H1N1 Flu and WC, Fresh Dawn for State WCC
Wednesday, May 6, 2009 | 0
By Keefe, Campbell & Associates
Synopsis: Dealing with H1N1 swine flu claims in workers' compensation.
Editor's comment: For the academics out there, a legal concern about a worker becoming sick is an "occupational disease" and isn't actually "workers' compensation." The two legal models are treated generally the same from the perspective of benefits to be paid to injured/infected workers in Illinois. There are subtle differences between the Workers' Compensation Act and the Workers' Occupational Disease Act. You don't suffer an "accident" in an occupational disease claim; you suffer a work-related exposure.
Keefe, Campbell & Associates does a substantial amount of defense work for Illinois' largest hospitals. Doctors, nurses and other medical staff suffer work-related occupational exposures and we are very familiar with the parameters of the problem and how to optimally manage and potentially defend occupational disease claims. Almost all of them are unique in some fashion.
For municipal risk managers, Section 1(d)(par. 7) of the Workers' Occupational Disease Act provides a rebuttable presumption of compensability for an Illinois employee employed for over five years as a firefighter, emergency medical technician or paramedic which results directly or indirectly from any bloodborne pathogen, lung or respiratory disease or condition - resulting in any disability (temporary, permanent, total or partial) to the employee. We wish anyone who wants to try to "disprove" the presumption regarding a covered firefighter with H1N1 swine flu the best of luck before this current administration.
Other than five-plus year firefighters, workers can be compensably "exposed" to possible occupational illnesses such as H1N1 swine flu under a variety of situations.
If your worker performs normal work in a normal way and comes down with H1N1 swine flu but can't identify a specific source or exposure, general exposure is a risk common to the public and benefits shouldn't be due.
We feel the non-specific exposure rule would apply to a situation where one employee in a factory or other workplace was sick, didn't know it and unknowingly infected a number of other workers via airborne or hand-to-hand contact.
Please note the non-specific exposure defense may not apply to health care workers who might have difficulty tracing an illness to a specific patient. Such exposures are considered "iatrogenic," which some define as exposures that come from patients or healthcare work. The Commission is generally very liberal about non-specific exposures for health care workers.
The opposite of this scenario would be a worker who is clearly on duty and has to provide emergency services or assistance to a co-worker or customer who is or may be later found to be suffering from H1N1 swine flu. We would feel all of such cases involving specific work exposures as part of a required work activity would be found compensable.
As with many things for human resource managers, the devil is in the details. It is extremely important to investigate any occupational exposure to ascertain whether there was a specific or general exposure along with all circumstances leading up to the claimed exposure. Get a HIPAA release signed to insure you can review relevant medical records and background. If you don't investigate and claimant goes to a wily attorney, the facts may later morph in ways you won't like. Always investigate as thoroughly as possible from the onset of the condition. If you need help with investigation protocols, let us know.
If an employee suffered a specific work-related H1N1 swine flu exposure, medical bills under the fee schedule and lost time or TTD would be due while the employee was off work and treating. Once reaching MMI, the employee would no longer be entitled to lost time benefits. We would consider an award of permanency to be unusual following full recovery from such a disease but this is Illinois and one never knows. The employee is not supposed to be able to recover permanent benefits for the temporary discomfiture of a passing disease. If the employee could demonstrate permanent changes to his/her physical makeup or abilities, permanent loss could be awarded.
If the employee were to pass away from a specific occupational exposure to H1N1 swine flu, full death benefits would be due the family. Please remember a compensable death under the Illinois Occupational Disease Act may cost the employer a minimum $600,000 and the maximum is now more than $1.6 million.
Another major source of compensability would be under the "traveling employee" rule. In such settings, the employee is supposed to be covered on a "door-to-door" basis for any normal risk. We mean the whole business trip is covered under the Occupational Disease Act from the time the employee leaves their home until they return back home. As we have outlined in past Updates, we feel the "traveling employee" rule should only be applied when an employee is asked to leave their normal environs and goes to a foreign place and encounters risks not otherwise present in their expected work areas. So a worker who travels to Borneo or any part of the world that is completely foreign to them may be accorded global coverage of any exposure. By "global coverage," we mean, if the employee becomes sick on such a trip, the occupational illness is compensable and benefits are due.
