2009 Workers' Compensation Overview

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This presentation was given on 9/18/2009 to clients and friends of Kegler Brown. The presentation features a case law update, third party administration, bureau of workers' compensation issues and voluntary abandonment.

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  • payment shall not be made for the period when any employee has returned to work, when an employee’s treating physician has made a written statement that the employee is capable of returning to the employee’s former position of employment, when work within the physical capabilities of the employee is made available by the employer or another employer, or when the employee has reached the maximum medical improvement.
  • Ohio Admin. Code 4123:1-5-05(D)(2) requires requires an employer to supply a device to lock a machine's controls in the off position when machines are shut down for repair, adjusting, or cleaning.
  • The Company argued the Commission could not rely on post accident evidence that the alarm did not work, especially considering the OSHA investigation had determined that the alarm may have been broken during the attempted rescue. that it was no abuse of discretion to deny the employer's rehearing motion claiming its "first-time failure" defense was not considered, because it never raised the defense before a hearing officer, so the commission could not be compelled to grant an appeal in order to consider it.
  • 2009 Workers' Compensation Overview

    1. 1. Welcome!
    2. 2. Helpful Safety Tips…
    3. 13. presented by Randy Mikes September 18, 2009 Voluntary Abandonment: Legal Relic or Valid Defense?
    4. 14. Voluntary Abandonment <ul><li>Origins of Voluntary Abandonment </li></ul><ul><ul><li>Proximate cause - requirement of a causal connection between an injury in the course of and arising out of the employment and the harm or disability </li></ul></ul><ul><ul><li>Voluntary departure from employment, typically resignation </li></ul></ul><ul><ul><li>Post departure worsening of condition does not render departure less voluntary </li></ul></ul>
    5. 15. Voluntary Abandonment <ul><li>Expansion of Voluntary Abandonment </li></ul><ul><ul><li>Imprisonment - State ex rel, Ashcraft vs. Indus. Comm .: Commission of crime and subsequent imprisonment is a voluntary act barring receipt of temporary total </li></ul></ul><ul><ul><li>Job change - State ex rel, McGraw vs. Indus. Comm .: Voluntary departure from former position of employment for other employment barred subsequent request for temporary total </li></ul></ul>
    6. 16. Voluntary Abandonment <ul><li>Expansion of Voluntary Abandonment </li></ul><ul><ul><li>Violation of a written work rule - State ex rel, Louisiana Pacific Corp. vs. Indus. Comm .: Termination pursuant to a written work rule policy that </li></ul></ul><ul><ul><ul><li>clearly defined the prohibitive conduct, </li></ul></ul></ul><ul><ul><ul><li>had previously been identified as a dischargeable offense, and </li></ul></ul></ul><ul><ul><ul><li>was known or should have been known by the employee represents a voluntary abandonment </li></ul></ul></ul>
    7. 17. Voluntary Abandonment <ul><li>Limitations of Doctrine </li></ul><ul><ul><li>Pretext </li></ul></ul><ul><ul><ul><li>Timing and circumstances of discharge </li></ul></ul></ul><ul><ul><ul><li>Burden shifting to claimant </li></ul></ul></ul><ul><ul><li>Claimant must raise issue </li></ul></ul>
    8. 18. Voluntary Abandonment <ul><li>Limitations of Doctrine </li></ul><ul><ul><li>Job change </li></ul></ul><ul><ul><ul><li>Baker : claimant who leaves former position for new employment is eligible for temporary total should allowed conditions cause disability from subsequent employment </li></ul></ul></ul><ul><ul><li>Nature of firing </li></ul></ul><ul><ul><ul><li>Subjective element to offense </li></ul></ul></ul><ul><ul><ul><li>Work rule predate injury </li></ul></ul></ul>
    9. 19. Voluntary Abandonment <ul><li>Limitations of Doctrine </li></ul><ul><ul><li>Subsequent re-employment </li></ul></ul><ul><ul><ul><li>McCoy - Claimant who voluntarily abandoned the former position of employment, subsequently re-enters the workforce and again becomes temporarily and totally disabled as a result of the original industrial injury is eligible for temporary total </li></ul></ul></ul><ul><ul><ul><li>Employed at time of subsequent disability </li></ul></ul></ul><ul><ul><ul><ul><li>Possible exception: lay off </li></ul></ul></ul></ul>
