Monthly Archives: October 2010

Ex corrections officer charged with workers comp fraud while injured off-duty officer denied benefits

A former Department of Correction officer in Massachusetts has been arraigned on a charge of fraudulently collecting workers’ comp benefits, while a motorcycle police officer in Montgomery, AL, is being denied workers’ comp benefits because when he was injured in a funeral procession he wasn’t on the city clock.

Originally injured in 2008

According to an Oct. 27 article at, John Cloutier, 45, of East Freetown was hurt on the job in Freetown in 2008 and began collecting benefits and continued to do so until March 2010.

“During this time, Cloutier allegedly repeatedly told medical providers that he could neither stand for long periods of time nor do any strenuous activities that could potentially aggravate his injury.”

But the attorney general’s office got a tip that competed in two half-marathons and one full marathon in 2009.

‘Never disclosed marathons’

“Authorities allege Cloutier never disclosed to correction officials or any of his doctors that he trained or ran in any of these races or engaged in any kind of strenuous exercise.

Calaculations: ‘more than $56,000’

“Investigators subsequently calculated that Cloutier fraudulently collected more than $56,000 from the state after January 2009.

“The matter was then referred to the Attorney General’s Office for prosecution.”

Cloutier pleaded not guilty at the Oct. 26 arraignment  and was released on his own recognizance, awaiting a pre-trial conference in December.

Motorcycle officer hurt on escort job then ambulance turned over

In Alabama, says the Montgomery Advertiser, Cpl. David Brown “was critically injured when his motorcycle was hit by a car while he was escorting a funeral procession Sept. 11. Afterward, the ambulance carrying him turned over on the way to the hospital.”

Brown has, however, received some benefits, including medical disability.

Lawsuit details injuries

His family has filed a lawsuit seeking workers’ comp benefits. “The lawsuit states Brown has suffered permanent disability, including ‘a broken jaw, cracked pallet, shaken baby syndrome, bleeding on the brain and multiple infections in his amputated limbs.’ Since the accidents, he has undergone numerous operations, including the amputation of his right leg above the knee and his left arm above the elbow.”

Mayor Todd Strange said Brown last week received medical disability retirement “and will receive retirement benefits for the rest of his life.” He said Brown has received paid leave time and other benefits.

‘Knowledge of the city’

According to the Advertiser, “The lawsuit states that Brown’s duties that day were done ‘with permission, knowledge and approval of the City of Montgomery Police Department and were performed for the benefit of the department and citizens of Montgomery.’

“Brown’s brother, Todd Brown, said Tuesday that the family wants the city to declare the police officer on-duty that day.”

The mayor said he wishes he could help more but because Brown was off duty and performing under contract with the funeral home, there’s nothing he can do.

” ‘I’d love to be able to say “yes” (to the claim), but I don’t have that prerogative,’ [the mayor] said.

Using city equipment

Strange concedes Brown was using city equipment on the escort job but maintains that doesn’t help Brown’s case for city-based workers’ comp.

“Brown was using city equipment when the accident occurred, but Strange said that would not have an impact on the family’s claim. He said police officers take their equipment home with them in Montgomery, and state law allows for the use of police equipment while officers are working private, off-duty jobs.”

An official with the Alabama Department of Industrial Relations said “the circuit judge has the exclusive discretion on whether to grant the workers’ compensation.”

Frequently enough, a worker’s compensation case may be so complex as to demand legal representation. However, sometimes what seems like a cut-and-dried situation to an injured worker may result in a smaller award than envisioned–or even a denial. Have you, a friend or a loved one been injured on the job? Whether you’re merely seeking answers about your rights or believe a lawsuit may be necessary, be sure to seek counsel with attorneys trained and experienced in workers’ compensation. Here’s some resources:

Workers compensation basics

Injury on the job

Filing a claim

Cries of ‘lies’ over workers’ comp charge campaigns in two states

We’ve seen workers’ comp issues become political footballs, but usually in states facing some sort of change in the system. California, Colorado, Oklahoma and Washington state come to mind.

