July 12, 2002
The following is the briefing paper sent to all legislative and gubernatorial candidates, and senators in the middle of their terms. It outlines some of the problems injured workers face and proposals to remedy them. It accompanied a survey sent inquiring about these person's willingness to bring back fairness to the workers' compensation system.
Guarantee Fairness for Injured Workers in the Legal Process
The Workers' Compensation Law seems simple. Workers injured or made ill by the job give up the right to sue. In exchange, we are supposed to receive, regardless of fault:
The reality is that ORS 656 contains dozens of pages of exclusions, loopholes, contradictions, and conflicts with the legislative intent behind this supposed exclusive remedy. Sadly, Oregon's worker's compensation system is designed to make injured and ill workers feel like frauds. Insurance companies can spend whatever they want on attorneys, many of whom imply that we're frauds. They can hire "private eyes" and videotape us, even. Although insurers have claimed upward to 30% claimant fraud, numerous studies have found it to be .5 to 2%.
Most workers don't have the same "deep pockets" to fight back against big corporate law firms, etc, that receive a bounty of at least $25 million every year. The laws on attorney fees and evidence have created a game rigged against the injured or ill worker. Many injured and ill workers don't even file claims.
Employers ultimately pay for this wasteful and adversarial system through higher premiums and lawsuits. Attorney fees and settlements inside the system come to at least $100 million every year. The Management-Labor Advisory Committee has been "studying" these problems for years now, but they can't find a solution. Balancing incentives for attorneys, "defense" as well as workers', is part of the solution:
No "out-of-compensation" attorney fees. No attorney fees will be paid out of the additional compensation won by the worker.
Pay for work done. All attorney fees will be awarded on the basis of "reasonable attorney fees," out of premiums or a special fund.
Fully staff the Ombudsman for Injured Workers. Hire new positions for the OIW within DCBS.
Get Injured Workers Back to Safe, Living-wage Work
Injured and ill workers are at a competitive disadvantage in the job market. Many times, the pre-injury employers can't or won't rehire injured workers. Yet the Workers' Compensation Law successfully provides reemployment benefits to less than 25 percent of workers severely disabled by the job.
Every year, a couple thousand more of Oregon's workers face a future of disability that is further complicated by limited workers' comp benefits and bleak job prospects. This is a tremendous waste, due in large part to overly restrictive return-to-work programs.
The members of the current Management-Labor Advisory Committee know about these problems, but they have yet to come forward with a "fair deal." The law promises injured workers a remedy that includes a productive life after injury. The following are some ways to guarantee that remedy:
More retraining and job placement for the disabled worker. Provide vocational assistance to anyone who needs help getting back to work. Greatly expand job placement benefits.
Income benefits paid throughout eligibility for vocational assistance. The injured worker must be assured an income to support a household, yet the law permits a delay of a year or more (no benefits) between eligibility and training.
Longer training periods. Expand the maximum training time to at least 48 months, to assist workers with exceptional disability.
Fairer representation in disputes over vocational assistance. The worker's right to present evidence must not be infringed.
Full staffing of BOLI to enforece civil rights. Too many employers discriminate against workers who get injured on the job.
Make Insurance Companies Accountable for Not Paying Mandated Benefits to Injured Workers
Insurance companies have a legal duty to pay benefits promptly. Too often, the insurance company has a strategy to "go low and go slow" on paying benefits, and the law allows it. Over time, this may force the injured worker to settle the claim for cents on the dollar. Injured workers call this the "starve out." Penalties against insurance companies are few, averaging only $300 a violation.
Established insurance companies as well as "fly-by-night" and "off-shore" insurers continue to go bankrupt or otherwise default on paying benefits under their policies. Current guarantees of payment to injured workers appear to be insufficient.
Households have been ripped apart when workers' comp benefits are delayed. The Management-Labor Advisory Committee has shown little interest in hearing about these problems. The following is a list of "bare minimum" fixes:
Raise or remove the caps on civil penalties. The "bad actors" need to pay the price, and maximum penalties haven't increased in decades.
Penalize insurers and self-insurers that fail to process claims according to the law. The goal must be 100 percent compliance, not 80 percent.
