Reps. Dave Reichert (R-WA) and Mike Thompson (D-CA) introduced the Medicare Secondary Payer and Workers’ Compensation Settlement Agreement Act (H.R. 1982) into the House of Representatives May 15, 2013. 

The bill establishes clear and consistent standards for the administrative process which provides for reasonable protection of the injured worker and Medicare. Supporters indicate that it will benefit injured workers, employers and insurers by creating certainty as well as allowing the settlement process to move forward without the delays that parties are currently presented with.

The legislation is supported by the American Insurance Association, the American Bar Association, the National Council of Self-Insurers, Property Casualty, Insurers Association of America, UWC- Strategic Services and the Workers Injury Law and Advocacy Group (WILG).

The bill will likely be referred to the Ways & Means Committee for consideration.

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ABOUT THE AUTHOR

The article was written by Joshua G. Holden, Esq. a Member of Fish Nelson, LLC, a law firm dedicated to representing employers, self-insured employers and insurance carriers in workers’ compensation and related liability matters. Mr. Holden is AV rated by Martindale-Hubbell, which is the highest rating an attorney can receive. He is Chair of the ABA/ TIPS Workers’ Compensation and Employers’ Liability Committee. He is also on the board of the Alabama Workers Compensation Organization and a member of numerous other associations and organizations. Holden has been selected as a "Rising Star" by Super Lawyers.

Holden and his firm are members of The National Workers’ Compensation Defense Network (NWCDN). The NWCDN is a national and Canadian network of reputable law firms organized to provide employers and insurers access to the highest quality representation in workers’ compensation and related employer liability fields. 

If you have questions about this article or Alabama workers’ compensation issues in general, please feel free to contact the author at jholden@fishnelson.com or 205-332-1428.

On January 10, 2013, President Obama signed the SMART Act (the Strengthening Medicare and Re-Paying Tax Payers Act) into law. The Act reforms certain aspects of Medicare’s requirements for conditional payments, which affect workers’ compensation claims. The various sections under the SMART Act will go into effect at different times throughout the next 18 months.

Section 201 deals with the approval of conditional payments. This section creates reform in the following areas: 1) The U.S. Secretary of Health and Human Services (the Secretary) can be notified within 120 days, prior to settlement, judgment and award of the expected date and amount of the settlement, judgment or award; 2) Upon the Secretary receiving notice, the conditional payment information can be provided through a website and the information will be updated no later than 15 days after a payment; 3) Subject to certain conditions, the last statement downloaded from the website will be considered the final demand for conditional payment; 4) If the conditional payment amount is disputed, the Secretary is required to respond to resolve any dispute within 11 days. If not, the proposed resolution by the claimant, plaintiff, or applicable plan will be deemed accepted. These procedures will go into effect on April 9, 2013.

Section 202 will not take effect until 2014 but will obligate the Secretary to publish a reporting threshold by November 15^th of every year.

Section 203 has an enactment date of March 10, 2013 and applies to fines for noncompliance. The fines will now be discretionary.

Section 204 states that the Centers for Medicare and Medicaid Services (CMS) has 18 months from the date of enactment to publish rules that phase out the use of Social Security numbers and health ID claims numbers in the reporting process.

Section 205 sets forth a statute of limitations for conditional payment recovery of 3 years after the receipt of notice of settlement, judgment, award or other payment. As of January 1, 2014 certain liability claims will be exempt from reporting and reimbursement. The exemption will be based on whether or not the claim falls below the annual threshold, which is calculated by the Secretary. This section also states that the discretionary (see Section 203) civil noncompliance penalties can be up to $1,000.00 for each day of noncompliance, with respect to each plaintiff or claimant.

ABOUT THE AUTHOR

This article was written by Joshua G. Holden, Esq. of Fish Nelson, LLC, a law firm dedicated to representing employers, self-insured employers, and insurance carriers in workers’ compensation matters. Fish Nelson is a member of the National Workers’ Compensation Defense Network (NWCDN). If you have any questions about this article or Alabama Workers’ Compensation Issues in general, please feel free to contact the author at jholden@fishnelson.com or any firm member at 205-332-3430.

On December 31, 2011, this Blawg addressed proposed legislation that would substantially change the Alabama Workers’ Compensation Act. As an update, SB 77 was referred to the Senate Business and Labor Committee. At the request of the Alabama Trial Lawyers Association, Committee Chair, Rusty Glover, has scheduled a public hearing for February 22, 2012 at 9:00 a.m. in room 610.

To be continued...