    10. 20. Voluntary Abandonment <ul><li>Timing of Prohibited Conduct & Disability </li></ul><ul><ul><li>Conduct during disability </li></ul></ul><ul><ul><ul><li>Pretty Products and Reitter Stucco : A claimant cannot voluntarily abandon his former position of employment if he is disabled at the time of the conduct giving rise to his discharge </li></ul></ul></ul><ul><ul><li>Conduct caused injury </li></ul></ul><ul><ul><ul><li>Gross - temporary total eligibility is not compromised where claimant is injured by the same misconduct that led to his termination </li></ul></ul></ul><ul><ul><ul><li>Motor vehicle accident cases </li></ul></ul></ul>
    11. 21. Voluntary Abandonment <ul><li>Timing of Prohibited Conduct & Disability </li></ul><ul><ul><li>Conduct before injury/discharge after </li></ul></ul><ul><ul><ul><li>Employment application cases </li></ul></ul></ul><ul><ul><ul><ul><li>Intent to deceive </li></ul></ul></ul></ul><ul><ul><ul><li>Post-accident drug testing </li></ul></ul></ul><ul><ul><ul><ul><li>Dischargeable conduct occurred before injury even though discovered after injury </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Caveat: Language of drug policy can change outcome </li></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>What must claimant &quot;know&quot; </li></ul></ul></ul></ul></ul>
    12. 22. Voluntary Abandonment <ul><li>Timing of Prohibited Conduct & Disability </li></ul><ul><ul><li>Light duty employment </li></ul></ul><ul><ul><ul><li>On light duty </li></ul></ul></ul><ul><ul><ul><li>Offer of light duty </li></ul></ul></ul>
    13. 23. Voluntary Abandonment <ul><li>Evidence </li></ul><ul><ul><li>Written policy </li></ul></ul><ul><ul><ul><li>File entire thing </li></ul></ul></ul><ul><ul><li>Documentation of violation </li></ul></ul><ul><ul><li>Documentation of termination </li></ul></ul><ul><ul><ul><li>I.e. letter or other notice to claimant </li></ul></ul></ul>
    14. 24. Voluntary Abandonment <ul><li>Evidence </li></ul><ul><ul><li>Voluntary resignation </li></ul></ul><ul><ul><ul><li>Lack of search for work </li></ul></ul></ul><ul><ul><ul><li>Type of resignation taken </li></ul></ul></ul><ul><ul><ul><li>Lack of medical evidence of disability at resignation </li></ul></ul></ul><ul><ul><ul><ul><li>Claimant's testimony has been held sufficient </li></ul></ul></ul></ul>
    15. 25. Voluntary Abandonment <ul><li>Conclusion </li></ul><ul><ul><li>Valid defense </li></ul></ul><ul><ul><li>Move to abolish </li></ul></ul><ul><ul><ul><li>Always issue of proximate cause </li></ul></ul></ul><ul><ul><ul><li>Refinement </li></ul></ul></ul>
    16. 26. 2008-2009 Workers Compensation Case Law Update Brendan P. Feheley, Esq. [email_address] (614) 462-5482
    17. 27. Major Areas <ul><li>Prescription Medications </li></ul><ul><li>Successorship Liability </li></ul><ul><li>Temporary Total </li></ul><ul><li>VSSR </li></ul><ul><li>Going and Coming Rule </li></ul><ul><li>A Hodgepodge of Interesting Cases </li></ul>
    18. 28. Just an FYI <ul><li>Voluntary abandonment </li></ul><ul><ul><li>Randy already covered that! </li></ul></ul><ul><li>Settlement Agreements </li></ul><ul><ul><li>Dave will cover that! </li></ul></ul><ul><li>Everything else </li></ul><ul><ul><li>I’ll do my best! </li></ul></ul>
    19. 29. Prescription Medications <ul><li>State ex rel. Jordan v. Indus. Comm'n , 120 Ohio St. 3d 412 (Ohio 2008) </li></ul><ul><ul><li>1984 Injury </li></ul></ul><ul><ul><ul><li>Claimant asserts she has a continued right to full payment for brand name prescription medications. </li></ul></ul></ul><ul><ul><li>Not a question of whether the medications are necessary </li></ul></ul><ul><ul><ul><li>Bureau asserts 4123-6-21(I) applies retroactively… </li></ul></ul></ul>
    20. 30. Prescription Meds <ul><ul><li>4123-6-21(I) says: </li></ul></ul><ul><ul><ul><li>Claimants who request a brand name drug or whose physician specifies a brand name drug designated by “dispense as written” on the prescription for a medication which has an applicable maximum allowable cost price shall be liable for the product cost difference between the established maximum allowable cost price of the drug product and the average wholesale price plus or minus the bureau established percentage of the dispensed brand name drug. </li></ul></ul></ul><ul><ul><li>Ohio Supreme Court Says: </li></ul></ul><ul><ul><ul><li>Retroactive application of the administrative rule was improper only if it abridged a vested right. Full payment for brand name drugs by the Bureau was not a vested right. </li></ul></ul></ul>