However, in the West Virginia race that will determine the elected successor to Sen. Robert Byrd, workers’ comp has emerged as a hot topic, as seen at this Oct.28 post on “Governor Joe Manchin’s negative attack ads on John Raese’s Greer Industries continues, despite a cease and desist letter being lodged by Greer Industries. The ads have claimed that Greer Industries hasn’t paid their Workers’ Comp payments, a statement that has been proven false by the Manchin Administration’s own Workers Comp records as well as Greer’s own records.

“Manchin’s ads have proven to be one of the more controversial aspects of his campaign, as the Governor has come under fire for attacking a respected West Virginia business during a recession.”

Candidates square off

Manchin, a Democrat, with “an approval rating of almost 70%, seemed like a lock to replace Byrd. But the race has increasingly turned into a referendum on President Obama, who has a 69% disapproval rating in West Virginia, according to polling firm Rasmussen,” says this IBD post.

Raese is a co-owner of Greer Industries, which comprises “steel, lime and asphalt companies — along with Seneca Caverns, the Pikewood National Golf Club and several media operations, including The Dominion Post,” according, oddly enough, to a re-post of an article from…The Dominion Post, which explains action from earlier in the campaign: “Greer Industries involved itself in the John Raese-Joe Manchin race for the U.S. Senate on Tuesday afternoon [Sep. 28],  announcing it will be sending a letter to the employees of Greer and related companies regarding Manchin campaign ads.”

Greer fires back

The article mentions mine safety issues and that Greer has ” ‘repeatedly failed to pay workers’ compensation.’ These ads,” says a Greer press release, “are misleading at best and are at worst, with regard to certain facts, untrue, false and defamatory.”

Then, deep in the story, more details about the response to allegations of unpaid worker’s comp premiums:

A footnote in the Manchin ad notes that the workers’ compensation issue stems from a July 1999 Associated Press article. The ads say “Raese’s companies have repeatedly failed to pay workers’ compensation.”

Gwynne notes that the actual story doesn’t use the words “companies” or “repeatedly.”

“Moreover,” Gwynne wrote, “the payment mentioned in the story or the article was either a reporting error or the failure of the Workers’ Compensation Fund to appropriately bill our companies. Our companies have always been in good standing with the Workers’ Compensation Fund, and none of our employees have ever been deprived of the benefits or protections of the Workers’ Compensation Act.”

Did L&I withhold info to affect I-1082 vote?

As regular readers know, we’ve been following the I-1082 debate in Washington State.

Supporters of the initiative are upset over information gleaned from a public records request that they believe proves officials of the state’s Department of Labor and Industries lied to legislators about the costs employers will have for worker’s comp coverage in 2011.

According to an Oct. 27 piece in the Kitsap Peninsula Business Journal, “A public records request by Senator Janéa Holmquist (R-Moses Lake) and Representative Cary Condotta (R-Wenatchee) has revealed officials with the state Department of Labor & Industries (L&I) lied to lawmakers about the workers’ compensation rates employers will pay for 2011.”

Washington’s unique status

In earlier pieces, the Business Journal has described I-1082 as a measure that would not only end a state monopoly on issuing workers comp insurance but also would end “Washington’s unique status as the only state in the nation that forces workers to pay a portion of workers’ comp.”

In the Oct. 27 article, the narrative continues: “The business community supporting Initiative 1082 cried foul, arguing L&I is playing politics on the public’s dime by breaking with the agency’s long-standing tradition of providing employers with the workers’ comp rates they will pay the upcoming year on the eve of an election in which voters will have the opportunity to end L&I’s monopoly on workers’ comp. Business owners rely on the information to plan their company’s budget.”

In other words, it looks as though the agency that stands to  lose a monopoly refused to provide information it had in order to influence the election.