Representative Paul DeMarco (R) of Birmingham, has introduced HB 104 seeking to amend §25-5-51 of the Alabama Workers’ Compensation Act. HB 104 relates to injuries caused by an employee who is impaired by drugs or alcohol. As initially drafted, the billed would have prevented an employee, or the employee’s estate, from receiving medical and indemnity benefits if the injury or death was the direct result of impairment or intoxication caused by the employee’s alcohol consumption or drug use. The bill then provided that, once the employee had a positive drug or alcohol screen according to the U.S. Department of Transportation, the burden would be on the employee to demonstrate that the impairment was not the cause of the injury or death.

Unfortunately, the bill was weakened by two amendments added by the House Judicial Committee. In addition, the Medical Association added an amendment that requires an employer to notify a medical provider in writing if the employee was guilty of a drug or alcohol offense thus ending the coverage through the employer.

The Trial Lawyers Association further weakened the bill with its amendment requiring the employer to petition the court once a positive drug or alcohol screen is received for a determination on whether medical and indemnity benefits can be terminated. Medical benefits would be due until the date the Court ruled they were no longer owed as a result of the positive drug screen. At the hearing, if the test resulted in a blood alcohol level equal to or greater .08 as stated in §32-5A-191 (a)(1) of the Alabama Code, there would be a rebuttable presumption that the employee was impaired. If conclusively established that the employee was impaired and the employee proves by a preponderance of the evidence that the impairment did not proximately cause or contribute to the accident, then the Court could deny the petition filed by the employer. If only rebuttably presumed impaired and the employee proves by a preponderance of the evidence that a) he or she was not impaired, or b) though impaired, the impairment did not proximately cause or contribute to the accident, the Court may then deny the employer’s petition. If the employee was given written warning that the refusal to submit to or cooperate with testing would result in the forfeiture of benefits, the employer’s responsibility to pay compensation and medical benefits would terminate as of the date of the refusal.

With the two amendments the bill gained committee approval and is awaiting further action by the House. We will continue to monitor the status of this bill during this legislative session.

Re-posted (in part) with permission from Kansas WC defense attorney, Kim Martens (Hite, Fanning & Honeyman, L.L.P., Wichita, Kansas)

As an employer, you probably have been frustrated at one time or another with your State’s workers’ compensation system and what it has put you through. However, have you ever really considered what would/could happen to you as an employer if the workers’ compensation system was NOT the exclusive remedy for the injured worker’s claim, and what you as an employer would be put through if you were subjected to a civil tort suit for that injured employee’s work accident claim?

It’s happening right now, in several States in the "undocumented worker injury claim" context. A number of States are toying with the idea of enacting State laws totally banning undocumented injured workers from receiving benefits through the state workers’ compensation system.

This question will be explored by a panel of experts at in the upcoming American Bar Association’s National Trends And Emerging Issues Affecting Workers’ Compensation Laws Seminar in San Antonio, TX at the Westin Riverwalk Hotel, March 8-10. At 3 p.m on March 8th, the panel of experts will explore the following topic: "A telescopic look at a PARALLEL UNIVERSE for undocumented injured worker claims—is the civil tort claim alternative to workers’ compensation benefits BETTER or WORSE for employers, carriers and injured workers?"

If you as an employer thought a defense legal cost tab of $10,000 to $15,000 to defend an undocumented injured worker claim in your state WC system was high, wait until you hear from our panel of experts what defending that same action in the civil tort claim context would cost you, and what indirect costs you would face, that you would otherwise avoid, if the dispute remained in the WC adjudication process.

If this topic intrigues you, join us at the conference by registering at the following link:

www.americanbar.org/groups/tort_trial_insurance_practice.html

On June 9, 2011, Governor Robert Bentley signed into law the controversial Beason-Hammon Alabama Taxpayer and Citizen Protection Act. This new law has left Alabama workers’ compensation laws as they apply to illegal aliens in a state of limbo.  Portions of the law have been enjoined by the United States District Court for the Northern District of Alabama and the Eleventh Circuit but the remaining sections raise some interesting issues.

