Monday, June 29, 2015

Tennessee and New Mexico Provisions Deemed Unconstitutional

Florida has its share of recent and pending constitutional challenges to workers' compensation. We are currently watching Castellanos and Westphal at the Supreme Court. Recently, we learned that the 11th Circuit decision of Judge Cueto (Miami) would more likely avoid the Supreme Court and instead return to the trial judge from the Third DCA on remand, for dismissal. Thus ends (?) the challenge that was commonly referred to as Padgett.

There are other constitutional challenges going on around the country. There was a recent decision in Oklahoma that called exclusive remedy into question. There are a variety of constitutional challenges to the Oklahoma Opt-Out that are being considered also. I mentioned some of these in Court Watching recently. 

Just last week, the New Mexico Court of Appeals declared a provision of that state's statute unconstitutional. New Mexico does not statutorily require coverage for farm and ranch workers. The Court concluded that the distinction of this section "fail to serve the purpose of the Workers' Compensation Act" and that the distinction results in "dissimilar treatment of similarly situated workers." More on New Mexico in a future post. Interestingly, this is a constitutional challenge to force inclusion of workers in the system, compared to Padgett, a challenge to allow workers to leave the system. 

In March 2015 a Chancery Court Judge in Nashville, Tennessee concluded that a portion of that state's workers' compensation law is unconstitutional. The story first came to my attention on The Tennessean, but there is also a good blog on the subject on Knoxblogs.

The issue sounds like an equal protection dispute. Tennessee's law is drafted so as to specifically provide less benefits to undocumented workers. In striking the provision, the Chancellor concluded that the question was controlled by Arizona v. United States (U.S. 2012). Essentially, that is a preemption case which concluded Arizona could not regulate immigration because the federal government so regulated. Interestingly, Arizona is the authority that Florida lawyers relied upon in challenging the prohibition on false statements made to obtain employment in Brock (the Florida constitutional challege that has arguably received the least coverage). 

Brock was decided by the Fourth DCA in April of 2014. Last fall, the Florida Supreme Court declined to hear the case. Earlier this year, the U.S. Supreme Court denied the petition for writ of certiorari.  Thus the Fourth DCA decision stands. Essentially, it is illegal to make misrepresentations in obtaining employment, whether you are an immigrant or not. It is important to remember that in Florida a District Court decision like Brock is "binding authority" in that district, but not in other districts. Thus, a similar challenge to Fla. Stat. 440.105 could be pursued in another district and the result could be contrary to Brock.

When two district courts have reached opposite conclusions, the Florida Supreme Court can review the question(s) under what is commonly referred to as "conflict" jurisdiction. Thus, any conflict is resolved by the state's highest court. There are those who argue that the Florida Court's consideration of Westphal is pursuant to such, but is to resolve a conflict between the full First DCA in Westphal and the full First DCA in Matrix Employee Leasing v. Hadley. Of course, the Supreme Court is reviewing Westphal on certiorari (request), not on conflict. But it illustrates the concept of conflict. Courts can reach conclusions that are diametrically opposed to other decisions, even its own.  

In Brock, the Florida Fourth DCA did not find Fla. Stat. 440.105 to be an immigration law, and concluded that it was constitutional. The Tennessee Chancellor concluded otherwise regarding the restriction on benefit levels resulting from status as documented or undocumented. In doing so, he concluded "by limiting benefits to the workers," the legislature "intended to establish what amounts to a state immigration policy, but that could not trump federal law."

The Tennessee court does not address the question of whether criminal activity (immigration status) can be prohibited. It simply concludes, following Arizona that the states cannot punish certain activity. Worker status therefore cannot be the basis for a determination of the volume of benefits due. The state law in Tennessee, in specifically delineating benefit levels based on worker status violates the preemption doctrine that affords the federal government exclusivity in addressing issues within the express grants of the people and states to the federal government (the people and the original states were here first and formed the federal government, in the process granting it specific powers). 

One distinction between this Tennessee analysis and the Brock analysis may have been legislative intent. The Tennessee bill that resulted in its law included an introduction. That introduction referenced the purpose of the statue as preserving "traditional legal immigration" and the purpose was to "encourage the employers of this state to comply with federal immigration laws." I am aware of no such statement of intent regarding Fla. Stat. 440.105. Can one infer, in the absence of such a statement, that this Florida statute was intended as an immigration enforcement?

It is also worth noting that the Tennessee provision specifically refers to immigration status as a criteria in determining benefit entitlement, thus a facial constitutional challenge. The provisions of Fla. Stat. 440.105 make no such specific references to immigration status, race or national origin, suggesting that challenges thereto would be on the basis of how the statute is "applied."

Facial constitutional challenges require a showing that there are no circumstances in which that statute can be applied appropriately. The courts, in such challenges, consider the facts or situation in the case actually before them. but also search for any circumstance in which the provision might be appropriately applied. If any such circumstance can be identified, the statute is not facially unconstitutional.

As applied constitutional challenges require a less stringent proof. In this setting, the challenger need only prove that the application of that statute to a specific set of facts results in an inappropriate outcome on those facts, under the constitution. 

The greater distinction between the two types of challenges is their precedential value, that is the future impact of the court's decision. Generally, once a court decides an issue, it is bound to follow that decision. The current conflict between Westphal and Matrix suggests that precedent is neither a constant nor an absolute however.

A declaration that a statute is facially unconstitutional will render it invalid per se in all future applications. It is a broad result, based upon a broad consideration of both the presented factual setting and any other potential factual setting. The result in an as applied challenge is more limited, resulting in invalidation of a statute in a particular case. Thereafter, that result might be argued to be applicable to support a similar result in similar factual cases, but is not as clearly a blanket prohibition. 

These recent decisions in Tennessee and New Mexico affect the respective statutes in a facial manner and will thus likely have wide spread application in those states. As we await decisions in Westphal and Castellanos, we can wonder whether the Florida Court will find those constitutional challenges persuasive (it remains unclear whether the Court might simply conclude that the challenged statutes are constitutional), and if so whether any infirmity found will be facial or as applied in those specific cases. 

