Thursday, November 16, 2017

Staffing, Compensation, and Opt Out (4)

People are talking about workers' compensation, perhaps more today than ever. This is the third in an 11-post series (links to the first two are at the end of this post), that attempts to overview various perspectives heard from system observers and participants. The point is that discussion is good, and if this series generates debate and interaction, all the better.

Staffing and training of the workers’ compensation professions 

There is a perception of difficulty in recruiting and retaining staff for workers’ compensation. As an industry, workers’ compensation is faced with many challenges: e.g. complexity, frequency of litigation, and regulatory constraints. Some perceive these challenges as disincentive for professionals to enter, or remain in, this field. That may affect a spectrum of professions including claims adjusting, medical, risk management, and vocational rehabilitation. 

If workers’ compensation is more complex than other segments of the insurance industry, there is concern that talent will be consistently drained from this field. As expertise and talent migrates to other segments of the insurance market, workers’ compensation is challenged with persistent turnover rates and burnout. 

Similarly, there are perceptions regarding service providers, including medical doctors, disinclined to participate in the workers’ compensation systems. Because of other issues involved in work accidents, discussed herein, medical care providers are called upon to make difficult decisions regarding complex issues such as causation and contribution.

Causation referring to whether an alleged work event resulted in the need for medical care and/or activity constraints; contribution instead referring to the quantification of causation, i.e. how much of the need for care and/or activity restraint is related to the alleged work event.

A medical care provider allocating resources and time may be disinclined to provide treatment for work injuries. This may be driven in some jurisdictions by fee schedules or similar reimbursement constraints that render other business/care more lucrative. In other instances, providers may be discouraged by the regulatory complexity (various reporting, forms, etc.) or the litigious nature of workers’ compensation. 

The perceived net result is that recruiting and retention of professionals in this field is difficult; thus, recruiting and training are persistent and represent a significant financial expense. Similarly, an absence of continuity and experience is perceived as potentially contributing to performance of professionals. It is possible that performance is degraded by lack of specific workers’ compensation expertise and by distraction of recruiting and training. Those providing services are perhaps persistently challenged by regulatory and legal instability, pervasive litigiousness, and complexity. Coincidentally, these challenges may contribute to discouraging recruitment and retention.

The concern is essentially that there is a perception of a cyclical decline in the longevity and expertise of providers and employees willing to work in these difficult systems.

Permanent partial compensation 

This is a concern related in part to the benefit sufficiency issue. There is a general concern as to the sufficiency of benefits that compensate for the permanent effects of a work injury. In a broader context, however, there is concern about the ancillary effects of compensation for permanent injury. 

In 2015, advocacy groups highlighted distinctions and differences in state worker’s compensation systems. A major focus was the disparity between states in compensation for the lasting (permanent) effects of work injuries. These disparities result from a variety of factors, and comprehension may be elusive. 

A fundamental at the core of disparity lies in determining what loss is compensated. In American workers’ compensation there are essentially two schools, “disability” and “impairment.” The former refers to the factual impact of injury, that is, the ability to work and any constraints thereon. Ability to work is irrelevant to the latter, impairment, which is not a vocational construct but a medical one. Impairment is an expression of physiological dysfunction as a result of illness or injury.

Each of these concepts faces challenges both in logic and practicality. A system that compensates “impairment” may provide significant permanent benefits to an individual that has returned to work following an injury, with no diminution in wages or wage-earning capacity. Critics fault this process for providing compensation where there is no demonstrable effect on earnings. Advocates of this process cite simplicity, efficiency and consistency as justifications. In impairment-based systems, guides (publications generated by committees of medical experts, cataloguing the extent to which various conditions or effects restrict anatomical function) are consulted, impairment rating(s) assigned, and payments calculated thereon.

In a “disability” system, impairment is minimally relevant or irrelevant. The critical point in disability is how injury affects employability or employment. If the effects of an injury diminish employment, then the systems compensate for diminution of earnings. Critics fault this system for discouraging return-to-work (those who return to work receive no permanent benefits and may perceive themselves “shorted” by the system), and view the process as more labor intensive and subject to factual disputes (which may encourage or require litigation. 

Either of these foundations may contribute to the litigious nature of workers’ compensation. In “impairment,” advocates may drive workers to different physicians or specialties in an effort to enhance the impairment and thus the damages. In a “disability” system, the same behavior can occur, but would be focused on work restrictions (functional activity constraints) enhancement instead of impairment. 

Beyond this foundational distinction, there remain other concerns. In the event that vocational ability is relevant (“disability”), systems’ legal or regulatory specificity regarding return-to-work may be relevant. In measuring, a state may find relevance in whether an injured worker can return to her/his former employment (specific) or “any” employment (unlimited). 

Whether permanent benefits are limited in duration (disability) or extent (impairment), limitation is common in various systems. Either system may affect inequities among various individual injured workers. Inequities, or perceptions, drive emotional perceptions and conclusions about the systems, fairness, and justice. 

Opt-out movement

Workers’ compensation is a mutual renunciation of common law rights. Both employers and employees have given up rights and enjoyed benefits by participation in these systems. Primarily, employees gain the right to more immediate benefits without resort to litigation. The benefits are more certain, and in most instances are not subject to reduction based upon the employees fault.

In some jurisdictions, tort damages may be obviated completely if an injured party is in any part responsible, called “contributory negligence.” There is a related legal construct called “assumption of the risk” that might be similarly employed. In other jurisdictions, the injured party’s responsibility is used to reduce damages due, in pro-rata share with the fault. Thus a party 50% responsible for her/his own injuries might only be allowed to recover the other 50% of the determined damages from the injury.