Section 27 of the Act prohibits a court from enforcing a contract between a party and an illegal alien if the non-alien party has: 1) direct or constructive knowledge that the alien was unlawfully present in the USA at the time the contract is entered into; and 2) the performance of the contract requires the alien to remain unlawfully present in the USA for more than 24 hours after the time the contract was entered into or performance could not be reasonably expected to occur without remaining in the USA for over 24 hours.  Alabama law has consistently held that settlement agreements are contracts and, as such, future settlement agreements between illegal workers and employers may be voided by Section 27.  There is previous authority in Alabama that indicates a party should have constructive knowledge than an alien is unlawful if he invokes the Fifth Amendment right against self-incrimination in regards to citizenship questions or admits to not having a social security number.  See Cokely v. Cokely, 469 So. 2d 635 (Ala. Civ. App. 1985); Eagle Hosp. Physicians, LLC v. SRG Consulting, Inc., 561 F.3d 1298 (11 Cir. 2009).  If a settlement agreement is subject to court approval and the approval will take more than 24 hours to receive, then the agreement would possibly fall under the second prong of Section 27.  It is unclear if Section 27 will ultimately be applied to invalidate settlement agreements under these conditions.

Additionally Sections 5 and 6 of the Act place restrictions on officers of the court from interfering with enforcement of the Act.  Due to the Act’s intended purpose of removing illegal aliens from the state, an attorney (as an officer of the court) could conceivably violate the Act by having an illegal alien appear at a deposition, trial, or mediation.  Similarly, judges (as officers of the court) could violate the Act by allowing an illegal alien to pursue claims in their courts. 

Although the new immigration law raises several new issues to be considered in the realm of workers’ compensation, the question of whether or not an illegal alien even has legal standing to pursue a workers’ compensation claim in Alabama remains unanswered.

On December 9, 2011, State Senator Arthur Orr (R-Decatur) pre-filed a bill (SB77) for the 2012 legislative session that proposes several welcome changes to the Alabama Workers’ Compensation Act. The following is a summary of the proposed changes:

1. The addition of § 25-5-57(a)(3)j - "In the event of an injury to an enumerated member under paragraph a. of this subdivision, evidence of an employee's pain complaints that are limited to that member may not be relied upon by the trial court as the sole basis for an award of compensation benefits beyond those otherwise available for the loss, or loss of use, of that body part as provided under paragraph a. or d. of this subdivision."

Plain English:

The trial judge cannot consider complaints of pain from a scheduled member as a reason to remove the injury from the schedule.

My Two Cents:

This probably amounts to a non-issue since the current pain exception is exceptionally high. As the law now stands, an employee has the burden of proving that his pain is totally or virtually totally disabling in order to remove his injury from the schedule.

2. The following sentence will be added to § 25-5-57(a)(4)a - "Notwithstanding the foregoing, the obligation of an employer to pay benefits based upon a permanent total disability shall continue during the permanent total disability of the employee, except that benefits based upon permanent total disability shall otherwise terminate upon either the date of the employee's sixty-fifth birthday or the date 500 weeks after the date of injury, whichever is longer."

Plain English:

Permanent and Total benefits are cut off at the age of 65.

My Two Cents:

This makes a lot of sense. The employee continues to receive benefits in the form of Social Security and the cost for workers’ compensation goes down. This will make Alabama more attractive to businesses which will create more jobs and help improve the economy.

3. § 25-5-68 will be changed to increase the maximum compensation payable for permanent partial disability to $240 (from $220).

Plain English:

I can’t put it any plainer than that!

My Two Cents:

This is the first increase since 1985 and represents an olive branch to those who might oppose other aspects of SB77.

4. The addition of § 25-5-77(j) - "If the employee does not receive medical treatment related to the claimed injury for a period of two years, a rebuttable presumption arises that any subsequently obtained medical treatment is unrelated to the workers' compensation injury. The employer shall be liable for such medical treatment only upon a finding of clear and convincing proof that such treatment is related to the workers' compensation injury. The obligation of the employer for the payment of medical benefits shall conclusively end if the employee does not receive medical treatment related to the claimed injury for a period of four years."

Plain English:

Two years with no medical treatment means any subsequent treatment is probably not related to the worker’s compensation injury. Four years with no medical treatment means any subsequent treatment is definitely not related to the workers’ compensation injury.

My Two Cents:

As a practical matter, an employee will probably just need to see his or her authorized treating physician for a check up every couple of years to avoid medical benefits closure. If this bill is passed, I predict that there will be litigation over the definition of "medical treatment." In other words, if the employee checks out fine and the doctor does not actually provide any treatment, does that satisfy the § 25-5-77(j) requirement for avoiding the closure of benefits?

5. § 25-5-81(e)(2) will be changed to allow the Court of Civil Appeals to reweigh the evidence considered by the trial court. The actual language is as follows: "In reviewing pure findings of fact, the finding of the circuit court shall not be reversed if that finding, when weighed against evidence in opposition, is supported by substantial evidence."