As we have pointed out in prior Updates, the "wise guys" who may run the Commission have convinced some of our hearing officers to consider such global coverage for truck drivers, police officers, security personnel and anyone else who walks, roller-blades, bikes, drives any vehicle or otherwise moves from a stationary spot as part of their work. We consider administratively defining the "traveling employee" concept that broadly to be an abuse of the Act. Two Illinois workers were at an annual convention at a hotel near Disney World in Orlando and started wrestling like school boys. One of them hurt his shoulder and the Commission found it compensable, ruling these were traveling employees. We and any of the readers who commented about that ruling consider the outcome legally and factually preposterous. Please also note the "traveling employee" concept is not codified in the statute or Rules - it is an almost indefinable legal concept that appears in some Commission and court rulings and, in our view, is judicial legislation of the worst sort. Noting there are lots of employers shutting down work-related travel, we are sad to report Illinois workers' comp/occupational disease benefits may be another reason.
Synopsis: A fresh dawn at the IWCC - a Special Report.
Editor's comment: Amy Masters, our acting chairwoman of the Illinois Workers' Compensation Commission (IWCC), has demonstrated a remarkable desire to bring transparency to IWCC Operations early in her watch. She sought out the viewpoint of various stakeholders at a meeting last Tuesday at the Chicago IWCC office. This meeting was separate from the politically appointed IWCC Advisory Committee.
Valerie McGregor, a practice leader at CS STARS assembled a small roundtable of interested observers to meet with Ms. Masters, who was eager to listen to the concerns of stakeholders who had a vested interest in improving the operations of the IWCC. Ms. Masters is advocating for a new sense of openness on the part of the IWCC. Ms. McGregor selected one person from a variety of disciplines that are impacted by the IWCC:
By happenstance, Dr. David Fletcher was an invitee who was returning from taking a chronic pain patient to the Cleveland Clinic. The patient suffered a crush injury in October 2006 and developed Stage III RSD. This patient is still on narcotics, had several surgeries and has a peripheral nerve stimulator installed, has gone through multiple adjusters and case managers, had surveillance conducted and had several negative utilization review decisions.
Since this patient had to wait for Dr. Fletcher to drive him to downstate Illinois, Chairperson Masters welcomed this patient to have a seat at the table since he was the ultimate IWCC stakeholde - the injured worker with a legitimate and severe compensable claim. It turned out the majority of topics discussed; utilization review, case managers and medical cost control directly affected this injured worker who vocalized his own unique experiences.
There was general consensus from the committee there are needed rules and regulations regarding nurse case managers to govern conduct of this important advocate role for the injured worker to protect some abuses that have been going on. It was felt that potential rule-making could overcome some Petitioners' attorneys' stoic resistance to having a nurse case manager assigned to their injured workers. It was also felt rules may encourage an injured worker to request a nurse case manager to advocate on their behalf.
Similar sentiments were echoed regarding adjusters. Many in the committee advocated for rules and regulations or even licensing of Illinois claims adjusters. One participant confirmed she had fired four adjusters recently for incompetence.
The petitioner's attorney in attendance at the meeting urged the IWCC do more in the realm of prevention of work injuries and cited the material on Dr. Fletcher's SafeWorks Illinois website as examples of what companies could do to prevent injuries.
The defense-employer faction of the committee objected to implementation of utilization review in Illinois, stating present rules were ineffective and there was no accountability.
Dr. Fletcher spoke about the importance of FCEs and how they were an important claims resolution tool. Dr. Fletcher also spoke about Clayton v. Ingalls Memorial Hospital ruling. He outlined the decision was widely used by firms to attempt to extract records from physicians for $20 subpoena fee way below the actual cost of copying records. The group suggested that Record Copy be part of the MFS and reimbursed at a reasonable cost. Dr. Fletcher also spoke about arbitrators' decisions on medical evidence that often times were not scientific. He suggested a medical evidence advisory board that arbitrators could consult for assistance on weighing scientific evidence on difficult cases.
Finally, in regards to opening up transparency of the IWCC, the group suggested the IWCC post arbitrator openings on the website. They also felt the IWCC should post existing arbitrator bios and photos. Our concern would be framing such photos with a big bulls-eye - we want Illinois arbitrators to be kept completely safe from harassment by the public.
The panel also urged Chairwoman Masters to adopt a policy requiring arbitrators to make at least quarterly one tour of an employer that was within their jurisdiction to get a better of the work site issues. The panel felt injured workers sometimes paint a distorted picture of an employer's operations to paint a doom-and-gloom perspective. In contrast, the panel felt the majority of Illinois employers care greatly about safety and want to prevent injuries.