The primary benefit to employers is similar. The more certain measure of benefits that benefits employees also provides employers with predictability. And, though the employer loses the damage limitation defenses such as comparative negligence, it also avoids the uncertainty, delay and expense of the tort litigation system, as well as avoidance of various damages mentioned above. 

Since the 1990s, various systems have allowed employers to enjoy the benefits of workers’ compensation law, without participating in the jurisdiction’s workers’ compensation system. These statutory constructs allow certain employers to “opt out” of a particular system and instead to administer a parallel system of its own. Generally, such allowances were referred to as “carve-out” systems, and the employer was allowed to do so only if subject to a collective bargaining agreement; thus only with the acquiescence, if not participation, of the employees. As of 2013, according to workers’ compensation scholar Hon. David Torrey of Pennsylvania, twelve states (California, Florida, Hawaii, Illinois, Kentucky, Massachusetts, Maryland, Maine, Minnesota, Nevada, New York, and Pennsylvania) afforded employers this “carve-out” option. This group includes some of the largest workers’ compensation systems in the country, including California, Florida, and New York.

Additionally, the second most populous jurisdiction in the country, Texas, does not mandate participation in its workers’ compensation system. Texas’ voluntary process can accurately be called an “opt-in” system, in which employers may obtain the benefits of workers’ compensation by volunteering to participate and providing benefit coverage for its employees. 

In 2013, Oklahoma’s legislature expanded upon the decades-old “carve-out” construct, extending the ability to “opt-out” to any employer, regardless of participation in collective bargaining. Following passage of that provision, a number of Oklahoma employers did opt-out and provided alternative benefit plans purportedly under that legal construct of ERISA (The Employee Retirement Income Security Act of 1974.). In the years following, proponents of the “Oklahoma Opt Out” attempted unsuccessfully to modify the law in Tennessee and South Carolina to afford a similar option to employers. 

Many critics oppose the “Oklahoma opt-out” concept in general terms, though there were various reasons expressed. The Summit did not discuss the existence or effect of the various collective-bargaining dependent opt-outs already in existence.


Other posts in this series are:





(4) Staffing and training of the workers’ compensation professions, Permanent partial compensation, Opt out movement

(5) Injured workers beliefs - not informed or uninformed assumption, Treatment protocols, a benefit or a burden, Perceptions and education

(6) Vocational rehabilitation, Ability versus disability, Methodology of claims handling

(7) Medical ignorance, The critical point in a claim, People who are acting inappropriately

(8) Misclassification, Unrealistic expectation of full recovery and youth, Federalization

(9) A new national commission?, Employee participation in the conversation, Occupational disease

(10) Lawyers in the system, Competition between states, Roles and delineation

(11) Single payer, Outliers, Conclusions

Tuesday, November 14, 2017

The 2017-18 Annual Report and Litigation Volumes

Each year, the Florida OJCC issues an annual report documenting various metrics of litigation character and volume. Two of these are the rate at which petitions for benefits ("PFB") are being filed and another is a subset of that volume, the rate at which "new cases" are filed. Both volumes have demonstrated, with some minor exceptions, a general downward trend until recently. 

The Florida workers' compensation law requires reporting on the volume of "litigated cases." It is difficult to ascertain with absolute certainty how many “cases” are in litigation at a given moment however, because in Florida workers’ compensation there simply is no clear definition for “cases.” 

Litigation in Florida workers’ compensation is usually instigated with a PFB. A particular PFB filed might seek a single benefit, or many  various benefits. A workers’ compensation trial might decide the issues in one PFB or several PFBs serially filed prior to trial. The overall number of PFBs filed is therefore only one measure of system volume. 

A second measure of “case” volume is the “new case” PFBs filed annually. Each “new case” PFB certainly represents an accident for a particular injured worker that is new to litigation, i.e. “new” to the OJCC. This metric measures “new” litigation, but ignores the intensity of litigation. Conversely, the overall PFB number more accurately reflects litigation intensity.
      
Each metric is an arguably valid method for measurement of the number of litigated cases. Because there are merits regarding the efficacy of both the “raw PFB” measure and the “new cases” measure, the OJCC calculates and reports each. Notably, each of these metrics ignores a third metric, the volume of litigated cases that are instigated by motion instead of PFB. Although these motions also represent litigated “cases,” it is believed that cases instigated by PFB filing effectively represent litigation volume trends statistically. 

Gross Petition for Benefit (“PFB”) Filing
                                               
Significant legislative amendments were enacted in 1994 and 2003. After the 1994 reforms, PFB filing volume consistently increased each year. Just prior to the 2003 reforms, annual PFB filings peaked at 151,021. The progressive increase in PFB filings between 1994 and 2003 belies the efficacy of the 1994 reforms’ intent to decrease litigation. Immediately following the 2003 reforms, the PFB filing volume decreased at a consistent annual rate of approximately fifteen percent (15.21% to 15.9%) over each of the next three years, and then continued to decline with reasonable consistency through fiscal 2013 with the sole exception of a slight increase in 2008-09.

Modest PFB filing increases in 2013-14 and 2015-16 were followed by a marked increase of twelve percent (12%) in 2015-16. Questions were raised in the 2015-16 Report regarding whether a trend was potentially suggested by that significant increase. The five percent (4.6%) PFB filing increase in 2016-17 may be seen as indicating such a continued trend of increased filings. It is notable that the 2016-17 increase, while not as marked as 2015-16, is the second highest increase since 2003-04.

New Case Filing      
       
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. While the overall PFB filing volume may indicate litigation intensity, the rate at which “new cases” are filed is perhaps more indicative of the rate at which cases are entering the OJCC litigation process (volume), and is not as affected by the serial nature inherent to workers’ compensation generally as overall PFB filing.
      
