Florida work group begins effort to corral ‘shell-company’ scheme

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Even though ultimately we strive here to provide equal access to all manners of workers’ comp issues, sometimes we just can’t help taking sides.

In other words, our basic premise is that injured workers need to be treated fairly.

That being said, we also realize that some workers try to game the system.

Shame on such workers, for they bring undue scrutiny and added costs to the system–which eventually mounts up societal costs not only in terms of the worker’s attempted scam but also allows critics to label the barrel rotten because of a few apples.

Another factor is the worker’s comp insurance carrier: They have their games, too.

As do medical providers–and sometimes even the workers’ comp officials, as has been so publicly revealed in Illinois.

Medicare paid $550,000 for worker stricken with cancer, but workers’ comp should have paid

An Ohio case shows just how far some people have to go to get justice. An Aug. 17 story at Cincinnati.com describes a couple’s lawsuit against three defendants over workplace-induced cancer, several surgeries and workers’ comp benefits to repay Medicare–which shelled out over half a million dollars for James Cliff’s treatment.

Apparently Cliff’s wife Delores speaks for him because he no longer has a larynx.

“He has no voice box,” she was quoted in the story. “They cut him from ear to ear.”

Employee at claims company altered ironworker’s documents

They filed the Monday suit in Hamilton County Common Pleas Court against her ironworker husband’s former employer, Fenton Rigging & Contracting of Pleasant Ridge; Roselawn’s Matrix Claims Management, the company they say handled workers’ comp claims for Fenton; and Crystal Nguyen, also known as Crystal Sikes, who was convicted of altering Cliff’s workers’ comp documents.

A call to Fenton was returned by an attorney who declined comment. A call to Matrix wasn’t returned. Nguyen, who worked for Matrix, couldn’t be reached.

Delores Cliff said her husband was an ironworker for 37 years and worked for Fenton at several local sites where he was exposed to chemicals and other contaminants that resulted in him contracting throat cancer requiring several surgeries.

Case was won in June 2010

At first, Medicare paid for treatments and surgeries. Later Medicare “required the Cliffs to file a workers’ comp claim because he contracted cancer due to his job. Cincinnati attorney Harry McIlwain Jr. helped the Cliffs win their workers’ comp case in June 2010.”

The rigging company had hired Matrix Claims Management to administer its workers’ comp claims. Incredibly, the Matrix employee named as co-defendant attempted to forge documents after missing a deadline to appeal the workers’ comp ruling.

Nguyen, 29, initially was charged with forgery, tampering with records and telecommunications fraud. She cut and pasted part of a different person’s workers’ comp claim to Cliff’s claim to make it appear as if she’s appealed the decision on time, a spokesman for the Ohio Attorney General’s Office said Wednesday.

In March, Nguyen accepted a plea deal. She pleaded no contest to and was convicted of telecommunications fraud for faxing the altered documents. In exchange, the other two charges were dismissed. She was placed on probation for two years by Common Pleas Court Judge Beth Myers.

The Cliffs have fought since they won the workers’ comp case to get bill collectors seeking reimbursement for his medical bills to leave them alone.

Maybe punitive damages will allow couple to stay in home

Beyond the husband’s condition and the medical bills, says the story, the couple also care for a daughter with special needs as well as two grandchildren.  Plus, they fear losing their home.

The suit aims to force the co-defendants to reimburse Medicare and pay punitive damages.

State CFO leads effort to stop abuse of Florida system

Workers’ comp fraud is so bad in Florida that CFO Jeff Atwater is leading a task force to end the practice of using “shell companies” in a workers’ comp scheme that seems to be flourishing in the construction industry. The group includes law enforcement, state officials and trade groups.

According to an Aug. 30 piece at Insurance Journal, “officials held the first meeting of a working group to investigate the role of check cashing companies with an eye on developing legislative recommendations to be considered year.

“Atwater said the various check cashing schemes are becoming endemic around the state and hurting both employers and injured workers.”

