Tag Archives: wilson

Issue 'Tickets' for Safety Violations?

A recent article in CompNewsNetwork describes the training of Alberta’s first occupational health and safety peace officers.

Don't get too excited. “Peace officer” is the same politically correct mumbo jumbo term some jurisdictions use for their prison guards.

These peace officers will have the ability to write tickets to employers and workers who cut corners and put people at risk. Classes of officers will continue training until all 143 OHS officers are certified to write tickets. The fines will range from $100 to $500. While employers here in the States have become accustomed to potential fines and regulatory actions for workplace safety infractions, this is different. First, a ticketing action is onsite and immediate, similar to being pulled over for driving 98 mph in a school zone. Second, and most dramatically, the worker — the employee previously known as the innocent victim of corporate greed and arrogance — could be the one on the receiving end.

That is huge: personal accountability in a no-fault world. Who'd ever heard of such a thing? Frankly, I have my doubts, but it will be interesting to see if this type of approach has any impact on reductions in workplace accidents.

The ticketing of employees for safety violations will strike some as a breach of exclusive remedy; the no-fault doctrine that has guided our industry for more than 100 years. 

I think they may be wrong. The adherence of exclusive remedy is strictly post-accident — once an injury has occurred. These citations on the other hand are clearly in the safety and prevention realm. Personal responsibility still applies in that world. As long as, that is, this method is used in a preventative manner and not a post-injury action.

What remains to be seen is what these peace officers are willing to do. There is always a tendency to go for the “deep pocket,” and writing a $500 citation for a faceless company may be much easier than issuing it to the forklift operator with a wife, three kids and a broken-down car. And what of the post-accident investigation? Will these officers cite an employee for causing an accident? If I am a worker injured by another’s action, an action for which he receives the equivalent of a traffic citation, does that cement potential third-party liability for him?

Under our workers’ comp system in the States, this policy of writing tickets would be much less likely to see the light of day. Still, it is a concept worth watching. It is possible that Alberta is on to something here that will help avoid accidents by putting the blame where it belongs, whether company or worker, before someone gets hurt.

Yeah, that’s the ticket.

Teachers Apparently Object to Being Shot

I can’t say that I blame them, actually.

Missouri legislators have mandated that teachers and students in public schools undergo “active shooter” drills. I suppose people call Missouri the “Show Me State” for a reason. Teachers in St. Francois County, MO, have complained because their duties now include being shot at with pellet guns during these drills. This despite being told that they would be required to wear goggles to protect their eyes. Pansies. It’s not like the welts and bruises won’t eventually heal.

To be fair, it seems the Missouri legislature was not alone. In the wake of the Sandy Hook school massacre, several states now require active shooter drills be performed in public schools. These often-unannounced drills are designed to assist law enforcement in procedure development, and to make teachers and students familiar with the sounds of gunshots and with in-pants urination.

What a brilliant idea. I can think of no better way to keep that pesky teachers union in line while simultaneously terrorizing innocent children. A real twofer from the Marquis de Sade School of Training, if you will.

Seriously, who thinks this is a good idea?

Can we not foresee (legitimate) stress claims arising from teachers who now must, sometimes without notice, deal with “active shooters”? And doesn’t this whole charade lead to a possible over-familiarization, so that people won’t respond when they need to – believing a real assault is just a drill?

Because not all drills are announced, teachers can’t comfortably secure that safety gear they are required to wear. In Texas, an unannounced drill last year in El Paso angered many parents dealing with traumatized children who thought the attack was real. These drills are moronic, knee-jerk thinking that won’t help anybody, but might be a boon for the undergarment industry.

As I have previously noted, I am but a simple boy from Durango. My crazy-ass solution to the “active shooter” scenario could best be summed up by this phrase: active defenders. If you want teachers to be familiar with the sound of gunfire, take them to a gun range and teach them how to handle a weapon. And when they are done, certify them to carry if they wish. Some people will think that is nuts – truly certifiable – but I maintain it is less crazy than creating “Gun-Free Zones” that provide target-rich environments for whackjobs who are not overly concerned with violating useless gun registration laws. And my approach is certainly a better defense than teaching people how to hide in a closet and pray that “this one is a drill.”

Our children and teachers are now far more likely in some states to be traumatized by a law-enforcement exercise than by a real “active shooter.” Still, we live in a world where the mentally ill do not get help until it is too late. We do need to be prepared to defend our children from terrible assaults like the one at Sandy Hook. I just wish the people of Missouri and other states could show me a better way than the path they have chosen.

Management by Wandering Around: A Workers' Comp Lesson From Television

I once saw an episode of the television show “Undercover Boss” that offered a good lesson for employers everywhere. 