Another Oct. 27 article, in The Seattle Times, serves up this racy passage: ” ‘Obviously Labor & Industries has known for months what the indicated rate is for 2011,’ said Patrick Connor, who directs the campaign for I-1082. ‘These new documents prove it.’

“He added, ‘L&I has been caught red-handed lying to the Legislature, and the only explanation is they are desperate to hide the indicated rate because it shows what we’ve said all along — a massive tax hike is coming.’ ”

Automatic hike for biz if workers contributions removed

The Times also provides some background, saying “If I-1082 passes, businesses would see an automatic rate hike because employees would no longer be required to contribute a portion of their workers’ compensation premiums. The employee portion that would be shifted to employers accounts for, on average, 18 percent of this year’s premiums.

L&I announced in September it would wait to propose a 2011 rate until after the election.

“Although the agency historically has proposed rates for the upcoming year in September, it’s not legally required to do so.”

It’s an interesting–and complex–situation, and one that we will continue to follow.

Frequently enough, a workmen’s compensation case may be so complex as to demand legal representation. However, sometimes what seems like a cut-and-dried situation to an injured worker may result in a smaller award than envisioned–or even a denial. Have you, a friend or a loved one been injured on the job? Whether you’re merely seeking answers about your rights or believe a lawsuit may be necessary, be sure to seek counsel with attorneys trained and experienced in workers’ compensation. Here’s some resources:

Workers compensation basics

Injury on the job

Filing a claim

HR folks need to be aware of ‘long-tail’ secondary injuries

Boy, howdy, talk about jargon.
Look at this piece, posted Oct. 26 with the unlikely hed, “The ‘Long Tail’ of On-the-Job Injuries.”
If you don’t get that on first read, don’t feel bad. Who would, given the buzz-word connotations of  Long Tail?
Just scroll and glance at this Google-search results page:
  • statistical property
  • Sales made for less usual goods within a very large choice
  • how the normal distribution curve has elongated as a consequence of the internet reshaping of buying habits
  • the exposure of content beyond the initial released time frame
  • something “First coined by Chris Anderson in an October 2004 Wired magazine article” about Amazon or Netflix
  • then–finally–“refers to a type of insurance where claims may be made many years after the period of the insurance has expired. Liability insurance is an example of long tail business.”
Here’s the lead-in to the story, dated Oct. 26 at Human Resource Executive Online:
The Wyoming Supreme Court ruled that a man’s former employer is responsible for a 2007 medical condition because it was related to treatment for a 1993 workplace injury. While that already is the situation in some states, it is not in others — although their courts or regulatory agencies may start seeing claims with such arguments popping up.

In this case, the Wyoming Supreme Court recently overturned a ruling about a man who was injured on the job, about 15 years previously, and then injured again during treatment. The second injury, a hernia apparently “caused by a malfunctioning electrical spinal-cord stimulator” was initially ruled compensable.

Hence, the “long-tail”: first the employer is responsible, then not, then years later is finally found responsible once again.

In overturning the first ruling, the second court found that the man’s hernia  “did not qualify as a compensable injury because it did not occur ‘during the course of the employment.’ ”

According to the article:

Some states already have rules or laws that mandate that secondary injuries such as this are covered by workers’ compensation, but those that do not may face the prospect of a longer tail on some workers’ comp claims, experts say. For HR managers in charge of workers’ comp programs, it’s good to be aware of the potential long-term costs, no matter how remote they may initially seem.

Injured workers in those states without specific legislation may opt “to make the same argument” for coverage of secondary injuries that can be linked back to the original job-related medical injury, says James E. Pocius, a shareholder at Marshall, Dennehey, Warner, Coleman & Goggin, based in Scranton, Pa.

Proximate cause is the balancing test, he says: “It’s more a matter of public policy as we move ourselves further and further away from the original accident. The conclusion is that you’ll have a long tail in workers’ comp cases in Wyoming.”

