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Tn Workers’ Compensation Reform J eff Francis Assistant Administrator Division of workers’ compensation. Why Reform? Workplace injuries are a serious matter. Cost to employees May jeopardize their position May leave them with impairments May hurt them financially

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slide1

Tn Workers’ Compensation ReformJeff FrancisAssistant AdministratorDivision of workers’ compensation

why reform workplace injuries are a serious matter
Why Reform? Workplace injuries are a serious matter
  • Cost to employees
    • May jeopardize their position
    • May leave them with impairments
    • May hurt them financially
      • May not be able to support families
  • Cost to employers
    • Money, disruption of operations and loss of productivity. In FY 2011-12:
      • 60,541Medical-Only Claims
      • 40,360Lost Time Claims
why reform
Why Reform?
  • Complaints about WC costs in TN
    • Higher than surrounding states
    • Discourages new jobs from coming to TN
      • Some TN firms expand to other states instead of in TN
  • Increased interest in “opting out”
  • Perception that process is too lengthy and complicated
  • Perceived incentives to stay off from work
why reform1
Why reform?
  • Concerns about court system
    • Too litigious
    • Only TN and AL use trial courts
    • Inconsistency in court rulings
      • “Race to the courthouse”
    • Timeliness; it can take years for a claim to move through the court
governor listened appointed working group and asked
Governor Listened, Appointed “working group” and asked,

How Can the System

Be Improved?

slide6

Sixteen Months LaterPublic Chapter 289 An act To Reform Tennessee’s Workers’ Compensation System was signedFor dates of injury on/after july 1, 2014

major changes in the reform
Major changes in the reform
  • Definition of Injury
  • Change in Construction of Law
  • Move from Chancery and Circuit Courts to Workers’ Compensation Court in DWC
  • Change in Medical Provider Panels
  • Change in Physician Communications
major changes in legislation
Major changes in Legislation
  • Enhanced Mediation
  • Introduction of Treatment Guidelines
  • Change in Temporary Total Disability Benefit
  • Change in determination of permanent partial disability benefits
  • New Penalties
major changes in the reform1
Major changes in the reform
  • Change in Administrative Structure
    • DWC autonomous unit of DOL
      • Court of Workers’ Compensation Claims
      • Board of Workers’ Compensation Appeals
      • Ombudsman Program/Enhanced Mediation
      • Continuation of Existing Programs
expected impact of reform
Expected impact of reform

On Employees:

  • Process that is easier to understand
  • Emphasis on resolving disputes
  • Faster access to court
  • Quicker Medical Treatment
  • Quicker return to pre-injury employment

On Employers:

  • Fairer, more predictable environment
  • Quicker, simpler resolution of claims
  • Less concern about venue
  • Lower administrative costs
  • More conducive to bringing jobs to TN
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 “primarilyin the course and scopeof 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
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.
physician communications
Physician communications
  • Now: Legislative requirement for a signed waiver form from injured worker before ER could speak to medical provider. (Response to Overstreet case)
  • New: Employer is allowed to communicate with treating physician (orally or in writing), only about the treatment for the workers’ compensation injury.
new provider panel process
New Provider panel process
  • Providers must be willing to treat the injured worker.
    • If not, ER must provide additional choices.
  • 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
new medical treatment guidelines to be adopted by 2016
NewMedical 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
medical treatment guidelines
Medical Treatment Guidelines
  • Medical Advisory Committee
    • Physicians with experience in WC with representatives of insurance, employers, and employees
  • Any treatment that follows guidelines presumed to be medically necessary
    • Rebuttable by clear and convincing evidence
    • Addresses an area of concern to employees and physicians
alert employer opportunity
Alert! Employer Opportunity

Employers who do not provide

injured workers appropriate,

timely panels hurt themselves.

  • Lose control of claims when they do not act quickly to manage the claim.

19

alert employer opportunity1
Alert! Employer Opportunity

Employers who do use the panel process proactively can better manage claims:

  • Can negotiate discounts with the providers on panel.
  • Panel physician has a presumption of correctness regarding causation.
    • Can be overcome by preponderance of evidence.
  • Employers can more easily monitor the medical progress of the claim.
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.
the ombudsman program
The Ombudsman Program…
  • Will provide education and assistance to any party to a workers’ compensation claim that is not represented by an attorney.
  • Will be staffed by persons trained in Tennessee Workers’ Compensation law and rules of the various programs.
  • An ombudsman is not an attorney, and cannot provide legal advice, cannot sign documents on behalf of a party.
duties of the ombudsman
Duties of the Ombudsman
  • The ombudsman will have the basic responsibilities of:
    • Advising parties of the basics of workers’ compensation laws and procedures
    • Answering the questions of parties
    • Assisting parties in the completion of forms
    • Acting as a liaison among the parties to ensure communication among parties and efficiency in the administration of claims
mediation process
Mediation Process
  • The new Mediation Program will function similarly to the current Benefit Review Process, but from the start of the claim.
    • Includes temporary and medical benefits
    • NEW—Additional requirements to act in good faith
      • Rules will be promulgated regarding “good faith”
      • Violation of those rules may lead to a penalty of up to $5,000
the workers compensation mediation program
The Workers’ Compensation Mediation Program
  • All disputed claims must be mediated before a hearing in the workers’ compensation court will be scheduled.
    • NEW - certification of dispute process
      • If parties cannot agree, disputes must be certified before appearing before judge
workers compensation court
WORKERS’ COMPENSATION COURT
  • Judicial function moved from courts to DWC for permanency issues – DOI 7/1/14
  • 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
workers compensation court1
Workers’ Compensation Court
  • Judges will be located across state and will receive training prior to serving.
  • Judges can be removed for non-performance or for cause
      • Tennessee Code of Judicial Conduct
  • Court hearings will be conducted in accordance with TN Rules of Civil Procedure and Rules of Evidence
duties of a wc judge
Duties of a WC Judge
  • Conduct hearings
  • Render orders, decisions and determinations in a timely manner
  • Approve settlements
  • Issue subpoenas
  • Compel obedience to judgments, orders and process through the assessment of civil penalties
new board of wc appeals
newBoard 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.
alert employer opportunity2
Alert! Employer opportunity
  • Employer/Insurance Company can have a better outcome if they:
    • Provide a representative with authority to settle the claim at all mediations
    • Provide the opposing party all documentation and information pertinent to the claim that is necessary to engage in fruitful negotiations
    • Arrive at ADR proceedings on time
temporary total disability ttd benefits
Temporary Total Disability (TTD) Benefits
  • Amount unchanged for those employees out 7 or more days
  • NEW—Ends when employee reaches MMI
    • “when the treating physician ends all active medical treatment and the only care provided is for the treatment of pain” with one exception—Mental/Mental claims
  • NEW— If TTD payments made post MMI, automatically offset against PPD
new impairment rating process
NewImpairment Rating process
  • Authorized treating physician’s (ATP) rating has presumption of correctness
    • Presumption can be overcome by a preponderance of the evidence
  • MIR Registry is still available when there is a dispute over the ratings
    • MIR rating trumps treating physician's
  • All impairment ratings will be BAW
current permanent partial disability ppd benefits
Current Permanent Partial Disability (ppd) Benefits
  • The current PPD benefits are capped at:
    • 1.5X the impairment rating for cases where the EE returns to work at the same ER earning at least 100% of pre-injury wage; and,
    • 6 X the impairment rating for cases when the EE doesn’t.
  • The number of weeks of benefits are due varies. There is a list of 31 scheduled members that range from 10 weeks to 400 weeks.
  • For injuries to non-scheduled (BAW) members, the max number of weeks is 400.
slide34

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

new permanent partial disability ppd benefit
New Permanent Partial Disability (ppd) Benefit
  • Employee eligible for PPD benefit whether they return to work or not when they reach MMI
    • The initial PPD Benefit equals: impairment rating X 450X 66 ⅔ % of the EE’s average weekly wage
    • This benefit is for the period determined by multiplying 450 by impairment rating
    • Impairment ratings “shall not consider complaints of pain”
permanent partial disability ppd how to calculate initial benefit
Permanent Partial Disability (PPD):how to calculate initial benefit
  • Example:

If the EE’s Average Weekly Wage is $750 and Impairment Rating is 7% :

    • Multiply .07 (rating) X 450 (weeks) X $500 (comp rate) = $15,750 during initial compensation pd.
      • .07 X 450 = 31.5 weeks (compensation period)
    • If the EE hasn’t returned to work 31.5 weeks after MMI, he/she is entitled to additional benefits
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
ppd benefit after initial benefit1
Ppd Benefit after initial benefit
  • EE received $15,750 during the 31.5 weeks after the initial compensation period.
    • Lump sum or periodic payments
  • EE may be eligible for additional benefit(s):
    • Loss of job or lowered pay factor (1.35)
    • Education factor (1.45)
    • Age factor (1.2)
    • Unemployment factor (1.3)
  • The actual benefit will depend on which factors apply.
ppd example 3 of 4 factors
PPD Example: 3 of 4 Factors
  • Injured worker is 45, 8th grade education, worked in Davidson County
  • Comp rate is $500
  • Impairment rating is 7%
  • 0.07 X 450 X $500 X 1.35 X 1.2 X 1.45 = $36,996.75 in total benefits
    • Employee would have already received $15,750 in the initial benefit period
    • Additional benefit is $21,246.75
new penalties
New Penalties
  • Failure to mediate in good faith
  • Failure to comply timely with order or judgment issued by a WC judge
  • Failure of employer to timely provide appropriate medical treatment
  • Failure of employer to provide panel
  • Wrongful failure of employer to pay TTD
  • Wrongful failure to satisfy terms of approved settlement
reforms are only part of the solution
Reforms are Only part of the solution
  • What Employers Can Do To Make the System Better:
    • Know the law
    • Respond quickly and effectively to claims
      • First Report of Injury even if you dispute the claim
      • Contact Insurance Co. or TPA
      • Medical Panel
      • Wage Statement
      • Meet deadlines in law
      • If a claim is denied, file appropriate form
how dwc can help
How DWC can Help
  • Local DWC office can provide information and assistance
  • Education programs about Reforms and current law
  • Listen to your issues and look for solutions
  • Provide fair, impartial service to all parties
slide43

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