    21. 31. Successorship Liability <ul><li>State ex rel. Valley Roofing, L.L.C. v. Ohio Bureau of Workers' Comp. , 2009 Ohio 2684, (Ohio 2009) </li></ul><ul><li>What Happened </li></ul><ul><ul><li>PNC Bank foreclosed on the assets of Tech Valley Contracting, Inc. (&quot;Tech&quot;). </li></ul></ul><ul><ul><ul><li>PNC now owns the assets! </li></ul></ul></ul><ul><ul><li>Valley Roofing Company, L.L.C. (&quot;Valley&quot;) bought those assets from PNC and continued the business operation. </li></ul></ul><ul><ul><ul><li>Same Business! </li></ul></ul></ul>
    22. 32. Successorship Liability (cont’d.) <ul><ul><li>Valley applied for workers‘ compensation coverage, BWC transfers Tech's experience rating to Valley, finding that Valley was Tech's successor in interest. </li></ul></ul><ul><li>Court says: </li></ul><ul><ul><li>Valley did not purchase Tech's assets from Tech. It acquired them from an intermediary bank. Under Crosset , Lake Erie's definition of successor in interest does not apply. Accordingly, Valley can not be considered to be Tech's successor in interest and cannot be assigned Tech's experience rating. </li></ul></ul>
    23. 33. Successorship Liability (cont’d.) <ul><li>Court means: </li></ul><ul><ul><li>Statutory language “employer transfers his business in whole or in part or otherwise reorganizes the business,” means what it says . </li></ul></ul><ul><ul><li>refers to a voluntary act of the employer and not the involuntary transfer of the employer's business through an intermediary bank. </li></ul></ul><ul><li>Things to remember </li></ul><ul><ul><li>Bad Economy </li></ul></ul><ul><ul><li>Failing Businesses </li></ul></ul><ul><ul><li>FIND A BANK!!!!!! </li></ul></ul>
    24. 34. Temporary Total Disability <ul><li>State ex rel. DaimlerChrysler Corp. v. Indus. Comm'n , 121 Ohio St. 3d 341 (Ohio 2009) </li></ul><ul><ul><li>The employee was awarded TTD. It was determined by medical evidence that her allowed conditions had not reached maximum medical improvement. However,her attending physician stated that the employee could not ever return to her former position of employment. </li></ul></ul><ul><ul><li>Employer sought termination of the TTD (can’t ever return to former position) pursuant to §4123.56(A). </li></ul></ul>
    25. 35. Temporary Total Disability <ul><li>The IC rejected the termination request </li></ul><ul><li>Court of appeals agreed with the IC that none of the disqualifying events listed in § 4123.56(A) had occurred. </li></ul><ul><li>Supreme Court holds: </li></ul><ul><ul><li>“ [t]he commission's designation of a disability as permanent relates solely to the perceived longevity of the condition at issue. It has absolutely no bearing upon the claimant's ability to perform the tasks involved in his former position of employment… we continue to declare MMI to be the only standard by which temporary total disability compensation can be terminated on a basis of permanency.” </li></ul></ul>
    26. 36. Temporary Total Disability <ul><li>What it means? </li></ul><ul><ul><li>Permanency must relate to the medical condition not the ability to return to job. </li></ul></ul><ul><ul><li>As long as employee’s condition can improve then employee can still be eligible to receive TT. </li></ul></ul><ul><li>Definition of Temporary Total? Definition of Maximum Medical Improvement? </li></ul>
    27. 37. VSSR <ul><ul><li>State ex rel. Metcalfe v. Indus. Comm'n , 121 Ohio St. 3d 347 (Ohio 2009) </li></ul></ul><ul><li>The employer made flooring materials, one of which was a rubber and polyurethane compound that was used in gyms and health clubs. A bulk loading system was used to manufacture that material. While engaged in the daily cleaning of the mixer, the hopper doors closed and crushed the employee due to the failure of one of the valves that controlled air pressure to the doors. </li></ul><ul><li>A claim for death benefits was allowed. Thereafter, the widow sought an additional award due to the employer's alleged VSSR. The IC denied the request upon finding that the employer's noncompliance with did not proximately cause the accident. </li></ul>
    28. 38. VSSR (cont’d.) <ul><li>The Court held: </li></ul><ul><ul><li>&quot;The purpose of this safety rule is to guard against the possibility that a machine might turn on unexpectedly, thereby catching a repairman or another nearby person unawares. It was reasonable for the commission to hold that the rule does not apply when the machine is already running, because the fact of its running, itself, provides adequate warning.“ </li></ul></ul><ul><li>What to Remember? </li></ul><ul><ul><li>Check the specific safety rule alleged to be violated. </li></ul></ul><ul><ul><ul><li>Possible that facts demonstrate that the violation of the rule didn’t proximately cause accident. </li></ul></ul></ul>