The concern, of course, is the potential for higher costs–but not only for workers’ comp premiums. The concern extends to “insurance costs and an impact on Medicare set-asides related to permanent disability cases.”

Some states already agree with Wyoming, and Florida exceeds it. According to a Florida workers’ comp attorney quoted in the article, “Under Florida’s workers’ compensation law, if you sustain an injury in the course of treatment for a workers comp injury, it’s compensable. In fact, if you sustain an injury on your way to treatment for a workers’ comp injury, that is also compensable.”

One point the article emphasizes is that human resource departments need to be aware that secondary injuries may indeed be compensable, because it may seem counterintuitive to be held responsible for injuries occurring away from the job.

Indeed, it’s a worthy question: Why isn’t the medical provider or device manufacturer held responsible.

One expert attributed in the article, Rebecca Shafer, president of Amaxx Risk Solutions and a leading workers’ comp cost-containment consultant and attorney based in Hartford, Conn., recommends pushing the insurance company seek recovery from the medical side of the equation, even if the employer has to pay and get reimbursed.

“Following claims closely and checking with the insurer about recovering costs is an extra step that involves a lot of work, but in the end, it will control workers’ comp costs, Shafer says.”

Frequently enough, a workmen’s compensation case may be so complex as to demand legal representation. However, sometimes what seems like a cut-and-dried situation to an injured worker may result in a smaller award than envisioned–or even a denial. Have you, a friend or a loved one been injured on the job? Whether you’re merely seeking answers about your rights or believe a lawsuit may be necessary, be sure to seek counsel with attorneys trained and experienced in workers’ compensation. Here’s some resources:

Workers compensation basics

Injury on the job

Filing a claim

Benchmark study shows Montana with highest workers’ comp rates; some providers stung by unemployment

This might seem an odd way to rank something. Normally, when we say something is Number One, that’s a good thing.

Not in this case.

As ranked in a biennial study by an Oregon state consumer agency, Alaska and Montana swapped places since 2008 in rankings of states with the highest premiums for workers’ compensation insurance.

Thus, Montana has moved from second-place to first, as the state with highest 2010 worker’s compensation premiums. Alaska was the worst in the 2008 study but dropped to second-worst in the rankings released Oct. 20.

51 rankings: all states and D.C., too

According to a Department of Consumer and Business Services’ press release, “The study ranks all 50 states and the District of Columbia according to their workers’ compensation premium rates. The median index rate, a benchmark for rates nationally, dropped to $2.04 for 2010, 10 percent below the 2008 median value. Oregon’s index rate, at $1.69, was 17 percent below the 2010 median.”

An Oct. 21 article at Bloomberg says, “The study undertaken every two years by the . . . [department] found Montana’s premium rates this year are $3.33 for every $100 of payroll.” That’s 163 per cent of the national median, which Businessweek says is “$2.04 per $100 of payroll.”

Montana is one only three states that “topped the $3 mark.” The other two are Alaska, with an index rate of $3.10, and Number 3 Illinois, at $3.05, which puts them, respectively, at 152 per cent and 149 per cent of the median.

Business Insurance notes that “North Dakota had the lowest rates at $1.02 per $100 of payroll, or 50% of the national median.”

National median dropped 10 per cent

According to the study, a summary of which is here, including an easily read table, the median dropped 10 per cent from 2008 levels.

California’s re-ranking exemplifies significant change over the two-year period, moving from 13th most expensive in 2008 to eighth, with a 2010 cost of $268 per $100 of payroll.

Wisconsin also saw a significant change in its ranking, moving from No. 34 in 2008 to No. 19 this year, with its average rates at $2.21 per $100 of payroll, or 108% of the national median.

Delaware, with a rate of $1.84, improved to 34 on the list from its 2008 ranking of 7. The District of Columbia also made a big move, falling to 48 from 29. Indiana and North Dakota remain unchanged; they were 50 and 51 in 2008  maintain those spots, with respective rates of $1.16 and $1.02.

