December 9, 2009

Racketeering and Comp: When the Denial of an Injury is an Injury

Imagine you work as a commercial driver for a long-established trucking firm that self-insures for workers comp. You are injured on the job. You seek benefits under the comp statute. The TPA handling the claim refers you to a company doctor. The doctor determines that the injury is not work related. The adjuster for the TPA denies the claim. End of story?

Not quite. What if you shared your story with five other employees, all of whom filed comp claims, all of whom saw the same doctor (a family practitioner), with the same result: claim denied by the same adjuster at the TPA? A coincidence or a conspiracy?

Five employees of Cassens Transport in Michigan concluded that there was a conspiracy to deny their claims. They filed suit in federal court, alleging a violation of the Racketeer Influenced and Corrupt Organizations Act ("RICO"). A district court dismissed their claims, finding that their individual claims did not constitute a "pattern" of activity and that invocation of the RICO statute would violate the McCarren-Ferguson Act by interfering with state regulation of insurance.

The U.S. Court of Appeals for the 6th Circuit reviewed the case and overturned the district court's ruling. Now the U.S. Supreme Court, by declining to get involved, has upheld the Appeals Court. The Appeals ruling is a fascinating document which explores the nature and definition of racketeering, the relationship of workers comp benefits to insurance and the roles of state and federal governments. It's required reading for attorneys and highly recommended for all others.

Criminal Acts?
The district court has been ordered to reconsider the allegations. The five Cassens drivers allege that Cassens, their self-insured employer, Tina Litwiller, a claims adjuster for the TPA Crawford and Co., and Dr. Saul Margules conspired to deny their comp claims. (While you might expect Dr. Margules to be board certified in occupational medicine, he appears to be a family practitioner.) The Appeals Court does not address the substance of the allegations: it simply rules that denial of the workers comp claims might involve a violation of the RICO statute and thus is appropriate fodder for the federal courts.

Some folks are alarmed that the feds are getting involved in what is usually a state issue. That might be a problem, but let's not lose sight of the delicious prospect before us. During the course of the new hearings, plaintiff attorneys will seek access to some fascinating communication records: between Cassen and Crawford, detailing the status of individual claims; Ms. Litwiller's claim notes; and communications between Crawford and Dr. Margules, who had so much difficulty finding a connection between a given injury and work. As much as I enjoyed the Appeals Court's discussion, I am really looking forward to the nitty-gritty details of the proceedings in the district court. (You don't suppose that some of the written and electronic communications have disappeared, do you?)

At heart, this is a very serious matter. The five employees allege that they have been unlawfully denied the protection of Michigan's workers comp law through a conspiracy of company, TPA and doctor. If the allegations are proven, if the accused violated the RICO statute, they will face the consequences of a criminal conspiracy. In the Insider's burgeoning annals of fraud - employee, employer, attorney, doctor, agent, insurer - this case will surely offer one of the more compelling narratives.



Good article Jon. But you had the opportunity to mention "treble damages." If the RICO statutes are applied the Doc & TPA are subject to treble damages... It's just fun to say...

This can spell trouble because I suspect that a lot of adjusters have gotten used to sending claims to doctors who routinely deny the work relatedness 100% of certain classes of claims (in the same way that other doctors would do the reverse). The fact that the doctor in question is a family practitioner makes the defense case weaker. This sorry story underscores the fact too often overlooked: expertise in medical care counts.

Kaiser Hospital is another self-insured employer. As an employee when I was seen by their occupational clinic doctor he claimed there was nothing wrong with me. I was smart enough to seek another outside opinion. He quickly diagnosed carpal tunnel which somehow their doc missed. Conspiracy? Well at least malpractice. In fact Kaiser's occ med docs are very well known at discouraging/misdiagnosing/under treating valid work injuries. Always get an attorney if you have a serious work injury. I was very glad I did. Shame on Kaiser! Also shame on California for limiting the ability of employees to be seen by doctors of their own choosing in recent years.

Ohhhhh I so wish that the RICO statute could be applied to AIG and their handling of DBA cases. These supposed "experts" are nothing but paid medical liars. They put forth rampant medical hypothesis with no basis in reality to deny and delay all claims! It is criminal what those b@stards are doing, they should face criminal consequences!


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This page contains a single entry by Jon Coppelman published on December 9, 2009 1:41 PM.

"Exclusive Remedy" for Losing Your Face? was the previous entry in this blog.

Health Wonk Review: the sausage-making-is-a-messy-business pre-holiday edition is the next entry in this blog.

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