It is worthy of consideration that Westphal may not even be a constitutional challege at this point. The First District did initially invalidate specific provisions of Fla. Stat. 440.15 in a panel decision (three judges). The panel concluded that this section is contrary to "natural law." When the full court ("en banc") considered the challenge in Westphal there were multiple opinions written, but none of them concluded that the statute was unconstitutional. The "natural law" challenge was seemingly abandoned. 

A year ago, Risk and Insurance questioned whether more states would pass laws restricting benefits for immigrants. It seems that this is unlikely in light of Arizona, whose impact can be seen in this regard so recently in Tennessee. Seeing that the Tennessee courts will not enforce such a distinction may discourage other states from this course. 

*Update, February 20, 2016: The Florida Supreme Court has yet to rule on Castellanos or Westphal. The New Mexico Supreme will reportedly review the decision of the New Mexico Court of Appeals. In the interim, the high court has issued an order suspending the effects of that decision. 

Wednesday, June 24, 2015

It is Padgett Time, Third DCA Reverses

One of the cases upon which the Sate of Florida has focused over the last year has been decided. The Third District Court of Appeal today (June 24, 2015) rendered its REVERSAL of the trial judge in The State of Florida v. Florida Workers' Advocates (Commonly referred to as Padgett).  

Remember last August Judge Cueto, a Circuit Judge in Miami, concluded that the Florida Workers' Compensation exclusive remedy provision is unconstitutional. Details are in "Padgett," or Florida Workers' Advocates," A Rose by Any Other Name. There was a push to have the State's appeal certified directly to the Florida Supreme Court. The Third District denied that request and undertook review, see Now We Know Where Padgett will next be Decided.  

After a long winter, the Third District held oral argument in the case in late March. In May, I wondered, Is it Padgett Time Yet? And I must admit I have thought that there would be a decision literally any day since then. Today is that day. In that post, I recited some prognosticators thoughts that the case would be reversed on more procedural grounds. The discussion centered on whether Ms. Padgett's employer had been afforded due process after she intervened into the originally filed case.  Those prognostications regarding her employer turned out not to figure in the Third District's reasoning. But, similar concerns regarding the State of Florida did. 

The Third District reversed Judge Cueto today and the matter is therefore (likely) headed back to the Miami Circuit Court. I say "likely" because either party may move for the Third District panel (three judges who decided this case) to revisit the opinion, called a "motion for rehearing;" or a party could ask for the entire Third District Court to rehear the case, called a "motion for rehearing in banc." Also, the parties may still seek review by the Florida Supreme Court in this case. 

As described in an earlier post, if the Third District had affirmed Judge Cueto, finding the statute unconstitutional, then the Florida Supreme Court would have been obligated to review the decision. As the Third DCA reversed that conclusion, the Supreme Court still may review the decision, but is not necessarily obligated to do so. 

The District Court considered the State of Florida's appeal of a "final summary judgement determining that section 440.11, Florida Statutes (2014), the 'exclusiveness of liability' provision of the" law "is facially unconstitutional under the United States and Florida Constitutions." That trial order is here. The Court did not address those specific constitutional questions however, and instead concluded that "the threshold requirements for the prosecution of such claims were not met" and reversed the trial court. 

You see, Ms. Padgett and the Florida Workers' Advocates were not originally parties to this case. The case started out as a civil lawsuit by Julio Cortes against Velda Farms. The Court said that it was "transformed by the present appellants and their counsel into a completely different set of claims and parties over the three years which followed." 

Velda Farms defended the workers' compensation case by Mr. Cortes, and denied his claims. Mr. Cortes sued in civil court and alleged that "Velda Farms and its employees were negligent" and that "Velda Farms should be estopped (precluded) from claiming immunity under the Workers' Compensation Law because of the denial of Mr. Cortes's claims by" the employer/carrier. The court notes that "to this point, no party had raised an issue relating to the constitutionality" of exclusive remedy.

In 2012, "Cortes filed an amended complaint" and alleged that "440.09 and 440.11 of the Workers' Compensation Law are facially unconstitutional or are unconstitutional as applied to Mr. Cortes. The distinctions between "facial" and "as applied" constitutional challenges are discussed in Brock is Gone, is Hector next, in the Florida Court, or the U.S. Supreme? Essentially, a facially unconstitutional statute cannot be appropriately applied in any set of circumstances. One that is unconstitutional "as applied" can be constitutionally applied in some circumstances, but a court determines its application in a particular case or situation does not operate constitutionally. 

The Court noted that when the amended complaint was filed, the plaintiffs did not "join the State of Florida as an additional defendant." Thereafter Florida Workers' Advocates (FWA) and the Workers' Injury Law and Advocacy Group (WILG) intervened into the case as "additional plaintiffs." In 2013 "Velda Farms voluntarily dismissed its" immunity defense" and sought dismissal of "claims other than negligence and loss or consortium." Velda contended that the "relief sought by WILG and FWA - had become moot and should be dismissed."

The intervenors (FWA and WILG) contended that Velda could not seek that relief, and "that the Attorney General of Florida was not a party in the case, though it had been mailed the notice of constitutional question" by Cortes. Despite the fact that "the Attorney General had not filed a notice of appearance or responsive pleading in the case, the trial court ordered that Count IV 'shall go forward to be tried separately by" the intervenors "against the State of Florida." The name of the case, or "caption" was then changed to "In re: An Action for Declaratory Judgement seeking a judgement that s440.11 Fla. Stat. 2003 is invalid." The intervenors were "designated as 'petitioners' and the State of Florida, Office of the Attorney General, as 'respondent'."

Then Elsa Padgett came into the case. She is "an individual workers' compensation claimant in an unrelated matter" against her employer, Miami-Dade County. She sought determination of "whether or not workers' compensation benefits are my exclusive remedy for my on the job injury in light of thee  vact there is no compensation benefit in the law for my loss of wage earning capacity . . .."

The Court notes that throughout, WILG, FWA and Padgett "did not name the State or the Attorney General as a defendant," nor was the State or AG served "with original process." Judge Cueto later entered an order commanding the State to show cause as to why the State had not responded, and concluding that the lack of response was in spite of his conclusion that "the record indicates proper service." The District Court noted that the trial court concluded that the "notice of constitutional challenge" that was sent "is sufficient to align and implead the State of Florida as a defendant." Thus, that the notice was a valid substitute for service of process in the perspective of the trial court. 