An Aug. 26 account from The News Service of Florida explains:

Shell companies enable bypassing of legit policies

The schemes center on people who create shell companies that are used to buy minimal workers-compensation insurance policies. With the policies in hand, operators of the shell companies then hook up with construction sub-contractors who need workers-compensation insurance to get jobs — but don’t want to buy it.

The shell-company policies are used to get what are known as “certificates of insurance,” which are sent to general contractors as proof of coverage. The sub-contractors are purported to be employees of the shell companies, which allows the sub-contractors to get the jobs.

When construction jobs are finished, general contractors write checks to the shell companies. Those checks are taken to money-services businesses, with the sub-contractors getting paid in cash and the operators of the shell companies taking a cut for providing the insurance certificates.

Authorities said Thursday that operators of money-services businesses also are often part of the scheme, as the shell companies typically provide the certificates to numerous sub-contractors. The businesses get a cut for cashing large numbers of checks and going along with the fraud.

Authorities want to prevent premium hikes on legitimate operators as well as head off confusion over payments or treatment for injured workers.

We can help you find an attorney

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

In Florida, ‘illegal alien’ case riles those who write the laws in the first place

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What is it with carriers and volunteer firefighters?

We’ve written several times, most recently here, about workers’ comp problems for volunteer firefighters in West Virginia, a state where most of the fire departments are volunteer outfits–which creates an insurance problem for many, many homeowners when the local VFD can’t obtain workers’ comp coverage.

Admittedly, the West Virginia situation is somewhat complex and involves some advanced underwriting math and arcane–possibly outdated–state law.

Vermont denial raises fundamental questions

But this case in Vermont seems to fly in the face of logic and all things reasonable. If you’ve got what seems to you be a slam-dunk case for receiving workers’ comp benefits, you may want to check this out. According to a recent piece from a local NBC affiliate, WPTZ.com, a volunteer firefighter was injured in a fall while performing maintenance at the fire hall. We’re not talking a sprained ankle, either.

The Colchester Volunteer Fire Department is speaking out over a workers’ comp denial for one of its firefighters, saying the state law has a loophole that could endanger other volunteers.Volunteer firefighter Jason Stech was working on improvements to the fire station last month when he fell and shattered his ankle. Stech filed for workers compensation, but the insurance company denied his claim, saying it was not covered under the state’s definition of “line of duty.”

“You’re covered for any injuries. I assumed (that) meant while I was doing anything that had to do with the department,” Stech said.

Hurt in a parade? OK, you’re covered–hurt at the hall? Nah

Says WCAX.com, another broadcaster’s site:

In June, Stech fell from a ladder while fixing insulation at the station. He fractured his ankle, broke his foot and shattered his heel. His injuries require surgery that will keep him from his paying job for about four months. Now the fire company’s insurer is using Vermont law to deny his workers’ comp claim.

“I think it’s very unfair,” Stech said. “We all go out in the middle of the night to put our lives on the lines in some cases.”

But not in this case, says American Zurich Insurance Company. It based its denial on a legal issue concerning the legislative intent of “line of duty.” The statute says it’s when a firefighter is responding to a fire, a drill or a test, participating in a parade or fundraising. Since Stech wasn’t doing any of those activities he’s ineligible for coverage. But lawmakers argue the insurance company is twisting their intentions.

“Over the history of the workers’ compensation program we have meant it to be read expansively and remedially to benefit the injured worker,” said Sen. Vince Illuzzi, R-Essex-Orleans counties.

More than 90 percent of the state’s fire departments are volunteer. And now some worry that this loophole, sends the wrong message.

Case shows complexity of workers’ comp law

Boy, I’ll say. If a firefighter isn’t covered for injuries sustained AT THE FIREHOUSE, isn’t that like saying the military can only really be hurt in combat? If so, then who does the routine maintenance on aircraft, tanks, and such? By extension, are hard-pressed, donation-dependent VOLUNTEER fire departments supposed to hire contractors to fix up the fire hall? If so, who pays for that? I won’t even belabor the point about being covered during a parade.