A ‘black eye’ for Montana

According to the Businessweek story, Montana is not happy about having the highest rates in the nation. “Montana Chamber of Commerce president and CEO Webb Brown said in a statement Thursday the ranking is a black eye for the state. His organization called on the Legislature to change workers compensation laws when it meets in January.

“The business association says high premiums hurt wage levels and Montana’s image as a business-friendly state.”

Unemployment pinches workers comp providers

The economy is putting pressure on the workers’ comp industry, in general.

According to a Reuters analysis piece posted Oct. 22, “Persistently high unemployment translates to fewer workers to cover, which cuts into revenue. And insurers known as ‘workers comp’ providers face higher payouts because claiming workers are staying on benefits longer for lack of other jobs.

“Companies such as Travelers Companies Inc, Employers Holdings Inc, SeaBright Holdings Inc and Amerisafe Inc are already seeing the effects of weak employment. Even if the jobs market is showing marginal improvements, these companies are still likely to suffer.”

Seabright reported $15.5 million loss

This MarketWatch piece from July addresses  Seabright’s troubles:

SeaBright . . . reported a second-quarter net loss $15.5 million, or 74 cents a share, versus net income of $4.3 million, or 20 cents a share, a year earlier.

The loss came as the insurer had to set aside more money to cover higher-than-expected claims from policies sold in previous years. Most of this was driven by SeaBright’s book of workers’ compensation insurance it sold in California.

“During the second quarter we undertook prudent measures to strengthen our loss reserves to reflect recent adverse claim development we have experienced, primarily in our California book of business,” John Pasqualetto, SeaBright’s chief executive, said in a statement.

“In California, we encountered increasing medical cost trends and longer average claim durations, made worse by protracted high unemployment levels,” he added.

The Reuters piece quotes an investment manager and points out potential problems for the industry: ” ‘SeaBright is a very clear warning sign to investors that there could be some negative surprises in this space,’ said James Ellman, president of San Francisco-based investment manager Seacliff Capital.

” ‘It is an industry where losses are going up and this, unfortunately, happens when you get a recession.’

Some companies too specialized

“The companies that could be hit hardest are the ones that focus exclusively on workers compensation. SeaBright’s share valuation is among the lowest in the industry, trading at just under half its book value, or the net accounting value of its assets.

“If the job market remains soft, the company could be hurt even further, Ellman said.”

Even though an economy with fewer workers is also an economy with fewer injured workers, fewer premium fees coming in adds pressure on insurers already facing rising costs, longer recoveries, and reduced opportunities for alternate work that might be available to ease a recovering worker back into full time employment.

“Analysts say performance in the industry is very much a company-by-company story,” says Reuters, “depending on what industries and regions a company participates in and how well it does at managing its book.”

Revised reforms drag on in California; I-1082 divides workers comp community in Washington State

In the 1960s, a popular interoffice cartoon depicted a beleaguered bureaucrat with an S-shaped piece of paper, a pen dripping with what might be either ink or blood, and the caption, “You mean you want the revised revision of the original revised revision revised?”*

That just might summarize the feelings of Governor Arnold Schwarzenegger and others who have been through the wringer with a series of revised reforms of California’s workers comp system, beginning during the era of Schwarzenegger’s predecessor.

Washington state is another West Coast hotbed of workers comp issues this election cycle, but as regular readers here can attest, we have often discussed the Governator and the California system.

The San Francisco Chronicle reported today that “One of Gov. Arnold Schwarzenegger’s crowning achievements, the overhaul of workers’ compensation, is in danger of unraveling as employers begin to face rising costs even though disabled workers now get less in benefits.

“One sign of trouble is the state Department of Insurance hearing scheduled for today at which the group representing workers’ compensation insurers will argue that they need a 27.7 percent rate increase.”

