Lynch Ryan's weblog about workers' compensation, risk management, business insurance, workplace health & safety, occupational medicine, injured workers, insurance webtools & technology and related topics

February 24, 2009

School Board Needs History Lesson

Audeen Jacobs was a teacher in the Clark County (Kentucky) school system. She retired in June 2003, but was hired back on a 100 day contract in the fall of that same year. In addition to her teaching responsibilities, she volunteered to sponsor the high school's Beta Club, an honor society that requires students to maintain a specific grade point average.

On December 6, 2003, she accompanied the students to a Beta convention in Louisville. She was paid while attending the conference and had secured permission from the high school principal to attend. In other words, Jacobs was clearly "in the course and scope of employment" when she fell from a set of bleachers and severely injured her left shoulder.

The Clark County school board denied the claim, lost at the initial and appeal levels, and lost for the last time at the Kentucky Supreme Court. The board argued that participation in the Beta club was not required and, like other extracurricular activities, the club was of "intangible benefit" to students.

The judges did not buy this specious argument. They pointed out that Beta club activities were directly connected to educational goals and that participating students had access to scholarships only available to Beta members. Jacobs was off-site, but directly involved in school-related activities.

History Lessons
Audeen Jacobs gave a lot to the kids in Beta. Maybe it's time for the kids to give something back. The Insider would like to propose an extracurricular project: a presentation to the school board on the history, purpose and importance of workers compensation. The kids might even ask Audeen Jacobs to attend, to share her experience of being injured and unable to work, the pain and shock of the initial fall, the subsequent operations, the medications, the indemnity payments that helped her pay her bills.

While the kids have the attention of a board that is clueless about comp, they might want to take the opportunity to provide an historical lesson in irony and ambiguity. Their high school is named for a revolutionary war hero. Here, courtesy of Wikipedia, is a little background on Mr. Clark:

George Rogers Clark (November 19, 1752 – February 13, 1818) was a soldier from Virginia and the highest ranking American military officer on the northwestern frontier during the American Revolutionary War. He served as leader of the Kentucky militia throughout much of the war, Clark is best-known for his celebrated capture of Kaskaskia (1778) and Vincennes (1779), which greatly weakened British influence in the Northwest Territory. Because the British ceded the entire Northwest Territory to the United States in the 1783 Treaty of Paris, Clark has often been hailed as the "Conqueror of the Old Northwest."
Clark's military achievements all came before his 30th birthday. Afterwards, he was disgraced and accused of being drunken on duty and therefore left Kentucky to live on the Indiana frontier. Never fully reimbursed by Virginia for his wartime expenditures, he spent the final decades of his life evading creditors, living in increasing poverty and obscurity, and often struggling with alcoholism. He was also involved in two failed conspiracies to open the Spanish controlled Mississippi River to American traffic. After suffering a stroke and losing his leg, he was aided in his final years by family members, including his younger brother William, one of the leaders of the Lewis and Clark Expedition. Clark died of a third stroke on February 13, 1818.

The name of George Rogers Clark graces the facade of the county high school. I wonder how many school board members - let alone kids in the school - appreciate the rich history behind that simple name.

Posted by Jon Coppelman at 12:39 PM Link to, Comment (0), or E-mail this post
February 23, 2009

McDonald's: Heroes Need Not Apply

Perry Kennon, a thug with a long record, experienced a craving for a Big Mac, so he accompanied a lady friend to a McDonald's in Little Rock, Arkansas. ["I'm lovin' it!"] His lady said something he disapproved of, so he smacked her in the face. McDonald employee Nigel Haskett, 21 at the time, rushed at Kennon and pushed him out of the restaurant. Haskett then stood by the door to prevent Kennon from re-entering. Kennon, not surprisingly, took offense to Haskett's chivalry. He went to his car, retrieved a gun, and shot Haskett in the stomach multiple times.

Haskett has undergone three abdominal surgeries and has incurred over $300,000 in medical bills. Surely, you know where this is going: McDonald's denied Haskett's workers comp claim. They assert that the injuries did not occur in the "course and scope of employment."