This is simply another example of how complex any given workers’ comp case can become. Everybody knows an injured worker should receive proper treatment, paid for by the insurance carrier: That’s why employers buy workers’ comp coverage. But when the system goes haywire, injured workers need help from a trained, experienced workers’ comp attorney.

Birthplace not at issue in workplace injury, says district court

That being said, another case of an undocumented worker receiving workers’ comp benefits has ignited a controversy in Florida. We’ve also covered cases like this, most notably in a piece about Montana and Georgia.

According to a July 7 piece at an insurance trade site, PropertyCasualty360:

The 1st District Court of Appeal in Tallahassee has upheld a lower court’s ruling that an illegal alien working in Florida is entitled to workers’ compensation when injured on the job.

Luis Aragon, who illegally crossed the border into the U.S. 11 years ago when he was 16, was working at HDV Construction Systems, Inc. in Jacksonville when he fell 30 feet and injured his foot and arm in September 2007.

When he was awarded permanent total disability (PTD) benefits from the Judge of Compensation Claims, HDV and its insurer, Gallagher Bassett Services, Inc., resisted, saying that because Aragon was illegally working he was not entitled to PTD.

The court rejected that argument, ruling that the “that the employer knew or should have known that claimant, an illegal immigrant from Mexico, was without the legal right to work” in the U.S. and “the employer hired and continued to unlawfully employ claimant until he was injured in a significant workplace accident.” Aragon did not have a Social Security number or a green card.

The legislators cry out

The backlash in Florida was, apparently, immediate: another July 7 piece ran under this hed: “Lawmakers Blast ‘Illegal’ Workers’ Compensation Case.” (In a whimsical accident of language, the name of the state rep who’s described as “incensed” is Workman):

State Rep. Ritch Workman, R-Melbourne, said he was incensed by the decision, but not necessarily at the undocumented worker.

“The only mistake the judges made was to make workers’ comp insurance ‘must pay.’ The insurance company ought to make the employer pay every dime of that claim. I don’t care if that puts the employer out of business,” Workman said.

Workman said he would support legislation barring illegals from receiving benefits through the state’s workers’ comp system. Any liability in the case of an undocumented worker should fall solely on the employer, he said.

Florida law makes it a misdemeanor to hire an illegal alien, but the statute is virtually unenforceable because it includes the loophole-laden qualifier “knowingly,” says Rep. Bill Snyder, R-Stuart.

We recognize that we’re not likely to have much effect on such large, national issues. But these questions and problems are worth knowing about. If nothing else, knowing about some of the angles involved may help you communicate better if or when you retain an attorney.

We can help you find an attorney

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

NFL workers’ comp issue expand to other sports, out-of-state workers in Florida

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Delicate compromise too delicate: ‘surprise reversal’

Last time we posted ” ‘Delicate’ compromise may avoid killing Illinois system,” as part of our ongoing coverage of workers’ comp reform movements around the country.

Apparently, the “delicate compromise” has blown up. A May 30 piece at the St. Louis Post-Dispatch’s Web site says:

In a surprise reversal of what was to have been historic workers’ compensation reform in Illinois this year, state House members killed the bill late Sunday after a bitter floor fight that pitted medical and business interests against workers.

The workers’ compensation system is a state-run program that settles cases between injured workers and employers, keeping those cases out of the courts. The system has been plagued by skyrocketing costs for employers and alleged abuses by employees.

The Democratic-sponsored bill that failed Sunday would have lowered those costs by reducing the program’s fees to doctors, and would have tightened rules for employees trying to collect. Proponents claimed it would have saved employers some $500 million a year. Critics said it unfairly attacked doctors and didn’t go far enough to stop fraud.

