Workers’ Compensation & Reform – At what cost?
Workers’ Compensation “Reform”- At what cost?
While it was interesting to read the article authored by one of my learned colleagues in the February’ 09 (Volume 59, Number 2) issue of this magazine, I feel compelled to respond on behalf of the injured worker. After all, that article, although written by someone whom I hold in high regard for her knowledge and professionalism, has a clear and undeniable defense perspective, which “perspective” is admitted to in the opening to her article.
First, she made some valid points. Specifically, there were, in the 1980s, some unscrupulous medical providers who took advantage of not only the system, but also the injured worker. However, many law firms representing injured workers would seek out credible reporting physicians who would not take advantage of the system or the injured worker. In fact, in addition to the obvious reasons for doing this, this was done because it did not take long for these “physicians” to obtain a reputation not worthy of most reputable medical practitioners, with the result that workers compensation judges also felt their opinions were “not worth the paper they were written on”.
In discussing the “Boom of the 1980s” the author stated that “employees took advantage of long periods of temporary disability, then vocational rehabilitation and generous permanent disability settlements [emphasis added]”. Quite frankly, having represented injured workers for over twenty-eight years, such statements concern me. Specifically, it is unfair to suggest that all employees, or for that matter, even the majority of them, took advantage of anything, especially those injured workers with serious injuries. For instance, temporary disability only paid them two-thirds of their average weekly wage up to a maximum “capped” figure. If their earnings were significantly higher, they would not be compensated for any of that loss above the cap. This could, and often did, have devastating financial consequences, for injured workers and their families.
Likewise, what was wrong with the idea of vocational rehabilitation? If an injured worker was unable to return to his or her usual and customary job, at least there was an effort by the workers’ compensation system to return them to work such that they could once again contribute to society and take care of their family. That is not true today.
Similarly, to suggest that permanent disability settlements were “generous” distorts reality. Although there were times when, an injured worker could obtain a significant amount for his/her permanent disability, this was usually accompanied by a significant and life-long disabling condition, many times with intractable pain and extreme physical limitation that would impact the quality of life, their ability to return to work and their family forever. Although a few individuals made for good headlines by abusing the system (including claimants and insurance companies) many deserving employees with severe injuries received nominal compensation that did not come close to adequately compensating them; and their needs were not (and often are not) addressed by the system. In fact, the insurance industry, for obvious reasons, does not want this side of the story to be told.
In the discussion of the 1989 and 1993 reforms the $16,000 vocational rehabilitation “cap” is only briefly touched upon. While it is true that this “cap” was developed to limit costs, and also to streamline the vocational rehabilitation process. It largely limited the applicant to three to six month vocational trade schools, with no guarantee (and a limited likelihood) of employment. In fact, usually $4000-4500 of this $16,000 was paid to a qualified rehabilitation representative who “guided” and “assisted” the applicant in forming a vocational rehabilitation plan and to provide assistance until the conclusion of the vocational rehabilitation program. In addition, the injured worker was previously provided a vocation rehabilitation benefit that provided a maximum of $246/week (wow!) paid to them during the vocational rehabilitation plan. This left very little for the expense for educational retraining and limited the employee to a short term program, often with short-term or no meaningful results.
During the period from 1994 to 2003, the February 2009 article references the 1994 deregulation of the workers’ compensation insurance industry, by indicating that by 1997 some “major” workers’ compensation insurance companies were going out of business in California. It should, however, be pointed out that some insurance companies appeared to use deregulation to undercut their competition to the point that certain of those companies claimed they could no longer afford to do business here. Some who weathered this, though, acted to quickly recoup their (alleged) “losses” by increasing premiums to historically new levels – while blaming the injured worker rather than either their own greed or their own careless management.
But the main focus of my angst and concern from the articles is the April 2004 “reform” legislation (S.B.899).
For years before these “reforms”, workers compensation carriers in California were making significant profits under a system that essentially froze the benefits for injured workers from 1996 through 2002. Then, in 2003, when benefits to injured workers were increased to balance the freeze, the insurance industry put its substantial power, lobbyists and money behind an effort, not only to halt the balancing increase in benefits that the injured worker had waited for over seven years for, but also to further limit the rights and benefits of the injured worker and to increase their own “bottom line” that much more.