According to Haskett's lawyer, Philip M. Wilson:

"McDonald's position now is that during a thirty-minute orientation Mr. Haskett and the other individuals going through the orientation were supposedly told that in the event of a robbery or anything like a robbery . . . not to be a hero and simply call 911. Mr. Haskett denies that anything like that was even mentioned during orientation or at any time during his employment with McDonald's."

Cowards Preferred?
It is reasonable to train employees not to resist robbers. By all means, hand over the cash and stay out of harm's way. Such a policy may or may not be a viable basis for denying this particular claim, but it's a strategy that comes with a big hole and significant cost. The hole is this: the incident was not "anything like a robbery." It was an assault. Haskett rushed to the aid of a defenseless woman. He acted instinctively, as good samaritans usually do. In most states, the actions of good samaritans are considered compensable under workers comp statutes.

The cost of McDonald's policy may prove greater than the short-term savings on the comp side. McDonald's can try to set corporate policy that prevents employees from being good samaritans, but society frowns on such corporate indifference to suffering. It's one thing to encourage employees to hand over the money, it's quite another to prohibit them from helping people with urgent needs.

This much we know: Haskett was working when his instinctive, chivalric response resulted in serious wounds. McDonald's could have shared the glory and given Haskett a medal. Instead, they gave him the boot. If their corporate strategy is stamping out any hint of heroism among their underpaid employees, I'm not lovin' it.

Posted by Jon Coppelman at 11:45 AM Link to, Comment (13), or E-mail this post
February 20, 2009

The Ventless Vent

When is a vent not a vent? When it doesn't vent. Here is a toxic conundrum for a Friday, from our neighbors to the north in Vancouver. Appropriate material, perhaps, for the 1,000th Insider entry.

For two years Jim Mulally worked as an attendant in an underground parking garage. He and his fellow attendants collected parking fees for EasyPark Vancouver, which manages a city-owned underground parking garage in the downtown library square complex. The city leases space in the building to McDonald's and other restaurants. Instead of blowing restaurant exhaust outside the building, where it belongs, the ventilation system blows it into the enclosed parking lot, right next to the toll booths. This vent system doesn't vent.

Parking attendants say they are literally sick after years of breathing foul fumes from the restaurant.

"The headaches kicked in within an hour of showing up," Mulally says.

Who Owns the Problem?
The city believes the problem should be solved by the two restaurants, McDonalds and Kamiya Sushi (fumes from a sushi bar?). In a letter disclaiming any responsibility for the liability-laden situation, the city goes on to write that "the odour of fried food is measurably better than the odours of rotting garbage, feces, animal rendering … or other industrial processes." Well, that's true, but of little consolation to the workers who must inhale the fetid air.

Domenic Losito, regional director of health protection for Vancouver Coastal Health, said studies indicate the cooking oil particles coming out of the vent could increase the workers' risk of developing cancer.

"There is a slightly elevated risk of cancer from those fine particles that get into the lungs," Losito said. "So, the last place you want to exhaust any grease-laden vapour is into an occupied space." Well, duh!

MacDonalds pays the city about $45,000 in annual rents. If any of the parking attendants develop serious lung ailments from the relentless exposure to toxins, this rent will seem like chump change compared to the comp liability. Beyond that, current and former parking attendants might want to explore a lawsuit against the architect of this bizarre air transfer system. My well-worn copy of "Architecture for Dummies" says that you never run vents into enclosed spaces, let alone vents that carry the grease from the world's biggest purveyer of hamburgers and fries. McDonalds earns a dubious twofer: slowly killing their customers with (mostly) unhealthy food and slowly killing the poor parking attendants with the resulting grease. Bon appetit!

Posted by Jon Coppelman at 10:30 AM Link to, Comment (0), or E-mail this post
February 19, 2009

Health Wonk Review: The Anti-Spam Edition

You've heard about a spoonful of sugar making the medicine go down, but how about Spam as a substitute? It's Health Wonk Review day, and Hank Stern of InsureBlog offers us Health Wonk Review: The Anti-Spam Edition - replete with recipes. Posts range from commentary on the Stimulus package and health reform initiatives to a list of top 50 Medical Tourism resources. Many thanks to Hank - he and his colleagues are insurance blogger pioneers and mainstays. Hank is also the driving force for Cavalcade of Risk. While visiting HWR, you might check out some of his other blog posts.