Crowning achievement tarnished

In an Oct. 10 article, the San Diego Union-Tribune said, “Insurance Commissioner Steve Poizner will have to decide on the proposal before the end of the year. He rejected a similar request last year, saying that the insurers had to show that they were cutting down on their costs before charging more for their insurance.

“Schwarzenegger and other critics note that medical costs have risen only 2 percent in the past year, while loss expenses dropped from $7.8 billion to $7.3 billion. “Where is the money being spent? This question must be answered before employers are asked to pay more,” Schwarzenegger asked in August, when the board initially floated an initial proposal for a 29.6 percent increase. The board has since trimmed the request to 27.7 percent after discovering that some insurer expenses had declined more than expected this year.”

Permanent disability awards reduced by half

The Chronicle piece says that advocates for injured workers contend that the people who most need this sort of coverage are taking a hit “by rule changes that have cut average awards for permanent disability in half since 2005.”

Another problem, says, involves the often-secretive process of arbitration. It’s a huge red flag anytime consumers have to sign onto deals that preclude access to courts in favor of arbitration. In this case, though, there’s an added layer: the possibility of forcing involved parties to submit to laws outside the state of California.

A.B. 2490

Concerning the bill known as A.B. 2490, an Oct. 11 post at the industry trade site reports:

A California lawmaker said Gov. Arnold Schwarzenegger sided with insurers in vetoing legislation that would have required workers compensation insurers to submit dispute-resolution clauses to the state’s insurance commissioner for approval.

A.B. 2490 also would have required workers comp dispute-resolution clauses to specify that California law applies in coverage disagreements involving California employers.

The bill, sponsored by Assemblyman Dave Jones, D-Sacramento, additionally sought to mandate that policyholders and insurers with contracts containing such clauses, including arbitration language, settle any California disagreements in a venue within the state.

Deregulation looked good–at first

By way of background, the Chronicle says that Schwarzenegger inherited a system in crisis when he took over in 2003.  “Deregulation of the system in 1995 had ushered in years of price cutting that, at first, benefited employers with lower rates but eventually boomeranged when 29 insurance firms went bankrupt between 2000 and 2004.”

With fewer companies writing policies–that is, with less competition–prices took off.

Two reform bills passed under former Governor Gray Davis, the Democrat who lost to Schwarzenegger in a recall election,  reduced medical costs by restricting “the power of doctors to prescribe unnecessary or excessive treatments,” says the Chronicle. The bill Schwarzenegger signed shortly after taking office resulted in more cost controls and changes in the awards for permanent disability ratings.

Falling costs, judicial response

Costs have fallen, but the disability changes have fueled a dogged opposition coupled with a judicial backlash against veto power that has sent three cases to the Supreme Court.

We’ll be following the results of today’s hearing.

I-1082 hotly debated in Washington State

In Washington State, the initiative known as I-1082 (which we addressed here), is a polarizing measure that proponents say will result in a de facto raise for workers and opponents say will hurt education, small business and –eventually–the workers themselves.

According to an Oct. 10 piece in the Kitsap Penninsula Business Journal, the measure would not only end a state monopoly on issuing workers comp insurance but also would end “Washington’s unique status as the only state in the nation that forces workers to pay a portion of workers’ comp.”

‘Business community’ support

Calling the measure, which goes to the electorate in November, one that is backed by the “business community,” the Journal says that although “some employers voluntarily pay their employees’ share of workers’ comp taxes already, others do not, opting to deduct the workers’ portion from every paycheck. These workers [therefore] will receive a pay raise when I-1082 passes.”

The article also provides a link to an “online calculator” described as being able to show workers what their potential raises might be.

Measure would ‘pit injured against insurance industry’

In an Oct. 10 guest opinion piece in The Seattle Times, a state senator and a state representative penned a vigorous rebuttal that begins thusly:

This November, voters will determine the outcome of an initiative that would add costs to every university, community and technical college in the state, force small businesses to pay $315 million extra next year and every year after that, and pit people who get injured at work against the insurance industry.

