Thursday, February 19, 2015

Workers' Compensation Legislation 2015

Workers' compensation is in the news across the country, but not so much in Florida. There are some workplace related bills that have been introduced, but it looks like a quiet session for Florida workers' compensation. There is House Bill 297 which would create liability for workplace bullying. This is similar to the proposal discussed in 2013. But elsewhere around the country, workers' compensation is receiving some attention. 

Recently, the workers' compensation news platforms became a bit excited by a couple of Gubernatorial announcements, one in North Carolina and one in Wisconsin. 

North Carolina Governor Pat McCrory delivered his 2015 State of the State address on February 4. He noted the presence of "fraud and abuse" in workers' compensation, and committed to battle the problem. Towards the end of his address, he noted that "workers compensation claims have cost North Carolina taxpayers $896 million during the past six years. That’s about $150 million annually, which would have paid for a 2 percent pay raise for state employees…every year." 

Governor McCrory stated that an "examination of workers compensation estimates that 40 percent of workers costs are related to abuse or outright fraud." He therefore announced a plan to have the state's Office of Human Resources oversee the workers' compensation claims of state employees. His goal to get employees back to work sooner.

This hit the newswires and spread quickly. WorkCompCentral ran the story. There was an interesting blog From Bob's Cluttered Desk explaining that the estimate of 40% came from a vendor that works with the state on its compensation claims. Some have been publicly critical of the claim.

A few days later, the story broke that Wisconsin Governor Scott Walker would propose to abolish the Wisconsin Division of Workers' Compensation and move various elements of it to other state agencies. It sounded a bit similar to Florida's 2001 change to the Department of Labor, which resulted in the Office of Judges of Compensation Claims becoming part of the Division of Administrative Hearings (DOAH). 

According to WorkCompCentral, there is not unanimous support for the Wisconsin proposal. Some opposition resulted from a perception that the proposal came without benefit of consulting Wisconsin's workers' compensation advisory council. 

The rearrangement in Wisconsin would remove the requirement for judges to review settlements. The adjudicatory functions would remain the responsibility of administrative law judges (ALJ), but the ALJs would become part of the state's administrative hearing agency, The Division of Hearings and Appeals (DHA), similar to Florida's DOAH. Some contend such a move would increase ALJ oversight. Apparently there is some concern with how long some ALJ decisions require. 

There are those who question altering a system which they believe to be a model for other states. One even described Wisconsin as the "best-running workers' comp system in the country." Unlike the move of the OJCC to DOAH in Florida, the Wisconsin plan appears to envision existing DHA judges undertaking responsibilities to hear at least some workers' compensation claims. 

There are other legislative proposals out there.

Tennessee may enact an opt out for workers' compensation. Some have characterized the Tennessee proposal as a cross between the age-old Texas opt out and last year's Oklahoma opt out option. This subject is getting a fair amount of discussion. It will be the subject of one of the breakouts at the upcoming WCRI Conference, March 5-6 in sunny downtown Boston. I am hoping the snow has melted by then.

New Mexico is considering changes to the way intoxication is treated by their statute. Washington state may be considering changes by which it would abandon the monopolistic model and allow insurance carriers to sell workers' compensation coverage. 

Arizona is debating a change to their insurance laws that would make it harder to pursue damages for bad faith claims handling. Arizona is also considering a pre-emptive strike on medical marjuana in workers' compensation claims. This may be a reaction to recent rulings in neighboring New Mexico. They are also considering whether workers' compensation should include post traumatic stress disorder (PTSD).

Illinois has nine bills pending in its legislature. According to WorkCompCentral, there have been various unsuccessful efforts at reform there in the last few years. With Governor Rauner's campaign promise to reform Illnois workers' compensation, will this be the year for significant reform there? There is an interesting piece on the Illinois News Network comparing Illinois and Indiana. There is a stark comparison there. 

Kansas is considering a change in their law. Essentially, their Secretary of State is advocating a return to the Kansas law as it existed before its 2013 reforms. He says that the latest revisions empower injured employees to sue their employers. He seems to be pointing to Padgett, the trial decision in Miami last summer in support of his campaign. He recently told the Kansas legislature "a train wreck is about to happen and this committee has the power to stop it.” He fortells that the Kansas Supreme Court would reach the same decision as two trial judges have in Florida and Oklahoma. Meanwhile, we wait to see what appellate courts in either Florida or Oklahoma may do.

Connecticut is considering coverage for emotional distress and mental issues for workers who experience "extreme workplace violence. Montana is looking at whether to create a cancer presumption for firefighters.

Maryland has announced a truce with physician dispensing. There are apparently several ways to look at the pervasiveness of physician dispensing. There is Workers' Compensation Research Institute (WCRI) data and conclusions. The Maryland Board of Workers' Compensation has other data. The distinction between the two data sets may be which claims are included in each. WCRI is said to have studied lost time claims, while the internal data is said to have examined all accident claims. Joe Paduda has a perspective. There are other perspectives. WorkCompCentral is reporting that Maryland's legislature has agreed not to address physician dispensing for two years.

Across the country, it looks like there may be significant legislative discussion of workers' compensation. Time will tell if it translates into statutory amendments. It is always impractical to guess whether any particular bill will pass. And that is true when you are focusing on a single state. With the variety of initiatives and proposals out there, it will be interesting to see what occurs this season.   

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