summit county safety council august 18, 2010. successful strategies for controlling workers’...

Summit County Safety Council

August 18, 2010

SUCCESSFUL STRATEGIES FOR SUCCESSFUL STRATEGIES FOR

CONTROLLING WORKERS’ CONTROLLING WORKERS’ COMPENSATION COSTSCOMPENSATION COSTS

By Hans A. Nilges, Esq.By Hans A. Nilges, Esq.Morrow & Meyer LLCMorrow & Meyer LLC

6279 Frank Avenue NW6279 Frank Avenue NWNorth Canton, OH 44720North Canton, OH 44720

330-433-6000330-433-6000

E-mail: [email protected]: [email protected]

Copyright 2010Copyright 2010

PART ONE:PART ONE:

COMMON MYTHS AND COMMON MYTHS AND MISCONCEPTIONS ABOUT OHIO MISCONCEPTIONS ABOUT OHIO

WORKERS’ COMPENSATIONWORKERS’ COMPENSATION

Things You Need To Know But Things You Need To Know But Nobody Will Tell You.Nobody Will Tell You.

Myth No. 1:Myth No. 1:

The Ohio Workers’ Compensation System is The Ohio Workers’ Compensation System is in great shape.in great shape.

Reality:Reality:

The Ohio Workers’ Compensation System is The Ohio Workers’ Compensation System is a mess and it continues to drive companies a mess and it continues to drive companies out of business and/or out of state…why?out of business and/or out of state…why?

1. Gradual Liberalization of the 1. Gradual Liberalization of the Workers’ Compensation System Workers’ Compensation System by Ohio Courtsby Ohio Courts

EXAMPLE:EXAMPLE:

Schell v. Globe Trucking, Inc.Schell v. Globe Trucking, Inc. (1990), 48 (1990), 48 Ohio St. 3d 1 (Claimant not required to Ohio St. 3d 1 (Claimant not required to prove “substantial” aggravation for claim to prove “substantial” aggravation for claim to be compensable)be compensable)

- - An aggravation, no matter how An aggravation, no matter how slight, is compensable!slight, is compensable!

RESULT: A CLAIMANT’S BONANZA!RESULT: A CLAIMANT’S BONANZA!

2. Bureaucratic Complacency2. Bureaucratic Complacency

3. Increased Pressure from Doctors and Injured 3. Increased Pressure from Doctors and Injured Workers to Push Costs of Non-Occupational Workers to Push Costs of Non-Occupational Illnesses onto the Workers’ Compensation Illnesses onto the Workers’ Compensation System.System.

Myth No. 2:Myth No. 2:Workers’ Compensation Is Just Another Workers’ Compensation Is Just Another Form of InsuranceForm of Insurance

Reality:Reality:It is much more than that! The Ohio It is much more than that! The Ohio Workers’ Compensation System offers a Workers’ Compensation System offers a veritable cornucopia of benefits and legal veritable cornucopia of benefits and legal protections that are not available under protections that are not available under traditional employee insurance programs.traditional employee insurance programs.

The Horn of PlentyThe Horn of Plenty

1.1. Temporary Total Disability (TTD)Temporary Total Disability (TTD)

2.2. Permanent Partial Disability (PPD)Permanent Partial Disability (PPD)

3.3. Wage LossWage Loss

4.4. Permanent Total Disability (PTD)Permanent Total Disability (PTD)

5.5. Lifetime Health Care for Allowed ConditionsLifetime Health Care for Allowed Conditions

6.6. Additional AllowancesAdditional Allowances

7.7. Violation of Specific Safety Requirement Violation of Specific Safety Requirement Awards (VSSR’s)Awards (VSSR’s)

8.8. Job Protection (R.C. 4123.90Job Protection (R.C. 4123.90))


Workers’ Compensation Workers’ Compensation Fraud Is RareFraud Is Rare

Reality:Reality:

Approximately one-third of Approximately one-third of all Workers’ Compensation all Workers’ Compensation claims involve some form of claims involve some form of fraud or abusefraud or abuse


Workers’ Compensation Hearings Are Non-AdversarialWorkers’ Compensation Hearings Are Non-Adversarial

Reality:Reality:

Workers’ Compensation hearings can become very Workers’ Compensation hearings can become very contentious, especially when the injured worker has contentious, especially when the injured worker has hired a lawyerhired a lawyer


Workers’ Compensation Hearings Are Fair and Workers’ Compensation Hearings Are Fair and Impartial Proceedings That Do Not Favor One Impartial Proceedings That Do Not Favor One Party Over the OtherParty Over the Other

Reality:Reality:

The system is run for the benefit of the injured The system is run for the benefit of the injured worker. Workers’ compensation laws are worker. Workers’ compensation laws are construed liberally in favor of the claimant (See construed liberally in favor of the claimant (See R.C. 4123.95)R.C. 4123.95)


Your Company’s Interests Are Adequately Your Company’s Interests Are Adequately Protected by Your Third-Party AdministratorProtected by Your Third-Party Administrator

Reality:Reality:

Third-Party Administrators (TPA’s) provide useful Third-Party Administrators (TPA’s) provide useful services but they are limited in what they can do services but they are limited in what they can do for you…. Why?for you…. Why?