For those of you not familiar with it,  “Undercover Boss” is a CBS show where a CEO who is completely unaware of what actually happens within his company dons a cheap and unconvincing disguise and spends a week working undercover within the organization. He meets employees along the way who, while turning out to be the bedrock of success for the company, have every possible malady and crisis occurring in their personal lives. The CEO learns that her company does not train, supply, support or develop employees at any acceptable level. One CEO actually found that his female employees had to urinate in a can when on the job. Ironic when you realize his company was Waste Management. The program ends every week with the CEO revealing himself to said employees, giving them each a bazillion dollars, a paid vacation to Disneyland, new teeth and a promotion to head a new department designed to do whatever they happen to be good at, like peeing in a can. I personally think the employees are being paid off to keep quiet about the CEO's inability to actually perform any job within the organization.

If you haven't guessed, this isn't my favorite show. However, my wife and I are a typical married couple and have to have something to watch, or risk having to “talk,” which always gets me in trouble, so we load up the DVR.

I have often joked in the office about doing a spoof video of “Undercover Boss. The joke, of course, being that, in our small office, everyone knows me and is already aware that I am incapable of performing any job within my organization. In the real show, we always see the CEO's palatial home(s), fancy cars, private jets and drop-dead-gorgeous families. In my version, you would see a modest home with a lawn in desperate need of new sod, a Hyundai Santa Fe that hasn't been washed since 2010 and our four cats, one of whom is blind. The highlight of the home portion would likely be my mopping up the occasional accident when blind kitty is in the box but doesn't know his fanny is over the side. You would not see my wife, as she hates having her picture taken. Even our wedding photos are just of me. They came out okay, but frankly the one of me throwing the bouquet just looks staged. 

I suppose I could wash the Hyundai before we commenced filming, or try to borrow my wife's Mercedes, but she requires a hefty security deposit.

But, as usual, I digress…..

The episode about which I wish to opine featured Jose Mas, CEO of MasTec Industries, an energy transmission construction company. The company builds pipelines, transmission lines and other energy infrastructure. The company was founded by Mas' father, a Cuban immigrant who passed away in 1997, at the age of 58. By Mas' own account, his father was a “hands on” businessman, involved in every facet of the operation. This really became apparent in one segment of the show. 

Mas junior was in Oklahoma, where he had just demonstrated his complete inability to run a piece of heavy equipment while working with a field supervisor named Rich, who was from Georgia. Rich had been with the company almost 15 years and was preparing to retire. At one point, Rich said he “got hurt real bad” while working for MasTec. With the show's history of featuring employees who willingly rip the bejesus out of their employers while standing in front of multiple camera crews, I braced for the worst, but it didn't happen. Rich explained that he fell in a hole and crushed his ankle, the treatment of which involved surgery and multiple screws. He followed up by saying, after a significant pause, “MasTec treated me real good on that deal.” 

And what was it that made Rich feel that way? The CEO at the time, Mas senior, personally contacted both Rich and his wife to express his concerns and offer any assistance they needed while Rich was off the job. It was a small gesture that resulted in a huge long-term benefit. MasTec likely did other things to make the process a positive outcome, but it struck me that it was the outreach to his wife that so impressed Rich.  

Communication with an injured worker from a high level of the organization is great. Communication with the worker's family and loved ones is pure gold. What a brilliant concept.

The story is even more remarkable if you do a little basic math. The accident happened while Mas senior was still alive, so more than 14 years earlier. Rich was not yet at his 15-year mark with the company when he told his story, so he was a relatively new employee when the accident happened. MasTec was a very large and successful company when the accident happened–yet the CEO made the effort for a relatively new and unknown employee.  

The Looming $20 Billion MSA Train Wreck: Welcome Aboard

There is a $20 billion calamity on the tracks ahead, and no one seems to care. As this train hurtles ever closer to its inevitable demise, the passengers ride oblivious. A program created to protect those passengers – U.S. taxpayers — seemingly will do anything but what was originally intended. 

Medicare Set Asides were developed with the good intentions of protecting Medicare, and the taxpayers that fund it, from unnecessarily paying for injuries and illnesses that are the prior responsibility of third parties. Quite simply, people were taking settlement money received from a general liability or workplace accident—money that was supposed to pay for future medical needs from the injury—and were spending it on anything but its intended purpose. While this was great for the bass boat and travel industries, it was a less than stellar deal for the U.S. taxpayer, who wound up paying for the injured persons’ care once they were eligible for Medicare.

Enter the MSA: a vehicle designed to protect a designated portion of settlement funds by placing them aside and requiring they be used for the purpose intended. This is not new. The roots of today’s MSA lie in the passing of the Medicare Secondary Payer Act of 1980. That act was significantly strengthened in 2003, however, and this has resulted in far more activity for the workers’ compensation industry over the past decade.

True to form, the government has not made implementation easy. Extremely detailed reporting requirements, extensive fines for the Responsible Reporting Entity (even for rules not established at the time) and a complex process made for a confusing road for employers and payers. An entire industry has sprung up to manage this process. The risks of not complying are serious, and the liability for getting it wrong is huge. The Medicare Set Aside today is integral to virtually any settlement situation in the workers’ compensation industry.

All of this is done to protect the U.S. taxpayer from Joe Sixpack and his desire for a bass boat.

