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Overview of Tennessee Workers’ Compensation—2014 Avoid some of the most common mistakes, cut your workers’ comp costs and prepare for the upcoming Reforms. Jeff Francis, Assistant Administrator b.jeff.francis@tn.gov. During this presentation, I am going to introduce you to the

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Overview of Tennessee Workers’ Compensation—2014Avoid some of the most common mistakes, cut your workers’ comp costs and prepare for the upcoming Reforms.Jeff Francis, Assistant Administratorb.jeff.francis@tn.gov

slide2
During this presentation, I am going to introduce you to the

Five Most Common Mistakes

that drive-up your workers’ comp costs and the

Pending Reforms.

common mistakes
Common Mistakes

Mistake #1:

Employers do not handle reported injuries correctly.

important when to file a 1st report
Important—when to file a 1st Report

Form C-20 (Tennessee Employer’s First Report of Injury or Illness) should be filed in all cases where the injury or illness results in:

  • receipt of medical treatment outside of the employer’s premises,
  • absence from work,
  • death.
worker s compensation claims t c a 50 6 201
Worker’s Compensation ClaimsT.C.A. 50-6-201
  • Claims have two classifications:
    • Medical Only
      • 1 to 7 days off work with physician statement
    • Lost Time & Medical
      • If 8 days or more off work with physician statement indemnity benefits are due to the claimant
    • July 1, 2012 through June 30, 2013
      • 59,713 Medical-Only Claims
      • 39,809Lost Time Claims
common mistakes1
Common Mistakes

Mistake #2:

Employers are not providing injured employees with a panel of physicians.

6

provide a panel
Provide a Panel

C-42—Choice of Physician Form

Employers lose control of claims when they don’t take reported injuries seriously.

Several types of panels.

7

2009 legislation
2009 Legislation

SB1574/HB1472provides specific procedures for obtaining medical information from authorized treating medical providers—medicalwaiver. (Deals with Overstreet case)

there is no covenant of confidentiality or prohibition against communications with authorized treating medical providers if guidelines/procedures (waiver) are followed.

8

common mistakes2
Common Mistakes

Mistake #3:

Employers are not taking full advantage of recent reforms passed by the legislature.

drug free workplace program t c a 50 9 101 et seq
Drug Free Workplace ProgramT.C.A 50-9-101 et. Seq.

Created as part of the Workers’ Compensation Reform Act of 1996, the DFWP has three basic objectives:

  • To promote drug-free workplaces in Tennessee,
  • To discourage the abuse of alcohol and drugs in the workplace, and
  • To penalize employees who choose to engage in alcohol and drug abuse.
drug free workplace program t c a 50 9 101 et seq1
Drug Free Workplace ProgramT.C.A 50-9-101 et. Seq.

While participation is voluntary, this program offers the employer several significant benefits, among them:

  • A shift in the burden of proof in workers’ compensation claims involving a positive alcohol or drug test,
  • Discounted workers’ compensation insurance premiums (by 5%), and
  • Denial of unemployment benefits to an employee terminated because of a positive alcohol or drug test.
the benefit review program t c a 50 6 236 239
The Benefit Review ProgramT.C.A. 50-6-236-239

The goals of the Benefit Review Program are:

  • To resolve disputes which occur in the context of a workers’ compensation claim,
  • To minimize adversarial relationships between parties, and to
  • To decrease litigation and reduce the overall costs of workers’ compensation claims for all parties.
the benefit review program
The Benefit Review Program

The Benefit Review Program offers service in four main areas:

  • Toll-freenumber: 1-800-332-2667
  • Requests for Assistance: for temporary disability and medical benefits
  • Benefit Review Conferences: for settlement mediation
  • Settlement Approvals: finalization of settlements
slide14