Then, just prior to the 2014 workers' compensation conference, Judge Cueto entered "a twenty -page order granting the petitioner's amended motion for summary final judgement," concluding "the Florida Workers' Compensation Act, as amended effective October 1, 2003, does not provide a reasonable alternative remedy to the tort remedy it supplanted. It therefore cannot be the exclusive remedy. §440.11 is constitutionally infirm and invalid.”

The prognostications and discussions that followed covered a multitude of ideas, interpretations and contentions. Was the whole statute unconstitutional? Was exclusive remedy unconstitutional? A Judge from another state, at the 2014 comp conference, asked me if the OJCC would be open for business the following week in light of the Circuit Judge's decision. It, like many of the questions raised, was answered with the standby "I don't know." There was much uncertainty in the air as this trial decision was discussed. The Florida workers' compensation community has been abuzz for ten months. 

The nation has watched also. Professor Burton has mentioned the case more than once. He was one of the witnesses upon whom Judge Cueto relied in his order. Professor Burton also mentioned Padgett recently,at least in terms of the challenges to exclusive remedy generally, in testimony in Illinois related to reform efforts there.  I have heard the case discussed in a multitude of national gatherings, including SAWCA, last fall's IAIABC in Austin, and more. 

The District Court today held that only Velda Farms was "named as a party and duly served." When that defendant dismissed its workers' compensation immunity defense, the issue "became moot, and any further proceedings were an intervenors-only exercise." The Court held that the "Attorney General of Florida was not a party to the case below."

The Court rejected the intervenors' argument that mootness should be excused because the situation presented was "capable of repetition, yet evading review." In its most famous (to lawyers and law students anyway) context, this exception was adopted for the challenge of abortion law cases. In those situations, a pregnant person seeking that procedure, against the constraints of some state or local law, would be virtually precluded from reaching a meaningful appellate review before the child was born (40 week human gestation is longer than the 45 weeks between Judge Cueto's August 13, 2014 order and today's order from the Third District). Thus, there are contexts in which a court will proceed with a determination even when something has caused a mootness issue, but which situation is likely to recur. 

Rejecting the application of this exception in Padgett, the Court noted "workers' compensation claims, and employer defenses are individualized; and such cases have not been shown, as a category of cases, to be short in duration or to 'evade review'." 

The Court also concluded that as "intervenors, Ms. Padgett, WILG, and FWA took the procedural posture of the case as it stood when they were allowed to intervene."  The Court says that the law "does not support some sort of 'piggy-back' standing by an intervenor based exclusively on a predecessor plaintiff's subsequently dismissed claim." Thus, when Velda Farms dropped the exclusivity defense, it was no longer an issue in that case. 

The Court held that the intervenor organizations "may have an economic interest in establishing their clients' rights to file tort claims, but that indirect interest does not confer standing upon them in the present case."  Standing is a legal concept that requires a party to have a definite interest in a legal question in order to be allowed to prosecute or defend the issue. There must be some personal harm suffered or threatened upon the party for that party to have "standing." 

Thus, the "trial court lacked a justiciable case or controversy" (the question was moot) and "the intervenor/appellees lacked standing to assert" such case or controversy. Therefore Judge Cueto's order of August 13, 2014 was REVERSED. The case was sent back to Judge Cueto ("remanded") so that he could enter an order "dismissing Count IV of the amended complaint."

There are those who are already saying that this decision vindicates the statute, and that Florida exclusive remedy is "constitutional." That is not what the opinion says. It says that the parties who brought the question (WILG and FWA) did not have the standing to bring it, and that the question was moot when Judge Cueto ruled. Those are procedural decisions. The Third DCA did not address the substance of Judge Cueto's ruling. It did not conclude that exclusive remedy is constitutional. It said that the question was not appropriately before Judge Cueto. 

That answers one of the questions that has been on so many tongues for the last year. The debate on the substance will have to wait for another challenge in another case. The Brock questions were resolved earlier this year. We now await word from the Florida Supreme Court in Westphal and Castellanos. Their decisions are released on Thursdays. Tune in tomorrow to see if it is time for either or both of them. 


Ideological Shift

Marriage and the attitudes towards it are apparently changing in America. 

Last year, the topic of "same-gender" or "same-sex" marriage was in the news. In Marriage, the Law and Workers' Compensation, I took a stab at exploring a decision of the Alaska Supreme Court. The issue there was intertwined with the word "spouse" as used in many workers' compensation statutes. The most general application is in the context of workers' compensation benefits for the death of a worker. 

It is important to note that death benefits around the country are rarely a legislative focus. This is likely due in part to the fact that workplace deaths are a small percentage of the annual accidents. As mentioned in the previous post, there are still too many deaths. The good news is that workplace death seems to be an area in which safety efforts are having a positive effect. 

The Florida death benefits section is Fla. Stat. §440.16. It provides benefits in (1)(a) for "funeral expenses not to exceed $7,500.00." Many would suggest that this sum is no longer sufficient to cover the expenses related to a funeral. Inflation is a reality in this country as anyone who has purchased groceries lately will tell you. 

The law proceeds in (1)(b) to define and confine who will be eligible for compensation benefits as a result of a death. Everyone potentially entitled to such benefits is so "on account of dependency upon the deceased." The aggregate of all of the death benefits is currently capped at $150,000.00. What is considered a "poverty level" income would likely depend on where one lived. The United States Department of Health and Human Services (USDHHS) recognizes that the number of people in a household influences what is considered "poverty." 

According to the USDHHS website, for a family of three, the poverty threshold is $20,090.00. So a family of four that loses a wage-earner, leaving three dependents, might receive about 7.5 times that annual income in total Florida workers' compensation death benefits ($150,000/20,090 = 7.46). 

The statute delineates which of the deceased worker's relatives will receive how much in benefits. The sentence that is worthy of consideration here is "to the spouse." The first and second subsection of (1)(b) each lead with "to the spouse." As discussed in Marriage, the Law and Workers' Compensation This language may be very important regarding the analysis of how marriage is defined. 

The provisions of (1)(b)2. also include that spousal death benefits may be affected by "the surviving spouse's remarriage." In such an instance, the surviving souse "shall be entitled to a lump-sum payment equal to 26 weeks of compensation at the rate of 50% of the average weekly wage."

