Actions in three states exemplifies need for workers to have access to trained, experienced counsel
Do you work for a contractor? Are you a contractor? Have you had liens filed against you? Are you considering filing a lien? These are all questions worthy of answers in the world of Workers’ Compensation
Last time we looked at California and Utah trying to tighten up regs on contractors who try to game the system. Today we’ll resume with California, where liens also affect the workers’ comp system, plus current affairs in Washington and Montana. The liens have been described as “choking” the system in California. In Washington, an ad hoc rate hike has been declared official.
How to strangle? Use liens, says one report
According to a recent post at ClaimsJournal.com, “Liens are ‘choking’ California’s workers’ compensation system, with employers and insurers spending roughly $200 million per year on loss adjustment expense to handle medical liens claims, according to a new liens report [from the California Commission on Health and Safety and Workers' Compensation (CCHSWC)].
“In the Golden State’s workers’ compensation system, a lien is a direct claim against the defendant for a benefit which is not otherwise payable to the injured worker. ‘The rationale is that the lien claimant has furnished medical treatment or other service that the employer was required to provide, so the lien claimant is entitled to payment from the employer. A medical provider must accept the payment allowed by workers’ compensation and must not collect from the patient unless the claim turns out to be noncompensable. A lien is the medical provider’s vehicle for contesting the employer’s determination of the amount payable for medical goods or services. Unlike conventional liens, these are not obligations of the injured worker,’ according to the California Commission on Health and Safety and Workers’ Compensation.”
A ’cause and a result‘
It may even be worse than that. According to the commission’s report, not only is the current system abjectly inefficient but also may involve coercion, all to the detriment of injured workers and taxpayers:
Liens are both a cause and a result of serious distress in the California workers’ compensation system.
As a cause, liens are choking the system.
The Presiding Judge of the Los Angeles office estimates that liens consume about 35% of the court’s calendar and would consume even more if the calendar slots were not being rationed. Lien hearings take away time for the court to deal with the claims of injured workers.
California employers and insurers are spending roughly $200 million per year on loss adjustment expenses to handle medical lien claims. The volume of liens provides an environment where indefensible delays and denials by claims administrators and fraud and abuse by lien claimants can thrive, side by side. As a symptom, the billions of dollars in dispute reflect both obligations that should have been paid but which may eventually have to be compromised in order to obtain any payment, and claims that should not be paid but which may eventually have to be compromised in order to obtain closure.
The volume of liens forces the courts to encourage settlement, almost to the point of coercion. The necessity of settlement rewards both unjustified claims and unjustified refusals.
The prevalence of liens is unique to California. Other states we have contacted have nothing comparable. One national insurer commented that it writes 22% of its business in California but receives 87% of its liens in this state.
Sounds like a helluva problem, and we’ll definitely keep following this situation.
Emergency rate hike goes mainstream
Something else we’ve been following is the goings-on in Washington state, recently discussed here.
What I termed an ad hoc decision, Insurance Journal is calling a decision made on an “emergency basis.” Hedzup, everybody who might be affected–this is yet one more reason to get educated about the system and to consider hiring a competent, trained, experienced attorney: “Washington’s Department of Labor & Industries (L&I) has approved an increase to the state’s workers’ compensation premium rates by an average 12 percent or 6.5 cents per hour for 2011.
“The new rates already took effect on Jan. 1 on an emergency basis while the state held public hearings on the matter. Individual employers could see their rates go up or down, depending on their recent claims history and any changes in the frequency and cost of claims in their industry.”
In Montana, the dust is flying
Now, in Montana, which we’ve written about, this recent post at Bloomberg.com informs us that, “The battle lines over competing workers’ compensation reform plans crystalized Monday at a hearing for the Republican reform plan, as workers made it clear they don’t like a bill partially written by the insurance industry.
“Construction, timber, oil companies all made up parts of the business community that aligned with the medical community in backing a Republican proposal aimed at cutting rates by as much as 40 percent. One eastern Montana oil business said it could save more than $600,000 in work comp costs alone if it moved its headquarters across the border to North Dakota.
“That proposal was also viewed more favorably by the insurance companies.”
Regardless of whether you have an ongoing workers’ comp case, it’s informing to understand that state governments and major insurance companies are in the midst of redefining the boundaries of the rules and regulations.
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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:
