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2004 to 2006 Work Comp News
2007 Work comp news...
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FLASH REPORT!
Supreme Court Rebuffs California State Fund
The Supreme Court yesterday declined to review an Appellate Court ruling which holds that State Compensation Insurance Fund has to be fair to California business. Why a quasi governmental entity needs to be told by
multiple courts multiple times to be fair is either the subject of anyone's supposition or yet another weight on the scale of justice that speaks to what can only be the continuing culture of corruption that is
California's State Fund.
In a closely watched case challenging the notion that State Fund - because of its sheer size - has an obligation to be procedurally fair and reasonable in deciding who is in and who is out of its provider networks,
the California Supreme Court yesterday, like the Appellate Court before it, came down clearly on the side of fairness.
The Same People Doing the Same Things
The case is a carry over from the heyday of when now deposed ex-president Jim Tudor was running things. Notably, SCIF lawyer Charles Savage has been the steward of this case. Savage was Tudor's handpicked vice
president and general counsel. As part of the Tudor purge Savage was stripped of both titles and sent back down to his former civil service position. Savage physically shows up at many of these old cases and appears
to be directing State Fund's expensive outside counsel on the cases.
State Fund Board Chair Jeannie Cain, who additionally is executive vice president, policy, for the California Chamber of Commerce, works as well with State Fund's expensive outside legal and public relations counsel.
The California Chamber filed an Amicus brief in the case. Board Chair Cain is responsible for appointing Tudor as both interim and permanent president. It is she who was in control and serving as chair during all of
the controversial board meetings in which conflicts occurred about which Workers' Comp Executive wrote resulting in the removal of three board members.
The Case Itself
The case, Palm Medical v. State Compensation Insurance Fund, started when the clinic tried in 1998 to gain entry to the Fresno area preferred provider network operated by State Fund but was repeatedly
rebuffed. A jury found in 2005 that State Fund's reasons and methodology for excluding Palm were arbitrary and unreasonable and sided with the clinic. It awarded Palm $1.3 million. Interestingly enough, sources tell
Workers Comp Executive, had State Fund acted reasonably and not as some say like a bully it likely would have been able to exclude Palm from its network and avoid the whole legal precedent.
In a rare move, State Fund's outside counsel surprised everyone when it was able to convince the trial judge to overturn the jury's findings. That decision predictably did not stand on appeal.
"I've argued throughout that this is not a hard standard to achieve. We're not setting the bar too high by asking businesses to make their decisions in a procedurally fair and rational manner," said a joyous Drew
Pomerance of Roxborough, Pomerance & Nye. "If someone has a problem with that then I think their values are all messed up. In this case that's State Fund as they're the ones who don't want to be fair or rational."
But State Fund still stands by its position that the decision does more to cloud the air than to clear it around the issue of PPNs.
"We believe the decision not to review the Palm Medical case has the potential to create a significantly difficult climate for businesses [insurance carriers] in California who operate preferred provider networks as
evidenced by the number of amicus briefs that were filed [by insurance carriers] in support of our position," says Jennifer Vargen, who is not a lawyer, but is the internal public relations person for State Fund.
"This leaves California businesses [carriers] to deal with the difficult situation of understanding exactly what the rules are around PPNs."
But the broad applicability of the case is somewhat in question. The court of appeal went out of its way to note that it was limiting its discussion only to PPNs. PPNs have largely been replaced by medical provider
networks or MPNs. Such is the case at State Fund, which replaced the contested PPN with a medical provider network that includes Palm Medical.
None of State Fund's 200+ actual lawyers were available to speak to Workers' Comp Executive. Many it seems were attending a fancy retirement party for lawyer Robert Danari.
According to the Division of Workers' Compensation 60% of all care for injured workers is now being delivered through the 1300 MPNs now in operation. Common industry wisdom holds that most if not all PPNs have been
replaced with MPNs.
