BB&B v. Bonat - 8 Week Limitation for Soft Tissue

Even though this case was in the summer of this year, it is very signifigant and I thought I would post it. I pulled this off of Judge Tom's blog.

BB&B v. Bonat: Return of the 8-Week Limitation for Soft Tissue
The soft tissue provision inserted into the Workers' Compensation Act in 2005 contains a patent ambiguity. Language at the beginning of 85 O.S. §22(3)(d), Soft Tissue, limits temporary total disability compensation ("TTD") for nonsurgical soft tissue injuries to 8 weeks plus a 16 week extension if surgery is recommended. The ambiguity arises when a subsequent section states "[i]n all cases of soft tissue injury, the employee shall only be entitled to appropriate and necessary medical care and temporary total disability as set out in paragraph 2 of this section . . .." [Referring to 85 O.S. §22(2) which allows up to 300 weeks of TTD].Three divisions of the COCA construed the ambiguity by overriding the 8 + 16 limitation and allowing TTD in excess of 24 weeks for nonsurgical soft tissue cases.In Bed, Bath & Beyond v. Bonat, a 9-0 decision written by Justice Tom Colbert, the Oklahoma Supreme Court addressed the issue and stated "this Court provides this analysis as binding authority for resolution of the ambiguity."Justice Colbert succinctly stated the Court's conclusions in ¶12:1. The legislature intended to limit TTD for certain soft tissue injuries;2. TTD for non-surgical soft tissue injuries is limited to 8 weeks;3. If surgery is recommended the trial court may extend TTD for up to 16 additional weeks while waiting to perform the surgery; and4. Since there is no reference to TTD and medical benefits when a soft tissue surgery is performed, §22(2)(c) applies allowing up to 300 weeks of TTD.In an apparent attempt to limit claimant's TTD to 24 weeks, the employer withheld authorization for surgery until the outcome of the appeals. The Court held "[t]he presence of a soft tissue injury is a medical question to be determined by the Workers' Compensation Court based on competent medical evidence, not on an employer's decision to authorize or refuse to authorize recommended surgery. The claim in this matter is not subject to the soft tissue injury time limitations set forth in section 22(3)(d)."This holding fits squarely with the doctrine of "extra-statutory forfeiture of benefits" pronounced by the Court in BE&K Construction v. Abbott. Employers will not be allowed to avoid compensating their injured workers through unilateral actions outside the Workers' Compensation Act.

NCCI boosts Work Comp Rates for Oklahoma

NCCI (National Council on Compensation Insurance) recently hosted its annual advisory Forum at the Oklahoma City Waterford Hotel. They discussed the latest year’s results and trends for Oklahoma, surrounding states and how they related to the National Results. NCCI is charged with maintaining adequate rates and has taken a 9.1% rate increase in Oklahoma. Carrier’s rates are not directly determined by the rate increase as it is only a part of the total rate. Each carrier will adopt these rates at their own pace and could use credits to offset some of the increases. Compsource Oklahoma files their rates separately and may differ from this increase. We have attached the entire presentation in color for download.

CLICK HERE TO DOWNLOAD PRESENTATION FROM NCCI

How High Tech Sleuthing Helps Adjuster find Fraud

Here is a decent article from Risk and Insurance Magazine that talks about the new resources available to adjusters to investigate fraudulent claims.

Click Here for Article

NCCI's State of Workers Compensation Summary Article - National Basis

Click for Article on State of National Workers Compensation by NCCI

The Oklahoma Information will be available shortly and I will post that when available.

Texas Supreme Court Revisits WC Case after Pressure from Lawmakers

DALLAS — The Supreme Court of Texas held a rare rehearing of a unanimous decision Thursday, listening to arguments about whether it erred last year in ruling that a contract employee who suffered on-the-job injuries couldn't sue the company that owns the work site.

The court's decision to revisit the case came after a bipartisan group of Texas lawmakers — along with labor groups and accident victims — protested the original ruling, saying justices "flat-out got it wrong."

"It's a reckless deregulation of Texas workplaces," said Craig McDonald, the director of Texas for Public Justice. "If this ruling is allowed to stand, there will be more accidents, more injuries and more preventable deaths."

