Tuesday, November 22, 2016

New Case Volumes Grew in 2016

Every year, the Florida Office of Judges of Compensation Claims submits a report regarding the state of Florida's adjudication system. This year's report is in the proofing stage and will be published close to November 30, 2016. The following is an excerpt from that report.


The volume of “new cases filed” has been tabulated only since the OJCC was transferred to the DOAH in 2001. The term “new cases filed” refers to the volume of PFBs filed, which represent the first PFB in the history of that particular accident by that particular injured worker. 

Workers’ compensation cases often involve the litigation of multiple, serial PFBs over the course of years. The rate at which “new cases” are filed is indicative of the rate at which cases are entering the OJCC litigation process, and is not affected by the serial nature inherent to workers’ compensation generally, and thus of PFB filing.

Generally speaking, this is the inverse of the volume of settlements approved in a year, which is similarly statistically indicative of the trend rate at which cases are leaving the OJCC litigation process. Although cases can be resolved without settlement, those that are not settled may have some potential to return to the litigation process regarding some future additional claims or issues. The “new case” measure may arguably be a more accurate indicator than PFB filing volume of the effect of legislative changes to the substantive benefits provided to Florida employees through chapter 440, Florida Statutes.

However, a “new case” filed in 2015-16 could involve an accident that year, or could involve an accident that occurred years prior. It is possible that an injured worker might receive all benefits due, without any need for litigation, for many years following a work accident. Such a case may enter litigation after many years of administrative delivery of some benefits. The OJCC has not attempted to delineate the age of accidents that enter the OJCC system as “new cases” each year.
      
The volume of “new cases” filed steadily declined after 2003 statutory amendments. The rate of decline in “new cases” filing was less than the rate of PFB decline in almost every fiscal year since 2003. An exception was 2009-10, when “new case” filing decreased over ten percent (10%) compared to an overall PFB filing decrease of eight percent (8%). In 2013-14 and 2014-15 “new case” filings increased slightly. That trend continued in 2015-16, and the rate of increase may be strengthening. The following graph depicts the declining OJCC “new case” filings (red), and the PFB filings (blue).



These figures support that “new cases” and PFB filings each increased significantly between 2001-02 and 2002-03. Notably, in 2004-05 (107,319), two years after the 2002-03 volume “spike” (151,021), PFB volumes returned to a level reasonably consistent with 2001-02 (115,985). The “new cases” volume similarly “spiked” markedly in 2002-03 (56,869), but returned to pre-2002-03 levels only five years later, in 2008-09 (33,995).

This comparison supports that overall PFB filing volume has demonstrated more elasticity than the “new cases” volume. The coincident increase in both PFB and “new case” volumes in 2013-14 had not occurred since 2002-03. It was suggested in the 2014-15 Annual Report that a demonstrated second year of increased volume could be significant. It is now suggested that the third year of increase in 2015-16 substantiates an upward trend, of as yet unknown extent or cause.

The volume of “new cases” filed may also be expressed as a percentage of the gross volume of petitions for benefits (PFB) filed during the same time period. This compares the relationship of each annual “new cases” volume to the corresponding annual overall PFB filing volume. This comparison demonstrates that the percentage of all PFBs that were “new cases filed” remained fairly consistent after the 2003 reforms; in fiscal 2003-04 (34.5%) and 2004-05 (35.9%). As overall PFB volumes have decreased significantly, and “new case” volumes decreased more moderately, the percentage of “new cases” has remained above 40% since 2005-06, and the overall trend has been upward, peaking in 2014-15, and most recently trending down.


In summary, the available data supports several conclusions. First, the overall PFB volume stabilized in 2008-09, and returned to a measured and consistent decline thereafter. In 2013-14 PFB volume began to increase, and that trend has continued over the last three years. The volume of “new cases filed” has decreased at a much slower rate generally, punctuated by a marked decrease in 2009-10 (10.21%) and a marked increase in 2013-14 (2.97%).  The trend for “new cases” is likewise now trending upward for the last three years. However, the PFB volume is still remarkably lower than historically experienced. The 2015-16 volume is similar to 2009-10, but remains much lower than in the years 2001 through 2008-09. 

Though the percentage of “new cases” has declined to 46.3% in 2015-16 (as the rate of increase in overall PFB volume has strengthened), and is similar to percentages in 2008-09 and 2010-11, it remains significantly higher than in the first years of the century. This data does not support that constraints on the litigation process, that is the 2003 statutory amendments, are decreasing the litigation of issues in claims occurring after those revisions. The data appears to support the contrary, that litigation involving new claims remains reasonably consistent, while litigation on previously filed claims has decreased over time.

The intuitive conclusion from this analysis might focus on attorneys’ fee payments, as amended in 2003. One might conclude that there is a perception that litigation early in a claim was more lucrative than subsequent litigation. Such a perception might be demonstrated by a willingness to file new cases, but reluctance to litigate arguably minor issues thereafter due to fee compression. It is possible that the potential volume of future benefits is sufficient, early in a claim, to accommodate litigation. 

This may be more supported in claims that are completely denied, or in which there are vast disparities in perceptions of the degree of future medical care required, leading to denial of benefits with significant monetary value and thus significant associated fee issues under the statutory formula reiterated in the 2009 legislative session. If this contention holds, Florida might expect to see continuing increases in PFB filing volume with the judicially created attorney fee changes.
      
In the past fee statute iterations, hourly fees were common. Thus, there was less compression on fee entitlement in subsequent litigation of comparatively minor medical issues. With hourly fees, litigation was economically viable on moderate to low monetary value benefits regardless of the stage of that claim in which such benefits were sought. The strict percentage fee calculation in place since 2009 may have influenced market behavior, and their elimination may likewise affect behavior and therefore volumes.



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