"This leaves California businesses [carriers] to deal with the difficult situation of understanding exactly what the rules are around PPNs." Jennifer Vargan, SCIF Internal PR Person
Doctrine of Fair Procedure
The case hinged in substantial part on the question of market power and the applicability of the doctrine of fair procedure. That common law doctrine provides that when a private business has substantial economic
power and the use of that power can affect another's ability to earn a living—then the decision-making must be both substantially rational and procedurally fair. In the present case, Palm argued the doctrine applied
because of State Fund's gigantic market share in the Fresno area. The jury agreed and ultimately so did the Supreme Court.
"I'm relieved and gratified that it turned out the way that it did. It would have been unfortunate if big money would have been able to take something that is logical and say it's not legal," says Dr. Frank Huljev,
administrator and principal of Palm Medical. "In other words for them to say that they don't have to be fair and rational in how they do things."
"It would have been unfortunate if big money would have been able to take something that is logical and say it's not legal." Dr. Frank Huljev, administrator for Palm Medical Group
Pomerance is confident that a similar argument could hold sway in the MPN arena if certain conditions are met. "For those medical provider networks that wield substantial economic power, I think a provider could make
the argument that 'you have to treat me and make your decisions in a rationale way and in a way that's procedurally fair."
In any case, Palm Medical now stands to collect on the $1.3 million it was awarded by the jury way back when. Pomerance notes the award is now up to $1,476,633 and continues to accrue interest at a rate of $310 per
day.
State Fund policyholders are out nearly one and half million dollars plus hundreds of thousands in legal fees to outside counsel all because it's the same old people doing the same old things. This case alone cost
approximately $10 per policyholder in premium.
Cowboy State Lawmakers Hear Testimony on Workers' Comp
At a hearing of the state's Joint Labor, Health and Social Services Interim Committee, Wyoming lawmakers scrutinize whether workers' compensation benefits are fair with respect to the program's solvency in the future.
By Dustin Bleizeffer, Casper Star-Tribune
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Commentary: Presumptive Legislation a Cause for Alarm
Well-intended state laws that seek to ensure that workers' compensation programs cover firefighters for, in some cases, numerous medical conditions that could be contracted as a result of their work, without having to
provide convincing evidence that they are eligible for the benefits are misguided. Business Insurance
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In Wake of Latest Tragedy, New York to Hire 20 Safety Engineers
In response to last week's crane tragedy in New York City—the second such deadly incident since March—the city temporarily suspends all crane construction and plans to spend about $4 million on 20 new safety engineers
to monitor hundreds of construction sites. But New York Gov. David A. Paterson promises a state investigation of the recent spate of deadly
construction incidents in the booming city, sparking an angry response by Mayor Michael Bloomberg. By Henry Goldman, Bloomberg
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Commentary: County's Tobacco-Free Hiring Policy the Right Call
Facing reduced productivity and higher insurance costs from people who smoke, many employers are deciding not to hire tobacco users. A county administrator argues that Florida's Sarasota County, which also must
contain these costs, has adopted a tobacco-free hiring policy that will promote a healthier work force and maintain responsible stewardship of taxpayer dollars. Herald Tribune
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Aussie Study Links Job Stress, Depression
Work demands are to blame for more than 21,000 annual cases of depression in the Australian state of Victoria, according to a new Melbourne University study that found 17% of working women and 13% of working men
suffering depression could attribute their condition to job stress, defined as a combination of high job demands and little control over how the job gets done. By Orietta Guerrera, the Age
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'Massive Financial Discrepancy' in PNG's Workers Comp System
Papua New Guinea's leading weekly newspaper reveals that tens of thousands of dollars from the Office of Workers' Compensation are believed to have been stolen by or misappropriated by staff over a 10-year period. The
departmental investigation has uncovered an "organized seven member gang" of senior and middle management staff being responsible for "pushing" bogus payment claims. By Tereni Kens, Pacific Magazine
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Granite State Agencies Crack Down on Misclassifications
Four New Hampshire agencies are collaborating to target companies that illegally misclassify workers as independent contractors to avoid paying workers' compensation insurance and unemployment taxes. By AP via
Concord Monitor
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Spokane Hospital Pilot Program Touts Success in Driving Down Costs
Occupational health officials at the Center of Occupational Health & Education, a pilot project funded by the Washington state Department of Labor and Industries, at St. Luke's Rehabilitation Institute in Spokane, say
a recent study shows its efforts have resulted in fewer rejected, reopened and protested workers' compensation claims, less frequent use of attorneys by participants, and a lower pension rate for time-loss benefits
than their non-COHE counterparts, since it began operations five years ago. By Emily Proffitt, Journal of Business (Spokane) [with photo]
Go to the Full Story...
OKC Nurse's Predicament Illustrates Effect of Limitation Ruling
An Oklahoma Supreme Court's recent ruling that effectively reinstituted an eight-week limit on workers' compensation benefits for soft tissue injuries is troubling news for, among others, an Oklahoma City-area nurse
who will receive no more benefits after the month of June. Julie Jones' situation is so dire that her attorney considers her layoff the good news. By Janice Francis-Smith, Journal Record (Oklahoma City)
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Rules for Crane Operators Nearly Four Decades Old
In the wake of three fatal crane accidents in recent weeks, including a collapse in New York late last week that killed two construction workers and seriously injured another, it's worth noting that Fed-OSHA existing
rules for workers who operate cranes have not been updated since 1971. By Dan Caterinicchia, AP via Forbes
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Mizzou Wellness Program Wins Heart Association Award
The University of Missouri's wellness program for faculty and staff began as a pilot in 2004 and expanded to the four system campuses in October 2007. As a result of programs like smoking cessation, stress management,
healthy eating and exercise, the program wins an award from the American Heart Association. By Michael Sewall, Columbia Missourian
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Mass. Mayor Won't Let City Underwrite School's Workers' Comp
The Westfield, Mass. school department's attempt to have the city underwrite its workers' compensation and other expenses next year is unacceptable, according to the mayor, who wants the department to find another
$300,000 to cut from the proposed fiscal 2009 budget. By Ted LaBorde, Springfield Republican
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Montana State Fund Announces Modest Rate Cut
The board of the Montana State Fund has announced that workers' compensation insurance rates will be reduced next year by an average of 3 percent, making the second straight year the agency has announced modest cuts.
Go to the full story by AP via KULR-TV (Billings)
Go to the full story by AP via KXMC-TV (Minot, N.D.)
Go to the full story by AP via Houston Chronicle
'More Drama' for Ohio BWC
An employee of the scandal-ridden Ohio Bureau of Workers' Compensation is accused of using state time and equipment to coordinate auditions and other work for a local theater group. By Jim Otte, WHIO-TV
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New York State Worker Nabbed for Suspected Workers' Comp Fraud
A 51-year-old New York Office of Children and Family Services employee, who claimed he was injured in a purported elevator accident and was too disabled to work his day job a Brooklyn residential center, is charged
with allegedly continuing to pick up benefits while working a second full-time job at a postal processing and delivery facility.
Go to the full story in the North Country Gazette
Go to the full story in the Empire State News
Empire State Honors Attorney for Reform Efforts
A Rochester, N.Y. attorney is one of five recipients of the annual Clara Lemlich Public Service Award for his efforts in workers' compensation reform and improved occupational safety in the state. Rochester
Democrat and Chronicle
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Former Steelworkers Head to Ontario Clinic for Help
Frustrated by a claim denial by the Workers' Compensation Board of British Columbia based on his having been a smoker 22 years ago, a 76-year-old retired steelworker flies to a Sault Ste. Marie, Ont. occupational
health clinic that focuses on employee exposures to toxic chemicals and substances. He is among more than 150 current and former employees, or surviving relatives of deceased steelworkers, who registered for a two-day
occupational disease intake clinic. By Dan Bellerose, Sault Star (Sault Ste. Marie, Ont.)