Turbine mechanic John Summers was a contractor when he suffered back, shoulder and arm injuries in a 2001 accident while repairing a leak on a hydrogen generator at an Entergy Gulf States plant in Bridge City. He sued Entergy, a power provider with regulated utilities in Louisiana, Mississippi, Arkansas and Texas.

The court said Entergy was immune from the lawsuit because Summers was covered by a workers' compensation policy purchased by the company. The ruling extended immunity provisions to work site owners when such provisions had previously shielded only employers sued by their direct employees.

The court's decision also means that a "property owner could act as its own general contractor and could provide workers' compensation coverage to its subcontractors' employees," said Lee Parsley, an attorney for Texans for Lawsuit Reform. "That decision was correct."
In arguing before the court Thursday, Entergy attorney Jacqueline Stroh told the justices that "nothing warrants any consideration of this original opinion."

But Summers' attorney Collyn Peddie argued the ruling rendered the term general contractor "meaningless and absurd," and opened loopholes for most Texas companies to claim immunity from workers' lawsuits.

Peddie also argued that the Legislature never intended work site owners to be immune from injury lawsuits from contractors, a point supported in a brief signed by two Democratic and two Republican lawmakers. The lawmakers said the Workers Compensation Act provides protection from liability to employers who have purchased workers compensation insurance for their direct employees but was not meant to extend to employers who hired independent contractors.
"There is nothing in the legislative history that says they intended this result," Peddie said.

An unusual coalition that brought together union leaders and both Republican and Democratic lawmakers has criticized the ruling, albeit for different reasons. State Rep. Craig Eiland, a Democrat from Galveston, said the court overstepped its authority and "caused chills and shivers among legislators ... who do not want activist courts."

Other critics include relatives of the 15 workers killed in a 2005 BP plant explosion, who in April urged the Legislature to undo the court's ruling. Some of those hurt in the explosion wouldn't have been able to sue, said Eiland, whose district includes Texas City, site of the BP plant explosion.

"If this law had been in place, people ... who were maimed, crippled and burned would have been limited to Texas workers compensation," Eiland said.

The hearing was held at Southern Methodist University's Dedman School of Law. The state supreme court routinely holds hearings at law schools and other sites around the state.

NEW PERMANENT PARTIAL DISABILITY AND DEATH BENEFITS CHARTS NOW AVAILABLE FOR OKLAHOMA

Permanent partial disability and death benefits charts FOR WORK-RELATED INJURIES AND DEATHS OCCURRING 11/1/08 THROUGH 10/31/11 are now available on the "Laws/Rules/Charts" page. Paper copies may be purchased at both Court locations. Direct requests for purchase by mail to the Workers’ Compensation Court, 1915 N. Stiles Avenue, Oklahoma City, OK 73105, Attention: Records Department.

2007 OKLAHOMA STATE WORKERS COMP REPORT AVAILABLE FOR DOWNLOAD

CLICK HERE FOR THE 2007 WORKERS COMP COURT ANNUAL WORKERS COMP REPORT. IT IS 136 PAGES.

http://www.owcc.state.ok.us/PDF/2007%20Annual%20Report.pdf

OKLAHOMA NCCI STATE FORUM TO BE HELD ON OCTOBER 23RD IN OKLAHOMA CITY

OKLAHOMA NCCI STATE FORUM - OCTOBER 23RD, 9AM-12PM, WATERFORD MARRIOTT HOTEL.

NCCI is embarking on its 2008 State Advisory Forum presentations. These forums are designed to promote education and provide a greater understanding of both national and state workers compensation issues. Most of the forums will take place after NCCI’s May Annual Issues Symposium in order to provide you with the most relevant and up-to-date information.
Additional Information

This year, we plan on holding forums in 36 states. We will continue to focus on state-specific information and speak in greater detail on:

• Proposed/enacted state legislation
• The residual market
• State system cost drivers
• NCCI studies and economic information
  

At these forums, we encourage participation from the broadest cross section of the workers compensation community, such as:

• NCCI affiliates
• Departments of Insurance
• Workers Compensation Commissions
• Insurance trade associations
• Legislators
• Self-insureds
• Employer trade associations
  

The content of each forum will be tailored to the state where the meeting is held. There is no charge to attend these forums, but reservations are required. You are welcome to attend the forum for every state where you are writing or involved in workers compensation insurance. Select the links above for dates and locations and to register now.
Experience the power of information at one or more of these forums. We look forward to seeing you there. You can register at www.ncci.com

Principal Employer May Be Liable for Injuries to Employees of Subcontractor

A general contractor is secondarily liable for injuries occurring to the employees of its subcontractor if the subcontractor has failed to provide coverage and the general contractor has failed to exercise good faith to determine the existence of coverage under a valid insurance policy. 85 O.S. §11(B)(2).Normally a policy's term of coverage is for one year. The "good faith" requirements of 85 O.S. §11(B)(2) are met when the principal employer receives a certicate of coverage that includes the period of the subcontactor's work. However, the good faith responsibility includes the continuing obligation to obtain proof of coverage on the expiration date of the policy. "Good faith is not demonstrated when a principal employer accepts proof of his subcontractor's workers' compensation coverage but remains indifferent to the stated expiration date of that coverage." Smalygo v. Green, 2008 OK 34, __ P.3d __.David Green (Claimant) suffered a work-related injury on October 10, 2002, while working as a construction laborer for Mark Murphy d/b/a Mark Murphy Construction, an independent contractor and subcontractor of the principal employer Millard Smalygo d/b/a Smalygo Homes. When Smalygo hired Murphy, he received a certificate of coverage for a workers' compensation policy covering Murphy's employees, including Green. The policy would have expired as late as August 13, 2002, but Murphy allowed it to lapse on April 1, 2002, without informing Smalygo. When Green learned that his immediate employer had no workers' compensation coverage, he amended his claim to add Smalygo as principal employer.If Smalygo had inquired about coverage on the anniversary date of the policy, he would have learned on August 13, 2002, nearly two months before Claimant's injury, that Murphy was uninsured.

The Supreme Court found that there was competent evidence to uphold the panel's decision finding Smalygo's failure to inquire made him secondarily liable for Green's injuries (overturning the trial court order to the contrary).It is interesting to note that Oklahoma is one of the forty-three states that allow an injured employee of an uninsured independent contractor to pursue a workers' compensation claim against the general contractor. Of those states Oklahoma is the only one to allow a general or intermediate contractor to escape liability by a good faith reliance on proof of coverage.

It's also important to note that any employer can be held as a "General Contractor" even if not in the construction business. A good example is a Manufacturing company that hires an outside individual or firm to provide work for hire on its premesis.

Increase in Compensation Rates 11/1/08

For work-related injuries occurring on or after November 1, 2008 the rates of compensation for temporary total disability (TTD), permanent total disability (PTD), and death benefits will increase to $683 per week, and to $342 for permanent partial disability (PPD).The court administrator is required to a adjust the rates every three years. These rates will be effective until October 31, 2011.These rates are based on the published notice from the Oklahoma Employment Security Commission which finds the state average weekly wage is $682.61.

RETURN TO WORK AND THE ADA

Under many Workers Comp systems, once an employee has reached a light duty, permanent, and stationary phase, the employer will often have the opportunity to provide them with modified work, alternative work, or ultimately, vocational rehabilitation. Many employers will gloss over the concurrent obligation to engage in a good faith interactive process with the employee to determine effective reasonable accommodations under the ADA — to do the job they were hired for!

So, for example, although they may limit the employee's ability to return to work until 100% fit for duty under Workers Comp, this is not the law under the ADA. For example, if a worker is 85% fit for duty, you have to search out a reasonable accommodation that might allow them to be 100% effective. In too many cases, the employer simply evaluates the modified alternative work option without engaging in a dialogue with the employee to do the job they were hired for.