The provisions of (1)(c) also begin with "to the surviving spouse" and provide for education and training benefits for that surviving spouse. This may provide up to 1,800 classroom hours, or 80 semester hours, at "any community college established under Part III of Chapter 1004."

So there are multiple instances of the use of "spouse" regarding entitlement to Florida workers' compensation death benefits. But recent news regarding the state of marriage in America bears revisiting the "spouse" language for further consideration. 

Regardless of how you would define marriage, or "spouse," there is evidence that marriage generally is on the decline in America. Yahoo News reported in June Singles Nation: Why So Many Americans are Unmarried. According to this story, "single adults now outnumber married adults in the U.S." The story says that "for the first time, the number of unmarried American adults outnumbered those who were married" last year. 

Of those, "one in 7 lives alone - about 31 million compared to 4 million in 1950." Another part of this analysis is that "almost half of new births are to unmarried mothers." That does not necessarily mean these mothers are alone, "the number of parents living together but not married has tripled" according to the article. There is no detail provided regarding over what period of time this tripling occurred. 

The Yahoo article continues "in 1950, married couples represented 78 percent of households," and in 2011 "that percentage had dropped to 48 percent." Looked at a different way, "in 2014 . . . 124.6 million Americans 16 years and older were single, or 50.2 percent of the population, compared with 37.4 percent of the population in 1976."

In 1960, the average age of marriage for Americans was "20 for women and 22 for men." Currently, the average has increased "to 27 for women and 29 for men." As they await that age, these young people form "urban tribes" which are described as "close groups of friends," and they "focus on their careers and their own personal fulfillment." Sounds like a description of Friends?

It is perhaps contributed to in part by the volume of American divorce. However, the "number of American adults who have never been married is at a historic high, around 20 percent." The young, referred to as the "Millennial Generation" do not hold marriage in the same regard as earlier generations. In 1997, members of "Generation X" responded indicating 47% of them felt that "having a successful marriage is one of the most important things." A recent similar poll of Millennials demonstrated "only 30 percent" of them held that belief. 

A Pew study "in 2010" revealed a belief that "marriage was becoming obsolete" held by forty percent of Americans. 

The "academics" therefore conclude that "American society is in the midst of a fundamental social and demographic shift." One sociologist's conclusion is quoted, that this shift is "affecting everything from housing and health care to child rearing and churches." Workers' compensation, a billion dollar program that is a fundamental part of the modern working world in all fifty states was not mentioned. 

Unfortunately, despite its broad influence on the lives of so many, workers' compensation is often overlooked by the academics. In a state that recognizes "common law marriage" perhaps those without a formal marriage certificate might be recognized as "spouses" in the event of a workplace death. Or, perhaps with the absence of some formality of a marriage, there would not be entitlement to death benefits for that nonetheless dependent person left behind?

As the attitudes towards marriage shift, should the entitlement to workers' compensation death benefits change? Is the spirit of the law to support that dependent left behind, or is the intent more specific and focused only on such a dependent with the legal standing of a "spouse?" If the entitlement criteria were changed to something short of formal legal marriage, would the benefit cessation criteria, the "surviving spouse's remarriage" language, also change to recognize that something short of of formal legal remarriage would later alter entitlement?

Our world seems to be constantly changing. Hericlitus is credited with the quote "change is the only constant." Every generation seems to lament the change, and reflect on the "good old days."  Is it a conscious legislative decision to cling statutorily to "spouse" or is this merely something that has yet to be noticed in the context of a shifting attitude towards marriage?

Monday, June 22, 2015

The 50 Most Expensive Hospitals

In May, I thought about data and information in Perfect Access to Perfect Information. Having data is comforting to many, and in pursuit of that data, researchers look at some amazing information. Of course, how that data is defined, refined, confined, and interpreted may have a great many variables. 

In June, WorkCompCentral reported that Johns Hopkins has published a study regarding hospital billing patterns. They say that "most hospitals charge 1.5 to four times the Medicare rate" for services. However, there are some hospitals "that charge 9.6 to 12.6 times the Medicare rates." They identified the "50 most expensive hospitals in the country" and say that these 50 charge up to "10 times the amount that Medicare pays."

According to a map published with the story, the list of 50 is in 13 states, as follows: 

Alabama 5
Arizona 1
Arkansas 1
California 3
Florida 20
Kentucky 1
New York 1
Oklahoma 1
Pennsylvania 7
South Carolina 1
Tennessee 3
Texas 5
Virginia 1 

According to the Census Bureau Florida has 19,893,297 of the 318,857,056 people in the United States, or roughly 6%.

According to Wikipedia (a trusted and cited authoritative source, see Trejo Perez v. Arry's Roofing, 141 So.3d 220 (Fla. 1st DCA 2014)), the United States includes 3,805,943.26 square miles. Florida is 65,757.70 square miles, or roughly 2% of that area. 

According to the Johns Hopkins study, twenty of the "50 most expensive hospitals in the country" are in Florida. That is, roughly 40% of the "most expensive" are in Florida. Pennsylvania is next with 14%, followed by Alabama and Texas tied at 10% each. These second and tied-for-third states total only 34%. Florida alone beat the next four runners-up in the count combined by a solid 6% margin.

According to Statista, there are 5,686 hospitals in the Unites States. According to the Florida Hospital Association, there are 303 hospitals in Florida. Florida has roughly 5.3% of the nation's hospitals. 

According to Statista, there are 914,513 hospital beds in the United States. According to the Florida Hospital Association, there are 67,081 hospital beds in Florida. Florida has roughly 7.3% of the nation's hospital beds.

Six percent of the U.S. population, two percent of of the U.S. land area, five percent of the hospitals, seven percent of the hospital beds, and forty percent of the "most expensive hospitals in the country."

