Demystifying Workers Compensation

Transcription

1 Demystifying Workers Compensation November 19, 2014 Presented by: Shari Deutsch, ARM-P Safety & Risk Management Administrator Central Contra Costa Sanitary District

2 Who Are You? HR Staff? Supervisor or Manager? Regular Employee?

3 What s Your Role in WC?

4 Why Are You Here? I m just curious I m new to Workers Comp I need a refresher I have specific problems or questions and I d like some answers Something else?

5 How Does Your Agency Manage WC? Self-Administered or through a Third Party Administrator (TPA)? Fully insured, self-insured, or blended? Do you have an In-House Workers Comp Coordinator?

6 Things to Consider I can t give you legal advice, just practical advice. For supervisors and HR folks, who do you work for; the employee or the employer? The rules change often SB 899 in 2004, SB 863 in 2013 WCAB and Appellate Court decisions

7 What We Will Cover A Broad Overview of WC Benefits Handling and Settling Claims Controlling Costs Easy ways to evaluate your WC program Issues and complications for WC program management

8 WC is the Center of the Universe

9 What s Workers Comp? WC was established and is governed by the CA Labor Code - Claims settlement overseen by WCAB (DIR) - Insurance oversight by Dept. of Insurance - We aren t discussing Federal programs or law No Fault Standard Benefits employees - Employees do not need to prove that the employer was negligent. Exclusive Remedy Benefits employers - Employees lose the right to sue employer for damages in other venues (civil litigation etc.).

10 Injuries Three Types of Compensable Injuries: Specific Injury a single event that results in a physical or mental condition - Trip/Fall - Car Accident Occupational Disease - Work-related exposure to asbestos, carcinogens - Result of work environment (i. e. hepatitis) Cumulative Injuries - Hearing loss over time - Back pain from repetitive bending - Carpal Tunnel, other RSIs

11 What s Not Covered Under WC? Injuries resulting from intoxication; Intentionally self-inflicted injuries or willful suicide; Injuries occurring to an initial physical aggressor (person who starts a fight); Injuries occurring during voluntary recreational activity (what about onsite?);

12 What s Not Covered Under WC? Injuries sustained while committing a felony; Injuries sustained while commuting (the Going and Coming Rule); Psychiatric injuries not substantially caused by work; Psychiatric injuries resulting from a good faith personnel action.

13 Workers Comp Benefits Medical Treatment Temporary Disability (Total and Partial) Permanent Disability (Total and Partial) Supplemental Job Displacement Voucher (after 1/1/04) Dependent Benefits (death) NOTE: Salary Continuation is not a state-mandated benefit. If offered by the employer, payments are considered income and are TAXABLE.

14 Benefits: Medical Treatment Employees are entitle to receive medical treatment reasonably required to cure or relieve the effects of the injury. Reasonable treatment is determined by Utilization Review (SB ). Treatment includes medical appointments, surgery, follow up care (i. e. physical therapy), prescriptions, medical devices (i. e. knee brace, crutches) etc.

15 Benefits: Medical Treatment Where does your injured employee go? On-site Clinic or Health Services Employer s Medical Provider Network (MPN) Employer s Designated Occupational Clinic Employee s Pre-designated Physician Emergency Room Other?

16 Benefits: Medical Treatment If the Employer has an MPN: Employee has to see a physician within the Network Employee must seek second AND third opinions from physicians within the Network After three tries, employee can request an independent medical review

17 Benefits: Medical Treatment MPNs after SB 863 (1/1/13) Employer s failure to provide an employee with notice of the MPN or notice of the employee s right to change doctors does not allow the employee to treat outside of MPN anymore. If employee impermissibly treats outside of MPN, the employer is not liable for treatment provided OR any consequences of that treatment.

18 Benefits: Medical Treatment If the Employer does NOT have an MPN: Employer has the right to control medical treatment for the first 30 days if treatment is offered on a timely basis. If the employer does not offer treatment on a timely basis, employee can seek treatment from provider of their choice and the employer has to pay for it. Best way to offer timely treatment: designate an occupational clinic to treat all work-related injuries.

19 Benefits: Medical Treatment Pre-designation of Physician Employee must provide written notice to Employer before an injury occurs. Doctor must be a someone who has treated the employee before the injury (i. e. primary doctor). Doctor must have employee s medical records and medical history in his/her office. You can still send employee to your clinic first. NEW: As of 1/1/13, the employee must have health insurance for non-occupational injuries or illnesses.

