Workers' Comp Reform "Wish List"

In the Winter 2011 newsletter of the Ohio Self Insurers Association, an article titled “Election Results May Bring Legislative Changes” raises some legitimate beefs with our current workers’ compensation system.  The article provides a wish list of legislative changes that would benefit SI employers in Ohio now that Republicans dominate the Governor’s office, the Senate and the House of Representatives. 

Some of OSIA’s ideas regarding workers’ compensation reform would benefit state funded employers as well as self-insured companies.  For example, requiring hearing officers to award permanent partial disability based on the medical opinion of one doctor rather than averaging the disability ratings of multiple doctors would help reduce the artificial inflation or deflation of percentage ratings.  We all know that if a state doctor opines 5% permanent partial impairment for a lumbosacral sprain/strain, and the injured worker submits a 20% report from one of the handful of doctors that the claimants’ bar uses for disability ratings, the hearing officer might compromise at a 12%.  OSIA’s proposed reform would require the hearing officer to rely upon one or the other report, so that the award will be either 5% or 20%.  If the injured worker only missed a week of work and has had limited medical care, most hearing officers would opt for the 5%.  Eventually, this would likely result in claimants’ doctors reducing their opined percentage of impairment to something more realistic, which a hearing officer might actually adopt.  We will delve into this issue in more detail in a future blog.

Another OSIA suggestion harkens back to the good old days when the effective date of an MMI finding was the date that an independent doctor offered an MMI opinion, not the date of the hearing.  As we all know, the hearing could be as long as six months after the date of the doctor’s report, once you wait for the BWC to refer the matter to the IC, wait for the IC to schedule the hearing, and wait for several continuances requested by an injured worker who wants to delay the inevitable.  The date of hearing bears no relationship to the medical finding of MMI.  It is completely artificial and only serves to eliminate overpayments for claimants by taking money from the pockets of employers.

Dawson Disantis & Myers, LLC has a workers’ compensation reform wish list of its own, should any of our legislators come knocking.

Wish No. 1:  Mandatory Treatment Guidelines

Many states have mandatory treatment guidelines that require medical providers to meet a standard of medical care, speed up return to work, and reduce disputes over treatment issues.  In fact, as of December 1, 2010, the state of New York rolled out its mandatory guidelines.  New York’s workers’ compensation board now limits the number of physical therapy and chiropractic visits that an injured worker can submit to his or her claim.  Under New York’s plan without objective evidence of functional improvement, manipulation, chiropractic care is cut off after just three weeks.  In other words, chiropractic care that simply maintains symptoms at a level that an injured worker claims is required for him to continue working won’t cut it in New York. 

Many other states also use mandatory treatment guidelines.  Some states adopt treatment protocols directly from groups such as the Work Loss Data Institute (Official Disability Guidelines – ODG) or the American College of Occupational and Environmental Medicine (ACOEM).  Others create their own with input from a number of sources.  For example, Massachusetts has 28 separate treatment guidelines, while Colorado has 9. 

The common factor among all of these states is the adoption of an evidence-based treatment model based on scientific evidence and best medical practices.  Oh, by the way, it turns out it saves money and actually benefits many, if not most, injured workers.

How could statutory regulation of treatment in workers’ compensation claims help in Ohio?  Let’s take, for example, an expensive surgical procedure we see prescribed more and more often in low back claims called spinal fusion.  Unfortunately, there are a number of “claimant-friendly” surgeons out there who never met an injured worker they didn’t cut open and fuse, regardless of the allowed conditions in the claim or indications for surgery.  The Official Disability Guidelines (ODG), a nationally recognized set of treatment rules, suggests that lumbar fusion in workers’ compensation patients is not recommended for chronic low back pain in the absence of conditions called stenosis and spondylolisthesis.  Yet, time and again Ohio claimants have lumbar fusions when the only condition involved is a disc herniation.  And, time and again we see claimants with poor results from fusion surgery.

