Tag Archives: comp claims

Why Comp Claims Can Take Forever

Over the years, I’ve had safety directors or claims managers tell me that workers’ compensation claims move slower than a one-legged dog on tranquilizers. I would say the resolution speed of comp claims more closely resembles that of a three-legged dog on mild muscle relaxants – – but I won’t quibble over how far to take the metaphor.

Bottom line: Oftentimes, comp claims do move very slowly. Without dwelling on the obvious, let me suggest three legitimate reasons why comp claims aren’t yet as fast as text-messaging teenagers.

1. Litigation takes time

If you have pro se claims (where the claimant does not have an attorney), you’ve undoubtedly noticed that these claims are usually resolved very quickly. Why? You can insert you own joke, but you might consider the old one about how attorneys make good speed bumps. Having fewer attorneys involved removes obstacles and speeds the process. The absence of attorneys also means that there are likely no real issues to resolve. Everyone agrees on everything, so there is nothing to argue about.

In disputed claims, though, investigation takes time. Discovery takes time. Getting opinions from expert physicians takes time. Courts take time.

Years ago, I had a client tell me: “Brad, I don’t want you to settle any of our comp claims. Take them all to trial.” I did that. . . for a while. After two years of this (and after seeing the defense costs associated with taking every case to trial), the VP of claims called me and said: “Brad, can you start letting me know which claims can be resolved without trial?”

It doesn’t take a high level of skill to take every case to trial. It does, however, require skill to know which claims should be settled and which claims should be disputed.

2.  Movement takes willpower

Apart from falling down, movement takes willpower and initiative. A new client contacted me in June about taking over the defense of a claim that has been litigated since 2002. I entered my appearance, reviewed the medical records, called the claimant’s attorney and worked out a tentative framework for settlement with three or four phone calls.

I am certain that I am not any smarter than the defense attorney I replaced. Some would say he is far smarter – – he was paid to work a file for 12 years, and I was the dope who resolved it with a few phone calls! Self-serving attitudes aside, I had a fresh perspective and wasn’t afraid to throw out ideas to resolve the claim instead of simply throwing out ideas for continued litigation. In an area of the law where the work is often very repetitive, coming up with a new approach is often difficult.

3.  Common sense is mistaken

Common sense would seem to indicate that if the claimant’s attorney knows little about workers’ comp law, this places me (as the defense attorney) in a better position to achieve a favorable result for my client. In this instance, common sense is completely wrong.

I have always found that claimant’s attorneys who actually know what benefits are payable under the workers’ comp law and how to prosecute a workers’ comp claim are far better to work with than the attorneys who handle three comp claims a year and try to handle the claim like a jury trial in circuit court.

Knowledge and experience can bring efficiency to a system that rarely seems efficient.

Why Workers’ Comp Claims Will Keep Falling

According to NCCI, the number of lost-times claims has been on a downward trend for more than a decade. With the exception of 2010, the number of lost-time claims has been declining over the past decade at a predictable rate of approximately 2% to 3% a year. The question, though, is whether this trend will continue.

Many analysts are predicting a rise in the number and frequency of lost-time workers’ compensation claims. This certainly may be true for 2014 as the U.S. is finally emerging from one of the longest recessions in history, coupled with the resurgence of the domestic oil and natural gas industry. However, this upward blip will have little, if any, effect on the long-term downward trend. I see several reasons why, except for 2014, this downward trend will continue:

Decline in manufacturing jobs

It should come as a surprise to no one that the U.S. economy has been shifting away from manufacturing jobs and toward a service-based economy. Even before to the Great Recession of 2008, manufacturing jobs were disappearing at an alarming rate. 2005 marked the first year since the Industrial Revolution that fewer than 10% of American workers were employed in manufacturing.

According to the Bureau of Labor Statistics, U.S. manufacturing employment fell from 19.6 million jobs in 1979 to 13.7 million jobs in 2007. Since 2007, the decline has only increased.

It stands to reason that as this trend away from manufacturing jobs continues, increased jobs in the service sector (where safety risks are often reduced) will lead to reduced lost-time workers’ compensation claims. Even if 2014 is an outlier, this trend will continue for the foreseeable future.

Increased Social Security disability claims

Obviously, people who receive Social Security disability benefits are either out of the work force or have a reduced employment capacity. While the last three decades have revealed a sharp increase in the number of Americans receiving Social Security disability, this trend has increased even more sharply over the past few years.

