An Act To Improve The Workers’ Compensation System HB 194/SB 200

*An Act To Improve The Workers Compensation SystemHB 194/SB 200

Why Reform?Concerns about costs in TNHigher than states around TNDetriment to bringing new jobs to TNSome current employers want to opt outConcerns about court systemInconsistencyRace to the courthouseClaims in the court system take too longConcerns that process is too complex and too lengthy

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WORKERS COMPENSATION COSTS BY STATEPremium Rates per $100 payroll*Workers Comp Costs/$100 Payroll by State2012 Oregon Workers Compensation Premium Rate Ranking, Oregon Dept. of Consumer & Business Services

Why Reform? Length of Time in Court *

Date Injured Worker Reaches Maximum Medical ImprovementNumber of Days from Maximum Medical Improvement to Trial8/18/2008148710/23/200811473/18/20097933/31/20096674/28/20096438/10/20105309/30/20094718/9/20102321/3/20113822/25/2011634

Primary Areas of ReformAdministrative StructureWorkers Compensation Division becomes an independent unit in Department of Labor & Workforce DevelopmentAdministrator is appointed by the Governor for a term of 6 years with limit of 2 termsCan be removed for cause or nonperformanceJudicial function moved from courts to DivisionPredominant model in United States

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AdministrativeCommissionJudicialW.C. Court (Commission) WORKERS COMPENSATION SYSTEM STRUCTURE BY STATE

Workers Compensation CourtWorkers Compensation JudgeHears claims under rules of civil procedure and rules of evidenceMust be 30 years old, be a licensed attorney, have 5 years experience in workers compensation law6 year terms, with maximum of 3 termsAppointed by AdministratorMay be removed for cause Decisions can be appealed*

Workers Compensation CourtChief JudgePerforms duties of judgeAdministers day-to-day operations of court Licensed attorney with 7 years of workers compensation experienceTerm of 6 yearsMaximum of 2 termsMay be removed for cause*

Workers Compensation CourtWorkers Compensation Appeals BoardSeparate from Court of Workers Compensation ClaimsGovernor appoints the 3 judgesLicensed attorneys with 7 years experience in workers compensationTerm of 6 years, limit of 2 termsFurther appeal may be made to Supreme Court*

Primary Reform Areas

Change the Definition of CausationInjury is compensable if it arose primarily in the course and scope of work when all other possible causes are considered.Definition of key phrasesStatute must be construed fairly and impartiallyReplaces language that statute must be liberally construed in favor of the employee

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Approaches to Determine Causation*

Must be major contributing cause to be compensableMust be significant cause to be compensableSubstantial cause for certain illnesses to be compensableDoes not require above to be compensable

Primary Reform Area - Disability Benefits All impairment ratings to body as a wholeImpairment rating from treating physician is presumed to be accurateEmployee receives benefits if returns to work after MMI with any employer earning 100% of pre-injury wage Impairment rating times 450 (increase from 400) times 66 % average weekly wage

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Permanent Partial Disability BenefitIf employee does not return to work or makes < pre-injury wage, employee will receive additional benefits:Factor of 1.35 if doesnt return to workFactor of 1.45 if no HS diploma or GEDFactor or 1.2 if > 40 years of ageFactor of 1.3 if unemployment in county where employed > 2 points above state average for year prior to initial period of compensation

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Disability Benefits Timeline*Maximum medical improvementIf worker does not return to work for ER at 100% wageDate of Injury

Temp Total Disability Imp rating * 450 * 66 % AWWAdditional benefits

Temporary Total Disability BenefitNowContinues until employee reaches maximum medical improvement and impairment rating is assigned by physician.Can continue for 104 weeks if mental injury.Delayed if employee is in pain management treatment.Not always offset against permanent benefits.Proposed Ends when employee reaches maximum medical improvement.No exceptions for mental injuries or pain management.If paid after maximum medical improvement, benefits are offset against permanent benefits.*

Primary Reform Area - Mediation Greater emphasis on already successful programHelps resolve temporary benefits and medical treatment disputesHelps parties resolve issues related to permanent benefitsAdditional requirements to act in good faithNew certification of dispute processIf parties cannot agree, disputes must be certified before appearing before judge*

Major Reform Area - Ombudsman Robust education and assistance program to workers who do not have an attorneyOmbudsman is neutral, no legal advice Provides education on rights and obligations of all parties and service providersEffective direction on preparation of formsHelps injured employees understand process and what they need to do to resolve disputes

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Major Reform Area Medical Selection of Medical Panel SimplifiedOne panel, not three for initial treating physician and additional panels for specialistsTreating physician can make referral to specialist if one is neededEmployer has 3 days to give a panel of 3 or treating physicians referral standsGreater continuity of care, less friction, speedier treatment*

Communications with Physician Employer is allowed to communicate with treating physicianIn writing or orallyRemoves requirement that employee sign a waiver before employer can review recordsOnly applies to medical records related to treatment for the workers compensation injury *

Medical Treatment GuidelinesTo be adopted by 2016Will improve utilization review processAny treatment that follows guidelines presumed to be medically necessaryAddresses an area of concern to employees, physicians, and the divisionIntended to reduce disputes, improve quality and timeliness of medical treatmentFees for appeals to offset costs*

Expected Results of ReformA workers compensation system that is fair, efficient, and provides better outcomes for employees and employers

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EmployeesMore assistance to understand the processProcess that is easier to understandEmphasis on resolving disputes before courtFaster access to court Expedited hearings for catastrophic injuriesImproved medical treatment Fewer delays for utilization reviewQuicker return to pre-injury jobsFaster delivery of benefits*

EmployersFairer, more predictable environment Quicker, simpler resolution of claimsImproved relations with injured workersLess concern about venueLower administrative costsQuicker return of employees to their jobsLess disruption in operationsMore conducive to expanding operations or coming to Tennessee

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Expected Results of Reform

Helps make Tennessee the #1 state in the Southeast for high quality jobs

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Questions?*

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Re TN Chamber Group: HR workers compensation committee meeting chaired by Eva Lynn Disbro, report is expected August 6 (next Monday), final meeting this Friday.

Re Division Process Improvement: Attorneys now writing orders, orders are reviewed by senior staff before being issued. Time limits have been tightened up in the initial stages of a claim that is brought to the division for assistance in resolution. New process has resulted in more consistency across state offices, higher quality orders (substantial reduction in the number of appeals), new leadership which has been well received.**Rules of civil procedure and rules of evidenceJudges can be removed for commission of any of the judicial offenses provided in 17-5-302Tennessee Code of Judicial Conduct, Rule 10, Canons 1-4 or the Rules of the TN Supreme Curt shall apply*Eliminates the haggling that goes on about impairment rating when an employee returns to work. Addresses the employers contention that employee shouldnt get anything if they return to work. This is part of the argument that opt out people make.*Plaintiff attorneys would argue that not enough people are impacted by high school factor. While high school graduation rates have certainly improved over the past year, this has not been the case for decades. Tennessee has been at the bottom of the ranks until the past year or two for graduation rates.***