20 Benefits: Temporary Disability TD is only payable after an employee has been off work beyond the 72 hour waiting period. TD is available for up to 104 weeks for up to 5 years from the date of injury (DOI). After 5 years from DOI, no TD is due, no matter how much was used.

21 Benefits: Temporary Disability TD is calculated as 2/3 of the injured employee s average weekly wage up to a maximum of $1, per week (as of November 2014). TD is not taxable (but salary continuation benefits ARE). Two Types: Temporary Total Disability (TTD) and Temporary Partial Disability (TPD)

22 Benefits: Temporary Disability Employee makes $50 per hour Average Weekly Wage (AWW) is $50 x 40 hrs. $2, Assume 30% taxes withheld Take home is $2,000 x.7 $1, Assume TD is payable for 1 week AWW exceeds Max so Max applies $1, Net effect of being off work for one week: ($325.36) Assuming a 30% tax withholding, the break-even point is: $26.86 after tax hourly rate or $34.93 pre-tax hourly rate $1,074.64/40 or $1,074.64x 1.3/40

23 Benefits: Temporary Disability Temporary Partial Disability Employee can do some work while recovering but earns less than before the injury (i.e. works less than full time). TPD (also called wage loss benefits) pays the difference up to the maximum weekly amount.

24 Benefits: Permanent Disability Per SB 863 (eff. 1/1/13) Increased the maximum and minimum Weekly Rates. Calculations are based on level of impairment, life expectancy and a host of other considerations The method used to calculate PD changes with every piece of WC reform legislation

25 Benefits: SJDV after 1/1/13 Supplemental Job Displacement Voucher Worth $6,000 (not tiered by scope of injury) Cannot be settled via Compromise & Release Expires after 2 years after issue or 5 years after DOI Includes $1,000 for computer, $500 for misc. (?) Applies after: Employee found P&S and Employee has some level of PD and Employer does not provide a qualified RTW offer

26 Benefits: Dependent Benefits Amount determined by date of injury, level of dependency, number of dependents. Death must occur within 240 weeks of the date of injury (roughly 4.6 years).

27 Handling WC Claims How It Should Work What Goes Wrong Mistakes to Avoid

28 Handling Claims: How it Should Work Injury occurs Employee receives medical treatment Employee receives DWC-1 and NOPE within 24 hours

29 Handling Claims: How it Should Work Doctor gives/prescribes Rx medications, provides restrictions or takes the Employee off work If none of these occur, it is a First Aid case, not WC Employee returns claim form (DWC-1) Employer reports the claim to TPA Submitted via form 5020, Employers Report of Occupational Illness or Injury

30 Handling Claims: How it Should Work Claim is investigated and is either accepted, delayed or denied Employer (and its agent) has the right to investigate all claims for WC benefits Most common type of investigation is called AOE/COE Notice of Delayed Claim must be issued within 14 days of when employer first knew of the injury or the claim is presumed to be accepted Notice of Denied Claim must be issued within 90 days or the claim is presumed accepted

31 Handling Claims: How it Should Work Employee receives benefits as appropriate Employee continues treatment until fully recovered or found P&S If Employee fully recovers, the claim closes Otherwise, the claim stays open until it can be closed via Stipulation or C&R

32 Handling Claims: What Normally Goes Wrong Employee doesn t report the injury immediately Doctor s restrictions are vague or indecipherable Employee fails to provide Employer with a work status report after a medical appointment Doctor treatment approvals are delayed when UR requires supplemental information

33 Handling Claims: What Normally Goes Wrong The injury is worse than anticipation or recovery takes longer than expected UR denies treatment that the employee or doctor wants Employee s supervisor doesn t want the Employee to return to work (yet) Other Things?

34 Handling Claims: Mistakes Employer ignores the report of injury Employer fails to provide timely medical treatment Employer fails to forward claim form or invoices to TPA Employer fails to investigate or report relevant findings to TPA Employer fails to provide, or provides inaccurate, info to TPA

35 Handling Claims: Mistakes Employer routinely denies TMD Certain exceptions are OK Employer fails to control receipt and distribution of medical records/info Employer fails to maintain confidentiality of medical and personnel information Employer fails to correct known safety hazards Employer fails to train Employees on hazards or safety procedures

36 Settling Claims: Stipulation with Award for Future Medical Benefits WCAB looks out for the unrepresented Claim stays open indefinitely to reserve for future medical expenses No Medicare ramifications