Posted by Julie Ferguson at 10:09 AM Link to, Comment (0), or E-mail this post
February 18, 2009

Economic indicators: insurance industry update

How has AIG been doing since their big government bailout five months ago? Ieva M. Augustums of Associated Press offers an update:

Q: How much has AIG paid back? A: In October, AIG said it would sell off a number of business units to repay the initial $85 billion Fed loan. The loan, which was reduced in size to about $60 billion under the restructured rescue package the government put together in November, had roughly $35 billion outstanding as of last week.

The company has not specifically disclosed the assets it is selling or the expected prices from the sales. However, AIG has said it plans to retain its U.S. property and casualty and foreign general insurance businesses, and plans to retain an ownership interest in its foreign life insurance operations.
....

Q: Has the bailout been successful?
A: Without knowing specifically how AIG is spending the money it's received from the government, it is difficult to know if AIG's bailout package has helped.

"To the extent the bailout was able to give them a bridge that would enable them to discard or separate the good business from the bad business, I think they have been able to do that," said David Steuber, co-chair of law firm Howrey LLP's Insurance Recovery Practice Group in Los Angeles.

And despite all the financial woes, AIG's traditional insurance subsidiaries have widely been viewed as safe, Steuber said. AIG operates insurance and financial services businesses ranging from property, casualty, auto and life insurance to annuity and investment services.

Meanwhile, other insurers should not be counting on any bailout funds, at least not at present. Arthur D. Postal of National Underwriter reports that there will be no relief for insurance companies in phase two of the federal bailout.

"However, insurers will be allowed to participate in a new program offering financial institutions an opportunity to sell troubled assets to the private market with government guarantees. “We believe insurance companies will benefit if the steps we are taking will lead to stability in the financial markets,” the official said."

In another story in National Underwriter, Jim Connolly reports that insurance companies are actively seeking some relief from state capital surplus requirements.

According to Andrew Frye of Bloomberg, insurance sales are experiencing the worst decline since the 1930s and it is expected that more than half of insurers may be downgraded by Fitch due to profit declines and quarterly losses.

"Fitch expects the extent of downgrades to be greater among life insurers" than property-casualty companies, the rating firm said. "If provided, government-funded capital or other forms of financial support could potentially temper downward ratings actions."

On the employment front, Jeff Casale of Business Insurance reports that insurance industry employment numbers have dropped, according to the U.S. Bureau of Labor Statistics. In January, the rate of unemployment was 3.5% for insurers and intermediaries, up from about 3.0% in 2008. The national unemployment rate in January stood at 7.6%.

Posted by Julie Ferguson at 11:50 AM Link to, Comment (0), or E-mail this post
February 17, 2009

Pain as a Variable of Coverage

Dr. Scott Haig, an orthopedic surgeon, has a thought-provoking article in Time Magazine on returning to work after surgery. As those of us involved in workers comp know all too well, returning to productive employment is not simply a matter of healing. Motivation is obviously a huge factor, as is the lurking sense of entitlement that may accompany a work-related injury.

Haig cites a study conducted back in 1995, involving 103 patients who underwent rotator cuff surgery. The study focused on the type of insurance coverage. Where the injuries were work related and covered by workers comp, only 42% of the patients felt better and returned to work in the medically necessary time frame; by contrast, fully 94% of those covered by conventional insurance felt better and returned to work in a timely manner.

These differing results have little, if anything, to do with the quality of the surgery. It's a matter of motivation: people covered by conventional insurance are not making money during recovery; they need to get back to work to pay their bills, or back to whatever life requires them to do. By contrast, people on comp are being paid not to work. They may prefer life on comp to the working grind. They may not approach the return-to-work process with the same sense of urgency that others usually feel.

Chester's Pain
Haig goes on to tell the story of a cop named Chester. Haig performed rotator cuff surgery on Chester, who healed well and seemed ready for a return to light duty, which was readily available. Haig was scrupulous in cultivating a good relationship with Chester; he was confident of optimum results. But well into the recover process, Chester, accompanied by his aggressive mom, complained that light duty wasn't fair. "My sergeant had the same operation and he got six months off...[and by the way],I'm in constant pain."