Our governor, unfortunately, turned a deaf ear to the needs of the injured employees of the State of California and instead chose to listen to his friends within the insurance industry. The result is a bill fraught with “reforms” that have had the effect of driving the injured worker into greater financial distress and, in many cases, onto public assistance programs or out of the work force entirely. These “reforms” include:
- The total elimination of any vocational rehabilitation retraianing program for the injured employee who, because of his or her injuries, cannot return to work even in a job that they may have had for several years. The result, obviously, is even more disastrous when you consider the difficulty of their returning to work after having worked in only one industry for the majority of their adult life, and they are now required to search for a job in another, and often unrelated field, with a known and documented, and often obvious, permanent impairment.
- A reduction in permanent disability benefits of between, in many cases, 50-70%!This has always been intended to be an amount to assist the worker during a time necessary to recover to the extent possible and to reenter the work force, when a permanent physical or mental impairment has resulted from their injury. To reduce this benefit by such an amount is unconscionable and often has a devastating impact upon an injured worker and their family.
- A medical utilization review by a physician who will never actually examine the injured employee, who is often out of state, reviewing the medical procedure requested by the injured worker’s often long-time treating physician and making a determination that denies or substantially denies or delays a much needed medical test, procedure, or treatment.
- A limitation of temporary disability payments to 104 weeks from the date of the first payment. As a result of this unique “reform”, in many cases, if an injured worker collected only a couple of weeks or months of temporary disability after their initial injury, but then more than two (2) years later their condition (for example a disease or a significant low back injury) flared up or deteriorated to the point that they needed surgery, they could be denied any temporary disability. Yet they would be out of work for several weeks or months, recovering from surgery. For injuries after January 1, 2008, the injured worker can now receive a maximum of two years of temporary disability to be paid within five years from the date of injury. Again, even in very serious cases, when the injured employee may be temporarily yet totally disabled for greater than two years, no further TTD benefits will be paid.
- Apportionment (i.e. a attributing a portion) of disability to an underlying degenerative condition. Even if the individual had absolutely no symptoms or disability attributable to said underlying condition before their work injury, and, arguably, even if the individual could have gone for years, or even a lifetime without ever experiencing symptoms or disability, under the new legislation, a portion or percent of overall disability will be attributed to this asymptomatic and non-disabling condition, reducing the permanent disability benefit.
To make matters worse, every physician I have ever deposed states that degenerative processes are synonymous with the aging process. As such, by permitting apportionment (and the resulting reduction of benefits) to the aging process, this bill is effectively discriminating against injured workers on the basis of age. This is improper and unlawful, yet now sanctioned by this reform legislation.
The previous article asked the question “How has the 2004 reform worked?” In response, let me say that if by “working” you mean that it:
- Has unjustifiably cut many injured workers recoveries by up to 50 to 70 percent;
- Has totally eliminated the ability of an individual who cannot return to the workforce to receive any retraining/vocational assistance;
- Has severely limited temporary disability benefits even in the most serious injury cases, where they are so greatly needed;
- Allows physicians who never see or examine the injured employee to deny and delay reasonable treatment requests by their long-time treating physicians;
- Allows an individual’s work-related disability to be reduced because of age and/or condition(s) that never had resulted in symptoms or disability and which, absent the work injury, never would have;
- Limits physical therapy to a set number of visits (even if post-surgically there is a recommendation for additional therapy);
-then I guess you could say its “working”.
Personally and professionally I have a problem with a system which was created to properly “compensate” the injured employee in lieu of allowing the right of independent civil actions against employers for work injuries, when inequities and unfairness abound.
Equally of concern is the stated fact that many applicant (injured worker) attorneys have left the practice and that, if the current schedules or benefits continue, “very few attorneys will be representing injured workers”. What a travesty it would be if the employee who is the backbone of our economy and who is already being denied rights, benefits and privileges, by this legislation is also effectivelydenied representation – denied help! Is this “reform”? Is this change for the good?
There is no question that the reforms have reduced costs to insurance carriers, that profits are up – but at what cost to the injured worker? The cost is much too high. We should all want our injured workers to have just and fair rights and benefits, without which he or she, and their family, will not thrive, and in some cases will not survive.
Don’t we owe an obligation to those workers that provide services to and on behalf of their employers, our community and our State on a daily basis, risking injury and, at times, their life, for and in the service of others? Maybe our priorities need to be reevaluated.
This article originally appeared in the November issue of the Riverside Lawyer