‘Nuclear option’ still on table

The so-called “nuclear option” remains viable. That’s the threat of simply letting the workers’ comp system die, forcing injured workers to take their cases to the court system. According to the Journal Star’s online site:

Backers of a failed plan to overhaul the Illinois workers’ compensation system prepared Tuesday to try again, while the possibility of simply eliminating the system loomed in the background.

Rep. John Bradley, a key negotiator on the proposal, filed motions that would allow another vote. The overhaul failed Sunday in the House as Republicans opposed it as a group.

Bradley, D-Marion, originally said lawmakers would only get one chance to vote on the overhaul. He said if it failed, the next step would be abolishing workers’ compensation altogether.

Bradley said that “nuclear option” is still a possibility. The Illinois Senate could vote on it Tuesday, the final day of the legislative session.

The point is to avoid costly court battles and get workers back on job

Agency under federal investigation

Besides the reform attempt, the state workers’ comp agency is also dealing with a federal investigation of its practices, an investigation launched in the wake of a series of revealing stories published in the News-Democrat: “The newspaper reported that in just three years beginning Jan. 1, 2008, almost $10 million was paid for injuries to employees at Menard Correctional Center. Most of the tax-free settlements, including one paid to the warden for $75,678, were for repetitive trauma, or injury to the wrist or elbow that guards claimed was caused by manually locking and unlocking cells.”

NFL issue spreads to other sports, out-of-state workers

We’ve also covered workers’ comp issues in the NFL, some that threaten to spill over into non-athletic workplace situations. News from Florida updates with recent events. From the May 31 Orlando Sentinel, this headline: “Prodded by sports teams, lawmakers block out-of-state workers comp claims“:

Florida workers who travel as part of their jobs may soon have a harder time claiming benefits from on-the-job accidents — thanks, in large part, to the state’s professional sports teams.

Sometime in the next few weeks, Florida Gov. Rick Scott is expected to sign into law a measure designed to ensure that workers who are injured while temporarily working in another state can’t pursue workers-compensation claims against their employer in those states.

The legislation, passed unanimously by the Florida Legislature last month, was sought by Florida’s professional sports franchises, lead by the National Basketball Association’s Orlando Magic, the National Hockey League’s Tampa Bay Lightning and the National Football League’s Jacksonville Jaguars.

Lobbyists for the teams say the law is needed to close a loophole that allows their players to seek claims in other states. Their most oft-cited statistic: From the inception of the Jaguars in 1995 through 2009, the franchise has played only five of its 224 games in California. Yet 95 percent of the team’s workers-compensation claims have been in California, where workers-comp laws are more favorable for employees. But the law could face a swift court challenge from unions representing professional athletes, which say lawmakers are attempting to take away rights from their members in Florida.

Beneath mainstream radar, issue closely watched in WC circles

This promises to be an ongoing issue in the workers’ comp arena. Sports franchises may hope to restrict language such that it applies only to professional athletes. So far, they haven’t been able to do that. Taken together, all these subjects indicate the complexity than can follow a workplace injury, whether you’re an elite “star” or simply a worker trying to make a living.

We can help you find an attorney

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

Workers’ comp reform remains a hot topic in the Northwest, where Washington State Gov.  Chris Gregoire is making news with what Bloomberg.com calls “bold policy suggestions,” a few months after the I-1082 initiative failed at the ballot box:

After years of talking about government reform, Gov. Chris Gregoire is suddenly leading the way with bold policy suggestions that have roiled Washington state’s political waters ahead of the 2011 legislative session.

Her suggestions would dramatically overhaul both education and the ferry system, while also addressing the long-term problem of workers compensation costs. All three topics are among the thorniest in Olympia, and some advocates were caught off-guard by Gregoire’s ideas last week.

They probably won’t all survive the legislative session — as the saying goes, the governor proposes and the Legislature disposes. But the executive’s policy framework does play an important role in setting the tone and terms of the debate for lawmakers.

Governor hopes for $720 million in savings

According to a Jan. 6 post at BusinessInsurance.com, “The governor says several workers compensation system changes she plans to introduce could save Washington state $720 million over four years.

