendar year begins. The holiday season usually brings a chance to slow down a bit, and usually a chance to reflect. Many in this part of the State instead spent much time reflecting on the violence that visited last week, and the inferences that may be drawn therefrom. 

At the outset, you may wonder what the following has to do with workers' compensation. However, in the end, workers' compensation litigation is a series of interpersonal encounters. Workers and employers are the reason for workers' compensation. But in the litigation process, a variety of others become involved. We all touch many lives and many touch ours. But do we know, or take the time to care, what others are going through?

Injured workers interact with adjusters, physicians, therapists and other medical providers. Physician and other providers interact with adjusters over authorization and documentation and referrals. Employers interact with medical providers and adjusters over return to work, restrictions, limitations, and provision of treatment. These are fundamental, but there is so much more in some cases. Nurse case managers become involved in some cases. Various testing facilities may become involved. Attorneys bring their expertise and perspective to the disputes. A work injury may necessitate a great many communications between any or all of these, and perhaps others. 

Christmas Eve 2013 turned bizarre in a small Pensacola suburb. 

Last spring, a young man was charged with vehicular manslaughter after he allegedly struck two people with his Mitsubishi 3000 GT. One was injured, another killed. In 2014, the prosecution of that crime would have continued. Before dawn on Christmas Eve 2013 he purportedly led the Pensacola Police Department on a high-speed chase through town. They allege speeds approached one hundred miles per hour. They eventually stopped him, blockading his Corvette between two police cars. He allegedly ran over one officer's leg, and struck one or both police cars. An officer then fired into the Corvette, killing the high-school student driver. 

Hours later, in the evening of Christmas Eve 2013, more tragedy struck. Sharon Aydelott was a science teacher at a local middle school, and coached the high school cross country team. She was discovered dead in her home, beaten and with multiple knife wounds. Later Christmas Eve, her 17 year old son was arrested for the death. In the days that followed, he would make his way through the preliminary criminal justice process. He is currently detained and charged as an adult with second degree murder. A grand jury may decide to increase the charge to first degree murder. His story made news nationally because it is shocking and because he is a student athlete with college potential.

Christmas Eve 2013 marked with the death of one student and one teacher/coach, and the arrest of another student for murder, all at one high school in one very small suburb/town. 

The local news has of course covered both stories. A dead coach and teacher, a dead student, a student charged murder. Both young men attended the same high school, where the teacher also coached. Here in a quiet suburb, three lives radically changed on Christmas Eve 2013. These events will of course affect more than these three lives. There is a police officer who pulled the trigger. There are friends and family who will struggle in days and months to come with their reflections upon decisions, actions, and perhaps inaction. In this tiny suburb community there will be reflection.

A high school student wrote to the Pensacola paper, and it was anonymously published. And this youth's perspective speaks volumes. The focus is on the tragedies of Christmas Eve 2013, but the message is worthwhile for almost everyone. 

The young author acknowledges acceptance "we can’t change the actions or consequences of those actions from two troubled students of our school." Who are the people involved? "They are not just names in the headlines. They are real people." The author notes that one might take issue with the decisions that were made, but reminds us that "they were regular kids just like the rest of us. They were not monsters."

If the anonymous letter ended there, it would be worth reflecting upon. These thoughts of this anonymous high school student, grappling with the emotions and challenges of tragedy are insightful. But there is more. 

The author tells us "these events opened up our eyes. We don’t know what happens behind closed doors. We don’t know who is fighting what battle. We all pass someone in the hall who is fighting a secret battle. We shouldn’t ignore that just because of what the news says about these kids." This evidences insight and wisdom beyond years.

This quote struck a cord with me. I have the opportunity to speak with so many people across the Florida workers' compensation system. Without exception, they face challenges, whether their stress is public or private. 

Some are professional challenges; their business is growing, shrinking, or changing. Some face personal challenges; children, parents, employment changes, aging, illness, injury and more. I have followed the challenges of David Depaolo on his blog this last month or so. He has been open and public about recent family challenges he has faced. I am impressed by his strength not only in facing those challenges, but in his public discussion of them. 

Simply stated, life is a challenge. When others share their challenges with us, as David has in his blog, we gain a glimpse of those battles. As the anonymous insightful young author noted so aptly however, "we don’t know who is fighting what battle." Absent someone sharing, I think we more often do not know.