That’s Initiative 1082, a shining example of how the citizen’s initiative process has been co-opted by special interests.

In some ways, I-1082 is dangerously simple. It would end Washington’s public nonprofit workers’ compensation system by allowing private insurance carriers to cover workers’ comp in our state. But when you explore the fine print, it becomes obvious that I-1082 benefits the few at the expense of our state’s business owners and working families.

Perhaps needless to say, this, too, is a piece of legislation that we’ll be following.

*(NOTE: Here’s a link to the cartoon, on page 148, where it is described as a 1970’s era artifact collected from Tennessee; however the author remembers seeing it after it was passed around in the Fort Worth Regional Office of the U.S. Postal Department, where his father worked in the 1960s.)
Frequently enough, a workmen’s compensation case may be so complex as to demand legal representation. However, sometimes what seems like a cut-and-dried situation to an injured worker may result in a smaller award than envisioned–or even a denial. Have you, a friend or a loved one been injured on the job? Whether you’re merely seeking answers about your rights or believe a lawsuit may be necessary, be sure to seek counsel with attorneys trained and experienced in workers’ compensation. Here’s some resources:

Workers compensation basics

Injury on the job

Filing a claim

Workers comp policy sales fell in ’09; judge rejects RICO claims–again

When you see a headline such as “Workers comp premiums drop fifth straight year: Analysis” in this Oct. 4 Business Insurance post, your first thought might be, “Oh, good–my employer’s costs for workers comp are going down.”

But such is not the case.

As explained in this post, also from Oct. 4, declining prices are a factor in the overall picture, but what’s really going on is that fewer companies are buying workers comp policies. The data are from an industry group, A.M. Best Co.

2009: Policy sales down 15 %

Bloomberg says, “Workers’ compensation policy sales dropped 15 percent in 2009, to the lowest in 10 years, as unemployment depressed demand, A.M. Best Co. said.

“Policy sales slid to $12.3 billion in 2009 for companies in A.M. Best’s workers’ compensation composite index. Revenue has declined for five straight years, falling 41 percent from its 2004 high of $21 billion, the Oldwick, New Jersey-based insurance ratings firm said today in a statement.”

Highest industry ratio since 2002

The BI account, citing the same report, wrote, “At the same time, the workers compensation insurance industry’s composite combined ratio deteriorated 8.8 percentage points to 120%, the highest composite combined ratio since 2002, when it reached 118.6%.

“ ‘The deterioration was driven primarily by the downward spiral in premium volume as the economy continued to take its toll on exposure levels and competitive pricing remained widespread,’ ” Best said in a statement.

NCCI report found similar rates says the report echoes findings of another industry group: “The report is consistent with findings from the National Council on Compensation Insurance (NCCI), annual report that also painted 2009 as a difficult year for workers’ compensation providers.”

According to Bloomberg, Travelers beat Warren Buffet’s Berkshire Hathaway in this sector but that Travelers’ success was a rarity: “Berkshire Hathaway Inc., Warren Buffett’s company, posted a 37 percent decline in policy sales, the steepest fall of the largest 25 companies by premiums in the composite. Travelers Cos., the insurer added to the Dow Jones Industrial Average last year, was the only company in the top 25 to increase its policy sales, gaining 1.2 percent.”

‘Jobless recovery’

BI quoted A.M. Best about the economy and provides links for more information: ” ‘As the economy moves slowly from recession to recovery, the consensus anticipates a jobless recovery; and therefore, sluggish premium growth, meaning the workers compensation segment’s underwriting performance is not expected to rebound over the near term,’ Best said.

“BestWeek subscribers can download a PDF of the special report, “U.S. Workers’ Compensation—2009 Market Review,” at target=”_blank”. Nonsubscribers can access an excerpt of each special report and purchase individual reports with spreadsheet data.”