Alas, despite the availability of appropriate light duty (answering phones), Haig realized that his return-to-work plan was doomed. "I knew the mess I was in. You can't argue with the complaint of pain. I could imagine the grimaces I would see when I examined his shoulder..."

Ultimately, Chester went back to work in four months and stayed on light duty for two more months. In other words, he got his six months, just like his sergeant.

As Haig concludes, the type of insurance coverage goes a long way to determine how much pain you feel. For those who qualify for comp with work-related injuries and illnesses, the pain just might reach the level where work of any kind is simply not not an option. At that point the pain is shared by the employer, who loses a productive employee for a longer period than is medically necessary, and faces increased cost of insurance through the experience rating process. When it comes to comp, there is plenty of pain all around, for sure.

Posted by Jon Coppelman at 11:54 AM Link to, Comment (4), or E-mail this post
February 12, 2009

Prying the Cell Phone from Your Cold, Dead Hands?

The National Safety Council, surely a credible safety organization, has come out for a total ban on cell phone use while driving. The council points to increasing evidence that the distraction of cell phone use - with or without headphones - is a major cause of accidents. The council has written to the governors of all 50 states, recommending legislation to outlaw cell phones for individuals operating vehicles.

This is from their press release: “Studies show that driving while talking on a cell phone is extremely dangerous and puts drivers at a four times greater risk of a crash,” said Janet Froetscher, president and CEO of the NSC. “Driving drunk is also dangerous and against the law. When our friends have been drinking, we take the car keys away. It’s time to take the cell phone away.”

Of course, this is not about to happen. A few states have limited cell phone use - some require headsets and others prohibit teen drivers from using the ubiquitous devices. (The NSC website has maps showing which states have implemented bans.) Charleton Heston famously noted that he would never give up his right to bear arms - you would have to pry his guns from his "cold, dead hands." American consumers have a similar attachment to their cell phones. Unfortunately, if the NSC numbers are correct, thousands of drivers will end up in accidents, cell phones in their cold hands - or perhaps headsets on their (cold) ears.

Looming Liabilities
The Insider has no position on cell phone use while driving. We recognize that it's a dangerous distraction, but one that has become an essential component of American life. Do it if you must, but do it carefully.

The emerging issue is one of liability. Many of us make work-related calls while driving in our vehicles. If we were distracted during such a call (post-accident, it is pretty easy to determine to whom we were talking at the exact moment of impact), our employers are vulnerable to lawsuits for negligence.

In response to what is now a widely acknowledged risk, some employers have issued policies banning cell phone use while driving on company business. Are they serious about this, or are they just "covering their butts?" It's one thing to have a policy, but if employers really intend to use the policy as a defense, they would have to prove that the cell phone ban is enforced. Theoretically, they would have to correlate cell phone records with known "time on the road" and take disciplinary action on employees who violate the policy. (Sounds like a lot of work for not much return, let alone a way of seriously compromising productivity.)

Perhaps the parties with the most at stake are the insurance carriers - the folks who write general liability and fleet auto policies for American companies, large and small. They are ultimately holding the bag for losses due to "negligent" driving. I wonder if these insurers will begin to require that their insureds issue and enforce "no cell phone" policies for drivers, in a manner similar to their requirements for safety committees and return-to-work programs for workers comp policy holders.

It will be interesting to track the development of this new and potentially expensive liability. In the meantime, the NCS has raised the bar significantly for all of us who drive and talk, and dare I add, drive and text. The sages of India recommend "one point of attention" at all times: when driving, just drive. Alas, this is hardly a viable option for a nation of time-harassed multi-taskers.

Posted by Jon Coppelman at 3:20 PM Link to, Comment (7), or E-mail this post
February 11, 2009

Cavalcade of Risk Issue #71

We're pleased to host issue #71 of Cavalcade of Risk here in our humble corner of the web. While risk is ubiquitous, in the current economic climate, times seem even more perilous - particularly when looking at charts for historical job losses during recessions. Ouch. We looked for something cheery to post but alarm seems pervasive. We may have to find a suitable cave to hunker down in. When all else fails, there's always actuarial humor.