Division of Workers’ Compensation Offices

1-800-332-2667

Website: www.state.tn.us/labor-wfd/wcomp

Pickett

Sullivan

Clay

Johnson

Montgomery

Robertson

Hancock

Claiborne

Sumner

Stewart

Scott

Fentress

Hawkins

Trousdale

Campbell

Lake

Obion

Jackson

Overton

Henry

Washington

Cheatham

Weakley

Grainger

Macon

Carter

Houston

Union

Smith

Davidson

Wilson

Hamblen

Greene

Morgan

Dickson

Putnam

Anderson

Gibson

Carroll

Dyer

Unicoi

Benton

Knox

Jefferson

Humphreys

De Kalb

Cumberland

White

Cocke

Williamson

Roane

Rutherford

Crockett

Hickman

Cannon

Lauderdale

Sevier

Loudon

Blount

Van Buren

Warren

Henderson

Perry

Decatur

Madison

Rhea

Haywood

Maury

Bledsoe

Meigs

Lewis

Bedford

Coffee

Tipton

Monroe

McMinn

Chester

Sequatchie

Marshall

Shelby

Grundy

Moore

Wayne

Hardeman

Giles

Hardin

Fayette

McNairy

Lincoln

Fayetteville

Bradley

Franklin

Lawrence

Hamilton

Marion

Polk

Nashville--Metro Center

2222 Rosa L. Parks Blvd.

Nashville, TN 37228

Telephone: 615-741-1383

Fax: 615-253-2480

Cookeville

444-A Neal Street

Cookeville, TN 38501-4027

Telephone: 931-520-4290

Fax: 931-520-4316

Knoxville

1525University Avenue

Knoxville, TN 37921-6741

Telephone: 865-594-5177

Fax: 865-594-5172

Memphis

170 N. Main Street, 11thFl

Memphis, TN 38103-1820

Telephone: 901-543-6077

Fax: 901-543-6039

Murfreesboro

845 Esther Lane

Murfreesboro, TN 37219

Telephone: 615-848-6743

Fax: 615-217-9378

Chattanooga

540 McCallie Ave, Ste W600

Chattanooga, TN 37402

Telephone: 423-634-6422

Fax: 423-634-3115

Kingsport

1908 Bowater Drive

Kingsport, TN 37660-4136

Telephone: 423-224-2057

Fax: 423-224-2056

Jackson

225 Dr. MLK Drive, 1st Fl

Jackson, TN 38301-6985

Telephone: 731-423-5646

Fax: 731-265-7022

Revised:07/13/2011

common mistakes3
Common Mistakes

Mistake #4:

Employers do not have the proper workers’ compensation coverage as required by law.

uninsured employers fund

Uninsured Employers Fund

The UEF strives to have covered employers comply with the Workers' Compensation Act. The Program has offices in Jackson, Nashville, Memphis, Knoxville & Kingsport, Tennessee.

Important Points:

In most industries, employers with five or more employees, including part-time employees, must carry workers’ compensation insurance.

Family members are included in the count if they meet the definition of employee.

compliance program uninsured employers fund stats
Compliance Program Uninsured Employers Fund Stats

In fiscal year ending June 30, 2013the program collected $995,592in monetary penalties.

We also conducted 1,308 onsite inspections.

Also, 324 employers were penalized for non-compliance.

2010 11 legislation

2010/11 Legislation

Employee Misclassification Education and Enforcement Fund (EMEEF) was created.

Effective March 1, 2011, new legislation requires everyone in the construction industry must:

be covered by workers’ comp, or

be specifically exempted.

2011 legislation

2011 Legislation

Who may request an exemption?

Up to 5 officers of a corporation

Members of LLCs that own at least 20% of the business (maximum of 5)

Partners that own at least 20% (maximum of 5)

Up to 5 owners of certain family owned businesses

Sole proprietors

exemption registry

Exemption Registry

My disclaimer:

Other restrictions apply (licenses, etc.)

Requests for exemptions are sent to the Secretary of State’s office, not the Dept. of Labor, and cost $200.00 for two years

For more info about the exemption registry:

http://tnbear.tn.gov/wc/

common mistakes4
Common Mistakes

Mistake #5:

Employers or their insurance carriers are not handling a claim timely.

penalty program
Penalty Program

The Penalty Program enforces several penalties, including:

  • a 25% penalty for failure to pay or untimely payment of temporary disability benefits; A 25% penalty assessed by the department is made payable to the injured employee;

2) a $10,000+ penalty for failure to comply with a Specialist’s order;

3) a penalty for failure to timely file Claims forms.

why reform
Why Reform?
  • Concerns about costs in TN
  • Higher than border states
  • Detriment to bringing new jobs to TN
    • Some current employers want to opt out
  • Concerns about court system
  • Inconsistency—“Race to the courthouse”
  • Claims in the court system take too long
  • Concerns that process is too complex and too lengthy
slide25

1. Concerns About Costs

Under $1.50

$1.50 - $1.99

$2.00 - $2.49

$2.50 - $2.99

$3.00 - $3.49

2 concerns about courts
2. Concerns about courts:

Tennessee’ s system is different from other states:

  • One of only two states that is a court-based system
  • The only state with a hybrid system that includes mandatory mediation
implementation
Implementation

Reforms are effective for injuries or diseases that occur on or after July 1, 2014

Rules will be formulated for various sections of the reform bill

major changes in the reform
Major changes in the reform

Definition of Injury

Change in Construction of Law

Move from Chancery/Circuit Courts to Workers’ Compensation Court in DWC

Change in Medical Provider Panels

Change in Physician Communications

Change in PPD benefit calculations

definition of injury
Definition of Injury

Currently, there is a “could be” standard when it is supported by lay testimony

New Law: Injury is compensable if it arose “primarily in the course and scope of work” when all other possible causes are considered

  • Primarily had applied to gradual injuries since 6/6/11.
meaning of primarily
Meaning of “primarily”

An injury arises primarily out of the employment if the employee can show that it “contributed more than fifty percent (50%)in causing the injury, considering all causes.”

medical proof
Medical Proof

Treating physician must state that work

primarily caused the injury to a

“reasonable degree of medical certainty.”

