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Slide 1
TN WORKERS COMPENSATION REFORM JEFF FRANCIS ASSISTANT
ADMINISTRATOR DIVISION OF WORKERS COMPENSATION 1
Slide 2
WHY REFORM? WORKPLACE INJURIES ARE A SERIOUS MATTER Cost to
employees May jeopardize their position May leave them with
impairments May hurt them financially May not be able to support
families Cost to employers Money, disruption of operations and loss
of productivity. In FY 2011-12: 60,541 Medical-Only Claims 40,360
Lost Time Claims 2
Slide 3
WHY REFORM? Complaints about WC costs in TN Higher than
surrounding states Discourages new jobs from coming to TN Some TN
firms expand to other states instead of in TN Increased interest in
opting out Perception that process is too lengthy and complicated
Perceived incentives to stay off from work 3
Slide 4
WHY REFORM? Concerns about court system Too litigious Only TN
and AL use trial courts Inconsistency in court rulings Race to the
courthouse Timeliness; it can take years for a claim to move
through the court
Slide 5
GOVERNOR LISTENED, APPOINTED WORKING GROUP AND ASKED, How Can
the System Be Improved? 5
Slide 6
SIXTEEN MONTHS LATER PUBLIC CHAPTER 289 AN ACT TO REFORM
TENNESSEES WORKERS COMPENSATION SYSTEM WAS SIGNED FOR DATES OF
INJURY ON/AFTER JULY 1, 2014 6
Slide 7
MAJOR CHANGES IN THE REFORM Definition of Injury Change in
Construction of Law Move from Chancery and Circuit Courts to
Workers Compensation Court in DWC Change in Medical Provider Panels
Change in Physician Communications
Slide 8
MAJOR CHANGES IN LEGISLATION Enhanced Mediation Introduction of
Treatment Guidelines Change in Temporary Total Disability Benefit
Change in determination of permanent partial disability benefits
New Penalties
Slide 9
MAJOR CHANGES IN THE REFORM Change in Administrative Structure
DWC autonomous unit of DOL Court of Workers Compensation Claims
Board of Workers Compensation Appeals Ombudsman Program/Enhanced
Mediation Continuation of Existing Programs
Slide 10
EXPECTED IMPACT OF REFORM On Employees: Process that is easier
to understand Emphasis on resolving disputes Faster access to court
Quicker Medical Treatment Quicker return to pre- injury employment
On Employers: Fairer, more predictable environment Quicker, simpler
resolution of claims Less concern about venue Lower administrative
costs More conducive to bringing jobs to TN
Slide 11
DEFINITION OF INJURY Currently, there is a could be standard
when it is supported by lay testimony New Law: Injury is
compensable if it arose primarily in the course and scope of work
when all other possible causes are considered Primarily had applied
to gradual injuries since 6/6/11.
Slide 12
MEANING OF PRIMARILY An injury arises primarily out of the
employment if the employee can show that it contributed more than
fifty percent (50%) in causing the injury, considering all
causes.
Slide 13
MEDICAL PROOF Treating physician must state that work primarily
caused the injury to a reasonable degree of medical certainty.
Reasonable degree of medical certainty means, in the opinion of the
physician, it is more likely than not considering all causes, as
opposed to speculation or possibility. T.C.A. 50-6-102(12)(D)
Treating physicians opinion is presumed to be correct
Slide 14
NEW MEDICAL PROVIDER PANEL PROCESS PC 289 simplifies the
process by requiring only one panel. Three or more independent
physicians, specialists, chiropractors, or practice groups (or any
combination thereof) Initial Treating physician may refer injured
worker to a specialist Employer has 3 business days after
notification of referral is received to offer a panel or referral
stands.
Slide 15
PHYSICIAN COMMUNICATIONS Now: Legislative requirement for a
signed waiver form from injured worker before ER could speak to
medical provider. (Response to Overstreet case) New: Employer is
allowed to communicate with treating physician (orally or in
writing), only about the treatment for the workers compensation
injury.
Slide 16
NEW PROVIDER PANEL PROCESS Providers must be willing to treat
the injured worker. If not, ER must provide additional choices.
Maintains the community rule, but allows a 100-mile radius if not
available in the community. EE still gets travel reimbursement if
outside 15- mile radius NEWDivision can enforce a penalty for
improper panels
Slide 17
NEW MEDICAL TREATMENT GUIDELINES-- TO BE ADOPTED BY 2016
Guidelines for the diagnosis and treatment commonly occurring
workers compensation injuries Intended to reduce disputes, improve
quality and timeliness of medical treatment In consultation with
medical advisory committee
Slide 18
MEDICAL TREATMENT GUIDELINES Medical Advisory Committee
Physicians with experience in WC with representatives of insurance,
employers, and employees Any treatment that follows guidelines
presumed to be medically necessary Rebuttable by clear and
convincing evidence Addresses an area of concern to employees and
physicians
Slide 19
19 ALERT! EMPLOYER OPPORTUNITY Employers who do not provide
injured workers appropriate, timely panels hurt themselves. Lose
control of claims when they do not act quickly to manage the
claim.