Plain English:

The Court of Civil Appeals will be able to consider the evidence on its own rather than simply deferring to the trial judge.

My Two Cents:

Check out our blog posting from 2 days ago entitled "Verdict of Employer Reversed due to Inconsistencies in Medical Records" and tell me that the Court is not already doing this.

The 2012 legislative session begins on February 7^th so stay tuned. We will continue to monitor the progress of the bill and report on any new developments.

According to the Alabama Self Insured Association, House Bill 21 which proposed lifting the $220 cap and weakening the schedule limitation was killed in the House Commerce Committee for this legislative session.

House Bill 21 which proposes lifting the $220 cap and weakening the schedule limitation will not likely be reached in this legislative session. According to the Alabama Self Insured Association, the bill will not be approved by the House Commerce Committee this session and Committee Chairman, Frank McDaniel, said he has no immediate plans to hear the bill.

The Legislators are at it again. Democratic Representative Joseph Mitchell, of Mobile has introduced HB 21 in the 2010 session that would seek to remove the $220 cap on weekly benefits. This bill would also remove the limitation to the schedule of injuries. This is not the first attempt at either of these. HB 18 was introduced in the 2009 session. (See previous entries under $220 cap). HB 21 is pending in the House Commerce Committee. The Committee chair has indicated that he has no plans to hear the bill in the immediate future.

You can visit the Alabama Legislation web site through the following link:

http://alisondb.legislature.state.al.us/acas/ACASLogin.asp

You can contact your Representatives and Senators by calling the House operator at 334-242-7600 or the Senate operator at 334-242-7600.

On July 14, 2009, the National Conference of Insurance Legislators (NCOIL) met in Philadelphia, Pennsylvania for its 2009 NCOIL Summer Meeting. At the meeting, members of the Workers' Compensation Insurance Committee engaged in serious discussion and debate concerning the Employee Misclassification Workers' Compensation Coverage Model Act. Representative Charles Curtiss (TN)-who co-sponsored the model for discussion purposes-at the NCOIL Summer Meeting, said:

In addition, co-sponsor Senator Ralph Hudgens (GA) said:

The draft model-based on Florida and Wisconsin statutes-targets transparency, disclosure, and accountability in workers' compensation insurance. It would set up a strict nine-point test to clearly define an independent contractor and mandate workers' compensation coverage in the construction industry, with certain exceptions. It would create clear procedures for insurer application, disclosure, and auditing and provide civil and criminal penalties for employee misclassification and insurance fraud. It also would establish strict enforcement authority including, among other items, power to temporarily shut down job sites when employers don't comply.

The Subcommittee deferred consideration of the model and will review all comments and produce a revised discussion draft. The Subcommittee will also hold a series of conference calls to advance the model for consideration at the NCOIL Annual Meeting to be held from November 19 through 22 in New Orleans, Louisiana.

As was previously discussed on the blawg (http://www.alabamaworkerscompblawg.com/template_permalink.asp?id=144 ) work continues in Congress in opposition to the possible federalization of Workers’ Compensation laws.  

There was an attempt to push the bill, H.R. 635, through Congress via the Suspension Calendar (which is an expedited procedure that is generally used for non-controversial measures), but this was blocked after many people contacted their Congressional delegation. Because of the calls and emails, the bill’s supporters got the message that they could not advance this bill through an expedited process.  The Chamber and other groups are continuing the grassroots effort to educate their members, and the public about this harmful bill. 

However, H.R. 635 could be included as an amendment to a larger piece of legislation, like health care or OSHA reform. Doug Holmes, President of UWC – Strategic Services on Unemployment and Workers’ Compensation, along with AIA, and the Property Casualty Insurance Association of America (PCI), drafted a resolution opposing H.R. 635 which will be offered for approval at the annual meetings of the National Conference of Insurance Legislators (NCOIL) and the American Legislative Exchange Council (ALEC) this summer.  The National Federation of Independent Business (NFIB) has similarly been preparing a resolution opposing H.R. 635 for consideration at the ALEC meeting. In addition, Bruce Wood, Associate General Counsel, American Insurance Association (AIA), will be speaking on a panel specifically addressing H.R. 635, at an American Association of State Compensation Insurance Funds conference in Washington, D.C.

Work continues to be done in opposition to H.R. 635 and members of Congress continue to be educated about this bill and the detrimental effects it will have on state workers’ compensation systems.

SB 381, by Sen. Quinton Ross (D) of Montgomery, was previously mentioned on the blawg here at http://www.alabamaworkerscompblawg.com/template_permalink.asp?id=133.

