Vocational Rehabilitation at a Crossroads: Personal Observations on the 2011 Reform of the North Carolina Worker Compensation Law

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1 Vocational Rehabilitation at a Crossroads: Personal Observations on the 2011 Reform of the North Carolina Worker Compensation Law Ted H. Sawyer, MA, CRC, CDMS, LPC On June 24, 2011, North Carolina Governor Beverly Perdue signed into law the first significant reform of Worker Compensation in seventeen years. For the first time, Vocational Rehabilitation has been cited within the new law as a recognized professional service for injured workers. With increased visibility and credibility, the rehabilitation profession will have an opportunity to play a greater role in the worker compensation process. Efforts to Change the Law Employers have long sought changes in worker compensation law. They wanted a clear definition of suitable employment, expansion of the rights of employers to conduct exparte communication with treating providers, restrictions upon the employee s right to change treating physicians, limiting Temporary Total Disability payments to 500 weeks, and a reduction in the number of Industrial Commissioners from seven to five. A number of other changes were sought as well. House Bill 709 was filed on 4/6/2011, and its companion bill, Senate Bill 544 was filed on 4/7/11. This bill had no mention of rehabilitation services in its language. Following the filing of H709, plaintiff attorneys submitted their own proposed legislation with Senate Bill 692. In this bill, injured workers could continue to remain on lifetime benefits unless employment was procured for them. While SB 692 did address Vocational Rehabilitation and included some language from the N.C. Industrial Commission Rules for Utilization of Rehabilitation Providers in Worker Compensation Claims, the proposed legislation would allow only mutually acceptable professionals to provide services, or a professional selected by the Industrial Commission. In addition, the bill would have required that rehabilitation services be subject to a fee schedule. At this point it seemed that rehabilitation providers were going to be forced to accept either an insignificant role, or one that severely limited their ability to effectively serve injured workers. Choosing to remain neutral, no professional organization representing rehabilitation professionals became publicly involved in advocating for change. Individual professionals were encouraged to contact their representatives and to work for language that would be favorable to rehabilitation providers. There was clearly a need to assert professional interests, and many did so.

2 I had the opportunity to meet with Representative Dale Folwell after his election as Speaker Pro Tempore of the House early in He had made it his personal goal to champion reform of the Worker Compensation Act. Representative Folwell invited me to provide my suggestions to him. I developed an extensive amount of background material as well as position statements regarding the legitimate role of case management and Vocational Rehabilitation in helping to restore injured workers to productivity and provided this material to Representative Folwell. In spite of my efforts beginning in January, 2011, and leading up to the filing of H709 in early April, I was disappointed that the initial language of H709 did not address rehabilitation. The bill s efforts to clarify suitable employment and ex-parte communication would certainly resolve some of the concerns heard from rehabilitation professionals over the years. However, the proposed bill was less specific about the role of rehabilitation than I had hoped. I agreed to support the legislation nevertheless and advised Representative Folwell of my willingness to work with him towards passage. That opportunity came on April 21 when I was invited to speak at the House Select Committee on Tort Reform. By that time there was considerable opposition to the bill. The hearing room was packed and the atmosphere tense. I was one of the last speakers on the agenda. Although I was only allowed a few minutes to speak, I used the time to voice support for the bill, but even more to argue for the inclusion of language which would establish a legitimate role for rehabilitation professionals in the process. My desire was for greater credibility for their opinions and services, delivered in a timely fashion to contribute to better outcomes in worker compensation cases. At the end of the hearing Representative Folwell publicly committed to supporting the inclusion of Vocational Rehabilitation in the bill. Following this hearing, a period of intense negotiations began between the business representatives and the trial lawyers under the leadership of Representative Folwell. What emerged from these meetings was a compromise bill that was almost universally received. On May 27, a substitute bill passed the Tort Reform Committee, and the full House approved it on May 31. The Senate ratified it on June 13, With the governor s signature, H709 has been renamed Session Law