Risk grab bag
Nancy Germond of Risk Management for the 21st Century gets an experienced risk manager's assessment of current loss trends in our troubled economic times, delineating areas in which risk managers will need to be particularly vigilant.

As if the risk to the public health wasn't bad enough with the peanut butter salmonella debacle, Effect Measure discusses how the negative fallout of the associated bad public relations has taken a toll on the industry at large and put a serious dent in the "Made in America" brand.

How many insurance agents does it take to change a light bulb? Henry Stern of InsureBlog notes that sometimes risk is simply about assessing whether or not it's safe to change a light bulb.

Does your project have "risks" or "issues"? At The Project Management Hut blog, PM Hut explains why it's important to differentiate between the two.

And while on the topic of language associated with risk, Spire Security Viewpoint explains why "risk optimization" is not an oxymoron, offering a unique perspective on risk minimization.

Sean Fowden, writing at the Putik Blog, offers a five-step course on assessing risk, and explains how risk assessments might fit into our everyday lives.

Consumer Insurance Blog discusses a recent Not-in-Traffic Surveillance study, which sheds light on the surprising numbers and types of injuries that occur as a result of non-crash related accidents.

Russell W.P. Hutchinson of moneyblog examines the relationship between political systems and life expectancy.

In Frontier Justice, Jon Coppelman here at Workers Comp Insider looks at the risks posed to both employee and employer when opting out of the workers comp system.

Health matters & risk
Being treated in the hospital has become a risky proposition. Jason Shafrin of Healthcare Economist discusses a study which estimates the high costs of medical errors as evidenced by a study of 14 patient safety indicators.

Government-funded research to determine the efficacy of medical treatments? Joe Paduda of Managed Care Matters puts on his sarcasm hat to contemplate the horrors.

Caveat emptor. David E. Williams of Health Business Blog suggests that cardiac patients should be asking some hard questions because they could be at risk from high radiation CTA scans and radiologists aren't doing a good enough job of mitigating that risk.

Louise of Colorado Health Insurance Insider notes that a new measure opening the state to out-of-state health care plans runs the risk of ushering in lower quality health insurance products for Colorado consumers, which would be regulated by another state’s rules.

Color Jaan Sidorov of Disease Management Care Blog skeptical when it comes to recognizing Community Care of North Carolina's Patient Centered Medical Home (PCMH) as the ‘The PCMH Saves Money’ poster child.

Michael Cannon of Cato@Liberty is willing to put his money where his mouth is to make a point about universal coverage.

At the Seek These Things blog, learn how the "sins of the fathers" are visited on their children due to increased risk of Celiac Disease.

Over at Life From Here, Luna reports on a recent study suggesting that the risk of developing ovarian cancer due to fertility drugs may be overblown, which could be good news for that young mother of octuplets from California.

Money matters & risk
Dorian Wales of Personal Financier poses the question as to whether valuation and risk measurement models are the root of all evil.

Risk Watcher Caroline Hamilton blogs on the risks financial institutions face by accepting TARP funds.

Given today's market, is your best approach lump sum investing or dollar cost averaging? Silicon Valley Blogger of The Digerati Life compares investing frequency methods with an eye to minimizing investment risk.

Looking for a relatively safe haven for your money in today's tumultuous times? Jacques Sprenger of The Smarter Wallet looks at the pros and cons of fixed annuities for those who wish to down the risk in their investment portfolio.

Are online banks risky? Only when you don't do your homework, suggests Jim of Bargaineering, who offers various online bank profiles, including FDIC coverage, history, and other useful information.

At American Consumer News, Sid Smith issues some warnings about discount cards pitched as an affordable insurance option for your health care needs.

MoneyBlueBook looks at the proposed stimulus package and contemplates what might happen if the government diverted all the bailout money and stimulus spending into large stimulus checks for all U.S. workers who filed federal income tax.

Thanks to all this week's contributors - there were far too many submissions to include them. Next up to bat: moneyblog on February 25.