What can we do? Perhaps nothing. We can ask "how are you" when we greet someone. Does this have any meaning, or has it become cliche, answered with the automatic "fine?" Can we resolve this year to know that everyone we encounter is likely facing some challenge, fighting some battle? Can we acknowledge that life itself is a challenge, struggle and sometimes battle? Can we accept that our disagreements need not make us disagreeable? Can we reach out to our fellow travelers and treat them with respect and dignity, despite the fact that we meet in the midst of dispute and disagreement? In short, can professionalism prevail?

I will make a renewed effort this new year. Will you?

Is it Really De Minimus?

There is a workers’ compensation bill proceeding through Florida's legislative committee process already. It is SB444 and there is a similar bill in the House, HB271. There are a variety of provisions in these two bills, many dealing with “stop work” orders and penalties. But of interest to the broad workers’ compensation marketplace, there is a mathematical revision or clarification that is academically interesting.

In the Fall 2013 News and 440, there is a small article I penned (is that still a viable verb in the 21st Century?) after the First District Court rendered Escambia County School District v. Vickery-Orso, 109 So.3d 1242 (Fla. 1st DCA 2013) last April. It includes more of the math and the analysis of the question of whether pennies and rounding are significant. News and 440, Fall 2013.

This was the compensation rate case involving calculations, percentages, rounding, and more. I have often heard attorneys say that "if I could do math, I would have gone to medical school." Several minutes on the worldwide web failed to locate the source of that quote. I did not originate it, and I cannot find who did, but I have often agreed with it.

I have been amazed over the years at how often I have become involved in mathematics. I look back on the times I asked "When will I ever use this" in high school and college math classes. Though I never got a great answer to that, it turns out I have used a great deal of math in my career. In a nice piece titled Dangerous Curves Ahead, attorney and mediator Michael Orfinger expresses some thoughts on using math in mediation. I recommend the article as it makes one think.

Returning to SB444/HB271, the logic seems to be a simplification of the mathematics required in workers’ compensation. Currently, sections 440.15(1)(permanent total), 440.15(2)(temporary total), 440.15(4)(temporary partial ) and 440.16 (compensation for death) use “66 2/3” as the factor to be applied to the Average Weekly Wage (AWW) in determining benefits due. After Vickery-Orso, I have discussed the Court's calculation with a variety of attorneys and other market participants. Not all agree with the Court’s math. Whether one agrees or not, however, the Court's math is reasonably clear. It is a road map for workers' compensation professionals.

SB444/HB271 would add the phrase “or 66.67” to each iteration of “66 2/3,” so that they would read (for example) “66 2/3 or 66.67 percent of the average weekly wage shall be paid to the employee . . ..” 440.15(1). Similarly, in one portion of the compensation for death section, “33 1/3” would be changed to “33 1/3 or 33.33 percent for each child.”

Eliminating fractions from the calculation might make the math somewhat easier (does anyone have a 1/3 or 2/3 key on their calculator?). The Court in Vickery-Orso has explained the calculation under the current statute though and it seems reasonably clear from this decision. Will the disjunctive “or” in SB444/HB271 be helpful, or will there be confusion over the application? In other words, as the bill is phrased, would either calculation be acceptable in any particular case? Would it matter that one carrier elects to use fractions and another carrier elects to use percentages?

The difference between the two calculations would be pennies. But pennies may be significant. In Vickery-Orso, the Court explained "these differences of two or three cents become significant when repeated over multiple payments, and are even more significant when they form the basis of awards of penalties, interest, costs, and attorney’s fees."

Under the proposed revision of SB444/HB271, who decides which of the two calculations is appropriate? Is the intent to give carriers the choice, and if they are correct under either calculation, that is appropriate? If so, they are likely to use that which yields the lower figure. Is the choice the Claimant's? If so they are likely to use the calculation leading to the higher figure. If simplification is the goal, would it make more sense to change to the percentage calculation instead of the fraction? Would that solve more problems than simply adding an alternative with "or" and its potential for further litigation and uncertainty? Is there a value in uniformity and clarity as well as value in simplicity?

Oklahoma Supreme Court Decides Coates

On December 2, 2013, I wrote about constitutional challenges. That included a discussion of Coates v. Fallin in Oklahoma. This is a constitutional challenge regarding a sweeping change to the Oklahoma workers' compensation law passed last spring. On December 16, 2013, the Court rendered its opinion, concluding that the statute is not unconstitutional on its face. Ninety days passed between the filing on September 17, 2013, and the ruling. 