Moderator McGregor commented: "I appreciate everyone taking time from their busy days to come out share their thoughtful comments and insights into making the IWCC an agency in Illinois that reflects the hard work and good intentions of all the people who try to do what is right for the injured workers of this state. I am especially grateful Ms. Masters gave us this opportunity to work with her and for her willingness to listen to our concerns.
After the meeting Chairperson Masters sent a note inviting committee members to suggest rule revisions or additions. All in all, this meeting represented a fresh start for the IWCC that is directly soliciting the input of its stakeholders to improve operations for the benefit of the injured worker. This report was sent to us by Dr. David Fletcher.
Synopsis: They may have just messed with settlement contracts yet again.
Can Illinois business ever finally settle the issues leading to a Section 4(c) Petition?
Can Illinois business ever finally settle the issues leading to a Section 4(c) Petition?
Editor's comment: We are somewhat amazed, dazed and confused by this ruling. There is nothing technically "wrong" with the ruling and it isn't a sweeping new change but, as defense observers, we can only shake our heads at what the members of the Court may have been thinking. We have to caution everyone on the defense side of the industry to modify settlement contract boilerplate language to protect your claims from the possible impact of this ruling. As part of your Illinois lump sum settlement contracts, we now suggest claimants be required to expressly waive rights under Sections 8(a), 19(h) and 4(c).
In Burzic v. Illinois Workers Compensation Commission (No. 1-08-2303 April 28, 2009), the Workers' Compensation Division of the Appellate Court considered a claim where a Section 4(c) Petition was filed by claimant. The battle was over termination of vocational rehabilitation. If you read the decision, we feel the vocational counselor did a generally below-average job of what we call a "Plan B" vocational effort. If you need want specifics or need our thoughts on Plan A and Plan B in Illinois vocational counseling, send a reply.
In response to termination of vocational counseling, the employee then filed a 4(c) Petition attacking the insurer's right to insure Illinois WC claims. The Section 4(c) Petition went to a full hearing with witnesses. The matter later settled for a lot of money. Settlement contracts were approved, probably by the same Commissioner who conducted the 4(c) hearing. Everyone in the Illinois defense industry would assume all pending workers' compensation issues were over, right? Well, not so fast - remember this is Illinois.
Claimant continued to press the 4(c) Petition and actually demanded a ruling from the same Commissioner who approved the settlement contracts. The Commission panel contradictorily ruled they didn't have jurisdiction due to approval of the settlement contracts and also denied the Petition. If you have any idea what "jurisdiction" means, you can't do both. Claimant then appealed - we can imagine how happy the claims manager was to receive notice of appeal of the otherwise "settled" claim and the need to reserve legal fees to continue to manage an otherwise "closed" file.
Thereafter, the Cook County Circuit Court also demonstrated an unusual level of legal largesse by effectively doing the same thing the Commission did - the judge ruled the Commission didn't have jurisdiction and affirmed the ruling the Commission didn't have jurisdiction to enter.
The Appellate Court, Workers' Compensation Division unanimously ruled the Commission retained jurisdiction of the Section 4(c) Petition despite the global settlement of all workers' compensation rights. As we indicate above, we have no idea why they made such a ruling. The problem we all face is settlements in Illinois are traditionally supposed to bring complete closure to pending workers' compensation claims. With respect to all of the august members of the Appellate Court, they keep sporadically leaving rights open and issues unanswered after settlements are approved.
In February 2009, another division of our Appellate Court ruled in Hagene v Derek Polling Construction, if one checks a box that "all medical bills are paid" by Respondent, Petitioner can eternally return to seek payment of medical bills that were otherwise unsubmitted and which the employer or the insurance carrier may have had no prior knowledge. We know the claims manager who got hit with that one and she is still hopping mad about it and we completely agree with her. So, Ooops! Don't check that box.
In this case, having found the settlement didn't deprive the Commission of jurisdiction, the Court ruled dismissal of the petition was not against the manifest weight of the evidence because Section 4(c) petitions require proof of unfair handling of more than one claim. The Act requires demonstration of a "policy" of unfair handling so several claims have to be shown to be handled unfairly. As there was only one claim involved, the Petition was meritless.
However, the practical impact of the ruling the Commission retained jurisdiction of the Section 4(c) Petition despite the settlement means we now have to address such Petitions and be certain they are addressed in settlement contracts. One never knows when a zealous claimant files a 4(c) Petition. No one wants to pay to litigate such claims after settlement contracts are approved. So, our word to the wise is to be certain to address the issue in all settlement contracts moving forward.