Posted by Julie Ferguson at 9:07 AM Link to, Comment (1), or E-mail this post
February 10, 2009

Annals of Compensability: Arthur Pierce's Work-Related Fall

Arthur Pierce worked for a trucking company in Virginia. In September 2006 he was found lying beside his dump truck. He had suffered a severe brain injury and was unable to communicate any details about what had happened. Physicians speculated that he had fallen from the truck (falls are the number one cause of injuries to drivers), but there was no proof and no witnesses. The unfortunate driver required constant care until his death in January 2008.

Due to the uncertainty of the circumstances surrounding the injury, Pierce was denied workers comp benefits. (This would have been a very large claim.) Ironically, if he had been found dead, the death would have been deemed compensable: when an employee is found dead at work, the fatal injuries are presumed to arise out of employment, unless there is a "preponderance of evidence" to the contrary.

Legal Remedy Fails
Lawmakers in Virginia, sympathizing with the plight of Pierce and his widow, proposed changes to the state's comp statute. Senate Bill 821 was aimed specifically at employees who suffer severe brain injuries and are unable to recall the relevant circumstances of the accident. (How many of these cases would there be in a year - or even a decade?)

Alas, SB 821 died in committee. Opponents feared that the bill would increase the likelihood of workers' comp fraud. They were actually concerned that employees would fake severe brain injuries to secure benefits. To be sure, fraud can be a real problem, but how can you possibly fake a brain injury?

SB 821 would have come too late to help Pierce, and was so specific in nature, it would probably never have been helpful to severely injured workers. It was a mostly a symbolic gesture toward a family that was not served well by the Virginia comp system. Arthur Pierce's work-related fall simply fell through the cracks.


Posted by Jon Coppelman at 4:27 PM Link to, Comment (4), or E-mail this post
February 9, 2009

News roundup: Letters of credit, nuclear workers, NY construction, collaborative whiteboard, and more

Another side effect of the bad economy - Roberto Ceniceros of Business Insurance points to another side effect of the credit crunch - higher collateral costs for many self insureds, particularly those in financially challenged industries, who are scrambling to secure alternatives to their letters of Credit (LOC).

"Typically, state regulators require employers to post bonds, letters of credit, securities or cash as collateral to self-insure their workers comp obligations.

But now bond insurers are asking some employers to post more collateral just to secure the bonds, insurers and brokers said. Surety contracts often allow insurers to call for additional collateral to secure their bonds during the contract term."

Shameful - nuclear workers issues still unresolved - The Rocky Mountain News reports that legislation to improve the federal nuclear weapons workers compensation program is gathering steam. Hopefully, this time, it will work. In 2000, Congress passed The Energy Employees Occupational Illness Compensation Program Act (EEOICPA) to provide assistance to those cold-war era workers who became ill as a result of on he job exposure to radiation. Since that time, it's been a story of bungling and snafus, with many workers dying before getting any federal help.

Safety winners - The National Safety Council announces their 2009 list of CEOs Who 'Get It', an annual program that recognizes corporate leaders who have demonstrated that employee safety is a core corporate value, and who have supported that belief by cultivating safety leadership at all levels of their organizations and supporting their employees with extensive safety training. Read about some of the practices they've implemented to see how your organization measures up.

NY construction rules beefed up - in the wake of last year's deadly crane collapses, New York's Department of Buildings set more than 40 new rules to heighten safety at high-risk sites. "The city spent $4 million hiring engineering consultants and inspecting more than 600 construction sites before rewriting the regulations."

Workplace burns - we missed National Burn Awareness Week last week, but still thought this article was worth passing along: Teach Workers How to Treat Workplace Burns.

Avoiding layoff pitfalls - from The Employment Law Chronicle, tips for employers to consider before restructuring the company's workforce: Layoffs & Reductions-in-Force: Avoiding the Legal Pitfalls & Perils

Insurer insolvency - We've talked about this issue a few times, but here is another take on what happens to your insurance policy if your carrier goes under.

Another bad actor - Last week, we blogged about the Fraud Hall of Shame "winners." We have a new nominee for next year's honors - yikes.