How state Comp funds end up in campaigns - NewsOK.com

Sun August 3, 2008

How state comp funds end up in campaigns

By Nolan Clay and Randy EllisThe Oklahoman© Copyright 2008, The Oklahoman

A secretive organization has raised close to $1 million throughout the last decade for political purposes, mostly from injured Oklahoma workers who sometimes don't even know they've donated.
...
Many of the donations to Working Oklahomans Alliance may be illegal, an investigation by The Oklahoman found. The organization could be penalized $1,000 or more for each violation.
The lawyers who control Working Oklahomans Alliance specialize in workers' compensation cases.

These lawyers raise money for a political fund by withholding a portion of their clients' workers' compensation awards. The lawyers then distribute the money to various political causes and candidates, mostly Democrats.

Several injured workers listed as political donors to the Working Oklahomans Alliance PAC said they were not aware they had given at all. Many were represented by Norman attorney Richard Bell, a key figure in a campaign corruption scandal in the 1990s involving then- Gov. David Walters.

"They didn't tell me,” said Elsa Tewolde, who is listed as giving $80 to Working Oklahomans Alliance's political action committee in November. Tewolde, 49, of Norman was injured helping a patient at a Norman mental hospital. She was represented by Bell's law firm. "It makes me mad,” she said of the donation she didn't know about. "It makes me very upset because it's deceptive.”

The alliance has an address in an office building north of downtown Oklahoma City. A piece of paper taped to a locked door says: "Working Oklahomans Alliance WOKA 80,000 Members Strong.” The door appears to lead to the offices of Lawyers for Working Oklahomans. The executive director of Lawyers for Working Oklahomans would not let reporters inside the offices. She also refused to identify the Lawyers for Working Oklahomans president. Former Executive Director Mannix Barnes said he hasn't worked there for about two years, so he didn't feel comfortable commenting about the organization. Barnes is now chief of staff for state Labor Commissioner Lloyd Fields.

Bell and other attorneys who raised donations from clients would not comment. Employees in Bell's office, however, insist clients authorized the donations in writing from their workers' comp settlements even if the clients can't remember it now. Clients are given a list of amounts withheld from checks, said a longtime friend of Bell's. Employees of Bell's office circle one item, "WOKA contribution,” from the lists and ask clients to place their initials by it. Clients also are asked to sign separate contributor's statements.

A few times, Bell's employees realized they forgot to get contributor's statements and tore up the checks to WOKA and sent the money to the clients instead, said the friend, who did not want to be identified.

Workers' compensation attorney Gary Prochaska always gets written authorization from his clients to make the donations, said attorney Jerry Foshee, who works with him. Investigation's findings The Oklahoman reviewed hundreds of pages of contribution reports and found hundreds of possible violations of ethics rules. The review found:
•Attorneys repeatedly fail to turn in donations from injured workers on time. Attorneys are required by law to get donations to the political fund's treasurer or deputy treasurer within five days of receiving them from injured workers. Instead, many donations apparently were not turned in for weeks or months.
•Injured workers are supposed to sign contributor's statements confirming their donations. Several workers interviewed by The Oklahoman didn't recall signing any such statements.
•The occupation of several donors is listed as unknown.
•Addresses of a few donors are listed as that of Working Oklahomans Alliance's post office box. In other cases, a donor's address is actually the address of his attorney.
•Ken Hartin was identified in January as the chairman and treasurer of Working Oklahomans Alliance. This year, he supposedly certified as true and correct contribution reports dated Jan. 30, April 30, July 18 and July 21. Hartin, a state Department of Human Services employee, said he got involved with the organization after he was injured but resigned over a year ago for personal reasons. He said his name should not be on recent reports.

The executive director of the state Ethics Commission would not comment on whether the agency has investigated Working Oklahomans Alliance. However, Executive Director Marilyn Hughes agreed some of the information on the contributions reports raised questions.
"It's questionable that an attorney representing a client in a workers' comp case would not know their occupation or employer,” Hughes said.

The Ethics Commission can seek civil penalties in court for violations. Unintentional violations start at $1,000 per violation. Penalties go into the state's general fund.
In 1993, Bell pleaded guilty to giving excessive donations to Walters' campaign by using the names of a son and aunt. Investigators then also looked at whether Bell was behind donations from other relatives, friends and his employees.