Go to the Full Story...
New Online Tool Part of D.C. Agency's 'Green' Efforts
The D.C. Department of Employment Services launches a new online tool intended to make it easier to find the status of workers' compensation decisions. The database is part of an effort to reduce paper consumption.
Washington Post [first item] [may require registration]
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In Canada, Special Week Offers Sobering Reminder
North American Occupational Safety and Health Week serves as a reminder that Canada is among the most dangerous industrialized countries in which to work, according to recent UN International Labour Organization data.
It used to be possible for a company to have a fatality and still receive a rebate on workers' compensation fees paid to the Workplace Safety Insurance Board; however, Ontario recently changed the rules. By David
Hamiton, Financial Post
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AmerisourceBergen Says It Won't Sell of PMSI
AmerisourceBergen Corp. decides to end its effort to sell PMSI, which provides mail order and online pharmacy services to chronically and catastrophically ill patients under workers' compensation programs, in addition
to pharmaceutical claims administration services for payors and a fully integrated Medicare set-aside program. PMSI had been on the block since January, but final bids did not reflect its fair value, according to
AmerisourceBergen. Philadelphia Business Journal
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Hit by Drunk Driver, Central Valley Woman Faces Workers' Comp 'Nightmare'
Jennifer Smith, a 24-year-old Manteca receptionist says she will have to live the rest of her life with pain, degenerative joint disease and other ailments that are the result of a 2003 job-related collision with a drunk
driver. But she also faces a battle with the state's workers' compensation system. "They are treating her like a criminal, but she's a victim, and that needs to change," says her husband. By Joe Goldeen, Stockton
Record [with photo]
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Commentary: Patronage at Root of Philly Parking Agency's Fraud
Amid revelations that Philadelphia Parking Authority employees file workers' comp claims twice as often as city firefighters and police officers, it's clear that the authority needs to more aggressively target fraud.
But the bigger problem—the authority's patronage-swollen structure, which results in the hiring of politically connected workers who don't really care about their job performance—will be harder to change.
Philadelphia Inquirer
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North Dakota AG: WSI Violated Open Records Law
Workforce Safety and Insurance violated North Dakota's open records law by refusing to disclose certain documents to a critic of the agency. However, the workers' comp agency properly declined to provide copies of
building security videos and a separate list of records to the Bismarck attorney, concludes the state's attorney general. By Dale Wetzel, Fargo Forum [may require registration]
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Oklahoma High Court Remands Workers' Comp Case
The Oklahoma Supreme Court remands a case in which a man failed to file a claim for benefits from the Multiple Injury Trust Fund for more than 12 years after his injury. Though he appeared to have exceeded the
five-year statute of limitations, the state high court found that the workers' comp court failed to include key information. By Janice Francis-Smith, Journal Record (Oklahoma City)
Go to the Full Story...
PEI Opposition Blasts Liberal Appointments to WCB
In Prince Edward Island, Opposition party members want the government to publicly account for its selection process after allegations of patronage regarding several recent political appointments. All six new
appointees to the Workers Compensation Appeals Tribunal have ties to the Liberal party. By Teresa Wright, Guardian (Charlottetown)
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Buckeye State City Not Enforcing Registration Law, Says Contactor
In Mansfield, Ohio, a contractor, who was part of a group that last year lobbied the city council for a registration system to protect legitimate contractors from scofflaws, contends that the city has not enforced an
ordinance requiring contractors to register with the city. By Linda Martz, Mansfield News Journal
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'Well Notes' Eyed for Mental Health Absences
In Britain, many employers regard general practitioners as an obstacle when dealing with workers' long-term sickness absences. The Chartered Institute of Personnel and Development is arguing that the new "well note"
plan, and a phased return to work, particularly in cases of mental ill-health, could cut the costs of long-term illness to business significantly. By Mary Braid, Times Online (U.K.)