    29. 39. VSSR (cont’d.) <ul><li>State ex rel. Shelly Co. v. Steigerwald , 121 Ohio St. 3d 158 (Ohio 2009) </li></ul><ul><li>The widow's husband was killed when a truck backed over him. The commission found the truck's reverse warning alarm, required by Ohio Admin. Code 4123:1-3-06(D)(2)(a)), did not work. </li></ul><ul><li>The Supreme Court held </li></ul><ul><ul><li>“ While Shelly Company correctly notes that there is evidence suggesting that the alarm was broken during rescue efforts and that OSHA indeed reached that conclusion, this fact is inconsequential. </li></ul></ul><ul><ul><li>As even Shelly Company acknowledges, the commission is not bound by OSHA findings. More important, so long as the commission's order is supported by ‘some evidence,’ ‘[i]t is immaterial whether other evidence, even if greater in quality and/or quantity, supports a decision contrary to the Commission's.’ </li></ul></ul>
    30. 40. VSSR (cont’d .) <ul><li>What to remember: </li></ul><ul><ul><li>Commission has wide latitude to make a decision due to the “some evidence rule.” </li></ul></ul><ul><ul><ul><li>Very important to vehemently argue defenses administratively as Court is unlikely to overturn. </li></ul></ul></ul><ul><ul><li>Make all defenses beginning at initial hearing </li></ul></ul><ul><ul><ul><li>Magistrate ruled, and Court affirmed that Commission not required to hear evidence submitted after the hearing. Commission has discretion as do hearing officers. </li></ul></ul></ul>
    31. 41. Coming and Going Rule <ul><li>Mitchell v. Cambridge Home Health Care, Inc./PRI , 2008 Ohio 4558 (Ohio Ct. App., Summit County Sept. 10, 2008) </li></ul><ul><li>The employee was a home health aide who worked for the employer. After leaving a patient's apartment to go home, the employee tripped and fell on a floor mat while exiting an elevator in the patient's apartment building. She filed a workers‘ compensation claim for injuries sustained to her leg. </li></ul><ul><li>The Industrial Commission disallowed the claim, finding that she was a &quot;fixed situs&quot; employee who was subject to the &quot;coming and going rule.&quot; </li></ul><ul><li>The court agreed with the denial of coverage. It found that the &quot;coming and going rule&quot; applied to the employee, who had finished her job duties when the injury occurred. </li></ul>
    32. 42. Coming and Going… <ul><li>Gilham v. Cambridge Home Health Care, Inc., 2009 Ohio 2842 </li></ul><ul><ul><li>Home health nurse, picks up schedule on Fridays and begins work from patients home on Saturdays. Sees multiple patients each day. Between patients’ homes employee involved in car accident. </li></ul></ul><ul><ul><li>Employer claims employee is fixed-situs employee and accident occurred between situses and is not compensable. </li></ul></ul><ul><ul><li>Trial court grants summary judgment and Court of Appeals affirms. Holding employee is fixed-situs employee with multiple fixed-situses and accident occurred between situses and is not compensible. </li></ul></ul>
    33. 43. Coming and Going Rule <ul><li>What do these cases mean? </li></ul><ul><ul><li>Employees can be fixed situs employees even if they travel. </li></ul></ul><ul><ul><ul><li>Need to have multiple fixed locations, not be paid for travel and travel relatively small distances. </li></ul></ul></ul><ul><ul><li>Exceptions to Coming and Going Rule don’t typically apply on public roadways or areas outside of control of employer </li></ul></ul><ul><li>Ruckman changed the game! </li></ul><ul><ul><li>Focus is on where work begins and ends! </li></ul></ul><ul><li>Most Important! </li></ul><ul><ul><li>Gilham cites to Crockett v. HCR Manorcare </li></ul></ul>
    34. 44. Coming and Going (travel) <ul><li>Griffith v. City of Miamisburg , 2008 Ohio 6611 </li></ul><ul><li>The claimant was attending a two-week training course. He was injured while he was playing basketball at the training center's workout facilities. </li></ul><ul><li>The purpose of the claimant's attendance at the training center was to enhance the claimant's ability to perform his job duties, the employer strongly encouraged the claimant to remain at the center throughout the training period, and the claimant was injured while on the center's premises. </li></ul><ul><li>Appeals Court finds the claimant was injured in the course of his employment. The claimant's injury arose out of his employment because: </li></ul><ul><ul><li>the scene of the accident was proximate to the training center, the employer exercised control over the claimant's presence at the academy by refusing to reimburse the claimant for his costs were he to leave the facility for alternative lodging </li></ul></ul><ul><ul><li>the employer derived a benefit from the claimant's use of the workout facilities, especially in light of the employer's physical fitness requirements. </li></ul></ul>