1.1. TPA’S CAN’T PRACTICE LAWTPA’S CAN’T PRACTICE LAW

Cleveland Bar Assn. v. CompManagement, Inc.Cleveland Bar Assn. v. CompManagement, Inc. 104 Ohio St.3d 168 (Dec. 15, 2004)104 Ohio St.3d 168 (Dec. 15, 2004)

SYLLABUS OF THE COURTSYLLABUS OF THE COURT

Non-lawyers who appear and practice in a Non-lawyers who appear and practice in a representative capacity before the Industrial representative capacity before the Industrial

Commission and the Bureau of Workers’ Commission and the Bureau of Workers’ Compensation in conformity to Industrial Compensation in conformity to Industrial

Commission Resolution No. R04-1-01 are not Commission Resolution No. R04-1-01 are not engaged in the unauthorized practice of law.engaged in the unauthorized practice of law.

INDUSTRIAL COMMISSION INDUSTRIAL COMMISSION RESOLUTION NO. R04-1-01:RESOLUTION NO. R04-1-01:

Third Party Administrators may not:Third Party Administrators may not:

1.1. Examine/cross-examine witnesses;Examine/cross-examine witnesses;

2.2. Cite, file or interpret statutes, rules or cases;Cite, file or interpret statutes, rules or cases;

3.3. Make or give legal interpretations regarding the Make or give legal interpretations regarding the evidence;evidence;

4.4. Comment upon the evidence;Comment upon the evidence;

5.5. Provide legal advice;Provide legal advice;

6.6. Give or render legal Give or render legal opinions before, during opinions before, during or after, certification of a or after, certification of a claim;claim;

7.7. Provide stand-alone Provide stand-alone representation at representation at hearings by charging a hearings by charging a fee specifically fee specifically associated with such associated with such representation.representation.


The Most Cost Effective Way to Control Workers’ The Most Cost Effective Way to Control Workers’ Compensation Claims is to Focus on Problem Compensation Claims is to Focus on Problem Claims Claims AfterAfter They Become a Problem They Become a Problem

Reality:Reality:

The most cost effective strategy is to control The most cost effective strategy is to control costs up front…. Why?costs up front…. Why?

PART TWO:PART TWO:

THE ANATOMY OF THE THE ANATOMY OF THE RUNAWAY CLAIMRUNAWAY CLAIM

Anatomy of the Runaway ClaimAnatomy of the Runaway Claim

1.1. Employee claims minor injury (e.g. minor Employee claims minor injury (e.g. minor LB sprain), and a claim is filedLB sprain), and a claim is filed

2.2. Claim is allowed without investigation Claim is allowed without investigation and TT is started (usually allowed for and TT is started (usually allowed for minor condition, e.g. LB sprain)minor condition, e.g. LB sprain)


3.3. Employee fails to return to work after 3 Employee fails to return to work after 3 monthsmonths

4.4. Company/TPA begins process for finding Company/TPA begins process for finding employee to be MMI (thus terminating employee to be MMI (thus terminating TT)TT)

5.5. Employee reacts by seeking additional Employee reacts by seeking additional testing (e.g. MRI) and/or filing motion for testing (e.g. MRI) and/or filing motion for additional allowance (e.g. herniated disc)additional allowance (e.g. herniated disc)


6.6. Company/TPA grants additional Company/TPA grants additional allowance (usually no investigation)allowance (usually no investigation)

OROR

fights additional allowance but losesfights additional allowance but loses

(no investigation/bad IME report)(no investigation/bad IME report)


7.7. Claim is now recognized for the more Claim is now recognized for the more serious (i.e. more costly) conditionserious (i.e. more costly) condition

8.8. Employee requests surgery and physical Employee requests surgery and physical therapy and Company/TPA grants therapy and Company/TPA grants request (no choice at that point)request (no choice at that point)


9.9. Employee takes > 6 months to recover Employee takes > 6 months to recover from surgeryfrom surgery

10.10. Company/TPA files second motion to Company/TPA files second motion to terminate TT and recommends getting an terminate TT and recommends getting an attorney involved.attorney involved.

TOO LATE!TOO LATE!

PART THREE:PART THREE:

HOW DO YOU STOP THE HOW DO YOU STOP THE RUNAWAY CLAIM?RUNAWAY CLAIM?

BE PROACTIVE: BE PROACTIVE:

ADOPT THE TEN KEY ADOPT THE TEN KEY ELEMENT STRATEGY – ELEMENT STRATEGY –

IT WORKS!IT WORKS!

WHAT ARE THE WHAT ARE THE TEN KEY TEN KEY ELEMENTS OF AN EFFECTIVE ELEMENTS OF AN EFFECTIVE WORKERS’ COMPENSATION WORKERS’ COMPENSATION PROGRAM?PROGRAM?