3 The Impact of North Carolina s New Worker Compensation Law on Rehabilitation Practice A review of the changes indicates that there are a number of modifications to the original proposed bill. Vocational Rehabilitation has now been prominently included. Changes that will likely impact rehabilitation professionals can be found in a number of areas: For the first time, Vocational Rehabilitation is specifically mentioned as a medical service. Suitable employment is also defined in the statue. There are several important concepts that will impact the delivery of Vocational Rehabilitation: A job must be offered to the injured worker which meets specific considerations, and it must be within a prescribed commute distance. It is also notable that an earnings threshold is not a component of suitable employment. Legal entitlement to work in the US is also addressed. For Medical Case Managers, GS outlines the right of the injured worker to secure a second opinion examination as well as circumstances under which the employee may change health care providers. In doing so, the employee must show by the preponderance of the evidence that such a change is justified. The refusal of the employee to accept medical compensation (which now includes Vocational Rehabilitation) when ordered by the Commission may result in suspension of compensation. GS addresses the broad issue of access to medical information as well as to clearly establish the right to obtain relevant information without the express authorization of the employee. There are also clearly established parameters for the type of information that can be obtained, as well as the methods by which such information can be exchanged. Ex parte language has been removed. GS clarifies the rights of the employer to seek other medical opinions and to communicate with the examiner, as well as suspension of compensation for failure of the employee to comply with requests for other medical opinions. One of the most controversial areas of the previous law involved the eligibility for lifetime benefits. GS has now been amended to establish a 500 week limit upon Temporary Total Compensation. However, there has also been added a provision by which compensation may continue if the injured worker can show by the preponderance of the evidence that he has sustained a total loss of wage earning capacity. Conversely, an employer can be relieved from the obligation to continue to pay extended benefits if it can show the Industrial Commission that the injured worker no longer has a total loss of wage earning capacity, or who can be shown as capable of returning to suitable employment under the new definition. Again, the preponderance of evidence language is used in this chapter in several paragraphs. Wage earning capacity is a different concept than suitable employment and could arguably require a different threshold of evidence.

4 GS outlines the consequences for refusal of the injured employee to accept suitable employment. No longer must there be an order in place to suspend compensation, but the employer must notify the injured worker and the Industrial Commission of the request for suspension of compensation. If the Industrial Commission approves the suspension, it must specify what steps must be taken by the injured worker to end the suspension and reinstate compensation. Refusal of suitable employment is therefore handled differently than refusal of Vocational Rehabilitation. Employers may also contact the injured worker directly about returning to suitable employment with contemporaneous notice to employee s counsel, if any. Arguably the most significant addition to the revised law for rehabilitation professionals is Section 13. This amends Article 1 of the Worker Compensation Act (Chapter 97) to specifically and in detail include Vocational Rehabilitation Services. This section requires careful reading by all vocational professionals as it extensively outlines the parameters of practice that is expected. GS defines the right of an employer to utilize Vocational Rehabilitation Services. Also, for the first time, employees are given the right to request Vocational Rehabilitation when a return to work results in compensation that is less than 75% of pre-injury wages. Such services will be predicated upon a reasonable likelihood that wage earning capacity will be substantially increased. This chapter also clearly delineates and defines Vocational Assessments and the development of Individualized Rehabilitation Plans. It also recognizes each as separate work products, and that one does not always follow the other. The expectations of Vocational Rehabilitation services are explicitly included in this section. The revised law specifies that the North Carolina Industrial Commission must review all rules impacted by the revised language and that revisions must be made by 12/31/2012. Failure to do so will result in the expiration of the rules. Conclusion: There are considerable nuances that will require analysis over time in order to develop new approaches to delivery of rehabilitation services. A review of the North Carolina Industrial Commission Rules for the Utilization of Rehabilitation Professionals (Rules) must be completed by the end of While it appears that the Rules are substantially supported by the new legislation, language regarding communication, definitions and consent procedures may require modifications. Rehabilitation professionals are not parties or agents as defined by the law, and therefore must follow the Rules unless they conflict with the law. Professional organizations must assume leadership in reviewing and proposing changes to The NC Industrial Commission in order to align the Rules with the new changes in the law.

5 At the very least the revisions in the law will require new considerations in rehabilitation practice. For example, while there is no earnings test for suitable employment, there is a 75% earnings threshold that must be met, or the injured worker can request Vocational Rehabilitation services. It may be concluded that job placement services should seek employment which compensates at or above the threshold; otherwise an evaluation of the feasibility of services should be made to ascertain the reasonable likelihood of significantly increasing earnings potential through the provision of alternative rehabilitation options. The quality of Vocational Rehabilitation, the substantiation of opinions and the quality of the outcome delivered will impact how subsequent court cases interpret the revisions as well as how the Industrial Commission decides disputed cases. Time will ultimately decide how well we take advantage of the opportunities that have been given to our profession. Rehabilitation professionals should help employers and claims adjudicators to understand the impact of the new provisions, and to properly utilize rehabilitation services in keeping with the intent of the law. When this legislative effort began, neither of the most powerful forces in the debate supported anything more than a marginal role for rehabilitation professionals as reflected by the original bills filed. However, I believe that the rehabilitation profession has helped to serve compromise by increasing its role into a viable and important component of restoring injured workers to productivity in support of the revised worker compensation law. 01/23/2012

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