Legislative Advisory 2010

The Colorado Division of Workers Compensation has posted a legislative advisory that briefly reviews the 2010 legislation that is applicable to workers compensation. While the legislative session is over the Division will proceed forward with rule making that may pertain to the recent legislation. Some of this recent legislation is significant. The advisory is just 6 pages so you can easily see for yourself.

Supreme Court reverses Court of Appeals in Ruff

Yesterday the Colorado Supreme Court issued a decision in the Ruff case. The issue posed to the court and at the original hearing was over a possible conflict of interest in a Division Independent Medical Examination (DIME). The claimant argued that the physician had at least the appearance of a conflict of interest so how can the exam be fair and impartial. In the case the physician selected had received some $600 a month from Pinnacol (the insurer in the case) for being an advisor and also was in Selectnet the Pinnacol endorsed medical group. So it was argued that it was inappropriate and should have led to a disqualification of the physician. The ALJ (Administrative Law Judge) decided it was not a conflict and the Court of Appeals decided it might require more review by the ALJ. The Supreme Court decided the Court of Appeals went too far and that there was no conflict on the facts of the case. Merely receiving some money and being in Selectnet was not enough to establish the sort of conflict of interest to disqualify the doctor. The dissent noted that in Selectnet the physician received 25% of his income and since this might raise questions about impartiality that the Court of Appeals should have been affirmed. There really was no evidence that the doctor was not professional and objective but his status as a Pinnacol advisor and being in Selectnet seemed to raise a question about his objectivity.

SB 10-187 Impacts Claims on or after July 1, 2010

In Senate Bill 10-187 Colorado is making some significant changes in workers compensation claims. For a complete reading just look at the bill but here are the highlights as I see them (effective only for injuries on or after July 1, 2010):

1. If the claimant has to seek a hearing to continue to obtain maintenance medical care then should the other side give in within 20 days from the hearing the claimant can seek his costs to support his effort to continue maintenance care. I see this as trying to stop the other side from objecting to care and forcing the claimant at some expense to try prove his ongoing entitlement but then backing off.
2. Two matters pertain to calculating average weekly wage. One, stops the effort to not count the claimants cost of converting from employer health coverage when he gets medicaid or indigent medical care. A recent case said do not add or adjust for a claimants cost of health insurance when he gets indigent care for free. My view is that the employer health benefit was worth something and should be a wage benefit that is counted in calculating your wage. Second, any wage calculation is to be based on your accident date or based on a judge using his discretion to figure what is appropriate. To me this just codifies what is the law today anyway.
3. Permanent partial disability benefits are no longer to be reduced if you receive Social Security benefits or an employer financed pension/disability plan. I recall one case where the fellow had a reduction of his benefits to zero because of the statutory offset which is corrected by this bill. However these offsets do apply to other benefits such as permanent total disability.
4. A modified job offer may be refused under some circumstances and not result in job termination and asserting the claimant by refusing was responsible for his own termination so his temporary benefits should stop. Personally I wish they had simply repealed the existing law on this which triggers much litigation. In the old days if you were fired when disabled you were often not cut off your temporary benefits as you were still disabled and other work was not that simple to obtain.
5. The caps or limits of top dollar compensation are to be adjusted each year for any claim for injury on or after Jan. 1. 2012.
6. Lastly it is said that there is no waiver of your right to pursue permanent total disability by seeking a lump sum of all the admitted permanent benefits.
Every point raised in the new law was important to correct problems or other interpretations of the law. I'd encourage all to look at the bill as this just represents my simplified take on it.

The Franz Case

The Franz case was decided on May 13, 2010 by the Court of Appeals. It concerns utilization review which is a process to review a treating physician. It can lead to the replacement of that physician or other consequences that directly impact a claimant. In this case the claimant addressed two points both of which were shot down by the court yet both have some logic to them. First he said the process violated his right to due process because he had no opportunity to discover and present evidence. Second he asserts a potential conflict of interest argument which was not permitted in the process. The court essentially said that there was no violation of Rule 10 which governs the process. The claimant had no right to assert a due process argument since it did not affect a property interest as only retroactive denial of treatment or benefits allows for such a due process argument said the court. It also said the rule was not violated as there was no conflict of interest as defined by the rule. Essentially the claimant could not explore and discover nor could he present evidence on any conflict of interest. In this case the claimant believed there was an inherent conflict because the committee members are closely involved with the insurer and SelectNet a provider organization. This case is disturbing as it deprives the claimant, in the end, of his doctor and he sought review by an ALJ who said he had not overcome the decision by clear and convincing evidence. Let's see now...if you stop the claimant from presenting evidence in the UR proceeding and prevent discovery exactly how can he even try to overcome the decision by clear and convincing evidence? So here Pinnacol was the insurer and it sought to replace the physician and the UR committee involved members of SelectNet which Pinnacol has a pretty cozy relationship with and sure enough they recommend to replace the treating physician for the claimant. Does it seem fundamentally fair? Not to me but the case really narrowly defines due process and the Rule in this matter at least in my opinion.

Pinnacol Bonuses and Travel audited

The Denver Post is indicating that Pinnacol was audited by the state in this article. Pinnacol Assurance is the state's largest workers compensation insurer and has been in the news often in the last year. The criticism is that Pinnacol pays higher then average bonuses and its travel benefits were also high. Of course Pinnacol is not completely public and operates also as a private insurer so it is a hybrid. In any event the criticism continues though it is nothing like the Wall Street bonuses we have read about. Pinnacol seems to be doing pretty well though the state and many others are dealing with the recession. Some would say it is at the expense of claimants and business owners. Others would say it is just doing a good job. This story is being reported everywhere. It is on Channel 7 News. At the Denver Business Journal it is reported with the attached audit should you wish to read the details.

Supreme Court issues decision on AWW

In the Simpson/Bennett cases the Colorado Supreme Court reversed the Court of Appeals to the extent it used the concept of date of disablement to determine a claimant's average weekly wage or AWW by applying a higher maximum rate in effect years later. The wage calculation can be a very important figure that is used to pay out benefits. The higher the calculation the higher the benefits may be. The case reviews the two ways a judge can determine AWW. One way is the statutory way which can involve computing your wage as of the date of injury. Another allows a judge to use his discretion when another way would be more appropriate. For the last year we also dealt with the concept of date of disablement which suggests another approach. Actually most of us in the field realized that the date of disablement concept is unnecessary anyway in most cases. The discretion given a judge is enough to afford him the ability to figure an appropriate wage if he exercises that discretion. Usually your wage at time of injury includes tips and overtime, perhaps room and board and perhaps even the cost of health insurance if it was paid in part by your employer and can be cancelled. Using some other concept seemed to be somewhat confusing but it came because of a prior Supreme Court case called Avalanche. Now the court simply corrected itself although the rest of that prior case still holds that wage calculations may include a subsequent wage if the judge in exercising his discretion decides it is appropriate.