This bill limits the preclusive effect of a finding of fact, conclusion of law, judgment, or final order made under the unemployment compensation statutes. Also, the bill precludes an employer from using an employee's previous statements and findings in court in certain cases. In a workers compensation case, not allowing evidence about a claimant's other cases or judgments could be very detrimental to an employer.

Democratic Congressman Joe Baca from California has introduced a bill to the 111^th Congress hoping to establish a commission to evaluate state workers’ compensation laws. The commission will be called the "National Commission on State Workers’ Compensation Laws". The main objective of this commission will be to determine the adequacy of each states current workers’ compensation laws and make recommendations for improvement based on their finding.  While this is the stated objective, it is interesting to note that the bill itself actually states that the current state systems are inadequate.  The commission will hold hearings, take testimony and receive evidence as part of the investigation. The commission will issue a final report within 18 months stating what changes they feel will benefit state law and will terminate within 19 days after the issuance of this report.  The commission will consist of 14 members including the Secretary of Labor, Secretary of Commerce, Secretary of Health and Human Services and Secretary of Education along with other appointees. Of the 14 members 3 will represent injured workers, 3 will represent insurance carriers and employers and 1 will represent the general public. There has not been a commission of this kind formed to review state workers’ compensation laws in over 30 years since the Nixon administration formed such a commission in 1972.

My Two Cents:  It comes as no surprise that the only groups who took part in writing and who provided input for this bill are comprised of plaintiff attorneys.  This would appear to be the first step towards federalization of workers' compensation.

One of the easiest ways for an employer to defeat a retaliatory discharge claim is by asserting the defense of collateral estoppel. Specifically, if the employee files for unemployment benefits and the administrative law judge (ALJ) rules that the termination was for any reason other than maintaining or instituting an action to recover workers’ compensation benefits, the issue cannot be relitigated in the retaliatory discharge lawsuit. In other words, whatever the ALJ decides on the issue is controlling in the retaliatory discharge case. This may change if SB 381 is passed. This is a bill that was introduced by Sen. Quinton Ross (D) of Montgomery. If passed, this bill would limit the preclusive effect of a finding of fact, conclusion of law, judgment, or final order made under the unemployment compensation statutes. Further, the bill would preclude an employer from using an employee's previous statements and findings in court in certain cases. SB 381 is pending in the Senate Judiciary Committee and could be considered as early as this week. Remember, you can contact your House and Senate members in Montgomery by calling the House operator at (334) 242-7600 or the Senate operator at (334) 242-7800, or writing to them via the State House Office Building, Montgomery, Alabama 36130. You can also visit the Legislature's official web site at: http://alisondb.legislature.state.al.us/acas/ACASLogin.asp.

In 1992, after many concessions from both trial lawyers and business interests, the Alabama Legislature passed the Workers' Compensation Reform Act of 1992. The goal was to reduce business costs, minimize future rate increases and deliver higher benefits to workers. Despite the passage of these broad sweeping changes, the Alabama Appellate Courts of the 90's interpreted the statutes liberally which effectually neutered them. The Alabama Supreme Court and the Alabama Court of Civil Appeals are now comprised of a conservative majority and the law is finally being applied as the legislature originally intended.

Since the trial lawyers lost their liberal majority in the Appellate Courts, they are now focusing their efforts on changing the statutes themselves. In February 2008, four Senate Bills and one House Bill were introduced which, if passed, would have exponentially increased workers’ compensation abuse, cost, and litigation. Fortunately, none of the bills were passed.

The 2009 regular session of the Alabama Legislature opened February 3^rd. One of the initial bills introduced was HB 18, sponsored by Joseph Mitchell (D) of Mobile. HB 18 would introduce two radical changes to workers’ compensation in Alabama. First, it would remove the $220 cap on weekly workers’ compensation benefits. Second, the bill would remove the limitation to the schedule of injuries. Specifically:

HB 18 is currently pending in the House Commerce Committee. Both Houses will meet on Tuesday, February 17^th, for the fifth legislative day. In response to the introduction of this bill, business interests will likely make their disapproval known to those House members responsible for sponsoring the bill. Remember, you can contact your House and Senate members in Montgomery by calling the House operator at (334) 242-7600 or the Senate operator at (334) 242-7800, or writing to them via the State House Office Building, Montgomery, Alabama 36130. You can also visit the Legislature's official web site at http://alisondb.legislature.state.al.us/acas/ACASLogin.asp.