Slide 20
ALERT! EMPLOYER OPPORTUNITY Employers who do use the panel
process proactively can better manage claims: Can negotiate
discounts with the providers on panel. Panel physician has a
presumption of correctness regarding causation. Can be overcome by
preponderance of evidence. Employers can more easily monitor the
medical progress of the claim.
Slide 21
DIFFERENT CONSTRUCTION OF LAW Will replace current construction
that the law must be liberally construed in favor of the employee.
New: Statute must be construed fairly, impartially and in
accordance with basic principles of statutory construction.
Slide 22
THE OMBUDSMAN PROGRAM Will provide education and assistance to
any party to a workers compensation claim that is not represented
by an attorney. Will be staffed by persons trained in Tennessee
Workers Compensation law and rules of the various programs. An
ombudsman is not an attorney, and cannot provide legal advice,
cannot sign documents on behalf of a party.
Slide 23
DUTIES OF THE OMBUDSMAN The ombudsman will have the basic
responsibilities of: Advising parties of the basics of workers
compensation laws and procedures Answering the questions of parties
Assisting parties in the completion of forms Acting as a liaison
among the parties to ensure communication among parties and
efficiency in the administration of claims
Slide 24
MEDIATION PROCESS The new Mediation Program will function
similarly to the current Benefit Review Process, but from the start
of the claim. Includes temporary and medical benefits NEWAdditional
requirements to act in good faith Rules will be promulgated
regarding good faith Violation of those rules may lead to a penalty
of up to $5,000
Slide 25
THE WORKERS COMPENSATION MEDIATION PROGRAM All disputed claims
must be mediated before a hearing in the workers compensation court
will be scheduled. NEW - certification of dispute process If
parties cannot agree, disputes must be certified before appearing
before judge
Slide 26
WORKERS COMPENSATION COURT Judicial function moved from courts
to DWC for permanency issues DOI 7/1/14 Judges appointed by
Administrator Licensed attorneys at least 30 years old Must have at
least 5 years appropriate experience Will serve a 6 year term;
maximum of 3 terms There will be one Chief Judge Selection
process
Slide 27
WORKERS COMPENSATION COURT Judges will be located across state
and will receive training prior to serving. Judges can be removed
for non- performance or for cause Tennessee Code of Judicial
Conduct Court hearings will be conducted in accordance with TN
Rules of Civil Procedure and Rules of Evidence
Slide 28
DUTIES OF A WC JUDGE Conduct hearings Render orders, decisions
and determinations in a timely manner Approve settlements Issue
subpoenas Compel obedience to judgments, orders and process through
the assessment of civil penalties
Slide 29
NEW BOARD OF WC APPEALS Will render and decisions on appeals of
decisions by WC judge. Wholly separate from the Court of Workers
Compensation. 3 Appeal Judges Appointed by Governor 6 year term,
limit of 2 terms Licensed attorneys with 7 years experience Parties
will still have right of appeal to the Supreme Court.
Slide 30
ALERT! EMPLOYER OPPORTUNITY Employer/Insurance Company can have
a better outcome if they: Provide a representative with authority
to settle the claim at all mediations Provide the opposing party
all documentation and information pertinent to the claim that is
necessary to engage in fruitful negotiations Arrive at ADR
proceedings on time
Slide 31
TEMPORARY TOTAL DISABILITY (TTD) BENEFITS Amount unchanged for
those employees out 7 or more days NEWEnds when employee reaches
MMI when the treating physician ends all active medical treatment
and the only care provided is for the treatment of pain with one
exceptionMental/Mental claims NEW If TTD payments made post MMI,
automatically offset against PPD
Slide 32
NEW IMPAIRMENT RATING PROCESS Authorized treating physicians
(ATP) rating has presumption of correctness Presumption can be
overcome by a preponderance of the evidence MIR Registry is still
available when there is a dispute over the ratings MIR rating
trumps treating physician's All impairment ratings will be BAW
Slide 33
CURRENT PERMANENT PARTIAL DISABILITY (PPD) BENEFITS The current
PPD benefits are capped at: 1.5 X the impairment rating for cases
where the EE returns to work at the same ER earning at least 100%
of pre-injury wage; and, 6 X the impairment rating for cases when
the EE doesnt. The number of weeks of benefits are due varies.
There is a list of 31 scheduled members that range from 10 weeks to
400 weeks. For injuries to non-scheduled (BAW) members, the max
number of weeks is 400.