In Ohio, managed care organizations utilize ODG along with Mercy Guidelines.  However, if a disputed medical treatment makes it to the Industrial Commission for hearing, treatment guidelines are generally out the window.  Hearing officers listen to the injured worker complain about their chronic symptoms and why they need the disputed care, and employer’s arguments about how the requested treatment doesn’t meet ODG are often disregarded by hearing officers.  The prevailing sentiment seems to be that the Commission is reluctant to stand between a surgeon and a willing patient.

Contrarily, in New York, for a lumbar fusion to be authorized, the doctor must first prove the claimant has spinal stenosis with instability or spondylolisthesis.  Even when there is spinal stenosis with instability, New York requires that there be neurogenic pain, diagnostic proof of a compressed nerve root, and lack of response to conservative care.  Absolutely none of this is required in Ohio’s system.

Wish No. 2:  Reigning in Narcotics Abuse

On February 21, 2011, Governor Kasich named former Attorney General Betty Montgomery as the head of a task force to fight prescription drug abuse that is a pervasive problem in southeastern Ohio.  It would certainly be interesting to find out how many of the 9.7 million doses of prescription painkillers dispensed by Scioto County’s doctors and pharmacies last year were paid for under workers’ compensation claims.  BWC rather than managed care organizations manage and pay for prescription medications in Ohio workers’ compensation claims.  Frankly, BWC does a woefully inadequate job of monitoring medications.  Injured workers’ submit their pharmacy bills, and BWC pays them with no questions asked.  Unless an employer or TPA asks the BWC to scrutinize the medications being paid for in a claim, the BWC rarely limits prescription medication.

This reform wish can really be considered a sub-wish of wish number 1.  Other states that have mandatory treatment guidelines often regulate the drugs permitted to treat specific conditions along with the allowable duration of those drugs.  It would not be unreasonable to have prescription medication guidelines rolled into mandatory treatment guidelines.   As it stands now, unlimited payment of prescription narcotics under workers’ compensation ends up subsidizing welfare and unemployment compensation with street values of up to $10 per pill with plenty of customers for claimants to sell to.  We’re not saying that all claimants sell their endless workers’ compensation narcotics supply, but isn’t just one who does this too many?

Wish No. 3:  Decertification of Sub-Par Medical Providers

The Bureau of Workers’ Compensation already has the authority to decertify a physician who does not provide quality care to injured workers.  The problem is that BWC does not use this tool except for extreme circumstances when a medical provider is convicted of criminal activity and/or fraud. 

To become a BWC certified medical provider, one must only have a current license to practice, have malpractice insurance, a DEA registration when applicable, and submit an IRS form W9. (The complete list of requirements can be found here.) The provider must then complete an application for provider enrollment and certification, agreeing to abide by BWC and MCO billing practices.  The provider agreement focuses mainly on billing rather than quality or standard of care for injured workers.  The only mention in the provider agreement of quality of care is, “Provider agrees to acknowledge and treat injured workers in accordance with BWC recognized treatment guidelines and the vocational rehabilitation hierarchy.”  The BWC does not specify what treatment guidelines it has adopted, because BWC has not officially adopted any treatment guidelines.

The Ohio Administrative Code gives BWC the authority, albeit toothless authority, to decertify a provider.  BWC may investigate a provider and if it finds “sufficient evidence” to decertify, it can begin the adjudication procedure to cut the provider loose.  With such vague criteria in the Code, it’s no wonder the bureaucracy can’t seem to organize or motivate itself to pursue those terrible doctors who 1.) never seem to be of the opinion that an injured worker can ever recover from even the most benign of injuries; 2.) use claimants as their own seemingly limitless gravy train with little regard for actually treating them, and 3.) prescribe narcotics and other drugs that no other insurance company would ever continue to pay for in such quantities and durations.

Wish No. 3 again leads us back to Wish No. 1.  It’s quite simple.  If Ohio has mandatory workers’ compensation treatment guidelines, medical providers who consistently seek to treat outside those guidelines can be easily booted from the system.

It’s not too much to ask, is it?  But is anybody listening?