37 Settling Claims: Compromise and Release (C&R) Claims can be closed for real Ideal for retiring or former Employees May be subject to Medicare Set Asides

38 Controlling Costs Things You Can t Control: Legislative Changes SB 899, SB 863, SCHIP WCAB, Appellate Court Rulings Insurer Loss Ratio or Bankruptcy Pool Experience or Excess Rate Increases Changes to Fee Schedules Overall cost of medical care

39 Controlling Costs Things Over Which You Have Some Control: Type of Insurance (guaranteed cost vs. loss sensitive plans), risk pools Your own Experience Modifier Safety Program / Ergonomics / Loss Prevention Efforts MPN/Clinic Protocols and Performance Reviews

40 Controlling Costs Things You Can Control Return to Work / Temp. Modified Duty Medical Management - MPN options - UR Triggers - Bill Review - Nurse Case Managers

41 Controlling Costs More Things You Can Control: Regulatory Compliance Good Working Relationship w/tpa, insurer Follow up on Accident Investigations Cost Allocation within your Agency Loss History Analysis / ExMod Near Miss Reporting Active Involvement in Claims Process - Quarterly meetings with TPA - Periodic meetings with or reports to depts.

42 Controlling Costs What Happens When Attorneys Get Involved?

43 Controlling Costs Biggest Bang for the Buck: Pay attention to your injured workers, their treatment, their work status and their needs. If you are rude or dismissive, you fail to explain the process or make things too complicated, or you treat injured employees like fools or cheaters, the cost of your claims WILL increase.

44 Easy WC Program Evaluation Relevant Data that s easy to get: Claim Type: Medical Only vs. Indemnity, Strain/Sprain, Abrasion, Fracture Claim Causes Claim Costs: Paid vs. Reserved (CMIS) Easy Metrics: Compare Medical Only to Indemnity Claims Average cost by claim type Most frequent types of injury Compare frequency and severity of claims ExMod over time

45 Medical Only vs. Indemnity $90,000 Average Incurred Cost per Claim Last 7 Years Combined $80,000 $70,000 Medical Only Indemnity $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $0 ADM CSO ENG POD

46 Most Frequent Types of Injury 12 Most Common Injury Types Cut/Bruise Pain Strain/Sprain

47 Claims Frequency 10 Med. Only Claims Frequency by Dept ADM CSO ENG POD

48 Claims Severity $700,000 Indemnity Claims Severity by Dept. $600,000 $500,000 $400,000 $300,000 ADM CSO ENG POD $200,000 $100,000 $

49 ExMod Over Time

50 WC Issues and Complications Penalties FEHA Violation Claims Personnel Problems Fraud Attorneys Doctors Disasters PEPRA

51 Penalties: Serious & Willful Misconduct If proven, Employer must pay employee supplemental benefit of 50% of compensation AND medical benefits payable. This is a penalty against the Employer so insurer/pool cannot cover this.

52 Penalties: Serious & Willful Misconduct Employee must prove either that: The injury resulted from a violation of a safety order designed to prevent this type of injury, that the employer knew about the safety order and knew of the violation OR Employer knew that a substantial risk of harm existed and took no steps to prevent the harm or to correct the defective condition. Should you install guard rails on a roof?

53 Penalties: Discrimination Employer cannot discriminate against an employee for making a WC claim. If proven, employee is entitled to reinstatement with lost wages and benefits back to the date of discriminatory act plus a 50% penalty up to $10,000. Since it s a penalty, it cannot be covered by insurance.

54 Labor Code Section 132 (a) (1) Any employer who discharges, or threatens to discharge, or in any manner discriminates against any employee because he or she has filed or made known his or her intention to file a claim for compensation with his or her employer or an application for adjudication, or because the employee has received a rating, award, or settlement, is guilty of a misdemeanor and the employee s compensation shall be increased by one-half, but in no event more than ten thousand dollars ($10,000), together with costs and expenses not in excess of two hundred fifty dollars ($250). Any such employee shall also be entitled to reinstatement and reimbursement for lost wages and work benefits caused by the acts of the employer.

55 FEHA Violations FEHA requires the Interactive Process for all disabilities. FEHA does not exclude temporary disabilities (like WC injuries, recovery). Courts have found Employers in violation of FEHA if they failed to engage in the interactive process for WC injuries.