As agreed to in the Governor's Office in 1999, audit claims "robustly" for proper determination of Permanent Partial Disability (PPD) benefits. Workers need more of a guarantee that they can count on permanent disability benefits when they are trying to return to a living-wage job.
Guarantee payment of benefits when the insurance company defaults. Recent legislation (SB 977 of 2001) provides only a $100,000 per policy guarantee. The repeal of ultimate employer responsibility for comp benefits, by SB 220 of 1999, was a big mistakecreating another conflict in the law and perhaps extending an invitation for lawyers to sue.
DCBS. "Claims processing" in Monitoring the Key Components of Legislative Reform (January 2001)
Make "Required Medical Exams" Fairer to Injured Workers
Required Medical Examinations are also known as insurer medical examinations. These "IMEs" are institutionalized second-guessing or micro-management of the injured worker's attending physician. Insurance companies would never admit it, but the effect of IMEs upon injured workers is to delay or deny us our benefits.
IMEs are almost completely unregulated as to the IME doctors' responsibilities and the fees charged to employers. Nobody knows for sure how often insurance companies and Managed Care Organizations order these IMEs, but there are probably at least 10,000 every year (one for every 10 claims).
Senate Bill 485 of 2001 made a first step toward reform of IMEs, creating a cumbersome process that is full of loopholes for insurance companies to exploit. It is doubtful that the Management-Labor Advisory Committee will seriously address the inequities and waste of the IME system. The whole system needs a complete overhaul. To get there, we offer a few ways to make the system fairer:
Insurance companies get the same number of IMEs as workers get changes of physician. This is only fair, righting the current imbalance where insurers get 3 IMEs every claim opening and workers get 2 changes for the length of the claim.
Exams ordered by a Managed Care Organization (MCO) should be counted as IMEs. "Disability Prevention Consultation" and the like are just other names for IMEs.
Doctors performing IMEs must be sanctioned for misbehavior. IME doctors have a duty to the patient, who is the injured worker: first, do no harm.
Injured workers can refuse to participate. If the IME doctor refuses to allow accompaniment or for the worker to audio record an exam, the worker can refuse to attend or to continue, with no penalty.
If a worker or attending physician is dissatisfied with the results of an IME, then the insurance company shall pay for a third opinion. This may even discourage some IMEs, thereby saving everyone money and aggravation.
Doctors performing examinations shall be subject to cross-examination. Doctors are making medico-legal decisions. They must be accountable for their opinions.
Improve Disability Benefits for Workers Who Can't Return to Work
Increases in maximum benefits have not resulted in adequate benefits. A recent study presented to MLAC suggests that Oregon's workers' comp system replaces only 42 percent of the paycheck lost in the 10 years following a disabling workplace injury. Unfortunately, the state's goals for workers' compensation are no longer balanced. The Oregon Benchmarks measure only the cost of workers' compensation insurance to employers.
Unbelievably, fewer than a dozen workers a year have been qualifying for permanent total disability (PTD) benefits. In 2001, the first year of insurer determination of PTDs, the figure was minus two. Before "reform," Oregon allowed anywhere from 100 to 200 PTD grants every year, at a rate much closer to the national average than now. Workers have few rights to present evidence regarding their disabilities. Workers and their families may fight for 10 or even 20 years and still not get PTD benefits. Many are forced into Social Security instead.
The members of the current Management-Labor Advisory Committee know about these problems. They are currently working on more piece-meal reforms that will not go far enough to fix the problems. Other improvements are necessary:
Remove or greatly raise the cap on permanent partial disability (PPD) benefits. Workers' compensation benefits should replace the earnings lost by a worker due to the lingering effects of permanent disability.
Restore benefits to the most severely disabled workers. Pay permanent total disability (PTD) benefits if the worker is unable to do sustained work at a living wage.
Consider all factors in awarding permanent disability benefits. The worker's right to present evidence must not be infringed. Chronic pain and depression must be considered.
For more information, please contact IWC Secretary Mike Maier <firstname.lastname@example.org> or IWC Chair Rosalie Pedroza <email@example.com>.
IWC Home | Briefing Paper | Senate | House
Sponsored by the Injured Worker Coalition
Published at www.injuredworker.org