Workers' Comp Is Under Attack

This is the Year of Awareness -- awareness by the general public about workers' compensation issues. There is the series by ProPublica, with three installments so far and more to come. You might not like it, but Michael Grabell and his team are accurately portraying pain points in workers' compensation. The Federal Occupation Safety and Health Administration's review of the literature over the past couple of decades also fuels the fire about the inadequacy of workers' compensation, and the spill of employer obligations onto the general taxpaying population. Last year, the Texas Tribune ran a series, "Hurting for Work," that criticized that state's work injury protection system (or lack of it). And a Florida trial judge has taken the position that workers' comp is no longer of constitutional grade. Now, Mother Jones has published an article it says exposes the true intent of the opt-out movement: to diminish benefits across the nation. Opt-out supporters contest that conclusion and say they only want employers (in this case, only big business can afford the resources to opt out) to be able to provide better benefits in a more consolidated manner to their workers. Proponents are not, however, shy about confirming that their intent is to take opt-out nationwide, to all states. The latest test case is Tennessee, where Sen. Mark Green's SB 721 has gone through several amendments in an attempt to address critics -- albeit, in my opinion, these amendments fall far short. There are two major problems with opt-out, and in particular with SB 721 if it is to be used as a model: 1) the cap on lifetime medical benefits; and 2) the lack of accountability to public regulators. Most state workers' compensation systems have a limitation on both temporary disability indemnity and permanent disability indemnity. There has been for a long time a debate as to the adequacy of indemnity benefits to keep the paycheck-to-paycheck worker sustained during recovery, and those benefits differ greatly from state to state. This debate is sure to continue regardless of what "reform" ever gets passed. This debate also applies to the adequacy of permanent disability indemnity-- whether it adequately compensates for the loss of an eye, etc. Again, where one gets hurt makes a huge difference in how much money a disability is "worth," and the debate about this will never settle. The provision of medical benefits for the lifetime of an injured worker, however, has never been on the table -- that is a topic that is simply sacrosanct, for the very simple reason that it was part of the original grand bargain. State reforms have, however, over the past two decades done as much as possible to eviscerate lifetime medical by requiring adherence to guidelines, by scaling based on co-morbidities, by forcing third-party reviews and by trimming reimbursement or rebalancing fee schedules, among other tactics. These efforts have been in reaction to perceptions that employers are unfairly paying for someone else's problem, or to abuses by unscrupulous providers. Broad-brush attempts to correct these problems reel in unsuspecting victims, just as tuna nets capture innocent dolphins. The Mother Jones article is critical of the lobbying efforts of the Association for Responsible Alternatives to Workers' Compensation, implying that its big-company sponsorships and spending is sinful. It's not -- it's just political reality. Just because a bunch of people with resources get together on a specific mission is not a reason to castigate either the people or the mission. It's done on both sides of nearly any debate. That's how we do things in America. Painful as it is for this industry, though, the fact is that workers' compensation is under attack -- from all sides. Employers are sick and tired of the cost of the system and how little control they have over it. They're paying for it and don't see much if any value or return on investment. And guess what? Workers who go through workers' compensation are likewise sick and tired over the cost of the system and how little control they have over it. Is this the fault of us, the professionals who have the task of administering benefits? In part, yes. But the larger issue is what society wants, and what all this attention lately is telling me is that society wants a way to provide security to both business and workers -- in a manner that is better than what workers' compensation has devolved into. I don't view opt-out as evil. I do view it as a necessary element in the debate about the adequacy of workers' compensation to deliver on its original promise: protect employers from economic ruin when someone gets hurt, and protect the worker who got hurt. If you take ARAWC's mission at face value, what the group wants to do is laudable. It is saying that state workers' comp systems no longer are a viable piece of the social contract, that private industry can do it better. Maybe it can, if there are reasonable protections that meet the essential elements of work injury protection -- and that means taking care of an injury for life and not stacking dispute resolution in favor of one party or the other. But this column isn't about ARAWC, or opt-out; it's about an awareness that is developing. Workers' compensation used to hide in the shadows of healthcare and disability. Ask anyone just a few years ago about work injuries and you'd get an earful about "workman's compensation" and how a neighbor is cheating the system. Now the public is beginning to ask: What are all these businesses doing for their pay when there's all these people who are being thrown to the curb for trash pick-up day? Why are businesses paying for services that don't seem to be delivered on time or in enough quantity? How is it that an insurance company that agreed to take care of an injured person for life can delegate that obligation to public welfare? As I see it, the public assault on workers' compensation, the trend that is developing toward opt-out systems and the overall malaise that seems to have settled over work comp portends a much-needed, long-deserved debate. The public is asking questions. Hard questions. Because the public isn't seeing the value in work comp that had been promised (and delivered) for so long. We're entering into a whole new era of business vs. labor dispute. The haves and the have-nots are drawing lines in the sand. The last time this happened, the federal government threatened imposition. It could happen again. What we rely on for work injury protection systems will be vastly different in 10 years than what exists now. It's clear to me this is what's happening. Less clear is what will actually exist in 10 years. This article first appeared at WorkCompCentral.