The Basics of Experience Rating Part 1 (NCCI)

What drives costs up the most? For a basic primer on experience rating, we recommend going to the source: The National Council on Compensation Insurance website provides a well-written document (PDF) that will walk you through the fundamentals of experience rating.

When we train employers on experience rating, we focus on employer strategies: what can you do to minimize the future cost of insurance? How can you translate a basic understanding of experience rating into a reduction in future premiums? Keep in mind that in experience rating, size matters. Large insureds with large premiums are expected to have more losses than smaller insureds. Indeed, because their margin of error is smaller, companies with premiums in the $10,000 to $50,000 range can easily find themselves in a lot of trouble with just a few injuries.
The Rating Period In workers compensation, your past history follows you along like a faithful dog. In fact, losses that occurred 5 years ago still impact what you are paying today for insurance. The rating period for your 2005 policy (the policy which begins any time during the 2005 calendar year) includes all the losses from 2001, 2002 and 2003. On the other hand, losses prior to 2001 are gone forever: they cannot impact your experience rating, even if the reserves are increased substantially.

Primary Losses Are the Most Expensive. Every time you report a claim to your insurance company, a reserve is set for the claim. The reserve projects the total indemnity payments (lost wages), medical bills and expenses for this particular claim. The first $5,000 of each claim is considered primary. Any amount of reserve above $5,000 is considered excess loss. Any reserves above a state-specific ceiling (ranging from $100,000 in most states to as high as $175,000 in Massachusetts) is unratable that is, it does not count at all in the calculation of your experience rating.

So what does this mean? Experience rating places more emphasis on the frequency of injuries than on the severity. An employer with one large loss ($100,000) will pay less for future insurance than an employer with 10 smaller lost time claims of $5,000 each with a total of $50,000 in losses -- because the full $50,000 is primary loss in the premium calculation for the second employer, while there is only $5,000 in primary losses for the first employer. Experience rating cushions the blow of the large loss, but hammers employers with frequent losses.
Small Employer, Big Trouble: Here is where a lot of smaller employers get caught: if you have a frequency problem (a lot of relatively small injuries involving at least some lost time) and just one big loss, the primary losses add up in a hurry. You quickly exceed the expected level of primary losses. As a result, your experience rating pushes up into the debit zone. You start paying a lot more for insurance.

If you find yourself in this position, with an experience modification well above 1.0, you need to learn more about the intricacies of the rating process itself. There are opportunities for minimizing the impact of your losses. NOTE: States vary in their application of experience rating procedures. Check with your local authority if you have specific questions.





Published by Lynch Ryan - Workers Comp Insider

Which State does the Work Comp Payroll fall Under

I recently had a contractor (OKLA client) hire a TN subcontractor to do some painting work in MO. They let them start the job without WC insurance and the sub never obtained the insurance. The question was what rate will apply at audit for our client since each state has different rates. After emailing the underwriter we received this answer from their audit department:

The WC Rules (as found in the Scopes under 5403) are:
1. the payroll of employees who are hired for a specific job project are assigned to the state in which the job is located.
2. payroll of employees who travel constantly across state lines but return home each night are assigned to their headquarters state
3. if employees are assigned to a job that is located in a state other than their headquarters' state, their payroll shall be assigned to the highest rated of either the state in which the job is located or the headquarters' state.

For Gen. Liability, they are assigned based on the location of the job

Since these multi-state issues do come up from time to time it is good to have a good insurance company that deals in multi-state exposures to help out on these situations.