Cuyahoga County Jury Bucks Ohio's Employer Intentional Tort Statute

On December 7, 2010, The L.E. Myers Company, an Illinois-based employer specializing in installation of transmission lines, appealed the decision of a Cuyahoga County jury who awarded almost $600,000.00 in damages to a company employee who was electrocuted while on the job.  The award represents the jury's disregard of a statute the Ohio Legislature enacted in 2005 and the Supreme Court of Ohio's upholding of that statute as constitutional in 2010. 

Article II, Section 35 of the Ohio Constitution provides for a state-run workers' compensation program mandatory for Ohio employers in order to compensate employees for injuries, occupational diseases, or death resulting from certain workplace accidents or hazards.  In return for participation in this mandatory program, Ohio employers yield the benefit of protection from certain lawsuits.  The Constitution states, "Such compensation shall be in lieu of all other rights to compensation, or damages, for such death, injuries, or occupational disease, and any employer who pays the premium or compensation provided by law, passed in accordance herewith, shall not be liable to respond in damages at common law or by statute for such death, injuries or occupational disease."  The workers’ compensation program is a trade-off, so to speak, of speedy relief for injured workers in return for limited liability for employers in the court system.

Ohio courts and the legislature have been doing a clumsy dance for the few decades trying to nail down the circumstances under which an employer would be exposed to civil litigation for damages above and beyond the compensation and benefits awarded within the workers' compensation system.  The Legislature has enacted several different "intentional tort" statutes which reflect the spirit of the Constitutional limitations on employers' civil liabilities only to be shot down by the Supreme Court, who in turn finds some fatal flaw in each version of the intentional tort statute.  Until 2010, that is. 

On March 23, 2010, the Ohio Supreme Court, in "sister" decisions regarding the constitutionality of the Legislature's latest version of the employers intentional tort statute O.R.C. 2745.01, finally found a statute they could live with.  In a final bow ending the awkward dance, the Court nodded satisfaction that the 2005 statute, trimmed of its earlier cancerous appendages, had passed the test.  You can view the two decisions here and here. 

Key portions of this brief statute require that an injured employee prove that the employer caused the injury or hazard with the intent to injure or with the belief that injury was substantially certain to occur.  Further, the statute clarifies "substantially certain" to mean that the employer deliberately intended to cause an employee to suffer an injury, disease, or death.  It does not take a law degree to glean from reading 2745.01 that it would be the very rare occasion indeed that would give rise to successful litigation that meets this standard.  An employer who acts in a negligent fashion would not suffer the consequences of 2745.01.  An employer would have to mean for an employee to get injured or die in order for there to be liability for damages outside of the workers' compensation framework. 

Yet, even after years of back and forth between the Legislature and the Court, an eight person jury of lay people, in deciding the matter of Larry Hewitt v. L.E. Myers Co., took that painfully crafted statute and chucked it out the window. 

Mr. Hewitt was working as an apprentice lineman when he hit a wire, causing electrical burns and nerve damage.  The injured worker's attorneys alleged that his safety was ignored by allowing him to be in a lift bucket without a supervisor and to work near lines that carried in excess of 500 volts. More important, it was the employer's instruction to apprentices to wear leather gloves rather than rubber gloves that the jury believed was the required  "deliberate intent" to injure Mr. Hewitt.  (See source here.)

Was it stupid for L.E. Myers Co. to instruct apprentices to wear leather rather than rubber gloves?  Certainly.  Was it negligent?  Probably was.  But for a jury to contend that the company deliberately intended for this to happen is stretching what is a reasonable conclusion way too far. 

Mr. Hewitt, pending the outcome of the appeals process, gets double recovery from his employer:  once through his workers' compensation claim and once through his lawsuit.  Isn't that just what the Article II, Section 35 seeks to prevent?

This verdict puts employers and insurance companies in a panic, for the protection they’ve enjoyed in return for paying into an expensive workers’ compensation system seems for naught.  To be certain, L.E. Myers Co.’s appeal will be closely followed with amici curiae briefs abound.

Check back with Dawson Disantis & Myers LLC as we follow this case through the Eighth Circuit Court of Appeals.