According to the Wall Street Journal, the number of Americans receiving Social Security disability benefits is up a whopping 42% since 2004. The actual number of Americans receiving Social Security disability benefits hit almost 11 million in 2013.

Data for 2014 shows that the number of people filing new Social Security disability claims has leveled off. However, this plateau is above the levels seen before 2013, and there is no indication that the number of such claims will actually decrease soon.

Increased focus on safety

Over the past decade, we have seen the creation of an entirely new business sector — workplace safety. Driven by both the requirements of OSHA and the workers’ comp savings realized by reducing accidents, this workplace safety business sector continues to make strides.

According to the Bureau of Labor Statistics, 4,383 fatal work injuries occurred in 2012, with 3.2 injury deaths per 100,000 full-time equivalent workers. This is a drop from the 2011 figures of 4,693 fatal work injures and a rate of 3.5 deaths per 100,000 full-time workers.

According to Amanda Wood, director of labor and employment policy at the National Association of Manufacturers, OSHA has played a role in this downward trend, but the bulk of the credit for these improvements should go to employers who are focused on a safe work environment. “I think those numbers show business’s commitment to a safe workplace,” Wood said in a recent interview with Safety and Health Magazine.

Insurance carriers have also jumped on the safety bandwagon. In years past, I would often speak with “the” safety professional with an insurance carrier. Now, carriers have entire safety divisions and even local safety professionals in every major market — all dedicated to reducing the number of workplace accidents.

A changing definition of ‘workplace’

Two technology trends are truly changing our definition of the workplace — mobile technology and internet/cloud technology. Telecommuting is now commonplace. There was a day when claims adjusters were all working from regional call centers scattered across the country. Now, more often than not, a claims adjuster is working from his or her basement…as are scores of other 21st century workers.

If all of the data accessed by an employee is available in the cloud as opposed to an office mainframe computer, it makes sense to give workers flexibility on where the actual work is performed. Employers can lower costs by reducing the amount of real estate that must be owned or leased, while employees spend less time commuting — and the average number of claims related to workplace accidents keeps dropping.

Combine this trend with the current emphasis on mobile technology and one can easily see why “getting to work” may become as archaic as saying “saddle up the horse.” While using mobile technology does increase the opportunities for accidents while driving cars, this is more than offset by the physical removal of a large number of employees from company-owned “workplaces” that present even more opportunities for accidents and injuries.

Bottom line: Except for 2014, we should continue to see great strides in workplace safety and a continued downward trend in workplace injuries.

A Catch-22 on Hiring the Disabled

In the Missouri Court of Appeals' recent decision in Stewart v. Second Injury Fund, the facts were not in dispute: Ms. Stewart worked at Subway for a few months, suffered a moderately severe injury at work and could not return to any type of employment.

Here’s where the story becomes interesting: The claimant qualified for Social Security disability in 1997 — more than 10 years before she started working at Subway. 

Her Social Security disability was awarded based on confirmed medical conditions including arthritis, reflex sympathetic dystrophy, degenerative joint and bone disease and carpal tunnel syndrome. She continued to receive Social Security disability benefits even while she was working at Subway.

After her work injury in 2009, she filed for workers' compensation benefits, claiming that she was permanently and totally disabled.

Was the claimant permanently and totally disabled before her injury at Subway? Apparently not, because she was able to obtain that job and perform the duties associated with that job. In the absence of her injury, she would have presumably been able to continue working. 

Why would she be entitled to Social Security disability benefits if she was able to compete in the open labor market? If she was disabled in 1997, should she be entitled to more benefits when she was injured at a job that she should not have been able to obtain?

What if Subway had told the claimant during her initial job interview that she could not be hired because of her multiple disabilities? She could have sued Subway under the Americans with Disabilities Act, arguing that Subway was discriminating against her. Subway, not wanting to be sued, could have been forced to hire the claimant only to face the prospect of being liable for permanent total disability after only a few months of work.

I’m not attempting to disparage the claimant. She obtained benefits that are legally provided. My question is this: Is it fair to place employers in no-win situations where they face litigation if the employee is not hired, yet still face litigation if the employee IS hired?

This situation arises because of the myriad of state and federal laws that regulate every facet of the workplace. Every employer must wade through an alphabet soup of overlapping laws every single day (ADA, FMLA, COBRA, EFCA, EAD, ERISA, FLSA, FCRA, INA and a host of others). 

One cannot swing the proverbial dead cat without hitting five politicians giving a speech focused on creating jobs. Yet, can jobs be created by strangling the very companies that create these jobs?