    35. 45. Coming and Going (travel) <ul><li>Lippolt v. William R. Hague, Inc., 2008 Ohio 5070 </li></ul><ul><li>The employee traveled frequently for the employer. After visiting several of the employer's stores, the employee drove to the area where he planned to visit oneof the employer's stores the next day. As he was walking toward the hotel lobby to check in, he slipped on ice in the parking lot and broke his ankle. </li></ul><ul><li>The court held that the employee's injury occurred in the course of his employment because: </li></ul>
    36. 46. <ul><li>Because… </li></ul><ul><ul><li>the nature of the employee's employment required him to engage in extensive travel and to stay in hotels </li></ul></ul><ul><ul><li>the employer paid the employee for all of his travel expenses </li></ul></ul><ul><ul><li>the employee's injury occurred just as he arrived at his hotel. </li></ul></ul><ul><ul><li>the employer benefited from the employee's presence at the hotel because a hotel near the stores that he was required to visit enabled the employee to visit more stores on the employer's behalf </li></ul></ul><ul><li>What to remember? </li></ul><ul><ul><li>When travel is on behalf of employer, more restrictions put on free time, more likely it’s in course of employment. </li></ul></ul><ul><ul><li>When employee also benefits from trip (educational requirements) can argue not solely for employer’s benefit. </li></ul></ul>Coming and Going (travel)
    37. 47. Coming and Going (random) <ul><li>Hirschle v. Mabe , 2009 Ohio 1949 (Ohio Ct. App., Montgomery County Apr. 27, 2009) </li></ul><ul><li>The employer offered to employees the option of picking up their paychecks at its offices on Thursday, the day before payday. Though the claimant did not work on Thursdays, she drove to the employer's officers each Thursday before payday to pick up her check. While walking back to her car after picking up her check, the claimant slipped and fell near her car in the parking lot and broke her hip. </li></ul><ul><li>The court held that the claimant's injury was received in the course of and arose out of the claimant's employment. Since the reason for the claimant's presence on the employer's premises was related to a fundamental aspect of her employment contract, the receipt of wages, her injury arose out of the employer's performance of a duty and the claimant's exercise of a right under the employment contract. Also, since the employer allowed the claimant the choice to have it fulfill its duty by picking up her paycheck on premises, the injury suffered in the employer's parking lot after the was compensable. </li></ul>
    38. 48. Coming and Going (random) <ul><li>What to remember? </li></ul><ul><ul><li>No good deed goes unpunished </li></ul></ul><ul><ul><li>Courts sympathize with injured workers </li></ul></ul><ul><ul><li>Getting paid for your job is a fundamental aspect of your employment! </li></ul></ul>
    39. 49. What’s left? <ul><li>State ex rel. Omni Manor v. Mihaley , 2009 Ohio 4209 </li></ul><ul><ul><li>New examination makes report from previously rejected Dr. ok. </li></ul></ul><ul><li>Chappell v. Wal-Mart Stores, Inc., 2009 Ohio 542 </li></ul><ul><ul><li>Employee has to prove injury is not idiopathic. </li></ul></ul><ul><ul><ul><li>Even when other laws are violated… </li></ul></ul></ul><ul><li>State ex rel. Ohio Tpk. Comm'n v. Indus. Comm'n , 2009 Ohio 468 </li></ul><ul><ul><li>Dr. has to relate PPD percentage to specific allowed condition. </li></ul></ul><ul><li>State ex rel. Marrero v. Indus. Comm'n of Ohio , 2009 Ohio 4382 </li></ul>
    40. 50. Still more? <ul><li>State ex rel. Marrero v. Indus. Comm'n of Ohio , 2009 Ohio 4382 </li></ul><ul><ul><li>Denial of Working Wage Loss affirmed because employee limited herself to finding a position that required left-handed only work that was available during the midnight shift. </li></ul></ul><ul><li>State ex rel. Lay-Z-Boy Furniture Galleries v. Thomas , 2009 Ohio 4546 </li></ul><ul><ul><li>Corrected impairment status can be used as the baseline to determine vision loss. </li></ul></ul><ul><ul><ul><li>Prior case law says can’t consider fact that vision can be corrected later as bar to award. </li></ul></ul></ul>
    41. 51. The End <ul><li>At least it’s NEVER boring! </li></ul>
    42. 52. presented by Dave McCarty September 18, 2009 So You Wanna Settle that Workers’ Comp Claim and Move On?
