TN WORKERS’ COMPENSATION REFORM

ABBIE HUDGENS, ADMINISTRATORJEFF FRANCIS, ASSISTANT ADMINISTRATOR

LANDON LACKEY, BENEFIT REVIEW DIRECTORJOSH BAKER, ADMINISTRATIVE ATTORNEY

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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:• 60,541 Medical-Only Claims• 40,360 Lost Time Claims

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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

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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,

How Can the System

Be Improved?

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SIXTEEN MONTHS LATER

PUBLIC CHAPTER 289 AN ACT TO REFORM

TENNESSEE’S WORKERS’ COMPENSATION

SYSTEM WAS SIGNEDFOR DATES OF INJURY ON/AFTER JULY 1, 2014

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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 LEGISLATIONEnhanced Mediation

Introduction of Treatment Guidelines

Change in Temporary Total Disability BenefitChange in determination of permanent partial disability benefits

New Penalties

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

New Reporting Requirement July 1,2015 Status, Challenges, and Opportunities

New Sunset June 30, 2018

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

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”

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.”

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

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 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 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 Advisory Committee

Physicians with experience in WC with representatives of insurance, employers, and employees

Geographically diverse 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

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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.

ALERT! EMPLOYER OPPORTUNITYEmployers 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.

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

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… 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

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

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

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

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 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 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

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 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

Cooperate with the opposing party and the mediator in scheduling ADR proceeding

Arrive at ADR proceedings on time

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

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

The current PPD benefits are capped at: 1.5 X 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.

NEW PERMANENT PARTIAL DISABILITY BENEFITS

Date of Injury

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

Date Injured Worker Reaches Maximum Medical Improvement

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 450 X 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 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 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 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 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 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 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

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

•AndersonAnderson

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•WilsonWilson

• Revised:Revised: 07/13/2011 07/13/2011

•MemphisMemphis

•170 N. Main Street, 170 N. Main Street, 1111thth Fl Fl•Memphis, TN 38103-Memphis, TN 38103-18201820•Telephone: 901-543-Telephone: 901-543-60776077•Fax: 901-543-Fax: 901-543-60396039

•Nashville--Nashville--Metro Metro CenterCenter

•2222 Rosa L. Parks 2222 Rosa L. Parks Blvd.Blvd.•Nashville, TN 37228Nashville, TN 37228•Telephone: 615-741-Telephone: 615-741-13831383•Fax: 615-253-Fax: 615-253-24802480

•CookevilleCookeville

•444-A Neal Street444-A Neal Street•Cookeville, TN Cookeville, TN 38501-402738501-4027•Telephone: 931-520-Telephone: 931-520-42904290•Fax: 931-520-Fax: 931-520-43164316

•KnoxvilleKnoxville

•1525University 1525University AvenueAvenue•Knoxville, TN 37921-Knoxville, TN 37921-67416741•Telephone: 865-594-Telephone: 865-594-51775177•Fax: 865-594-Fax: 865-594-51725172•KingsportKingsport

•1908 Bowater Drive1908 Bowater Drive•Kingsport, TN 37660-Kingsport, TN 37660-41364136•Telephone: 423-224-Telephone: 423-224-20572057•Fax: 423-224-Fax: 423-224-20562056

•ChattanoogaChattanooga

•540 McCallie Ave, 540 McCallie Ave, Ste W600Ste W600•Chattanooga, TN Chattanooga, TN 3740237402•Telephone: 423-634-Telephone: 423-634-64226422•Fax: 423-634-Fax: 423-634-31153115

•MurfreesboroMurfreesboro

•845 Esther Lane845 Esther Lane•Murfreesboro, TN Murfreesboro, TN 3721937219•Telephone: 615-848-Telephone: 615-848-67436743•Fax: 615-217-Fax: 615-217-93789378

•JacksonJackson

•225 Dr. MLK Drive, 225 Dr. MLK Drive, 11stst Fl Fl•Jackson, TN 38301-Jackson, TN 38301-69856985•Telephone: 731-423-Telephone: 731-423-56465646•Fax: 731-265-Fax: 731-265-70227022

Division of Workers’ Compensation Offices1-800-332-2667

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

•MaconMacon

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CONTACT INFORMATION Administrator

Abbie Hudgens abbie.hudgens@tn.gov

Assistant AdministratorJeff Francis b.jeff.francis@tn.gov

Benefit Review DirectorLandon Lackey

landon.lackey@tn.gov

Administrative AttorneyJosh Baker josh.baker@tn.gov

Administrative Review Director

Mark Finks mark.finks@tn.gov

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CONTACT INFORMATION

Compliance—Penalty, Uninsured Employers Fund, EMEEF Director

Kim Jefferson kim.y.jefferson@tn.gov

Utilization Review, Medical Fee Schedule, Medical Case Mgt.Suzy Douglas, R.N. suzy.douglas@tn.gov

Claims FilingsBonnie Hudgens bonnie.hudgens@tn.gov

Drug Free Workplace Program Lance Wheaton lance.wheaton@tn.gov

Medical Impairment Rating RegistryJay Blaisdell jay.blaisdell@tn.gov

Questions?

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