According to a map published with the story, the following Florida Hospitals are in that group

Bayfront Health Brooksville (Brooksville)
Bayfront Health Dade City (Dade City)
Brandon Regional Hospital (Brandon)
Fawcett Memorial Hospital (Port Charlotte)
Ft. Walton Beach Medical Center (Fort Walton)
Gulf Coast Regional Medical Center (Panama City)
Heart of Florida Regional Medical Center (Davenport)
Kendall Regional Medical Center (Miami)
Lawnwood Regional Medical Center (Port St. Lucie)
Lehigh Regional Medical Center (Fort Myers)
North Florida Regional Medical Center (Gainesville)
North Okaloosa Medical Center (Crestview)
Oak Hill Hospital (Brooksville)
Orange Park Medical Center (Orange Park)
Osceola Regional Medical Center (Kissimee)
Regional Medical Center Bayonet Point (Hudson)
Sebastian River Medical Center (Sebastian)
South Bay Hospital (Tampa)
St. Petersburg General Hospital (St. Petersburg)
Twin Cities Hospital (Ft. Walton)

The WorkCompCentral story makes clear that these are included based upon what each is billing. That does not necessarily mean that this is what each is being paid. The story points out that there are fee schedules in workers' compensation, which may impact the amount that is actually paid. According to one source though, "Florida's fee schedule doesn't offer much protection to payers." 

The hospital study author, Ge Bai, is quoted explaining the "business model" that is being followed. She says there is a "market failure" caused by "the difficulty of finding and comparing the actual prices a patient can expect to pay for services." She says that "[b]ecause the information is hard to gather," "hospitals rarely have to compete with each other on pricing." Perhaps another argument in favor of Perfect Access to Perfect Information?

If consumers knew of the differences in expected cost, would they travel across town for services? Would Medical Tourism cause them to drive across their region, to another state, or to a nice beach town somewhere for services?

An interesting study. 


Wednesday, June 17, 2015

So Federal Law Matters in Colorado

In January 2015 I mentioned "Medical Marijuana" in the dispute Coats v. DISH Network. That case involved a severely injured person who works for DISH Network in Colorado. DISH has a drug-free workplace policy in place. In fact, according to some reports, DISH is required to maintain a drug-free workplace program in order to qualify as a bidder for certain business in which the federal government is involved.

The case began several years ago. Mr. Coats underwent a drug test at work as part of this drug-free workplace policy. The results of that test revealed the use of marijuana. No one disputed that the test was positive, or that the test was valid. Mr. Coats admitted using marijuana, but contended that he could not be fired for that offense for two reasons. First, his use of marijuana was on his own time, not at work. Second, he held a Colorado state license to use marijuana for medical purposes, rendering it legal or "lawful" under Colorado law. 

According to Coats, medical marijuana provides the only relief he receives from seizures. He has found no alternative treatment to relieve these symptoms or conditions. He contended in his lawsuit that he could not be terminated for marijuana use at home, on his own time, as that was "legal activity." A trial court dismissed his termination lawsuit. In April 2013, a panel of the Colorado Court of Appeals disagreed with his characterization of "legal activity," and affirmed the dismissal of his lawsuit. 

Under Colorado law, 

"It shall be a discriminatory or unfair employment practice for an employer to terminate the employment of any employee due to that employee's engaging in any lawful activity off the premises of the employer during nonworking hours"

Coats' arguments were for relief against DISH under this state law, claiming that by terminating him for his admitted use of marijuana, DISH discriminated against him or committed an unfair employment practice. 

The appellate court affirmed a trial court decision dismissing his claim against DISH. The trial court concluded that marijuana use was not "lawful activity" because state law did not legalize marijuana per se, but merely "created an affirmative defense from prosecution for such use." In other words, the substance and its use remained illegal under Colorado law, but the law also created a defense to prevent prosecution for that violation. 

The Court of Appeals noted that the activity involved, use of marijuana, was against federal law. There has been some trend towards the federal government not enforcing those laws. The Department of Justice essentially outlined the marijuana laws that it would enforce, and thereby made somewhat clear which laws it would not enforce in August 2013. 

The Court of Appeals noted that the statute (above) under which Coats sought protection did not define "lawful," therefore there was need for interpretation of what "lawful" means in order to determine whether his activity was or was not lawful. While the trial court had centered on whether the medical marijuana use license rendered Coats' activity "lawful" or merely defensible, the appellate court centered on the admitted fact that the activity was without question illegal, not "lawful," under federal law. 

The Court of Appeals held that the plain meaning of "lawful" is "permitted by law," according to the legal dictionary. The Court concluded that the federal law applied to people in Colorado. The Court concluded that in order for activity to be "lawful," it must be in compliance with both state and federal law. Of course, this was in April 2013, months before the Department of Justice essentially announced an intention to ignore some categories of federal drug use prohibition in August 2013. 

The Coats case then progressed to the Colorado Supreme Court. It ruled this week, just over two years later, that Coats' activity was not "lawful." Again centering on the federal law question, and knowing of the Department of Justice's decision almost two years ago (August 2013) not to enforce federal law. It may appear to some to be incongruous for a State court to essentially enforce a federal law, enforcement of which it appears the U.S.  Department of Justice has declined. 

The Colorado Supreme Court, according to the Denver Post, concluded that there are issues presented that may be appropriate for legislative action. The legislature there could certainly enact its own definition of the word "lawful" to have a focused or specific meaning compared to that in the legal dictionary. The legislature could likewise refine the application of Colorado's discrimination law specifically in terms of the use of marijuana. 

Since Mr. Coats began the litigation of this termination, the legal landscape has changed in Colorado and other states. At least four jurisdictions have ventured beyond the confines of "medical marijuana" (if in fact such a thing exists) and have made "recreational" marijuana use legal, or at least not subject to prosecution, under state law. Colorado is one. According to Time, five more states are poised to make marijuana law changes in 2016. 

It appears for now, that the federal government's decision to not enforce federal law will not change the fact that certain activity nonetheless remains illegal under federal law. Some state courts, as the Colorado Supreme Court just has, appear to find relevance in the existence of federal legislation regardless of federal enforcement. 

In April, in Marijuana Back in the News, I noted that the news reports a growing acceptance of marijuana. That post predicted that there will be more issues with marijuana use in the coming years. Some believe that if Congress acts and ends the federal prohibition on marijuana use, that will bring an end to the debate surrounding marijuana use. That may be expecting the "lawful" debate to resolve too many issues or questions.

I would suggest that federal legalization may solve some questions, such as Mr. Coats'. However, there may remain other questions even if the substance were legalized by the U.S. Congress. Can an employer preclude workplace impairment? It seems likely that the answer to that will remain yes. 