A “new case” filed in 2016-17 could involve an accident that year, or could involve an accident that occurred years prior, even prior to the 2003 statutory amendments. 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 years of administrative delivery of various 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 case” filing was, however, less than the rate of PFB decline in almost every fiscal year since 2003. The exceptions are 2009-10, when “new case” filing decreased over ten percent (10%) compared to an overall PFB filing decrease of eight percent (8%); and, in 2013-14 through 2016-17 “new case” filings increased slightly. 

The “new case” filings have not been as elastic as PFB filings. The PFB filings returned to 2001-02 similarity much more rapidly than “new case” filings. While there has been some parallel in the trend each demonstrates, the PFB filings have changed more dramatically. In the 2014-15 Annual Report, suggestion was made that the downward PFB trend might be ending. The data since that time substantiates that prediction. However, the extent of that change, as well as duration, remains to be seen.

Summary 

In summary, the available data supports several conclusions. First, the trend since 2013-14 has been to increasing PFB volume. Second, the volume of “new cases filed” historically decreased, and then rebounded at a much slower rate than PFB filing. Third, the PFB volume has increased, but nonetheless remains below the volumes demonstrated before and immediately after the 2003 reforms. Finally, though the percentage share of “new cases,” compared to the overall PFB volume, has moderated notably in the last two years, it remains significantly higher than prior to the 2003 reforms. 

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 has decreased after 2003, but now remains reasonably consistent, while litigation on previously filed claims has more significantly fluctuated over time.

Observers strive to reach conclusions explaining the fluctuating litigation levels. The changes in attorney fee calculation are mentioned, as are the changes in Florida's economy (the "great recession" and the "housing bubble"), as are the overall indications that workers' compensation injury rates are continuing to decrease. 

Sunday, November 12, 2017

Because the Statute Says So

I recently had an intriguing conversation with another state's  (not from Florida) workers' compensation regulator. I am encouraged by these opportunities to interact with leadership from other states, and to understand what they perceive to be the challenges of administering Worker's Compensation systems. I hear expressions of frustration with the inhibitions to change, concerns about perceptions of their agendas and efforts, frustration with operational and budgetary impediments to progress. I hear pride in accomplishments and successes. These are some great conversations. 

This particular regulator recently happened upon some statutory language of concern in that state. The language had existed for years, but was not being followed. The statute required that state's workers' compensation agency to assimilate and report certain data, which it wasn't. The discovery led to questioning why compliance was ignored regarding this particular statute. Essentially, the recurrent answer was apparently "that's the way it's always been done," ("it says that, but we've never done that"). There was also some measure of "if anyone cared," then there would be questions and comments directed to this particular data absence.

Change for the sake of change can be more frustrating than necessary. I am not a fan of making changes without being able to explain both the "why" and the "how." We always have to keep in mind that there are a fair number of us who both resist change, and find it stressful. So, with the potential pitfalls of change, we should be careful to bring change only when it is appropriate. By the same token, there is merit in periodically questioning why processes and procedures currently exist as they are. I do not believe the answer "that's the way it's always been done," is necessarily a reasonable reason to continue along some path.

Examples are all around us. I remember people at the turn of the century using cardboard "date wheels" to calculate deadlines. They resisted evolution to computer programs, but the resulting efficiency was worth the stress of change. The same could be said for electronic filing, electronic service, email, and more. I remember an attorney complaining that to e-file he would have to replace his secretary's typewriter with a computer. Change can challenge us, but change can absolutely be positive. The point is to make that change after thoughtful consideration and focus it upon a real and justifiable improvement. 

However, in the statutory context, "that's the way it's always been done," is even less persuasive. The situation described to me was a clear statutory mandate for the workers' compensation agency to compile certain data. The regulator I was speaking with expressed frustration with the non-compliance, but more so with the seemingly unanimous sentiment in support of ambivalently continuing non-compliance. There was an apparent feeling that complying with the statute was not important, and that if it were then someone outside the agency would be voicing the concern ("why fix it until someone else notices and complains"). 

The people elect representatives. Those representatives debate policy, formulate statutes, and therein allocate resources. Those legislative decisions are subject to the analysis of elected governors, who may endorse or veto such decisions. Once those decisions are made, however, they are law. Certainly, it may be that people might not understand those laws. However, it is the obligation of the regulators involved to strive to comply with those laws. 

Certainly, those decisions must be consistent with the broader legal constructs of this country, for example the guiding principles of both the federal and applicable state constitution. Statutory constructs must be consistent with other statutory enactments, to avoid confusion and chaos. Thus, there is yet another "check and balance," the courts, on the laws enacted by the people's elected representatives. Regulators must of course be conscious of those constraints in the performance of their duties and in their efforts to fulfill statutory obligations. But no such concerns or constraints were expressed here, merely, "that's the way we've always done it."

In this instance, a state law seemingly required certain compilation and reporting. The regulator was told simply "it says that, but we've never done that." And questions as to "why" or "why not" were replied to with platitudes. I was proud of this regulator who essentially concluded that it was worthwhile to explore the subject more carefully, more introspectively. Whether it is practical or even possible to perform the statutorily assigned task there remains to be seen. But, there is value in the examination, evaluation, and discussion. If it turns out they "cannot," that is a better answer than "we never tried."

Change for the sake of change likely helps no one. Rigid and unthinking resistance to change as likely helps no one. Conversely,  open discussion of change likely hurts no one. I was pleased to hear from this regulator, and impressed by the decision to meaningfully discuss what that state's lawmakers have sought, and the potentials for effectuating that. 