  • Reasonable degree of medical certainty means, “ in the opinion of the physician, it is more likely than not considering all causes, as opposed to speculation or possibility.” T.C.A. 50-6-102(12)(D)
  • Treating physician’s opinion is presumed to be correct
different construction of law
Different construction of law

Will replace current construction that the law must be liberally construed in favor of the employee.

New: Statute must be construed fairly, impartially and in accordance with basic principles of statutory construction.

workers compensation court
WORKERS’ COMPENSATION COURT
  • Judicial function moved from courts to the Division of Workers’ Compensation
  • Judges appointed by Administrator
      • Licensed attorneys at least 30 years old
      • Must have at least 5 years appropriate experience
      • Will serve a 6 year term; maximum of 3 terms
      • There will be one Chief Judge
      • Selection process
n ew board of wc appeals
New Board of WC Appeals

Will render and decisions on appeals of decisions by WC judge.

  • Wholly separate from the Court of Workers’ Compensation.

3 Appeal Judges

  • Appointed by Governor
  • 6 year term, limit of 2 terms
  • Licensed attorneys with 7 years experience

Parties will still have right of appeal to the Supreme Court.

new medical provider panel process
New Medical Provider panel process

PC 289 simplifies the process by requiring only one panel.

  • Three or more independent physicians, specialists, chiropractors, or practice groups (or any combination thereof)

Initial Treating physician may refer injured worker to a specialist

  • Employer has 3 business days after notification of referral is received to offer a panel or referral stands.
new provider panel process
New Provider panel process

Providers must be willing to treat the injured worker.

Maintains the “community” rule, but allows a 100-mile radius if not available in the community.

  • EE still gets travel reimbursement if outside 15-mile radius

NEW—Division can enforce a penalty for improper panels

physician communications
Physician communications

New: Employer is allowed to communicate with treating physician (orally or in writing), only about the treatment for the workers’ compensation injury.

new medical treatment guidelines to be adopted by 2016
New Medical Treatment Guidelines—To be adopted by 2016

Guidelines for the diagnosis and treatment commonly occurring workers’ compensation injuries

Intended to reduce disputes, improve quality and timeliness of medical treatment

In consultation with medical advisory committee

slide40

New Permanent Partial Disability benefits

If worker does not return to work for any ER at 100% wage after initial disability period

Date of Injury

Date Injured Worker Reaches Maximum Medical Improvement

ppd benefit after initial benefit
PPD benefit after initial benefit

If EE does not return to work or does, but makes less than the pre-injury wage, the EE is eligible for additional benefits.

The additional benefit is determined by multiplying the initial benefit by all that apply:

  • Factor of 1.35 because of loss of job or pay
  • Factor of 1.45 if no HS diploma or GED
  • Factor of 1.2 if employee > 40 years of age
  • Factor of 1.3 if unemployment in county where employed > 2 points above state average for year prior to initial period of compensation
expected results of reform
Expected Results of Reform

A workers’ compensation system

that is:

  • fair,
  • efficient, and
  • provides better outcomes for employees and employers.
employees
Employees
  • More assistance to understand the process
  • Emphasis on resolving disputes in mediation
  • Faster access to “court”
  • Improved medical treatment
    • Fewer delays
  • Quicker return to pre-injury jobs
  • Faster delivery of benefits
employers
Employers
  • Fairer, more predictable environment
    • Quicker, simpler resolution of claims
    • Improved relations with injured workers
    • Lower administrative costs
  • Quicker return of employees to their jobs
    • Less disruption in operations
  • More conducive to expanding operations or coming to Tennessee
when an employee is injured the employee should
When an Employee is injured, the Employeeshould:
  • Immediately notify his/her employer and complete a “First Report of Injury”.
  • If medical care is required, choose a physician from a panel of physicians that is provided by the employer. Sign the form to acknowledge.
  • Sign a medical waiver.
  • Follow the advice of the physician.
  • Stay in contact with the employer and insurance adjuster.
when an employee is injured the employer should
When an Employee is injured, the Employershould:
  • Have the employee complete a “First Report of Injury” and file it with their insurance carrier
  • Provide the injured employee an appropriate panel of physicians
  • Have the injured employee sign a medical waiver
  • Give the injured employee the name & phone number of the insurance carrier/adjuster
  • Provide a wage statement to the adjuster
when an employee is injured the insurance adjuster should
When an Employee is injured, the InsuranceAdjustershould:
  • Contact the employer and the injured employee within 2 business days.
  • Investigate the claim.
  • Accept or deny the claim within 15 days of its knowledge of the claim.
  • For accepted claims, issue compensation if appropriate, and file all appropriate forms with the Workers’ Compensation Division.
  • For denied claims, file all appropriate forms with the Workers’ Compensation Division.