    43. 53. Why Are We Talking About Settlements?
    44. 54. Wise v. Ryan (April 2008)
    45. 55. O.R.C. 4123.65(A) <ul><li>A state fund employer or the employee thereof … may file an application … for approval of a final settlement of a claim. The application shall include the settlement agreement, … be signed by the claimant and employer, and clearly set forth the circumstances by reason of which the proposed settlement is deemed desirable … </li></ul>
    46. 56. O.R.C. 4123.65(D) <ul><li>At the time of agreement … under division (A) of this section or agreement between a self-insuring employer and the self-insuring employer’s employee, the administrator, for state fund settlements, and the self-insuring employer, for self-insuring settlements, immediately shall send a copy of the agreement to the industrial commission who shall assign the matter to a staff hearing officer. </li></ul>
    47. 57. O.R.C. 4123.65(D), cont. <ul><li>The staff hearing officer (SHO) shall determine, within (30 days), whether the settlement agreement is or is not a gross miscarriage of justice . If (SHO) determines within (30 days) that the settlement agreement is clearly unfair , (SHO) shall issue an order disapproving the settlement agreement. If (SHO) determines that the settlement agreement is not clearly unfair or fails to act within those time limits, the settlement agreement is approved. </li></ul>
    48. 58. Back to Wise v. Ryan <ul><li>Robert Wise </li></ul><ul><ul><li>IQ of 72 </li></ul></ul><ul><ul><li>Special education student </li></ul></ul><ul><ul><li>Mentally retarded, according to Dr. Beal Lowe </li></ul></ul><ul><ul><li>Fourth Grade level of reading comprehension </li></ul></ul>
    49. 59. Wise v. Ryan, cont. <ul><li>In 1997, TPA for his employer suggested a $2000 settlement for 1995 W/C claim for a fractured leg </li></ul><ul><li>Wise unrepresented </li></ul><ul><li>Wise and employer signed and submitted $2000 settlement application to BWC </li></ul><ul><li>Application contained no language concerning the circumstances by reason of which the proposed settlement was deemed desirable </li></ul><ul><li>BWC approved settlement for $2000, I/C did not disapprove it. </li></ul>
    50. 60. Wise v. Ryan, cont. <ul><li>Five years later, Wise goes to a lawyer, who files a motion to vacate the settlement. </li></ul><ul><li>I/C rejects the motion at all three administrative levels and Wise appeals. </li></ul><ul><li>Court of Appeals agrees with the I/C but the Ohio Supreme Court does not. </li></ul>
    51. 61. Wise v. Ryan, cont. <ul><li>Ohio Supreme Court: </li></ul><ul><ul><li>The language in 4123.65(A) -- that the settlement application clearly set forth the circumstances by reason of which the proposed settlement is deemed desirable -- is MANDATORY. </li></ul></ul>
    52. 62. Wise v. Ryan, cont. <ul><li>Commission argued, even without any of that language, it was enough that an SHO evaluated the application and found it was not clearly unfair. </li></ul><ul><li>Supreme Court rejected that argument. </li></ul><ul><ul><li>The statute is clear. </li></ul></ul><ul><ul><li>It's impossible for an SHO to evaluate whether a settlement is just when there is no reasoning provided that justifies settlement. </li></ul></ul><ul><ul><li>&quot;All requirements specifically enumerated in R.C. 4123.65 must be strictly adhered to before a settlement of a workers' compensation claim can legally be effectuated.&quot; </li></ul></ul>
    53. 63. So NOW What? <ul><li>Clearly, the settlement process for state-funded claims must change. </li></ul><ul><li>More about that in a few minutes. </li></ul><ul><li>What about self-insured claims ??? </li></ul>
    54. 64. <ul><li>How many of you get involved with self-insured settlements? </li></ul><ul><li>Have you changed anything about your procedures? </li></ul><ul><li>Do you need to? </li></ul>
    55. 65. Look at the language in O.R.C. 4123.65(A) <ul><li>&quot;A state fund employer or the employee of such an employer may file an application with the administrator of workers’ compensation for approval of a final settlement of a claim under this chapter…” </li></ul><ul><li>Clear distinction in the statute (also see 4123.65 (C) and (D)) between settlement requirements for self-insured and state-funded claims </li></ul>
    56. 66. However: <ul><li>Equal Protection problem? </li></ul><ul><li>Liberal Construction of the W/C Statute (4123.95)? </li></ul><ul><li>Fairness? </li></ul><ul><li>Not that hard to comply. </li></ul>
    57. 67. Some self-insured employers have decided to &quot;comply&quot; with 4123.65(A) requirement just in case.