Can an employer prevent an employee from operating equipment while under the influence of alcohol, or prescription medication today, despite both being perfectly legal under both state and federal law? The answer seems to be yes. And therein lies one of the difficult questions with marijuana. How can the impairment, not presence, of this substance be measured? There are existing tests that measure impairment from alcohol, and even high schoolers are well familiar with statutory presumptions regarding the blood alcohol percentages. 

A story just today on WorkCompCentral addressed an impaired driving accident in New Mexico. It reminds of the impaired employee concern, and the liabilities that may be faced by an employer. This story is about injury to the impaired employee, but there are similarly strong arguments for protecting the unimpaired coworkers, and the public.

Can impairment from marijuana be accurately measured? Some say that it can be. In Is Drug Testing Blaming the Victim I noted some comments surrounding a race car accident. There was a problem during a race and one of the drivers exited his vehicle to have a few words with another driver. Unfortunately, it was dark and the other driver did not see him walking on the darkened track that night. The driver was struck and killed. A conclusion was reached in that case that the driver walking on the track "had enough marijuana in his system to influence his actions." That quote suggests that the technology exists to measure marijuana impairment. 

There are potentials for this to become important in the workplace. If Congress removes the federal prohibition on marijuana, then laws such as Colorado's protecting the "lawful" activity in off-work hours could raise marijuana use and impairment questions that have not yet been discussed. The Court was not faced with safety or impairment questions in Coats. Likewise, if state legislatures, such as Colorado's, redefine "lawful," or if stricter definitions already exist in other states, then the impairment and safety issues may present there.

The Colorado decision this week is not necessarily monumental. The Denver Post quoted a University of Denver law professor, Sam Kamin. He said "it's easy to make too much of this decision. It really comes down to interpreting this one word ("lawful") in this one statute." That was the focus in Coats, and that is really the only issue determined by Coats. The issues of impairment, appropriate testing, and workplace safety remain for the future. 

The Southern Association of Workers' Compensation Administrators will be discussing medical marijuana at its 67th Annual Convention this July. Medical marijuana will be on the agenda for discussion at the annual workers' compensation educational conference (WCEC) in Orlando in August. It is a subject which raises questions and which will continue to garner attention and discussion. Safety experts, doctors, lawyers, risk managers, adjusters and more all have interesting questions about the evolution of marijuana in society, thus in the workplace, and ultimately therefore in workers' compensation. 


Tuesday, June 16, 2015

The Study of Workers' Comp Across the Continent

There have been a fair number of comments about the Propublica articles in early March. One was The Demolition of Workers' Comp, another was Workers' Compensation Reforms by State. At about the same time, the Occupational Safety and Health Administration published a report. I have had a number of people ask where to access these documents and so provide these links. 

Coincidentally, I worked on a review of the statistical analysis that is provided every other year by the Oregon Department of Consumer and Business Services. In mid-March 2015, that effort culminated in a comparison article titled Comparing the Premium Cost of Workers’Compensation published by the National Association of Workers' Compensation Judiciary.

There are a number of comparative law articles also available on the NAWCJ website, the majority of which were authored by workers' compensation judge David Torrey of Pennsylvania. Anyone with an academic interest in workers' compensation would enjoy some or all of these articles.

Sunday, June 14, 2015

Medical Costs, Fee Schedules, Disparate Reimbursement, and Medical Tourism

In February, NewsOK reported on the disparity between various charges for medical services in New Hampshire. It reports that an injection for a work injury could cost $763 while the same injection is only $298 if not work-related. A surgery for "tendinitis in the shoulder costs about $2,300" if work-related compared to $768 otherwise. These are figures gleaned from New Hampshire and evidence workers' compensation paying two and one-half to three times more for medical treatment.

It is not the first time that we have seen disparity reported.

In 2013, the federal government finally agreed to disclose details on what has been charged "for the 100 most common procedures." The Washington Post reported "these charges have been closely held by facilities that see a competitive advantage" in the fact that other facilities did not know what they were charging. The Post concluded that this resulted in a "health-care system with tremendous, seemingly random variation in the costs of services."

The figures in the Post story evidence these variations. For some procedures, the billed charges for one hospital were almost double the charges at other facilities. Inexplicably, the government reimbursed some facilities between 17% and 39% more in the examples cited. More inexplicably, it appears that facilities that billed more actually got paid less.

More data still was released in 2014, leading to some other interesting discussions.

The allegations have been made in Florida workers' compensation also. In April 2014 my posts questioned why surgery costs roughly double in workers' compensation claims. Senator Hayes noted last year that an average outpatient knee surgery in workers' compensation cost about $8,411 compared to $4,200 for non-work-related surgery.

Recently Julius Young blogged on "cost-shifting in workers' compensation." I read his thoughts with interest. Is the disparity between workers' compensation care and treatment and the cost for that care outside of workers' compensation somehow an issue of "cost-shifting?" Is the employer community subsidizing care that providers or facilities provide to non-workers' compensation patients?

Richard Krasner writes a blog titled Transforming Workers' Comp. He loyally advocates for medical tourism. The concept is simple enough, send the patient where the care is delivered inexpensively. This is most often advocated in terms of foreign countries. Of course there has to be a corollary to that, the savings has to result from efficiency or comparative advantage and not from lax standards or sub-par oversight.

There have been stories about foreign clinic closures after tragedies. One recently involved a plastic surgery facility in Mexico. It was not the first.  Mr. Krasner's blog addresses many concerns and questions that may be involved in medical tourism in the workers' compensation process.

There is an inevitability that regulation will be different in various jurisdictions. This is not an international reality any more than it is a domestic one. For example, Florida has a workers' compensation medical care fee schedule. It is mandated in 440.13. There are other states, however, that do not have a fee schedule, such as Virginia. 

The diversity of thought on fee schedules is intriguing and often provides for animated conversation at national gatherings such as the annual SAWCA Conference. Virginia has been heard to proclaim that there is no need for medical fee schedules, but WorkCompCentral reported in May that Virginia is studying the subject again. 

Where does all this lead? The inevitable destination is that information can be a powerful tool. It is clear that costs for medical procedures are different depending on location. This may be between facilities in the same town, between your hometown hospital and one in the next city or state, or between hospitals in the United States and elsewhere. Logically, people will ask questions about whether the cost differences in any particular scenario have any relation to safety and regulation, or quality of care, and the answers in a particular case may appropriately influence the analysis. 