Slide 34
NEW PERMANENT PARTIAL DISABILITY BENEFITS Date of Injury If
worker does not return to work for any ER at 100% wage after
initial disability period Date Injured Worker Reaches Maximum
Medical Improvement
Slide 35
NEW PERMANENT PARTIAL DISABILITY (PPD) BENEFIT Employee
eligible for PPD benefit whether they return to work or not when
they reach MMI The initial PPD Benefit equals: impairment rating X
450 X 66 % of the EEs average weekly wage This benefit is for the
period determined by multiplying 450 by impairment rating
Impairment ratings shall not consider complaints of pain
Slide 36
PERMANENT PARTIAL DISABILITY (PPD): HOW TO CALCULATE INITIAL
BENEFIT Example: If the EEs Average Weekly Wage is $750 and
Impairment Rating is 7% : Multiply.07 (rating) X 450 (weeks) X $500
(comp rate) = $15,750 during initial compensation pd..07 X 450 =
31.5 weeks (compensation period) If the EE hasnt returned to work
31.5 weeks after MMI, he/she is entitled to additional
benefits
Slide 37
PPD BENEFIT AFTER INITIAL BENEFIT If EE does not return to work
or does, but makes less than the pre-injury wage, the EE is
eligible for additional benefits. The additional benefit is
determined by multiplying the initial benefit by all that apply:
Factor of 1.35 because of loss of job or pay Factor of 1.45 if no
HS diploma or GED Factor of 1.2 if employee > 40 years of age
Factor of 1.3 if unemployment in county where employed > 2
points above state average for year prior to initial period of
compensation
Slide 38
PPD BENEFIT AFTER INITIAL BENEFIT EE received $15,750 during
the 31.5 weeks after the initial compensation period. Lump sum or
periodic payments EE may be eligible for additional benefit(s):
Loss of job or lowered pay factor (1.35) Education factor (1.45)
Age factor (1.2) Unemployment factor (1.3) The actual benefit will
depend on which factors apply.
Slide 39
PPD EXAMPLE: 3 OF 4 FACTORS Injured worker is 45, 8 th grade
education, worked in Davidson County Comp rate is $500 Impairment
rating is 7% 0.07 X 450 X $500 X 1.35 X 1.2 X 1.45 = $36,996.75 in
total benefits Employee would have already received $15,750 in the
initial benefit period Additional benefit is $21,246.75
Slide 40
NEW PENALTIES Failure to mediate in good faith Failure to
comply timely with order or judgment issued by a WC judge Failure
of employer to timely provide appropriate medical treatment Failure
of employer to provide panel Wrongful failure of employer to pay
TTD Wrongful failure to satisfy terms of approved settlement
Slide 41
REFORMS ARE ONLY PART OF THE SOLUTION What Employers Can Do To
Make the System Better: Know the law Respond quickly and
effectively to claims First Report of Injury even if you dispute
the claim Contact Insurance Co. or TPA Medical Panel Wage Statement
Meet deadlines in law If a claim is denied, file appropriate
form
Slide 42
HOW DWC CAN HELP Local DWC office can provide information and
assistance Education programs about Reforms and current law Listen
to your issues and look for solutions Provide fair, impartial
service to all parties
Slide 43
Revised: 07/13/2011 Revised: 07/13/2011 MemphisMemphis 170 N.
Main Street, 11 th Fl170 N. Main Street, 11 th Fl Memphis, TN
38103-1820Memphis, TN 38103-1820 Telephone: 901-543-6077Telephone:
901-543-6077 Fax: 901-543-6039Fax: 901-543-6039 Nashville--Metro
CenterNashville--Metro Center 2222 Rosa L. Parks Blvd.2222 Rosa L.
Parks Blvd. Nashville, TN 37228Nashville, TN 37228 Telephone:
615-741-1383Telephone: 615-741-1383 Fax: 615-253-2480Fax:
615-253-2480 CookevilleCookeville 444-A Neal Street444-A Neal
Street Cookeville, TN 38501-4027Cookeville, TN 38501-4027
Telephone: 931-520-4290Telephone: 931-520-4290 Fax:
931-520-4316Fax: 931-520-4316 KnoxvilleKnoxville 1525University
Avenue1525University Avenue Knoxville, TN 37921-6741Knoxville, TN
37921-6741 Telephone: 865-594-5177Telephone: 865-594-5177 Fax:
865-594-5172Fax: 865-594-5172 KingsportKingsport 1908 Bowater
Drive1908 Bowater Drive Kingsport, TN 37660-4136Kingsport, TN
37660-4136 Telephone: 423-224-2057Telephone: 423-224-2057 Fax:
423-224-2056Fax: 423-224-2056 ChattanoogaChattanooga 540 McCallie
Ave, Ste W600540 McCallie Ave, Ste W600 Chattanooga, TN
37402Chattanooga, TN 37402 Telephone: 423-634-6422Telephone:
423-634-6422 Fax: 423-634-3115Fax: 423-634-3115
MurfreesboroMurfreesboro 845 Esther Lane845 Esther Lane
Murfreesboro, TN 37219Murfreesboro, TN 37219 Telephone:
615-848-6743Telephone: 615-848-6743 Fax: 615-217-9378Fax:
615-217-9378 JacksonJackson 225 Dr. MLK Drive, 1 st Fl225 Dr. MLK
Drive, 1 st Fl Jackson, TN 38301-6985Jackson, TN 38301-6985
Telephone: 731-423-5646Telephone: 731-423-5646 Fax:
731-265-7022Fax: 731-265-7022 Division of Workers Compensation
Offices 1-800-332-2667 Website:
www.state.tn.us/labor-wfd/wcompwww.state.tn.us/labor-wfd/wcomp
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