In the spirit of reporting, the Florida OJCC publishes an Annual Report. It is mandated by statute, with several specific categories of data required. The report contains those, and an assortment of others that hopefully provide a complete picture of the efforts and mission of the OJCC. Notably, there are questions that cannot currently be answered (with current resources), such as the volume of petitions filed by pro-se workers. That is a question the legislature has statutorily asked, but which our database cannot really answer today. The programming could be changed, but we have limited resources for change each year, and that one has not reached the top of the priority list. So, the OJCC answers the question in the best manner practical today and looks to improve that in the future. 

Over the next several Tuesdays, portions of the 2017 OJCC Annual Report will be featured in this blog. It is hoped that this information is of use to the Floridians which this Office serves. And, it is pertinent that we will continue to think, reevaluate, and openly discuss how we can do a better job, of delivering service, documenting data, and serving Florida. We are proud of our progress, but not complacent. The future will bring change, and we look forward to that with you. 

Thursday, November 9, 2017

Failures, Incentives, and Adversarial (3)

People are talking about workers' compensation, perhaps more today than ever. This is the second in an 11-post series (the first is here, links to others are at the end of this post), that attempts to overview various perspectives heard from system observers and participants. The point is that discussion is good, and if this series generates debate and interaction, all the better.

System failures

By their very nature, workers’ compensation systems must be many things to many people and groups. As a result of this necessitated service of much to many, the converse that is mandates is that no system can be all things to any person or group. By their very nature, workers’ compensation systems will be imperfect compromises. Most modern systems will be the product of evolutionary development, with statutory supplementation or amendment occurring in small steps over long periods of time. Many have undergone larger modifications periodically, commonly referred to as “reform.”

“Reform” is generally defined as changes intended to improve something. Because of the many perspectives and internal bias, it is likely that various individuals and groups might have different perspectives on whether these “reforms” have overall been improvements or detriments. Because these “reforms” have also been produced in the legislative or regulatory processes that demand compromise, it is also likely that most persons or groups will find some element of a given “reform” to be positive from their or its perspective.

Critics and participants alike perceive failure in systems that provide less than a seamless response to work injuries. They lament that systems’ complexity and structures have resulted in perceptions of delayed and incomplete care, gaps in monetary benefit delivery, and dissatisfactory recovery of function and ability. The national press comparisons of benefit calculation and delivery, process and procedure, definition and regulation state to state is perceived as contributing to imperfect beliefs , expectations, and the adversarial nature of the systems.

There is a sentiment that workers’ compensation suffers from a poor reputation related to some of the concerns discussed in this report. Summit attendees see the reputations as deserved in some instances but ill-informed and undeserved in others. There is a general consensus that improving the reputation and positive perceptions of the systems would involve a culture shift; some believe that advancements on the issues discussed herein, particularly as they come from voluntary interaction and discussions rather than mandate, might begin a culture-shift that would facilitate such a change in perceptions and criticism over time.

Incentive is different in WC and group health

All economic systems are driven by costs, financial or otherwise. In base form, much human behavior is likewise driven by perceptions of cost/benefit analysis. commentators have identified multiple instances in which individual or systemic cost/benefit analyses are perceived as incentivizing behavior by system participants.

Workers’ compensation systems are significantly regulated (see #2). One notable example is regulatory constraint of reimbursement to service providers (medical doctors, etc.). In the marketplace, there may be prevailing service rates for health insurance, self-pay, government programs (Medicare, Medicaid, Veteran’s Administration) and workers’ compensation. It is possible therefore that a provider may perceive economic benefit in a particular conclusion. If a procedure is reimbursed by workers’ compensation at a rate double that paid by health insurance, a provider may be inclined by self-interest to opine that an injury or illness is work-related. The concern voiced is that the provider will perform the service in any event, and will seek the maximum economic benefit therefore.

The potentiality of such self-serving opinions has driven discussion of “cost-shifting” in the services related to workers’ compensation. There is no unanimity as to the result however. Most acknowledge the potentiality for shifting, caused by disparate economic incentives. Some perceive a tendency for work-related injury/illness care being shifted to health insurance or social medicine, while others perceive the opposite tendency of non-work injury/illness being shifted to workers’ compensation.

The incentive concern is also voiced in employee choices. This may be in the context of seeking workers’ compensation treatment, or in the context of benefits.

An employee is unlikely to have a choice regarding coverage for workers’ compensation. Generally, statutory constructs define which businesses must be covered. Business owners not required to participate are nonetheless able to elect voluntary participation. Thus, employers but not employees are afforded some choice regarding system participation. Conversely, many employees will have significant choice regarding the purchase of private disability insurance, group or individual. Employees may likewise have significant choice regarding whether to purchase health insurance, or at least the parameters of such a purchase.

Despite the mandatory nature of the Affordable Care Act of 2010, some conversation participants believe that a significant population of Americans remain without health insurance.

Health insurance is a dynamic product. It is valued based upon risk to the payer, which in turn is perceived based upon a number of variables. Older patients may be more likely to require care than younger patients; policies with high annual deductibles may be less likely to result in significant loss to a payer; policies with significant co-pay provisions may discourage policy holders from seeking covered care.

Thus, an injured person may face significant personal expense for care if an injury or illness is deemed “personal” rather than workers’ compensation. This potential may influence a service provider, perhaps persuading that any conclusion of “personal” will result in deferral or refusal of care and diminished or eliminated recovery and return of function. In that setting, a concerned service provider’s scientific opinions might be influenced in a manner to outweigh contrary business interests (opinion an injury/illness is work related to facilitate care, despite reimbursement that would perhaps be less than health insurance).