    58. 68. Sample Language <ul><li>Claimant X desires to settle this matter under the above terms in lieu of litigation, the result of which is uncertain at best. Ms. X and Upstanding Employer acknowledge that the terms of this Agreement are fair and equitable to both parties as demonstrated by their agreement to same. This statement is intended to comply with R.C. 4123.65(A) and the decision of the Ohio Supreme Court in State, ex rel. Wise v. Indus. Comm. (2008), 118 Ohio St.3d 68, to the extent such compliance is necessary under the circumstances of this claim. </li></ul>
    59. 69. SO -- How has the Bureau reacted to the Wise decision with regard to settlement of state-funded claims?
    60. 70. MELTDOWN!!!
    61. 71. <ul><li>Settlements all but came to a screeching halt for a year or so. </li></ul><ul><li>They revisited substantially all of their procedures. </li></ul><ul><li>They set up committees (of course). </li></ul><ul><li>They've implemented changes, with more to come. </li></ul>
    62. 72. External Stakeholder Committee <ul><li>Individual Case Reserves </li></ul><ul><li>Panel Process for External Legal Reviews </li></ul><ul><li>Medicare Set-Asides </li></ul><ul><li>Settlement Evaluation &quot;Tool Kit&quot; </li></ul>
    63. 73. <ul><li>Rated Age (Who pays???) </li></ul><ul><li>Lean on the Industrial Commission (pass the buck)? </li></ul><ul><li>Settlement when PTD application pending or PTD potential exists </li></ul><ul><li>Core Skill Inventory and Training for LSS CSS </li></ul><ul><li>Quality and Financial Metrics for Settlement Program </li></ul>
    64. 74. Any Questions, Comments or Concerns?
    65. 75. The Latest and Greatest in Third Party Administration Presented by: Jim Vassar V&A Risk Services
    66. 76. Role of the Third Party Administrator (TPA) <ul><li>Consultant looking out for employer’s interests </li></ul><ul><li>Claim consultation & compensation management of claims </li></ul><ul><li>Represents employers at hearings before all Industrial Commission Levels </li></ul><ul><li>Paid by the employer on negotiated fee </li></ul><ul><li>Review for clients for Group Rating every year </li></ul><ul><li>Risk Analysis </li></ul><ul><li>Recommend other programs as appropriate </li></ul><ul><li>Train and Educate </li></ul>
    67. 77. Effective TPAs <ul><li>Same principles apply to any company in the service industry. </li></ul><ul><li>Emphasis on Customer Service: </li></ul><ul><ul><li>Proactive </li></ul></ul><ul><ul><li>Experienced and Knowledgeable </li></ul></ul><ul><ul><li>Develop relationships through continuity </li></ul></ul><ul><ul><li>Willing to customize service based on customers’ unique needs </li></ul></ul><ul><ul><li>Responsive </li></ul></ul>
    68. 78. Role of the Managed Care Organization (MCO) <ul><li>Perform a function that the BWC used to do </li></ul><ul><li>Claim intake & medical management of claims </li></ul><ul><li>Paid a portion of employer’s premiums by BWC </li></ul><ul><li>Open enrollment coming up May 2010 (every 2 years) </li></ul>
    69. 79. TPA as an Educator/Advisor: BWC Programs
    70. 80. Group Rating Program <ul><li>97,000 participants (7/1/09) </li></ul><ul><li>Employers apply to TPAs/Sponsoring Associations to determine eligibility </li></ul><ul><li>TPAs compare Total Expected Losses to Total Actual Losses </li></ul><ul><li>Offer discounts based on Loss Ratio </li></ul><ul><li>Discounts range from 25% to 65% off BWC Base Rates </li></ul><ul><li>State max discount from 95 (’05) to 93 (’06) to 90 (’07) to 85 (’08) to 77(‘09) to 65 (’10) </li></ul><ul><li>Original AC26 forms must be filed with the TPA by 2/28/10 for 7/1/2010 </li></ul><ul><li>Employers keep own risk identity and can change groups annually </li></ul>