56 Personnel Issues Performance Problems WC claim follows a poor performance evaluation WC claim follows a disciplinary or good faith personnel action Workgroup/Supervisor Relations Boss is capricious, treats people inconsistently Employee doesn t get along with coworkers Morale other employees S/he is faking it or it s not even work-related We re expected to do unsafe things S/he is just avoiding the hard tasks

57 WC Fraud: Red Flags These warrant further investigation. The more of these you have, the more likely that you have a problem. Employee is a new hire Employee took excessive time off before DOI Injury occurs prior to strike, layoff etc. Injury relates to an Employee s pre-existing or nonoccupational condition Employee and witness statements are inconsistent

58 WC Fraud: Red Flags There are no witnesses Employee fails to report injury in a timely manner Injuries are all subjective (soft-tissue, pain) Co-workers say the injury is not legitimate Employee refuses to submit to diagnostic tests Medical treatment inconsistent with alleged injury Employee does not comply with doctor s recommendations

59 WC Fraud Does not absolve you of obligation to investigate for AOE/COE Employer can delay a claim up to 90 days but still has to provide medical treatment up to $10,000 Sub Rosa Investigation District Attorney WC Fraud Unit

60 Attorneys Not all WC cases are litigated. Most common where claims are frequent, benefits are generous, or agency suffers from an us and them mentality. Medical/Legal process complicates things exponentially: Tx appeals, 2 nd, 3 rd opinions, add-on claims, Restricts your ability to talk to the employee The attorney has to get paid

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62 Doctors The doctor s job is to treat the employee, not to save or spend your money. Doctors will defer to the employee s account of events unless you provide additional information Study: Less than 4% of treating physicians accounted for more than 72% of WC costs. More than half of those high-cost doctors were in the pain management business.

63 Doctors Implement ways to control doctor shopping. Establish and update treatment protocols Meet periodically with clinic administrator Decide how to handle First Aid cases Actively use all medical treatment cost control tools Send employee to your clinic for FFD or FCE evaluation (check MOU).

64 Disasters Disaster Service Workers are defined in Labor Code Section 3101 as: all public employees and all volunteers in any disaster council or emergency organization accredited by the Office of Emergency Services. The term public employees includes all persons employed by the state or any county, city, city and county, state agency or public district, excluding aliens legally employed.

65 Disasters You are obligated to provide WC to all DSWs as long as they are registered by a Disaster Council and were injured while working under the general direction of that council. Disaster Council means a public agency empowered to direct the activities of disaster service workers.

66 Disasters DSWs include your regular employees who report for work in a disaster, volunteers, and any other public employees who arrive because they cannot report to their regular agency (unless they are part of a mutual aid request). Mutual Aid: Hiring agency is responsible for the WC coverage of its own employees when they are responding in another jurisdiction.

67 Disasters If not registered DSWs, your WC coverage might not respond, but you are still liable for damages. Make sure your emergency operations plan (EOP) allows for a registration process. Public Entity WC coverage sometimes requires a resolution stating that the governing body intends to provide WC coverage to volunteers coverage is not always automatic.

68 PEPRA Future WC Impacts 62 if no reciprocal Employee may retire later (older workforce) People with prior injuries will work longer Longer recovery times = more TD More severe injuries = more PD Increase in disability retirements Other Considerations?

69 Other Things to Consider When should you require Functional Capacity Evaluations? When should you require Fitness For Duty Evaluations? Are the Physical Requirements in your Job Descriptions Current? How do you coordinate provision of other benefits (STD, LTD)? Disability Retirements

70 Acronyms Acronym AOE/COE C&R DIR DOI DSW DWC-1 ExMod FCE FEHA FFD LTD MPN Means Arising Out of Employment/Course of Employment Compromise and Release Department of Industrial Relations Department of Insurance Disaster Service Worker WCAB form number for claim form Experience Modifier Functional Capacity Evaluation Fair Employment and Housing Act Fitness For Duty Long Term Disability Medical Provider Network

71 Acronym NOPE PD P&S RTW SJDV STD TD TMD TPA TPD TTD UR WCAB Means Notice of Potential Eligibility Permanent Disability Permanent and Stationary Return to Work Supplemental Job Displacement Voucher Short Term Disability Temporary Disability Temporary Modified Duty Third Party Administrator Temporary Partial Disability Temporary Total Disability Utilization Review Workers Compensation Appeals Board

72 Handy WC References Conference Handouts (PARMA, PRIMA, CAJPA, COSIPA) Your TPA, Insurer, Risk Pool etc. Defense firms lists and newsletters IEA seminars Colleagues at other agencies

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74 Contact Info Shari Deutsch, ARM-P Central San 5019 Imhoff Place Martinez, CA (925)