“Under her health care provider network proposal, workers would be able to choose their doctor while state and self-insured employers would ‘be able to encourage providers to follow best practices to help workers remain productive and healthy,’ the governor said Tuesday in a statement.

“That proposal alone would save an estimated $160 million over four years, Gov. Gregoire said.”

Union leaders, trial lawyers, other obstacles

One problem in Washington, according to a Jan. 18  guest-opinion piece in The Columbian, is that state law  provides neither for voluntary settlements nor for built-in links between benefits and work-related disease. Another hurdle may be establishing a broad support base, especially so soon after the defeat of I-1082. “Unfortunately,” says the Columbian piece,  “there seems little support for the most effective solutions, which are opposed by union leaders and trial lawyers.

“Today’s workplaces are safer than ever, and fewer claims are filed each year. So why is Washington’s workers’ comp system unsustainable?

“Too many of those claims remain open too long. In Washington, the average claimant is collecting benefits and off the job for 284 days.

“One reason is that, unlike 44 other states, Washington doesn’t allow voluntary settlement agreements. Virtually every other type of insurance has a final settlement, where the worker negotiates a lump-sum payment. But that is prohibited in our state’s workers’ comp system where claims are open-ended — which is why we have four to eight times as many lifelong pensions awarded as the next highest state, California.”

Reforms in Oregon, Florida

The author admires the level of reform effected in neighboring Oregon, noting that “real reform works”–based on measures passed there about twenty years ago–”and premiums there have not increased since 1990. In fact, premiums have decreased 13 percent since 2006 while benefits have increased.”

Unlike Washington, where the failed I-1082 ballot measure would have allowed private insurers to enter the workers’ comp market, Florida has a system that allows both private and state pools. Florida has not been as successful as Oregon in holding down premiums, but Florida’s 2010 statute-mandated report from the Office of Insurance Regulation (OIR) contends that the state’s workers’ comp market remains:

• competitive enough such that “[n]one of the firms have sufficient market share to exercise any meaningful control” market price, yet
• affordable enough for employers that “[b]ased on entries and voluntary withdrawals,” the market is an “attractive market for insurers.”

Recent rate hike not enough to wipe out gains of 2003 reform

Despite those findings, though, state workers’ comp rates went up “7.8 percent, effective Jan. 1, after the hike received final approval from Florida Insurance Commissioner Kevin McCarty, according to a Jan. 5 article in the South Florida Business Journal, which also reports that the rate hike “is based on the National Council on Compensation Insurance’s amended rate filing for workers’ comp insurance rates. It originally requested an 8.3 percent rate hike.”

According to an OIR press release, ” The 7.8 percent rate increase follows a decrease earlier in 2009 and still results in rate decreases accumulating to 61.9 percent since the 2003 reforms . . . ,” when the state had some of the highest rates in the nation.

The PR also says, “The report shows the Florida market features 260 entities writing workers’ compensation insurance — 255 private insurers, four self-insurance funds, and the Florida Workers’ Compensation Joint Underwriting Association (FWCJUA). The residual market, the FWCJUA, had 746 policies as of October 2010 with corresponding premiums of $5.5 million. This is a fraction of Florida’s overall workers’ compensation premium, which reported a total of $1.71 billion in written premium in the private market in 2009, ranking Florida seventh nationally.”

Florida’s rates for workers’ compensation have become some of the most competitive in the nation, which is progress when taking into account that, prior to reforms, the state had some of the highest rates in the country.

Abundance of carriers

The OIR released the commissioner’s final order along with a report on rates. It shows that 260 entities are writing workers’ compensation insurance in Florida: 255 private insurers, four self-insurance funds and the Florida Workers’ Compensation Joint Underwriting Association.

“The 2010 report clearly demonstrates a healthy marketplace in Florida, with multiple competitors, numerous options for purchasing insurance, and competitive premiums relative to other states,” McCarty said in a statement. “Maintaining competition and consumer choice is especially important for Florida businesses, given the current economic environment.”