1.1. ASSUME PRIMARY RESPONSIBILITY ASSUME PRIMARY RESPONSIBILITY FOR YOUR WORKERS’ COMPENSATION FOR YOUR WORKERS’ COMPENSATION PROGRAMPROGRAM

2.2. CONTROL COSTS UP FRONTCONTROL COSTS UP FRONT(Don’t Wait Until It’s Too Late!)(Don’t Wait Until It’s Too Late!)

3.3. OBTAIN DETAILED INFORMATION OBTAIN DETAILED INFORMATION ABOUT THE CLAIMABOUT THE CLAIM

Injury ReportsInjury Reports

1.1. Should be signed and dated by the injured Should be signed and dated by the injured workerworker

2.2. At a minimum, it should request the following At a minimum, it should request the following information:information:

description of injury and accident;description of injury and accident; time the injury occurred;time the injury occurred; list of witnesses and their location at list of witnesses and their location at

time injury occurred;time injury occurred; specificspecific area of body affected; and area of body affected; and list of prior injuries and prior claims list of prior injuries and prior claims

involving the same body part involving the same body part

44.. OBTAIN DETAILED INFORMATION OBTAIN DETAILED INFORMATION ABOUT THE CLAIMANTABOUT THE CLAIMANT

a.a. Obtain a Medical Authorization and a Obtain a Medical Authorization and a List List of Medical Providersof Medical Providersb.b. Conduct an Immediate and Conduct an Immediate and Thorough Accident InvestigationThorough Accident Investigationc.c. Obtain and Review Medical RecordsObtain and Review Medical Recordsd.d. Review Prior Claims and Company Review Prior Claims and Company Medical/Personnel RecordsMedical/Personnel Records

5.5. FIGHT FRAUD AND ABUSEFIGHT FRAUD AND ABUSE

EXAMPLES OF FRAUD AND ABUSEEXAMPLES OF FRAUD AND ABUSE

Claimant receives disability compensation while Claimant receives disability compensation while working elsewhere.working elsewhere.

Claimant is Able to Work but Won’tClaimant is Able to Work but Won’t

Claimant is Hurt Outside of WorkClaimant is Hurt Outside of Work

Claimant Fails to Disclose Prior Injuries and TreatmentClaimant Fails to Disclose Prior Injuries and Treatment

Natural DeteriorationNatural Deterioration

Work Activities are not a Causative FactorWork Activities are not a Causative Factor

6.6. Raise Legal DefensesRaise Legal Defenses

Legal DefensesLegal Defenses

a.a.Claimant is Ineligible for TTClaimant is Ineligible for TT

b.b.Accident occurred through fighting or Accident occurred through fighting or horseplayhorseplay

c.c. Aggravation of Pre-Existing Aggravation of Pre-Existing Occupational DiseaseOccupational Disease

d.d.Idiopathic InjuriesIdiopathic Injuries

e.e.Injury Occurred Outside the Scope of Injury Occurred Outside the Scope of EmploymentEmployment

f.f. Injured Worker was under the influence Injured Worker was under the influence of alcohol or drugsof alcohol or drugs

7.7. AGGRESSIVELY DEFEND AGGRESSIVELY DEFEND AGAINST ILLEGITIMATE CLAIMSAGAINST ILLEGITIMATE CLAIMS

a.a. Effective Independent Medical Exams Effective Independent Medical Exams (IMEs)(IMEs)

b.b. Utilize Private InvestigatorsUtilize Private Investigators

c.c. Effective Use of Legal CounselEffective Use of Legal Counsel cross-examinationcross-examination subpoena information and subpoena information and witnesseswitnesses legal arguments and defenseslegal arguments and defenses

8. ACTIVELY MONITOR ONGOING 8. ACTIVELY MONITOR ONGOING CLAIMSCLAIMS

a.a. Review medical bills (for non-allowed Review medical bills (for non-allowed conditions)conditions)

b.b. Fight additional conditionsFight additional conditions

c.c. Fight excessive PPD awardsFight excessive PPD awards

d.d. Termination of TT (MMI or treatment for Termination of TT (MMI or treatment for non-allowed conditions)non-allowed conditions)

e.e. Settle Old ClaimsSettle Old Claims

9. TAKE ADVANTAGE OF COST-9. TAKE ADVANTAGE OF COST-SAVING OPPORTUNITIESSAVING OPPORTUNITIES

a.a. Group RatingGroup Ratingb.b. Light dutyLight dutyc.c. Salary continuation/first $15,000 medical Salary continuation/first $15,000 medical

programprogramd.d. Drug-Free workplace programDrug-Free workplace programe.e. Handicap reimbursementHandicap reimbursementf.f. SubrogationSubrogationg.g. Safety Council Incentive ProgramSafety Council Incentive Programh.h. Develop and implement an effective safety Develop and implement an effective safety

programprogram

10.10. WHEN IN DOUBT JUST SAY NO!WHEN IN DOUBT JUST SAY NO!

CONCLUSIONCONCLUSION

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