A quick update on the Florida cases mentioned in the December 2, 2013 post. Castellanos v. Next Door Company was filed in the Florida Supreme Court on October 31, 2013 (case number SC13-2082). There has been no action in that case docket since notices of intent to appear were filed by five organizations on November 5 and 6, 2013. Organizations that have sought to file "friend of the court" briefs, called "Amicus Curiae," include the Florida Justice Association, the Workers' Injury Law and Advocacy Group, the Florida Workers' Advocates, The International Union of Police Associations, and the Workers' Compensation Section of The Florida Bar. That appeal has been pending for about 48 days. It remains unclear whether the Court will consider the case on its merits.

Westphal v. City of St. Petersburg was appealed twice (case number SC13-1930 and SC13-1976). On December 9, 2013, the Court accepted jurisdiction of the two cases and ordered the two cases consolidated. The docket reflects that oral argument will be scheduled in the case, and that initial briefs are due at the court before January 3, 2014. 

This is an interesting case of statutory limitations on benefits. There is an en banc (the whole court) decision in a recent case, Matrix v. Hadley, 11.29.11, providing one statutory interpretation, an 02.28.13 panel (three judges of the court) decision finding constitutional infirmity on the basis of "natural law" and a new 09.28.13 en banc decision retreating from the prior en banc decision and not mentioning constitutionality or "natural law." 

Supreme Court cases on Florida worker' compensation are reasonably infrequent. Most appellate review in this state ends with the First District Court. This is another case that is attracting significant attention. Organizations that have sought to file Amicus Curiae briefs in this matter include the Florida Justice Association, the Workers' Injury Law and Advocacy Group, the Police Benevolent Association, the Florida Professional Firefighters, the Florida Workers' Advocates, and the International Association of Fire Fighters. 

Ninety days later, the Oklahoma Court has rendered its decision in Coates. After the September 17, 2013 filing, the Court assumed jurisdiction of the case on November 25, 2013, heard arguments and made their decision. However, the decision is arguably narrow, with the Court addressing primarily the contention that the bill was inappropriate in addressing more than one subject. Still, ninety days from filing to rendition, is impressive.

The Court concluded that the legislature which adopted all of the recent Oklahoma changes did not act "outside its constitutional authority by enacting a bill containing multiple subjects." The Court concluded that all of the sections of the bill, and therefore the "new law are inter-related and refer to a single subject, workers' compensation or the manner in which employees may ensure protection against work-related injuries."  

Justice John Reif, concurring in this narrow determination, also dissented in part. He noted in his opinion that "judicial restraint calls for the denial of relief at this point in time for most of the challenges to the administrative system raised." (emphasis in original). The majority of challenges will be heard in trials, and proceed through the appellate process. Thus, the somewhat unique Oklahoma process for constitutional challenge has provided some guidance on the "facial" challenge, but there will remain opportunities for "as applied" challenges. Justice Reif concurred in the conclusion that the law did not violate the single subject restriction, but in his dissent opined that two provisions of the new Oklahoma law are "unconstitutional on their face."

First, is the "Opt Out System," which he noted is also addressed in Justice Combs' dissent. Second, he noted that the appeals process in the new law violates due process. In the opt-out, the employer and an appeals committee chosen by the employer are empowered to make a variety of decisions. Justice Reif writes that such a process "cannot satisfy the impartiality requirement of due process." He contends that this process should be "severed in its entirety." Justice Reif also took issue with the law's provisions regarding death benefits "to a same-sex spouse," contending this is contrary to the equal protection clause of both the Oklahoma and United States Constitutions.

Justice Douglas Combs likewise concurred regarding the single-subject challenge. He noted that because the law has not taken effect, "it is unclear exactly how these issues will manifest themselves in future cases or controversies." This signals the same "as applied" concerns expressed by Justice Reif. Justice Combs wrote that the appellate procedure provisions in the law provide different treatment for different claimants, that is those whose employers have workers' compensation plans and those who instead opt out. He describes the appellate process for those in an opt-out is "somewhat nebulous" and "differs markedly from that available to claimants who are employees of an entity who has not chosen to opt-out."

So, for now the Oklahoma changes will become effective early in 2014. The cases and controversies to come will work their way through the administration process and perhaps the Oklahoma courts. Decisions will be made in this slower process with which Florida is more familiar. And, the nation may watch, curious as to the outcome of this experiment of an opt-out that retains exclusive remedy. 

Meanwhile, in Florida, we will see if the Supreme Court agrees in Westphal with the First DCA (Matrix), the First DCA (Westphal, 02.28.13), the First DCA (Westphal, 09.28.13) or comes up with its own interpretation of section 440.15.