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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:

Workers compensation basics

Injury on the job

Filing a claim

Three recent news items reflect the breadth and depth of disparity among the states’ regulations concerning workers’ compensation.

The first and third are from California and Florida, the second from Pennsylvania; taken together they reveal a shocking disconnect between treatment of perps and victims.

Roofer injured in 2003

According to a March 1 article in the Orange County (CA) Register, roofing contractor Michael Amzie Hollings “is expected to be sentenced to three years in state prison” after pleading guilty to various charges that boiled down to trying to hide workers, thereby paying nothing to the state’s workmen’s comp fund. No word from the Register on how long the scheme lasted, but it began unraveling in 2003 when a worker “fell from a roof and filed a workers’ compensation claim,” which resulted “in a denial of benefits,” according to prosecutors. The account also makes no mention of whether the injured worker ultimately received benefits–or even treatment.

On the one hand, the plea agreement shows how long such cases can slog through the system; on the other, even though Hollings faced a maximum sentence of 21 years and eight months, the expected three-year sentence should serve as a red flag for those who attempt to run similar schemes–at least, in California.

Agency owner dodges more than 1,000 counts

In another plea agreement reported today at pittsburghlive.com, 80-year-old William R. McCandless has apparently slipped through the system with a pretty sweet deal. Charged (along with his business) of “1,054 counts of failure to insure” from August 2006 through July 2009, McCandless “entered a general plea of no contest to a single count of failure to insure,” which is expected to net him a mere $3,000 fine plus probation.

One presumes the agency’s workers are now covered–and, of course, there’s no mention of anyone falling from a roof–but, still…more than a thousand counts? That must be one happy old guy.

Holdup victim awaiting surgery for more than a year

The next case is flat out tragic and has the father of an injured man taking on reform of Florida’s statutes, which were altered to prevent abuse by scam-running workers.

Posted March 01 at myfoxtampabay.com, this account tells the tale of Sam McGinnis, a drug store clerk gunned down during a holdup that netted $88 in Nov. 2008.

“We’ve all seen video of people caught on tape playing up their injuries and claiming benefits: people walking with a walker, and later walking just fine, or using or a cane where now you see it, now you don’t,” writes investifative reporter Doug Smith.

“But there’s nothing funny or phony about the video of Sam McGinnis, a clerk behind the counter at a drug store in Tampa, Florida on November 29, 2008. A camera inside the store shows a holdup.”

Cursed at by the robber and shot twice–for not moving fast enough–McGinnis still has a slug lodged in his back and remains “in constant pain,” with “[e]ven the simplest tasks . . . a challenge . . . and he says the workers’ compensation system is compounding his agony.”

Apparently, Florida’s worker-abuse reform went too far: Not only have the new regs have resulted in denial of surgery that would help McGinnis but also he’s been prevented from using his own private insurance–because he was hurt on the job.

“McGinnis hasn’t been able to get surgery that his doctors say could ease his pain because so far workers’ compensation won’t approve it. McGinnis says he had very good private insurance, but because he was hurt at work, he can’t use it.”

The article also says “McGinnis will need a lifetime of care.”

McGinnis’ father has begun a campaign to change the regs, creating a dual-track system, with one track for more routine on-the-job injuries and another for “for people who are catastrophically injured. . .” The father (Facebook profile here) has launched a Web site with a brief background and links to a youtube video and an online petition.

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Regardless of whether you’ve been hurt on the job, it’s wise to know the basics of workers compensation in case you, a friend or family member need to file a claim in the future. If you do get hurt, you should be aware of the first things to do or what to tell a co-worker who has been injured.

Sometimes an injured employee takes all the correct steps but still has trouble getting the claim taken care of; in that case here’s some information for problems with denial of benefits. If legal help is needed to help with the case, be sure to speak to a trained, experienced attorney.