Similarly, damages are statutorily defined and therefore potentially limited in workers’ compensation. Indemnity benefits are generally paid during specific periods defined by the existence and extent of medical imposed limitations or restrictions. Some perceive the absence of non-work related disability coverage as potentially motivating allegations of work-relatedness. An injured individual without such disability coverage could suffer significant economic damage from a decision that some injury or illness is not work-related.

When an injury or illness is work-related, indemnity remains delimited by restrictions on work. There are no damages in workers’ compensation for pain, suffering, loss of consortium or otherwise, which may be awardable in a tort claim. Some Summit participants contend that an injured worker might be incentivized to magnify symptoms or otherwise represent condition in order to attain damages for the injury.

Systems are persistently adversarial

A fundamental objective of workers’ compensation is the absence of litigation. The vast majority of jurisdictions have created administrative adjudicative systems for resolving disputes regarding benefit entitlement. However, these systems have evolved over time. There are increasing similarities between administrative adjudication systems and tort processes in state courts.

This concern is related to other concerns (See discussion in upcoming post, "Lawyers in Systems"). Legal challenges in other benefit delivery systems are perceived as less likely. Some see this incongruent with the nature of contractual relationships generally. In most cases, health insurance is “first-party” insurance. People purchase coverage for their own benefit. Workers’ compensation by comparison is “third party” coverage where the purchaser (employer) is procuring coverage for the benefit of some third party (employees). In most first-party insurance, parties in disputes are responsible for the payment of their own attorney fees and costs. There are exceptions to this general rule created by statutory frameworks for “prevailing party” fees in a variety of jurisdictions.

In most jurisdictions, there is a dual purpose attorney fee provision included in workers’ compensation programs. The first is to compensate attorneys who pursue benefits on behalf of workers. Courts have also interpreted attorney’s fees as a penalty (cost) that deters inadvertence or egregious benefit denial.

The result has been an increasingly adversarial system in which claiming benefits, and litigating entitlement, has become commonplace. Some see this as encouraging distracting litigation and conflict, which detracts from the foundational purpose of workers’ compensation.




(4) Staffing and training of the workers’ compensation professions, Permanent partial compensation, Opt out movement

(5) Injured workers beliefs - not informed or uninformed assumption, Treatment protocols, a benefit or a burden, Perceptions and education

(6) Vocational rehabilitation, Ability versus disability, Methodology of claims handling

(7) Medical ignorance, The critical point in a claim, People who are acting inappropriately

(8) Misclassification, Unrealistic expectation of full recovery and youth, Federalization

(9) A new national commission?, Employee participation in the conversation, Occupational disease

(10) Lawyers in the system, Competition between states, Roles and delineation

(11) Single payer, Outliers, Conclusions

Tuesday, November 7, 2017

Reweighing Evidence and Appellate Review

Courts hear cases, and they issue decisions. In appellate parlance, the review may come by appeal or by writ, recently featured in Writ Protection as Opposed to Appeal. Many times, an appellate court will rule without explanation, referred to as a Per Curium actions. They come in two main varieties, the Per Curium Affirmed (PCA) which essentially means "the Court will not reverse the trial judge and will not explain why," and the Per Curium Denied (PCD) essentially "the Court will not grant relief and will not say why."

Lawyers find both of these frustrating. They are the legal profession's equivalent of when your mom explained you could not do as you wanted, "because I said so." As you may recall, no amount of "but why" ever garnered further explanation. That is not always true in appellate work. Sometimes a motion for rehearing  ("but why," or "but what if")(the same three appellate judges hear the case again) or a motion for rehearing en banc (the whole appellate court hears the case), will afford a second chance to explain perspectives and to perhaps change the result. Even when the result is not different, one might at least get an explanation (or better explanation) of the "why" of the decision.

Sometimes when the court issues a PCA or PCD decision, one of the judges will nonetheless write a concurring opinion. This is a "comment" by that judge, not an opinion of the Court. It is important to remember that when an appellate court issues an opinion, that interpretation of the law governs all of the trial courts within that appellate court's jurisdiction. 

That means that a decision by the Florida First District Court of Appeal (DCA) is what lawyers call "mandatory" authority for all of the Florida Circuit and County Courts from Alabama to Jacksonville, and south to Gainesville. The jurisdictional territory of the First District is very large. In addition to that, the First DCA has jurisdiction over all workers' compensation appeals in Florida, from Key West to Jacksonville, to Pensacola and all points in between. But, a concurring opinion on a PCA or PCD is not controlling. It may be persuasive, that is it might convince a trial judge to rule in a certain manner. But the trial judge does not have to follow the concurrence. 

Recently, in Rodriguez v. IPC International, the First District issued a PCD, dismissing a petition for extraordinary relief, called "certiorari." In this case, the Court noted that the petition was seeking extraordinary relief. That is, the intervention of the appellate court immediately, before there is a trial and a final decision by the trial judge. If every preliminary decision of every trial judge could be appealed, we would need many more appellate judges and courts. So, in order to be entitled to this certiorari review before a final outcome, the petitioner has to demonstrate "irreparable harm." That means that the situation is one that will not be capable of repair or remedy after the trial and the final decision. 

In Rodriguez, the Court dismissed because the petition did not demonstrate "the irreparable harm necessary for certiorari review." 

But, Judge Wetherell wrote in Rodriguez to explain his agreement with that decision and to note that he would have denied relief on other grounds. He concluded that the trial judge in this matter "applied the correct law and reasonably based her" conclusions on evidence that was presented. He noted that since there was evidence to support her decision, that this petition for extraordinary relief was, from his perspective, "nothing more than a thinly veiled request for this court to reweigh the evidence presented to the JCC."