I am in no way an expert on MSAs. I have, however, spent time over the last two years attending conferences and talking to various experts on the topic, trying to better understand their purpose and procedure. I discovered a singular statistic that absolutely floored me. It was a fact that, in my opinion, flies in the face of logic and makes all the burdened activity around the MSA seem pointless.

What is so shocking? Only 4% of completed MSAs are professionally administered.

The rest, 96%, are given directly to the claimant/recipient and are self-managed. That means that, when all is said and done, when the calculations are made, when the submissions and approvals are complete, the money that is set aside for the purpose of protecting Medicare and the U.S. taxpayer is given right back to Joe Sixpack, the guy we were trying to protect ourselves from in the first place.

It makes no sense. None.

I am not saying Joe Sixpack is a bad guy. I am not saying his intents are not pure. I am saying that managing payments from an MSA, making sure they are properly coded and complying with mandated reporting is difficult. The process may be well beyond the ability of an injured worker turned fund manager.

Even with his best efforts, Joe could be in trouble when Medicare starts paying for his health care. If he has not dotted every “i” and crossed every “t,” as well as made sure all expenditures were classified to show appropriate care for the affected injury, he could find himself denied needed coverage by Medicare.

And when an army of Joes are pounding at the door of Medicare, because of possible denial of coverage, something is going to have to give.

So how bad is it? What are we looking at here?

For that I turned to Ken Paradis, chairman of Ametros Financial, a company that offers professional administration of MSAs. He confirmed that my suspicions were potentially accurate and provided some very interesting – make that scary – numbers.

In 2010, the Centers for Medicare and Medicaid Services (CMS) approved $1.4 billion in MSAs. Assuming a consistent approach since 2001, the inception of the current program, we can estimate that $16.8 billion have been approved for MSAs in the past 12 years. Using a straight-line estimation, this could mean that $16.1 billion is being self-managed.

Not all MSAs are reviewed by CMS—some are set up with no input or review by the government—and these Class III MSAs represent a completely unknown addition in risk to the long-term health of Medicare. Paradis indicated from experience that 20% of MSAs may be in this category. Using the base numbers from our equation, that estimate brings the total risk pool to perhaps $20 billion.

That figure represents true risk for the nation and our industry.

It seems that many are under the impression that self-administered funds are managed with some level of competence by Joe Sixpack’s counsel. However, the existence of waiver or hold-harmless indemnification language in many settlement agreements tells a different tale. The November 2013 manual on MSAs included guidance for non-professionally administered MSAs, which tells us someone out there might need that advice.

After all the convoluted effort focused on setting up MSAs to protect the interests of Medicare, the guidelines on administration offered by CMS are surprisingly simple:

  • Deposit the fund into an interest-bearing account.
  • Use the fund only for the MSA settlement injury.
  • Use the fund only for expenses covered by Medicare.
  • Pay according to the appropriate fee schedule.
  • Prepare and submit an annual account report to CMS.

The first three seem easy enough to understand. The last two, however, are where the wheels will most likely come off the bus for our wayward injured worker turned financial wizard. Fee schedule and medical classification codes are a science unto themselves, yet we expect Joe Sixpack to navigate that labyrinth with a ninja-like accounting skill set that many industry professionals themselves do not possess.

As for those detailed annual reports, anecdotal information shows CMS hasn’t actually seen many of those over the last decade or so. They, and we, are operating blind in that area.

And, as I’ve indicated, it is a damn big area.

The harsh truth is, no one knows what is out there. No one knows what is coming. We are blindly turning on faith that all this energy and effort will somehow end up doing what was intended. Trust me; this is not going to end well.

The cost of professional administration is a mere pittance when compared with the cost and complexity of setting up an MSA. It seems even smaller when we fully recognize the consequences at hand. Some in the industry are openly suggesting that the expense of professional administration could easily be offset by using it in place of the costly and slow approval process. By skipping the approval but securing the long-term health of the MSA, the greater goal of limited liability will be met. The indemnity saved by settling the case sooner would in many cases more than offset the cost of a professional manager.

Under the current scenario, the taxpayers will clearly be on the hook, but the workers' comp industry should not be foolishly complacent. There are potential clawbacks in our future, and many who think they've put these issues to bed may be again facing a call for more cash by our government.

Why the government fails to close the loop on this and secure the protection it originally intended is beyond comprehension. We are requiring the crafting of a lengthy and expensive letter, getting it reviewed, edited and approved, and then no one is putting a stamp on the envelope.

All that effort, all that expense, only to wind up where we were to begin with; with the exception of our new sense of security. Our false sense of security.

This is part of a much bigger issue: 10,000 retirees are entering the Social Security system every day. The Medicare trust fund will be broke by 2022 at its current expenditure rates, and the ability of Joe Sixpack to manage his funds has never been more critical. There is a train wreck coming, and we are all on board for the ride.  An army of angry Joes will soon be pounding on our door, and the $20 billion may be nowhere to be found.

After all the effort and fuss, I find myself wondering: Why?