But with the information regarding the cost of particular care among local hospitals or providers, can better decisions be made? If medical tourism is a (I did not say "the") solution to medical cost issues, would it make sense for the systems to look at it in a micro sense? That is, before one considers a trip to Mexico for care, might an injured worker in Philadelphia obtain identical care less expensively under relatively the same regulatory protections of care quality by travelling over a bridge to New Jersey, or vice-verse? 

Might the same or greater savings be accomplished with a trip from New Jersey to Florida, or vice-verse? Though there are some discussing medical tourism in terms of foreign countries, it does not seem to be taking off. With the increase in available information regarding charges and payments right here in the U.S., will there be more effort at seeking cost-effective providers and facilities? Will it result in shifting care within counties, within states, or will it go international?

There will be much more discussion of medical cost drivers, fee schedules, disparate fees, and medical tourism. But the news tells us that the subjects of medical cost and fee schedules are a "hot topic" from various perspectives. Over the next year, this will include discussion of Virginia adopting a fee schedule and states like  Arkansas, California, and Maine discussing adoption of closed formularies. Will further regulation be an (note, again I did not say "the") answer to the cost issues?

Some control issues are within the reach of the marketplace. Certainly a carrier cannot impose a closed formulary unilaterally, but with a pharmacy benefit management (PBM) process, significant control of prescription costs is possible. Through careful selection of facilities for surgery and other services, based on the knowledge of which facilities charge what, similar cost control may be possible through carrier action. 

Some will question whether state regulatory action is needed when the marketplace already has such tools available. Others may question why states would not regulate in order to bring marketplace uniformity. The questions are interesting and the development of how the data is put to use will be watched curiously. 

Wednesday, June 10, 2015

Redundant Costs?

A recent case on costs made some interesting reading. The Court in Coleman v. American Airlines settled a point that may have been seen as ambiguous by some.

Costs are an important topic in many workers' compensation cases in Florida. In the changes to the statute in 2003, the Legislature changed the taxation of costs statute. It used to allow taxation of costs by injured workers when they prevailed in a claim against the employer. The statute now affords that ability to a "prevailing party" against any other party. There have been a fair number of motions to tax costs filed by employer/carriers seeking reimbursement from unsuccessful claimants.

Coleman v. American Airlines is one of those cost taxation cases, in which the judge awarded the employer/carrier $2,645.70 in taxable costs. The court has previously ruled that such an award to the "prevailing party is mandatory." (Citation omitted).

The Coleman Court noted that the award of costs "is generally reviewed for abuse of discretion." Applying that test, the Court concluded that the reasonable costs would include the "cost for the original and one copy" of deposition transcripts, but would not include the additional $150.00 charged for "condensed versions of the deposition transcripts which was incurred in addition to . . .."

In the age of the digital PDF and the mandatory e-filing requirements of the statute, the question regarding the cost of even a copy may one day be raised. In the "old days" a copy made a lot of sense, because the original would be sent to the Judge as evidence in a case. The party filing that original would need a copy for preparation for trial and ready reference during trial. Paper was simply the way things were done. In the electronic filing paradigm, the "original" can be scanned and e-filed. That leaves the original paper document in the party's hands for use in preparation or for ready-reference during trial. 

In the digital age of the Twenty-First Century, we see many attorneys abandoning paper for their personal uses also. I attended a CLE program that detailed how an attorney tried a civil case recently with all of her/his materials and documents in PDF form on an electronic tablet (a "paperless" trial). This was seen as incomprehensible to several attorneys with whom I spoke at that seminar, but it appears some attorneys are in the "no paper" mindset. That may be driven by the expense and bulk associated with paper, or with the perceived benefits of having documents that can be readily searched for a term or phrase using software. 

Therefore, it is possible that some might see any paper copy as redundant in some future context. It is difficult to predict where the technology of today is taking us, and how it may change our worlds.

For now, however, there is clarity on the expense represented by condensed copies, or perhaps anything beyond the original and first copy (as the Court says "a third copy of the deposition"). The Court's logic seems less to do with the condensed nature in this case than with the redundant nature. 

The Florida Rules of Civil Procedure include the Statewide Uniform Guidelines for the Taxation of Costs in Civil Matters. To what extent these may control or influence workers' compensation cost claims is subject to the interpretation. Rule 60Q-6.24(3)(e) says "The Statewide Uniform Guidelines for Taxation of Costs in Civil Actions shall be considered by the judge in determining the reasonableness of an award of cost reimbursement." Thus, it appears that the Guidelines will be considered in such disputes. 

The Court in Coleman v. American Airlines did not cite the Guidelines. The Guidelines, however, specifically address costs associated with depositions. In section I.A.1., it provides that "litigation costs that should be taxed" include "[t]he original and one copy of the deposition and court reporter per diem for all depositions."

It appears that the outcome might be similar either under the analysis of the Coleman Court or the Guidelines. Both are interesting reading. 


Monday, June 8, 2015

Professor Burton as a Witness

There has been a lot of discussion in Florida about Padgett. The case has a lot of titles by which it is referenced, as I noted last fall in "a Rose by Any Other Name." The procedural path of that litigation is interesting. In Now We Know, I described how the case came to be pending before the Third District Court of Appeal in Dade County, Miami, Florida. In Update on Padgett, I gave a little coverage to the oral argument in the case and provided a link to the judges and the video.

Is Padgett significant? Questions like this are asked repeatedly as I run into workers' compensation professionals throughout the country. It is a difficult question because first you would have to define "significant." Understanding the context of "significant, many an attorney has pointed out to me that any benefit in workers' compensation may seem insignificant to some, but may be very significant to an injured worker seeking it. That is a fair caution to keep in mind when thinking about workers' comp. That is, "significant" may be in the eyes of the beholder. 

The Padgett analysis is getting some publicity though. WCI360 has a copy of the original order from last August. It coincidentally was issued by the Circuit Court on August 13, 2014 days prior to the annual workers' compensation conference in Orlando.  It seems probable to me that we will hear what the Third District Court has to say before the next annual conference. I recently noted that the decision could come any Wednesday.