Generally speaking, appellate courts do not weigh (or re-weigh) evidence. They are not courts of "second chance," but courts of "error." That is, they are charged with making sure that sound legal interpretation is made by trial judges. They are not courts that re-hear or re-weigh evidence, generally speaking. The rule that is oft-quoted is one of "competent substantial evidence." This was explained to me years ago as follows: 
an accident occurs at an intersection. One hundred witnesses say the light was green, and a video seems to also support that. Only one witness says that the light was red. That one witness had been drinking on the day of the accident and was not wearing his prescription eye glasses. The trial court (judge or jury) could nonetheless choose to believe the one witness and disbelieve the 100 others. In the appellate court review, the existence of the one witness, despite his drinking, glasses and overwhelming contrary evidence, would be still be "competent substantial evidence" and the appellate court would affirm the trial judge or court's decision to rely upon the one witness.

Which witnesses are credible or believable is a decision for trial courts, not appellate courts. Trial judges should explain why particular testimony or evidence is accepted or rejected, but that is their role. Judge Wetherell noted that the Rodriguez petition essentially invited the appellate court to abandon this appropriate role and to undertake the role of the trial court. That, he noted, is "not the proper function of this court, particularly in an extraordinary writ proceeding." Judge Wetherell's opinion in Rodriguez is a comment, not binding authority. 

But, there is ample authority supporting that this reweighing of evidence is not the appellate court's role. In Florida workers' compensation proceedings, the Florida Supreme Court has succinctly held in Croft v. Pinkerton-Hayes Lumber Co., 386 So.2d 535 (Fla. 1980). The Florida First District explained this again in Punsky v. Clay County Sheriff's Office, 18 So.3d 577 (Fla. 1st DCA 2009). Just last spring, the court reiterated this premise yet again in City of Jacksonville v. Ratliff, 217 So.3d 183 Fla. 1st DCA 2017). An appellate court's role is not to reweigh the evidence, but to review decisions for error.

In Ratliff, the court reminded that this "competent substantial evidence" standard does not change "merely based on the fact that expert testimony was submitted via deposition, so the JCC was in no better place than this Court to rule on credibility." in other words, just because the appellate court "could" effectively reweigh the evidence, that does not mean that the appellate court "should." Ratliff demonstrates, in fact, that there perhaps no probability that the appellate court "would" in a given circumstance. 

Though the concurring opinion (comment in Rodriguez does not make that the law, being perhaps persuasive, the decisions in Croft, Punsky, and Ratliff, among others, do make that the law. 

Jude Wetherell's concurring opinion in Rodriguez provides some guidance into the "why" that writ was denied. It also provides some reminders on the standard of "irreparable harm" that is required for extraordinary relief. More importantly, though, the decision reinforces that appellate courts are not a "second chance" to try the case. The chance to present evidence, and impeach evidence, and argue the case is at the trial. Lawyers and parties should remember that, and when trial day comes, bring the "A" game. 

Sunday, November 5, 2017

Anna Nicole Smith in Work Comp News

In 2007, Anna Nicole Smith was found dead in a Florida hotel. She was a high-profile Hollywood figure, whose life and death were chronicled in the American tabloid tradition. Her overdose made news, as did virtually every other aspect of her personal life, a tabloid feeding-frenzy. 


ABC News reported that Ms. Smith died from “the combined effects of nine different prescription drugs.” Though each was “present in levels lower than what would normally lead to overdose,” the “combination of the medications led to a toxic, and ultimately lethal, effect.” The offending chemicals included chloral hydrate, Klonopin, Valium, and Atavan, reportedly for the treatment of depression. There was also evidence of Benadryl, Tamiflu, Topamax, methadone, acetaminophen, and a variety of nutritional supplements. 

ABC noted that the presence of chloral hydrate was notable because its use had become rare. So rare, that one expert believed it would be difficult to obtain at many pharmacies. The drug had earlier enjoyed popularity, and “infamy as the notorious ‘Mickey Finn’ -- a drug that could be dropped into an alcoholic beverage in order to cause someone to lose consciousness.” But the drug had become antiquated and uncommon in the United States. 

The Daily Mail reported that Ms. Smith’s psychiatrist in California was “convicted of fraudulently obtaining drugs for Anna Nicole Smith,” and that resulted in a 90 day revocation of her medical licence. Dr Khristine Eroshevich initially “faced 11 charges involving drug prescriptions that were given to her patient.” The doctor was reportedly “initially convicted of two felonies” regarding prescriptions for Ms. Smith.” However the Daily Mail reported that “one charge was later thrown out and the other was reduced to a less serious misdemeanor status.”

And thereafter, Ms. Smith’s life and death faded from the front pages. But, Ms. Smith and Dr. Eroshevich made news again in October 2017 when WorkCompCentral reported Dr. Eroshevich has filed a federal case challenging her suspension from the California workers’ compensation system. In California, physicians can be banned from participating in the workers' compensation system, banned from treating injured workers. But, doctors that are banned in any state, may simply move to another.

Dr. Eroshevich has instead decided to fight her exclusion. She contends that the process which led to her suspension from the workers’ compensation system is unconstitutional. She contends that the “suspension is ‘wrong and inaccurate, and is capricious and arbitrary.’” Her conviction in the Smith case led to her being disqualified from providing treatment under the California Medicaid program, called Medi-Cal. 

That Medicaid disqualification in turn led to the notification of proposed suspension of privileges in the workers’ compensation system under Labor Code Section 139.21. That 2017 law is not permissive, but rather “requires the division to suspend providers who have been convicted of a felony or misdemeanor involving fraud or abuse of the a health care program, or who those have been suspended from participating in Medicare or Medicaid because of fraud or abuse.”