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Study: One-Third of U.K. Nurses Attacked at Work
Nearly one in three British nurses suffers frequent violent attacks at work, according to a new survey of nearly 40,000 nurses. The research suggests that violence has had wide-reaching effects, including problems
with recruitment and nurses leaving the profession, increased amounts of sick leave and "burnout." By David Rose, Times Online
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Patronage-Rich Philly Parking Authority Racks Up Comp Charges
Surprisingly, Philadelphia parking enforcement workers have been injured on the job more than twice as often as city firefighters or police officers over the past four years. One parking enforcement worker filed four
separate workers' comp incident reports for spider bites, recalls the authority's risk management director. By Patrick Kerkstra, Philadelphia Inquirer
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Is There a Kezar Connection to S.F. Parks Workers' Cancers?
The recent deaths of two San Francisco Recreation and Park Department employees and the cancer diagnosis of a third, all of whom worked or spent a significant amount of time in an office building adjacent to Kezar
Pavilion, is causing alarm. But a NIOSH expert consulted by the City finds no relation to workplace exposures, despite the crumbling walls. By Brian Hoffman, San Francisco Chronicle
Go to the Full Story...
OSU Scores with Novel Return-to-Work Approach
With its workers' compensation costs nearing $10 million a year, Ohio State University started moving its injured and ailing workers to less-demanding jobs instead of leaving them at home while they recover. At the
end of its first year, the program saved the school $4 million, more than double what the college had expected. Columbus Dispatch
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Connecticut Public Safety Workers Want Expanded Coverage
In Connecticut, police, firefighters and emergency rescue workers are again seeking workers' compensation coverage for certain cancers and diseases.
The union-backed legislation returns after having stalled in the state House of Representatives in the final days of the 2007 session. By Paul Hughes, Waterbury Republican-American
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Minneapolis Cop's Case May Trigger Law Change
A Minneapolis police officer who was injured during a training exercise is only collecting partial workers' compensation after an injury left him permanently disabled. But state and federal lawmakers are trying to
change the law that affects him and other disabled government workers. KMSP-TV (Eden Prairie, Minn.)
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Aussie State Weighs Benefit Payout Options
The WorkCover Tasmania Board commissions researchers at the University of Tasmania to investigate whether lump sums or regular payments of workers' compensation benefits make more sense. ABC Tasmania
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Florida Restaurant Reopens After Sweep for Illegal Workers
Patrons once again graze the buffet at a northwest Florida eatery that was shut down for nearly a week in connection with an investigation into the employment of illegal workers. The state Bureau of Compliance in the
Division of Workers' Compensation issued a stop-work order while it investigated allegations that employees were not properly covered. By Brian Hughes, Northwest Florida Daily News
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Commentary: Restore Executive Branch Control of WSI
Partisan games in the state legislature and within WSI are the reason new leadership is needed in the insurance commissioner's office. The first thing that must be done is to restore executive branch control of WSI.
By Jasper Schneider via Jamestown Sun
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How Federal Employees Face Disability
The senior benefits director for the National Institute of Transition Planning Inc., which conducts federal retirement planning workshops and seminars, provides a handful of examples of when employees need to use
federal benefits to cover situations where their ability to work is impaired by illness or injury. By Tammy Flanagan, GovExec.com
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Manitoba WCB Wants Comments on Addition of Industries
The Board of Directors of the Workers Compensation Board of Manitoba is seeking public comments on the addition of industries to the workers' compensation program. EcoLog.com
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Meadowbrook to Acquire Ohio-Based ProCentury
Westerville, Ohio-based special property and casualty insurer ProCentury Corp. agrees to be acquired by a Michigan specialty insurance firm for $272.6 million in cash and stock. Business First of Columbus
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Report Finds Possible Bias of Florida Workers' Comp Judge
A recent report by the chief of Florida's Division of Administrative Hearings finds that the actions of a Duval County workers' comp judge create the appearance of prejudice against workers. The report includes
information from four Jacksonville workers' comp lawyers who took the unusual step of filing formal complaints against the judge, citing a phenomenon in which court mediators tell workers that settlement is the only
viable option for them because they have no chance in the judge's court. By Paul Pinkham, Florida Times-Union (Jacksonville) [with photo]
Go to the Full Story...