One of our partners asked another obvious question: Can one ever settle a claim to include the right to bring or join in a Section 4(c) Petition? Can the Arbitrators or Commission approve settlement contracts and close their files but then consider such petitions complaining of the actions of employers or insurance carriers in advance of the settlement? Our answer is, no one knows - the decision in Burzic outlined above implies the Commission may always have "jurisdiction" to consider 4(c) petitions even if they settle and close the case. We assure our readers this sort of administrative confusion, unending litigation and uncertainty is a glaring reason Illinois is considered so anti-business in many circles.
Synopsis: CMS to begin implementing the dreaded "Average Wholesale Pricing" for prescription medication
Get ready for MSA costs to skyrocket.
Get ready for MSA costs to skyrocket.
Editor's comment: Back in April, CMS issued a memo detailing its new drug pricing plans and putting a hard initial start date of June 1, 2009, into place. What we end up with is another scheme by the federal powers-that-be that may end up costing U.S. business buckets of money.
Anyone familiar with workers - compensation settlements should be familiar with the concept of a Medicare Set Aside (MSA), and the government agency that approves them, the Center for Medicare & Medicaid Services (CMS). In the most basic terms, Medicare is a mandatory, federal government provided, medical insurance program for the disabled and Americans aged 62.5 and older. When a worker who is near that age is about to receive a workers' compensation settlement of more than $25,000.00, the feds require a "et aside" of money to pay Medicare back any future costs it may incur that would otherwise be due to the underlying work injury.
After former President Bush passed the Medicare Part D bill into law back in 2006, everyone in the workers' compensation industry knew that as soon as a form of implementation was concocted by our government overseers, prescription drug benefits would begin taking up a chunk of any MSA monies. It only took 3.5 years for the Feds to come up with what could potentially be the most outrageous "back door" penalty on employers we have seen in quite some time: average wholesale pricing (AWP).
Like the titles for most things the federal government wants to force feed you, it sounds reasonable on its face. Believe us when we tell you it is anything but. AWP is a pharmaceutical industry term which refers to the average price at which wholesalers report they sell prescription medication to customers. Right off the bat this gets confusing as there are several published lists of average wholesale pricing, but not all of the manufacturers provide data to all publishers, so the lists vary and there is no definitive standard.
The more disconcerting effect of AWP is that it is reliant on manufacturer reporting. Have you ever shopped for an automobile? Notice how the "sticker price" on the window is much higher than what one would expect to pay for the vehicle? Well, that is the type of figure AWP is based on. It is just like the sticker price on a car in a lot - it is the "manufacturer's suggested retail price," but it is never the price paid by a savvy customer. Much in the same way medical insurance policies are able to discount medical services, the actual price of any drugs is the AWP less some sort of negotiated discount applied. The more buying power the purchaser has, the lower the final cost of the medication.
The big problem here is CMS will be requiring cost to be based on the AWP, so insurers are losing out on the benefit they already had built into place of the "haggling" they were able to do. Essentially insurers will lose out on the cost reduction they could achieve on the open market. Once you understand how much prescription medication can be required for long-term treatment in some cases, this becomes a gigantic cost increase that may effectively remove the option for insurers to settle claims. They would be better off leaving medical rights open, trying matters and paying the reduced cost of prescription medication using their much lower negotiated fees. There may also be an underlying problem with states that have already regulated prescription medication costs within a fee schedule, such as California. How can the feds justify implementing an essentially unilateral cost increase for already defined state law remedies? Our guess is the dispute may be resolved in a court of law.
Sounds a little like the debacle we had to deal with here in Illinois when we got the "benefit to business" of the medical fee schedule, doesn't it? We caution, along a similar note to issues Illinoisans are facing with that delightful piece of legislative balderdash, what happens when drug companies begin inching their AWP up, while simultaneously offering larger discounts to insurers on the open market. In a case like that, the MSA costs will continue to rise, while the actually market cost won't. As we said above, this is probably all going into expensive litigation.
On a practical note, these changes go into effect on June 1, 2009, so if you have a case that is lingering waiting for an MSA, please do yourself a favor and get all the necessary paperwork submitted prior to May 25, 2009 to be safe. We have been told that if the MSA application is submitted prior to the deadline, it will not have to take the new pricing into account.
This section was drafted by Arik D. Hetue of our office.
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The sections on H1N1 and settlement contracts were written by Eugene F. Keefe, a partner in the Chicago law firm of Keefe, Campbell & Associates.
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