Dr. Eroshevich argues that Medi-Cal did not exclude her for fraud or abuse, but for only “the since-dismissed convictions.” Presumably, prescribing medication under false names for a celebrity that thereafter died would not be in the doctor's definition of "abuse." She was convicted of “conspiring to unlawfully prescribe controlled substances” to Ms. Smith, but a judge later “set aside the guilty verdict.”

This judicial erasure of the criminal conviction was apparently an exercise of discretion available to a California court when a “defendant has fulfilled the conditions of probation, or the court thinks it is ‘in the interest of justice’ to enter a plea of not guilty and set aside a verdict of guilty.” So, as a result of this later judicial pardon, the guilty verdict was set-aside, and the accusation of criminal activity in Ms. Smith’s death was judicially erased. There are likely some who struggle with understanding how convictions disappear in our legal system. 

Dr. Eroshevich alleges that she has applied to resume treating Medi-Cal patients. She says that “if that application is approved, it would eliminate the only other justification for her proposed suspension from California’s workers’ compensation system.” She complains that a workers’ compensation suspension based on the Medi-Cal suspension would violate her right to due process. 

WorkCompCentral noted that Dr. Eroshevich also previously faced allegations of misrepresenting the facts surrounding her interaction with a particular workers’ compensation patient. This involved her preparation of a “report indicating she examined the patient,” which contradicted allegations that she never met “the injured worker face-to-face.” The California Medical Board also alleged that Dr. Eroshevich nonetheless billed for the “time spent interviewing the injured worker.” While those allegations may seem troubling, there is no indication that the doctor was convicted of the allegations. While those allegations were raised, there was not apparently any conviction that resulted. 

Dr. Eroshevich also complains that suspension under Section 139.21 would exclude her from treating workers’ compensation patients permanently. She contends that there is no provision in the law to allow her to have that suspension reviewed or reversed, which she says “actually creates a ‘termination process,’ not a suspension process.” To some, that may seem a mere word game, but there is some potential that a judge would see such parsing persuasive. 

When those convicted of criminal activity can successfully have their convictions erased, as California apparently does, it is perhaps difficult to understand how some civil process could nonetheless impose sanctions for behavior. If a criminal conviction results in no permanent penalty, Dr. Eroshevich appears to question the constitutionality of a civil suspension that would carry permanent consequences. And, some will argue that if the legislature intended suspension of doctors who lack criminal conviction, the statute could have been phrased to have that effect. It is the legislature's job to make the law

The story raises issues worthy of discussion. Should those who are not eligible to treat in a system like Medicaid continue to treat injured workers? Should criminal penalties for behavior be permanent, or subject to erasure? If there is to be a judicial pardon process, will there be any assurance that its benefits will be equally available to all convicts regardless of means and position? I am wondering how often this erasure process is engaged by non-professionals with access to expensive attorneys? Should there be state tolerance of prescription issues in the midst of America's overdose epidemic?



Thursday, November 2, 2017

Adequacy, Complexity, and Delays (2)

People are talking about workers' compensation, perhaps more today than ever. This is the second in an 11-post series (the first is here), that attempts to overview various perspectives heard from system observers and participants. The point is that discussion is good, and if this series generates debate and interaction, all the better. 

Benefit adequacy

There is some perception that workers' compensation benefits are inadequate. Adequacy is a label, and must be defined before it can be appropriately analyzed. It may be more easily definable in certain contexts, and remain a more ambiguous challenge in others. For example, the “adequate” volume of caloric intake for a human could be (has been) scientifically determined. But, the resulting "recommended" caloric intake might nonetheless not be sufficient or appropriate for a particular individual. Furthermore, the adequacy definition in workers’ compensation, and other social programs, may be less amenable to scientific definition. 

In workers’ compensation systems, two major benefits are delivered to those injured through, or ill because of, work: medical care/treatment and replacement of wages. A recurrent theme of workers’ compensation systems is that benefits should be employed toward the goal of returning the injured worker to gainful employment. The broad topic of “benefit adequacy” might therefore refer to any portion of these individually, or to the collective of all sought or required by a particular worker. What is required, in definition and duration, will depend in large part upon the individual, the nature f injury, and the medical science available for the particular injury(ies). 

This topic may be further complicated in its application. In considering whether “benefits” are or are not adequate, there is debate as to whether they must be adequate for each individual injured worker or whether the goal is more generalized adequacy of a system for the broad spectrum of individual injured workers served. These distinctions between micro (individual) and macro (system) adequacy have been commented upon in a significant volume of conversations. Though this topic has various questions, there appears to be notable interest in the specifics of permanent partial disability.

Lost wage, or “indemnity” benefits in workers’ compensation systems are often described with adjectives directed toward extent of disability (“partial” or “total”) and the actual or predicted duration (“temporary” or “permanent”). Thus, benefits for a worker excused from work during recovery might be “temporary total”; a worker restricted in activity or function but working within such limitation during recovery might be “temporary partial."

A worker whose recovery is complete (whether optimum or sub-optimum) is usually considered to have achieved “maximum medical improvement” (“MMI”) and any impairment (diminution in body function) or disability (diminution in economic opportunity) related to the work injury/illness is determined. A worker returning to the workforce after MMI might be “permanent partial,” while one unable to return to work therefore might be “permanent total.” These are generalities, and each system defines and delineates the standards and definitions upon which a particular worker may be entitled to some category(ies) of such benefits.