Connecticut Worker Nabbed for Suspected Fraud
A 39-year-old Naugatuck, Conn., man may face as many as 20 years in prison after being charged with felony workers' compensation fraud. He reportedly was observed conducting daily activities that were inconsistent
with his claimed disability. WTNH-TV (New Haven)
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WSI Board Suggests Raise for Interim Director
The performance evaluation committee of the Workforce Safety and Insurance board suggests that the interim director of North Dakota's workers compensation agency should get a 3.4 percent pay raise when he returns to
his former job.
Go to the full story by AP via KXNet.com (Minot) [with photo]
Go to the full story by AP via Dickinson Press
Iowan Pleads Guilty to Insurance Fraud
A 24-year-old Iowa woman accused of racking up at least $22,000 in charges on another person's credit card and using false doctors' documents tells a judge that she created doctors' notes to file a workers'
compensation claim and made purchases and deposits into her bank account with another woman's credit card and credit card checks. By AP via Des Moines Register
Go to the Full Story...
A Look at Workers' Comp Insurance and the Construction Industry
In the construction industry, being the low bidder is commonly the difference between working or going home. To win bids, money has to be saved anywhere it can be, including one of the biggest costs for many
businesses, especially small ones: workers' compensation insurance. Sentinel Source (New Hampshire)
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'Well Note' Plan Garners Mixed Reaction
The U.K. health secretary's plan to replace sick notes with so-called "well notes," which lists tasks that sick or injured employees may be able to perform, meets a hostile reaction from occupational health
professionals, general practitioners and at least one prominent
physician. Personnel Today (U.K.)
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State Fund on Hot Seat Again This Week
The California Senate Banking & Finance Committee will begin its second round of discussions tomorrow regarding State Fund. If all goes as planned, a reform bill will follow in the California Assembly. By D. Ashley
Verrill, North Bay Business Journal
Go to the Full Story...
Business Owners Advised to 'Get Their House in Order'
California small business owners have enjoyed a steady decline in workers' compensation insurance rates that are now the lowest in nine years. But that may be about to change, meaning it's a good time for businesses
to renew their focus on safety. By Jan Norman, Orange County Register [with photo] [may require registration]
Go to the Full Story...
Palmetto Dispute Goes to Court This Month
A restraining order blocking the South Carolina Workers' Compensation Commission from following a 2007 executive order issued by Gov. Mark Sanford expires late next week. Sanford told commissioners to begin
using uniform medical standards in determining payouts for long-term disabilities, and that has led to a federal lawsuit challenging the order on constitutional grounds.
Go to the full story by AP via GoUpstate.com (Spartanburg, S.C.) [with photo]
Go to the full story by Sammy Fretwell, Myrtle Beach Sun
Story Illuminates Minimal Care for Retirees
Some workers find, after retirement, that workers' comp benefits can be reduced while their need continues. Here is the story of one New York man whose personal physician is being overruled by workers comp officials,
despite calling their decision on chiropractic adjustments "insane." WSYR-TV (Syracuse)
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Feds Indict New York Insurer and Developer
A New York insurance company owner and a developer face federal charges of insurance and mail fraud for allegedly marketing unlawful and invalid workers' compensation insurance policies to professional employer
organizations. By Rocco LaDuca Utica Observer-Dispatch
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Former WSI Boss May Seek Repayment of Legal Fees
Sandy Blunt, former director of North Dakota's Workforce Safety and Insurance agency, says he may go to court to force the state to pay legal fees he spent defending himself against three felony charges that
ultimately were dropped. Blunt, who was forced out late last year, has filed a claim with the state's risk management division. By Dale Wetzel, AP via Dickinson Press
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