Don't Decry the Data

Wednesday, December 12, 2012 | 0

WorkCompCentral reported last week that Oklahoma is considering implementation of an administrative system for workers' compensation disputes. The effort is being spearheaded by Oklahoma Senator Mark Allen, whose company does business in both Oklahoma and Arkansas. He notes that his company's activities are similar in both states, but that rates are about 30% lower in Arkansas.

The article says that only Oklahoma and Nebraska have separate court systems for workers' compensation. They note that Rhode Island assigns workers' compensation cases to its constitutional court system like all other cases, and Tennessee has a "hybrid" system that involves the state's constitutional courts. Though not mentioned in the article, Alabama has a similar process which involves its constitutional courts, and which does not have a separate judicial or administrative hearing process in place.

Workers' compensation experts Greg Krohm (former director of the International Association of Industrial Boards and Commissions) and John Burton (Professor and member of the National Association of Social Insurance) believed that there is no proof that administrative systems necessarily save costs. Mr. Krohm noted that "there are so many variables" to consider. Professor Burton noted that there are few "judicial-based systems left," and so studying the differences would be difficult.

I do not have any basis to disagree with either Mr. Krohm or Professor Burton. Each is a national leader in workers' compensation, and each has been exposed to a multitude of issues over many years. What workers' compensation adjudicators learn, however, is that decisions in workers' compensation have to be made, and unfortunately that is not always the best evidence. Sometimes this is because procuring the best evidence is expensive, beyond the pale of what is justifiable in a particular case. Sometimes this is because the best evidence is simply not available, such as the injured worker's testimony in a death or brain injury case, as was reported by the Workers' Comp Insider in recent years. When we do not have the best evidence, the show must go on, and we instead struggle with making the best decision we can with the evidence the parties do bring to us.

In this instance, there is some evidence to support Senator Allen's effort. And before we discuss the details of the evidence that is available, it is important that everyone in the debate acknowledge that the ambiguous "cost" may include much that is not measurable in dollars and cents spent by the workers' compensation systems. While it is reasonable to consider those funds expended by a workers' compensation system, it is ineffective to isolate the analysis to those direct impacts.

The Florida Office of Judges of Compensation Claims recently issued the 2012 Annual Report. Statutorily, the OJCC reports each December on a spectrum of metrics, one of which is the cost of litigation resolved. Over the course of 10 years, the OJCC has reported (page 18) the "cost per claim" by dividing the OJCC annual budget by the volume of petitions closed over that year. Over the past 10 years, the cost per closed petition has been $181.00. The Annual Report contrasts that to civil filing fees in Florida, which range from $55.00 each for small claims to as much as $400.00 for Circuit Court filings. As the report notes, the Florida workers' compensation system cost includes the clerk and adjudication services that the civil courts provide, but also include mediation services that are not afforded by the Circuit system. In short, the workers' compensation adjudication process in Florida is a financial bargain.

The "cost" of the workers' compensation system, though, includes the impact on people in the system. This system is for injured employees and the employers for whom they work. When an accident occurs, the employee is affected through pain, loss of function, loss of income and more. The employer is likewise affected through loss of the advantage for which they hired the worker. The employee may not be present, may be sporadically missing work for medical appointments, and may not be at 100% when they are present. It is axiomatic that the employer hired the employee to begin with because the employer needed that person, her/his skills, etc. After an injury, co-workers may be tasked to take up the resulting workload, or the employer may have to hire temporary help to accommodate the absence or decreased attendance of the injured worker. In short, both the employee and the employer face issues following a work accident.

According to some blogs on the Internet, it can take about a year to get a civil case to trial. The Web has included predictions in recent years that budget cuts will lead to further delays in civil cases. Court resources may decline, and the demands of the criminal justice system are subject to Constitutional constraints that do not apply to civil litigation. An injured worker should not be subject to such a delay, nor should that person's employer. Policymakers should remember that workers' compensation disputes may be focused on large issues that might be seen in civil lawsuits, such as the compensation for total disability or attendant care for the rest of some person's life.

However, many decisions in workers' compensation are less monetarily impressive, such as an authorization of a change in doctor, provision of a medical test or authorization of some discreet treatment such as a surgery. These medical care issues may pale in monetary terms. However, these are critical decisions in the diagnosis, treatment and recovery of an injured worker. The goal of workers' compensation is coincidental for employer and employee. The injured worker wants relief from symptoms and dysfunction and to return to work. The employer wants their employee back with as little residual dysfunction as possible. Unfortunately, there are disagreements in this process. When there is disagreement, the speed of resolution or adjudication is critical. Physicians will tell us that early medical intervention is beneficial and that delays may detrimentally impact the efficacy of care. Delay may likewise negatively impact the employee, who is receiving less than pre-injury wages during litigation, or perhaps no income at all in a denied claim. The employer may likewise suffer economic loss during such delay, in the payment to temporary workers, overtime to co-workers or training expense of new staff.

Certainly, there are reasons for delay in decisions in particular cases. Some questions may not be ready for an answer. But when those disputes are ready for an answer, there is a benefit to both employee and employer in a process that is dedicated to their disputes, focused upon their issues and capable of bringing their disputes to timely resolution or adjudication. In 2006, the Florida OJCC averaged 485 days between the filing of a petition and the beginning of trial. In 2012, the average was 166 days. In 2006, the Florida OJCC averaged 212 days between petition filing and the first mediation. In 2012, that average was just 88 days. Along the way, the OJCC leveraged technology, brought innovation to the attorneys and other interested parties and deployed multiple processes that enhanced transparency and therefore efficiency.

The WorkCompCentral article quoted Oklahoma Senate President Pro Tempore Brian Bingman as favoring the change to an administrative process, but saying "the devil is in the details." Isn't it always? I would suggest that those who will study Tennessee and Oklahoma should perhaps focus less on whether there are sufficient "court" states remaining to study, and instead make comparisons that are relevant to their decision. I would suggest that those comparisons are essentially whether costs, in their broadest definitions, can be reduced. This means deciding whether employees and employers will receive more rapid and focused consideration than they receive under the court system. Will the proposed process bring greater transparency? Will the process make the dispute process more efficient, empower litigants to make better decisions and resolve their own disputes through compromise? Will the process deliver all of this at less monetary expense, measured per claim, than the expense required by the court system?

There is plenty of evidence in the marketplace in this regard. Certainly, it may not be the best evidence. However, it is the best evidence that is available.

David Langham is the Deputy Chief Judge of Compensation Claims for the Florida Office of Judges of Compensation Claims and Division of Administrative Hearings. This column was reprinted with his permission from his Florida Workers' Comp Adjudication blog.