In the context of lost wage benefits (“indemnity”), there are various perspectives on the purpose and efficacy of benefits. In that context, it is perhaps natural to discuss similarities and distinctions between workers’ compensation programs and other disability programs. There is a perception that systems, to varied degrees, have lost focus upon the underlying theme of rehabilitation and return to work. 

In this context, there are those who believe that indemnity may currently be inappropriately structured. This is not unanimous, and is in fact a divisive issue. Some contend that current definitions are acceptable, but that systems provide inadequate compensation (in volume or duration, or both). In other words, they feel that the amount of indemnity paid weekly (though other period might be employed, e.g. biweekly or monthly) is insufficient. Likewise, some feel that limitations or caps on the duration of benefits are too short or too absolute. Others contend that indemnity is inappropriately structured, providing disincentive to the theme objective of return to work. 

The “group disability,” a private insurance product context was discussed repeatedly. Some advocate transitioning workers’ compensation to a model more consistent with those programs. They note that such programs are rarely “permanent” in duration, with a contractual focus on two alternatives, a return to function and employment, or an acceptance that such will not result and a commensurate adjustment of quality of living to accommodate that eventuality. Others find any suggestion of less than full and lifetime indemnity unconscionable. In the end, this disagreement is likely more fundamental than the limited environment of workers’ compensation.


Regulatory complexity 

All bureaucracy involves friction and the costs associated therewith. There are those who perceive workers’ compensation as over-regulated generally. The volume of independent systems dictates individualized and specialized regulation by each. This process is logical for states and their respective agencies. However, it is perceived as creating and perpetuating obstacles to efficiency for organizations that service the systems. Organizations such as insurance carriers, rating agencies, service providers, and others are said to struggle with the variety of regulation and compliance from jurisdiction to jurisdiction

Each workers’ compensation system includes an underlying theme that it will operate in a self-executing manner. That is, that injury or illness will result in administrative delivery of benefits to the injured worker, without the intervention of a formal litigation process. There is a perception that systems have devolved from this theme, becoming more complex and thereby less accessible to those without formal training. This is perceived by some as increasing system cost through decreased efficiency and speed. 

While this is unquestionably a criticism that involves legal professionals, the scope is not so limited. Examples have been proffered regarding perceptions of cyclical evolution in which problems or failings result in legislation or regulation. Those requirements burden providers of services, and lacking specific expertise some providers may delegate compliance to more specialized entities. Each instance of this delegation is seen as potentially adding a “layer” to the bureaucracy, and therefore cost to the system. Summit participants expressed consternation that such system costs divert resources from the appropriate primary focus: care for the injured or ill worker. 


Delays in treatment even if compensable 

There is a perception that medical treatment for workers’ compensation injuries is too often delayed. This is raised in a number of contexts. In one context, there can be disputes regarding whether a particular illness or injury is work-related, that is "compensable." That dispute and its determination can result in delays in the delivery of medical care. Despite federally "mandatory" health insurance participation, there is a perception that some portion of America's workers remain without health insurance, or the financial wherewithal to otherwise obtain medical care without resort to programs like workers' compensation. 

Causation is a critical question in workers’ compensation. If an injury or illness is related to work, i.e. “compensable,” then the cost of care is borne by the employer or some insuring entity that contractually substitutes therefore. In the event that the injury or illness is not compensable, then the cost of care and treatment is borne elsewhere, by the worker, a health plan, a social medicine program (Medicare or Medicaid), government benefits (Veteran’s Administration), facilities or providers. Critically, when injury occurs, Someone has to Pay

Because the resources of any payer will be limited, there will be tendencies to resist provision of benefits that are not due. In this context, it is possible that any suggestion of work-relatedness might result in delay of care. That is, a health insurer may deny coverage based on its perception that the responsibility may be more appropriately upon the workers' compensation provider. Perceiving the potential that some care might be the responsibility of workers’ compensation (claimed as such or not), another program like health insurance might decline to provide care. Such a declination might last only until entitlement to workers’ compensation care is adjudicated. However, this “temporary” delay in some systems might last for months or longer, during which time a worker may receive no care pending that outcome. 

In a more defined construct, there may be delays in care after an illness or injury is accepted or adjudicated as compensable, and is thus more clearly the responsibility of workers’ compensation. Care providers may be institutional (hospitals, clinics, etc.) or individual (medical doctor, chiropractor, therapist, etc.). These entities are binary in nature, professional and business. The professional interest seeks to render care, but the business interest is concerned about the occurrence, timing and amount of payment. 

The business interest has therefore evolved to a practice of seeking “authorization,” or pre-approval from payers prior to rendering care. System participants complain that “authorization” at times conveys diminished confidence because some payers fail to pay even after providing assurance of “authorization.” As such, some providers have evolved to require pre-payment before delivery of services. Each such process involves some volume of overhead expense (seeking and documenting pre-authorization or payment telephonically) and some measure of delay in delivery of care. Some contend that some portion of this is tied to jurisdictional regulation (see above) that either encourages or requires a pre-authorization process and its inherent costs and delay. 

Other posts in this series are:





(4) Staffing and training of the workers’ compensation professions, Permanent partial compensation, Opt out movement

(5) Injured workers beliefs - not informed or uninformed assumption, Treatment protocols, a benefit or a burden, Perceptions and education

(6) Vocational rehabilitation, Ability versus disability, Methodology of claims handling

(7) Medical ignorance, The critical point in a claim, People who are acting inappropriately

(8) Misclassification, Unrealistic expectation of full recovery and youth, Federalization

(9) A new national commission?, Employee participation in the conversation, Occupational disease

(10) Lawyers in the system, Competition between states, Roles and delineation

(11) Single payer, Outliers, Conclusions