Chris Moxley

Compsource official attributes losses to strength of private insurers

July 1, 2008
OKLAHOMA CITY – Terry McCullar seems unperturbed to report to the board yet another month of policy losses for CompSource Oklahoma. The state-created workers’ compensation insurer has been losing ground in its net number of policies at a steady clip since 2006.
But McCullar is familiar with the ups and downs of the workers’ compensation market in Oklahoma, and doesn’t seem to regret the loss in market share. McCullar notes the data suggests CompSource’s lost policies are an indication of the strength of the private insurance market at the moment. But the data also indicates that hard times for the market may be on the horizon, as private insurers increasingly become the victims of their own success.
“It’s starting to show up in combined ratios,” said McCullar. “They’re beginning to decline, which may be the first indication that the less competitive companies are pricing themselves out of the market.” An insurance company’s combined ratio is the sum of its loss ratio and expense ratio; a combined ratio over 100 generally indicates unprofitable underwriting.
“Softening prices are pushing written premium growth in workers’ compensation into negative territory, jeopardizing longer-term profitability,” Conning Research & Consulting reported in its midyear update. The average 3-percent decrease in written premiums experienced nationwide could in part be attributable to competitive pricing, as insurance companies fight for a greater share of the market. But when coupled with increasing medical costs and the threat of a sustained economic recession, low premiums could signal a profitability problem for the private market in the near future.
“Keeping the combined ratio at or below 100 percent will be both a test of insurers’ resolve in providing a stable market to the customer, and their ability to manage enterprise risk effectively,” Conning reported.
Private insurers may increasingly find themselves between a rock and a hard place as they balance the need to keep written premiums low with continued increases in medical costs. Workers’ comp reforms in several states have shown success in reducing the number of claims filed, but the cost of the average claim has grown enough to significantly erode the benefits of lowered frequency. And as the average age of the American worker continues to increase, insurers can expect to see greater severity in bodily injuries, Conning reported.
According to the latest NCCI report, frequency of claims per 100 workers has declined from 1.7 to 1.1 between 1997 and 2006, but the annual increase in medical care costs per claim averages 8.5 percent over the last five years. Medical care costs are growing faster than the overall Consumer Price Index medical care costs, NCCI reports, accounting for 59 percent of total claim costs in 2007.
Demand for insurance coverage declines during times of economic recession, as employers try to cut costs. At the same time, studies show more workers are likely to file claims during times of economic hardship. Employers may also cut spending on safety-related budget items, contributing to a rise in claims.
States that have in recent years made significant workers’ comp reforms may be unwilling to provide further benefits for insurers if it comes to light that some of their problems with profitability are “’self-inflicted’ by aggressive price cuts,” Conning reported.
The effect in Oklahoma may prove different for Oklahoma than for other states. The fact that premiums for CompSource have held relatively steady for the last few years despite a reduction in the number of policies may indicate that Oklahoma has bucked the nationwide trend in that wages have increased during that time, said McCullar.
The leading private insurer in Oklahoma, AIG, holds 15 percent of the market share. But AIG’s spokesman in New York remained tight-lipped about the company’s experience.
“We very rarely comment on claims experience,” said Joe Norton, director of public relations for AIG. “It’s not something I can help you with.”
Nationwide, the average combined ratio for private insurers rose from 93 in 2006 to 99 in 2007. CompSource reported a combined ratio of 111 for 2007, in range with other state-created insurers, which reported combined ratios between 106 and 115. CompSource was the leader in market share in Oklahoma during 2007, at 37.8 percent. During the last hard market cycle, in 2005, CompSource’s market share peaked at 46.9 percent.
Copyright © 2008 The Journal Record All Rights Reserved 101 N. Robinson Ave., Ste. 101, Oklahoma City, OK, 73102

Plastic Packaging Injuries

While opening my new blue tooth headset today, I started wondering how many people had been injured opening these bulletproof plastic packages. I had to get wire cutters to open the packaging and almost sliced open my arm in the process. I looked it up and the Consumer Products Safety Commission reported that injuries from plastic packaging resulted in 6,400 emergency room visits in 2004 alone. I'm sure this has gone up from 2004. These people need to seriously consider getting rid of this ridiculous plastic packaging.

Oklahoma Workers Comp Death Benefit Chart

Newest Oklahoma Workers Comp Death Benefit Charts. http://www.owcc.state.ok.us/Death%20Charts/Death%20Chart%20-%20Nov%201,%2005%20to%20Oct%2031,%2008%20-%20Rev.%2009-05%20from%20Tish.pdf

OKLA Workers Comp Fee Schedule 1/1/08

Oklahoma Medical Fee & Hospital Schedule Changes Effective 1/1/08 http://www.owcc.state.ok.us/MedServices/2008%20Fee%20Schedule_FINAL%20updated%203-10-08.pdf