To the substance of Padgett, one of the foundations upon which this order stands is the testimony of Professor John Burton. Professor Burton has been around workers' compensation since the National Commission in the early 1970s.  He made several points which the Circuit Court noted in its order last August. 

Professor Burton contends that the country's shift to comparative negligence instead of contributory negligence made employees more likely to recover in a civil lawsuit against her or his employer. This, he contends, changes the "value" of what has been given-up by the employee in the "grand bargain." The right to sue, he says, is now worth more than it was in the days of contributory negligence. 

He also notes that "the limited amount of benefits that are paid currently for permanent impairment are conservatively less than would have been available under the law in the seventies." He concluded that Florida's impairment benefits for permanent partial disability are "nowhere near the standards that would be consistent with the National Commission's recommendations." This argument is essentially that what the employee received in the "grand bargain" is worth less than it used to be. 

It is worth noting that few states comply with all of the recommendations made by the Commission back in the 1970s. In fact, it appears that few states have ever complied with the recommendations. So does that mean that workers' compensation was not the "grand bargain" in the 1970s? Because the Commission did its work in the early 1970s, before the reforms that have occurred throughout the country, has the level of benefits ever been sufficient from Professor Burton's perspective?

The affidavit of Richard Berman relied upon by the Judge in Padgett, describes the law becoming "unconstitutional as an exclusive remedy in stages," and notes that there was no additional benefit added in 1973 "to account for the change in the value of the 'trade'" that is workers' compensation. He seems to agree with Professor Burton's conclusion, which seems to be that the value of benefits has declined, the odds of prevailing in tort and thus the value of being able to sue in tort increased, and thus what may have been a fair trade (or Grand Bargain) is no longer such. 

Illinois struggles with workers' compensation in 2015, which has been in the news. The Illinois legislature convened a "committee of the whole," essentially a committee meeting to which the entire house of representatives was invited. It is in the committee meeting process that people other than legislature members testify and discuss topics. Professor Burton was one of the speakers. His testimony is available on Jon Gelman's blog

His testimony says the following: 

• The 1960s. Statutory benefits increase by more than 28 percent. 
• The 1970s. Statutory benefits increased by more than 50 percent. 
• The 1980s. Statutory benefits increased varied over the decade: up 18 percent in the first five years but only 5 percent in the last five years. 1985. 
•The 1990s. For the first time since at least the 1950s, statutory benefits declined during the decade, although the decline was only one percent. 
• The 2000s. Statutory benefits declined over five percent during the decade. 

• The 2010s. Statutory benefits have been essentially been flat. 

This is interesting. Workers' compensation has been in Florida since 1935. Do the statistics cited in Professor Burton's testimony mean that a dollar of benefits in the 1950s became $1.28 ($1.00 x 1.28) during the 1960s? Did that become $2.78 ($1.28 x 1.5) in the 1970s? Did that become $3.28 (2.78 x 1.18) in the early 1980s and $3.44 ($3.28 x 1.05) in the late 1980s? Does this mean that in the 1990s the decrease in benefits was to $3.40 ($3.44 x .99), and the decrease in the 2000s was to $3.23 ($3.40 x .95)?

Are these figures in actual dollars or have they been adjusted for inflation? Was there a real increase or an effective decrease due to the purchasing power of the money? If the figures are in inflation adjusted dollars, does that mean that benefits today are roughly 300% of what they were in the 1950s? Have benefits increased, or does inflation merely make it look that way? 

Effective and persuasive testimony would make these questions clear. For the bargain to remain "grand," must benefits consistently increase? Is the overall economy worthy of consideration in this regard. So many people saw decreases in the 2000s, in purchasing power of their money, in compensation, in value of their investments. It was a tough decade on many in the United States, and in fact the world at large saw economic struggle. 

Professor Burton testified in Illinois that some of the changes in workers' compensation are focused on limiting employer liability for some injuries, through what he refers to as "more restrictive eligibility standards." He itemizes such things as requiring objective medical evidence of injury, limits on stress claims, and limits on coverage for aggravation of pre-existing conditions. 

He testifies that a Major Contributing Cause (MCC) standard in Illinois could "jeopardize the exclusive remedy provision in workers' compensation." There is a lengthy discussion of Oregon's efforts with an MCC standard. He notes that Oregon's Supreme Court has concluded that the legislature cannot "eliminate both the workers’ compensation remedy and a tort remedy when the employment is not the major contributing cause of the condition." He concedes however that "similar constitutional challenges in other states have not all been successful."

The Illinois testimony is an interesting read. As is the Judge's ruling in Padgett

There seems to be a building consensus among the prognosticators and arm-chair, Monday morning quarterbacks. The general belief is that Padgett will be reversed by the Third District based upon procedural issues and sent back to the trial court. Few believe that the District Court will affirm the order or that this case will progress to the Florida Supreme Court.  

Is Padgett significant if that is the outcome? Some would argue it is not, and that it becomes a footnote in an otherwise tense year of waiting on other Florida Supreme Court decisions in more significant cases like Casellanos and Westphal. When I hear that, I always question whether either of those cases will be "significant" and remind myself that their significance depends perhaps on their outcome. Either could be a landmark case, but either could also be yet another footnote. That depends entirely upon the perception of the marketplace to the Court's decision.

Others would argue that even if Padgett is reversed, the decision and testimony quoted therein is significant in that it engendered a great deal of discussion about workers' compensation in Florida and across the country. If the propensity to generate discussion and debate equates to significance, then one might argue that Padgett is already significant. From the Circuit Court in Miami, it has been a topic of conversation in  many seminars and likely coffee shops over the last year. 

Regardless of the decision of the Third District, the debate will continue about the "grand bargain." The news might do a better job of clarifying the debate. Did American workers' compensation benefits actually rise as Professor Burton said, or were those increases inflationary effects? Did the benefits actually decrease in the 2000s or were those likewise deflationary effects? Knowing these things in context would add to the quality of the debate that now rages. 

In classic attorney fashion, I will tell you whether Padgett, Castellanos, and Westphal will be significant. The answer is "it depends." I sometimes wish that someone could be more concrete and clear. I wish that there was not so much uncertainty, but the fact remains that there is. Whether and how significant these decisions may be will depend upon them and how the marketplace perceives them. Unfortunately, no one can accurately predict. And so we wait. And the wait itself may be drawing to an end.