‘Stunning’ Michigan case reaches U.S. Supreme Court

Another BI post deals with a Michigan case that earlier in the year had astonished industry observers and legal minds alike . Hearing the case for a second time, a federal judge has once again barred a RICO suit from proceeding against employers accused of conspiring against workers.

“A federal judge has ruled that an attempt by a group of workers to sue their employer under federal anti-racketeering law is pre-empted by Michigan’s workers compensation law’s exclusive remedy,” writes Mark A. Hofmann in an Oct. 4 post.

Plaintiffs invoke RICO

“The case, Paul Brown et al. vs. Cassens Transport Co. et al., was brought by several employees of Edwardsville, Ill.-based Cassens. The plaintiffs alleged that self-insured Cassens and its third-party administrator, Crawford & Co., used unqualified doctors to give fraudulent medical opinions supporting denial of workers comp claims. The plaintiffs filed suit alleging mail and wire fraud violations under the federal Racketeer Influenced and Corrupt Organizations Act, which allows triple recovery of damages.”

Ruling from the 6th Circuit

Here’s a description of the case as it stood during February, from

Forget gambling, drug trafficking and prostitution.

The latest organized “crime,” according to the 6th Circuit, is conspiring to defraud injured employees of their workers compensation benefits.

In the first decision of its kind, the appeals court recently stunned employment attorneys across America by holding that employers alleged to have schemed with their insurance carriers and/or physicians to wrongfully deny workers compensation benefits can now be sued for treble damages and attorneys fees under the civil fraud provisions of the Racketeer Influenced and Corrupt Organizations Act (RICO).

Although RICO originally targeted criminal organizations such as the Mafia and Hells Angels, counsel warn that Brown v. Cassens Transport Co. exposes legitimate businesses to RICO litigation and intrusive discovery into their handling of workers compensation claims.

“I was frankly quite surprised,” says Robert Abell, a solo employment law practitioner in Lexington, Ky. Abell suggests the ruling should “raise a flag of caution” for any self-insured employers, insurance adjusters and doctors who might appear to reflexively deny workers compensation claims.

Judge said No in 2005

Judge Borman originally rejected the RICO claims in 2005, but a subsequent appeals court allowed them in 2008.

From there, the case proceeded to the U.S. Supreme Court. According to a LexisNexis blog, “The United States Supreme Court vacated that judgment, however, and remanded for further consideration in light of Bridge v. Phoenix Bond & Indemnity Co., — U.S.—, 128 S. Ct. 2131, 170 L. Ed. 2d 1012 (2008), which held unanimously that a civil-RICO plaintiff did not need to show that it detrimentally relied on the defendant’s alleged misrepresentations.”

Argument comes full circle

The LN blog says, “Judge Borman also held that the plaintiffs lacked standing to sue under RICO because their claims for medical expenses and related pecuniary loss did not constitute injury to business or property under RICO and were too speculative to confer standing under RICO” and that  “. . . the court was essentially being asked to decide whether the workers were entitled to workers’ compensation benefits. That decision was exclusively for the state administrative agency under the WDCA.”

In one sense, it seems as though workers comp law should be fairly simple: Was the worker injured on the job? If so, let the workers comp insurance pay the bill.

However, as we’ve seen repeatedly, these cases can be so complex as to wind up in the highest court in the land–whether they get heard there–or not.

Frequently enough, a workmen’s compensation case may be so complex as to demand legal representation. However, sometimes what seems like a cut-and-dried situation to an injured worker may result in a smaller award than envisioned–or even a denial. Have you, a friend or a loved one been injured on the job? Whether you’re merely seeking answers about your rights or believe a lawsuit may be necessary, be sure to seek counsel with attorneys trained and experienced in workers’ compensation. Here’s some resources:

Workers compensation basics

Injury on the job

Filing a claim