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An Act To Improve The Workers’ Compensation

SystemHB 194/SB 200

Why Reform? Concerns about costs in TN Higher than states around TN 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

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Under $1.50$1.50 – $1.99

$2.00 - $2.49$2.50 – $2.99

$3.00 – $3.49

Workers’ Comp Costs/$100 Payroll by State

2012 Oregon Workers’ Compensation Premium Rate Ranking, Oregon Dept. of Consumer & Business Services

Why Reform? Length of Time in Court Date Injured Worker Reaches Maximum Medical Improvement

Number of Days from Maximum Medical Improvement to Trial

8/18/2008 1487

10/23/2008 1147

3/18/2009 793

3/31/2009 667

4/28/2009 643

8/10/2010 530

9/30/2009 471

8/9/2010 232

1/3/2011 382

2/25/2011 634

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Primary Areas of Reform Administrative Structure

Workers’ Compensation Division becomes an independent unit in Department of Labor & Workforce Development

Administrator is appointed by the Governor for a term of 6 years with limit of 2 terms

○ Can be removed for cause or nonperformance Judicial function moved from courts to Division

○ Predominant model in United States

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AdministrativeCommissionJudicialW.C. Court (Commission)

WORKERS’ COMPENSATION SYSTEM STRUCTURE BY STATE

Workers’ Compensation Court Workers’ Compensation Judge

Hears claims under rules of civil procedure and rules of evidence

Must be 30 years old, be a licensed attorney, have 5 years experience in workers’ compensation law

6 year terms, with maximum of 3 termsAppointed by Administrator

○ May be removed for cause Decisions can be appealed

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Workers’ Compensation Court Chief Judge

Performs duties of judgeAdministers day-to-day operations of court Licensed attorney with 7 years of workers’

compensation experienceTerm of 6 years

○ Maximum of 2 termsMay be removed for cause

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Workers’ Compensation Court Workers’ Compensation Appeals Board

Separate from Court of Workers’ Compensation Claims

Governor appoints the 3 judges○ Licensed attorneys with 7 years experience in

workers’ compensation○ Term of 6 years, limit of 2 terms

Further appeal may be made to Supreme Court

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Primary Reform Areas

Change the Definition of Causation○ Injury is compensable if it arose “primarily in the

course and scope of work” when all other possible causes are considered.

○ Definition of key phrases

Statute must be construed fairly and impartially

Replaces language that statute must be liberally construed in favor of the employee

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Approaches to Determine Causation

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Must be major contributing cause to be compensableMust be significant cause to be compensableSubstantial cause for certain illnesses to be compensableDoes not require above to be compensable

Primary Reform Area - Disability Benefits All impairment ratings to body as a whole Impairment rating from treating physician is

presumed to be accurate Employee receives benefits if returns to

work after MMI with any employer earning 100% of pre-injury wage Impairment rating times 450 (increase from 400)

times 66 ⅔ % average weekly wage

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Permanent Partial Disability Benefit If employee does not return to work or

makes < pre-injury wage, employee will receive additional benefits:Factor of 1.35 if doesn’t return to workFactor of 1.45 if no HS diploma or GEDFactor or 1.2 if > 40 years of ageFactor of 1.3 if unemployment in county where

employed > 2 points above state average for year prior to initial period of compensation

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Disability Benefits Timeline

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Temp Total Disability

Imp rating * 450 * 66 ⅔% AWW

Additional benefits

Maximum medical improvement

If worker does not return to work for ER at 100% wage

Date of Injury

Temporary Total Disability Benefit Now

Continues until employee reaches maximum medical improvement and impairment rating is assigned by physician.

Can continue for 104 weeks if mental injury.

Delayed if employee is in pain management treatment.

Not always offset against permanent benefits.

Proposed Ends when employee

reaches maximum medical improvement.

No exceptions for mental injuries or pain management.

If paid after maximum medical improvement, benefits are offset against permanent benefits.

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Primary Reform Area - Mediation

Greater emphasis on already successful programHelps resolve temporary benefits and

medical treatment disputesHelps parties resolve issues related to

permanent benefitsAdditional requirements to act in good faith

New certification of dispute processIf parties cannot agree, disputes must be

certified before appearing before judge

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Major Reform Area - Ombudsman

Robust education and assistance program to workers who do not have an attorneyOmbudsman is neutral, no legal advice Provides education on rights and obligations of

all parties and service providersEffective direction on preparation of formsHelps injured employees understand process

and what they need to do to resolve disputes

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Major Reform Area – Medical Selection of Medical Panel Simplified

One panel, not three for initial treating physician and additional panels for specialists

Treating physician can make referral to specialist if one is needed○ Employer has 3 days to give a panel of 3 or

treating physician’s referral stands

Greater continuity of care, less friction, speedier treatment

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Communications with Physician Employer is allowed to communicate

with treating physicianIn writing or orally

Removes requirement that employee sign a waiver before employer can review records

Only applies to medical records related to treatment for the workers’ compensation injury

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Medical Treatment Guidelines To be adopted by 2016 Will improve utilization review process

Any treatment that follows guidelines presumed to be medically necessary○ Addresses an area of concern to employees,

physicians, and the division

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

Fees for appeals to offset costs

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Expected Results of Reform

A workers’ compensation system that is fair, efficient, and provides

better outcomes for employees and employers

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EmployeesMore assistance to understand the processProcess that is easier to understandEmphasis on resolving disputes before “court”Faster access to “court”

○ Expedited hearings for catastrophic injuriesImproved medical treatment

○ Fewer delays for utilization reviewQuicker return to pre-injury jobsFaster delivery of benefits

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Employers Fairer, more predictable environment

Quicker, simpler resolution of claims○ Improved relations with injured workers○ Less concern about venue○ Lower administrative costs

Quicker return of employees to their jobs○ Less disruption in operations

More conducive to expanding operations or coming to Tennessee

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Expected Results of Reform

Helps make Tennessee the #1 state in the Southeast for

high quality jobs

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Questions?

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