    71. 81. Group Rating Program – 2010 timing <ul><li>7/09-12/09 Employers send AC3’s </li></ul><ul><li>11/09-1/10 TPAs evaluate & send offers </li></ul><ul><li>2/28/10 Groups filed </li></ul><ul><li>7/1/10 Group Discount begins </li></ul><ul><li>1/11 & 7/11 Bills will include group discount </li></ul>
    72. 82. Experience Modifier Cap Program (EM Cap) <ul><li>For employers just removed from group 7/1/09 </li></ul><ul><li>5 steps of BWC 10-Step Business Plan first year </li></ul><ul><li>BWC will limit increase in EM to 100% </li></ul><ul><ul><li>Ex. 80% discount 7/1/2008 </li></ul></ul><ul><ul><ul><li>EM will be capped at 60% discount 7/1/09 </li></ul></ul></ul>
    73. 83. One Claim Program (OCP) <ul><li>For employers just removed from group 7/1/09 </li></ul><ul><li>Must be one claim that resulted in removal </li></ul><ul><li>Employer must have no more than 3 other medical-only claims in the last 5 years </li></ul><ul><li>Must attend 2 BWC-approved training days per policy year </li></ul><ul><li>BWC gives that employer a 40% discount off the base rates </li></ul>
    74. 84. Drug-Free Workplace Program (DFWP) <ul><li>For non-group-rated employers </li></ul><ul><li>Put BWC 10-Step Business Plan in place </li></ul><ul><li>Depending on level of involvement: create EAP, utilize random testing </li></ul><ul><li>Receive 10-20% discount on BWC bill </li></ul><ul><li>Drug-Free EZ program for companies with less than 25 employees </li></ul>
    75. 85. Safety Council Discount Program <ul><li>For non-group-rated employers </li></ul><ul><li>Attend at least 10 safety council meetings per year </li></ul>
    76. 86. Deductible Program <ul><li>536 participants (7/1/09) </li></ul><ul><li>For all State Fund employers </li></ul><ul><li>BWC offers small up-front discount </li></ul><ul><li>Employer agrees to pay up to deductible amount on every claim incurred during retro year </li></ul><ul><li>BWC still uses deductible amounts in future year rate calculations </li></ul><ul><li>Risk involved </li></ul>
    77. 87. Individual Retrospective Rating <ul><li>144 participants (7/1/09) </li></ul><ul><li>For employers with more than $25K in premiums </li></ul><ul><li>Put BWC 10-Step Business Plan in place </li></ul><ul><li>Pick maximum premium & per claim limits </li></ul><ul><li>Receive discount on BWC bill </li></ul><ul><li>Reimburse the BWC for all compensation & medical costs paid out in claims incurred during fiscal year for the next 10 years </li></ul><ul><li>At the end of year 10, pay current reserve as a “buyout” </li></ul>
    78. 88. Group Retrospective Rating <ul><li>365 participants (7/1/09) </li></ul><ul><li>Employers pool together </li></ul><ul><li>Pick maximum premium & per claim limits </li></ul><ul><li>Pay regular BWC bill </li></ul><ul><li>BWC evaluates at 12 moths, 24 months & 36 months if pool has less in claims that expected </li></ul><ul><li>If yes, refund to all </li></ul><ul><li>If no, BWC will collect more premium </li></ul><ul><li>Claims costs still used in future rate calculations </li></ul>
    79. 89. Self-Insurance (SI) <ul><li>1,200 participants </li></ul><ul><li>For employers with 500 or more employees </li></ul><ul><li>Strong financial picture </li></ul><ul><li>Replace the Ohio Bureau of Workers’ Compensation (BWC) by paying $ for $ </li></ul><ul><li>Must have knowledgeable personnel in charge </li></ul><ul><li>Attorneys, Third Party Administrators </li></ul>
    80. 90. Changes for Next Policy Year 2011
    81. 91. 2010 BWC Rating Formula <ul><li>Current calculation </li></ul><ul><li>TML-TLL/TLL * CRED % = TM% (discount or penalty on base rates) </li></ul>
    82. 92. 2011 BWC Rating Formula - Split Plan <ul><li>Components for frequency & severity </li></ul>
    83. 93. Q&A

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