Cool tool - try this at your next phone meeting: Scriblink, a free digital whiteboard that users can share online in real-time. The board is open only to the people you choose to invite and you can print, save, and email your work.

Posted by Julie Ferguson at 2:18 PM Link to, Comment (0), or E-mail this post
February 6, 2009

Comp as Enabler: The Nadya Suleman Story

Nadya Suleman recently gave birth to octuplets, six boys and two girls. These newborns join the six other children that were also conceived through in-vitro fertilization. Suleman is a single mother of 14 young children, living at home with her (distressed?) parents. As the father of two teenage daughters, I certainly appreciate the joys (and challenges) of parenting. But this is ridiculous.

Workers comp has played an interesting role in enabling Suleman to become the media's latest and greatest fertility symbol. Back in 1999, Suleman worked the graveyard shift as a psychiatric technician at the Metropolitan State Hospital in California. She was injured in a mini-riot, when a patient threw a desk at her, injuring her spine. The back injury was clearly visible on her MRI and obviously compensable. She was disabled from work and collected workers comp. We don't know how hard the hospital tried to bring Suleman back to work.

In 2001 she was on her way to a treatment session, when she was involved in an auto accident, injuring her back, shoulders and neck. She filed a claim for continued benefits based upon these new injuries. Her employer objected, but Suleman prevailed at a hearing. (I would have thought that going to a scheduled appointment, like "to and fro" in going to work, would not in itself be "in the course and scope" of employment - but obviously, the judge disagreed.) As a result of her continued indemnity payments, Suleman was supported by workers comp during her extensive and remarkably successful attempts to have children.

Pregnancy and a Bad Back
Suleman admitted that her back injury was exacerbated by her pregnancies. At the most recent hearing, in August 2008, Dr. Steven Nagelberg attributed 90 percent of her injury to the work incident and 10 percent to her pregnancy. (Obviously, Dr. Nagelberg has never been pregnant!)

In any event, Suleman has collected about $165,000 on her workers comp claim. Here is the key point: Suleman claimed to love her job, but her employer was unwilling or unable to bring her back to work. Given her attitudes toward life, marriage and children, she was undoubtedly a handful. Nonetheless, an aggressive attempt to return her to productive work might have saved the state a lot of money. As it was, comp became Suleman's primary means of support as she pursued her dream of having a family. Some dream!

In a recent interview on the Today show, Suleman says she had six embryos implanted in her fertility procedure — far more than industry guidelines recommend — and was well aware that multiple births could result. Indeed, during the very early stages of the pregnancy, the six became eight. (Hmm. I wonder if the infertility doctor consulted his/her local medical ethicist when agreeing to do this procedure.)

"I wanted them all transferred. Those are my children, and that's what was available and I used them. So, I took a risk. It's a gamble. It always is."

"It turned out perfectly," Suleman added.

Perfection is not the word that comes to my mind. This is a failure of mind-boggling dimensions, with profound implications for 14 innocent children. It is ironic that workers comp, the safety net for injured workers, has played a relatively small, but definitive role in this sorry saga.

Posted by Jon Coppelman at 10:52 AM Link to, Comment (8), or E-mail this post
February 5, 2009

Health Wonk Review & news from the insurance fraud front

Awaiting your perusal, this week's edition of Health Wonk Review. David Williams of Health Business Blog has compiled the best health policy wonkery from the creme de la creme of the health policy blogs. A preview of this week's fare to whet your appetite: Pharma's foibles; Less is more; The profit motive; The wonky section; Navel gazin’; The odd couple; Einstein in love; and Curmudgeon care.

And now, for an update on fraud watch:
Insurance Fraud Hall of Shame - It's a motley crew: a serial home arsonist, a dentist who did worthless root canals on children. and two elderly women who bought life insurance policies on homeless men and then killed them were all among the 12 swindlers elected to the 2008 Insurance Fraud Hall of Shame. Insurance fraud is estimated at $80 billion a year, a costly toll that adds to insurance costs for all the honest people.

Here are a few nominees for next year's list...
Coingate redux? - Things have been quiet in Ohio in the last year or so, but if some Ohio pols have their way, Tom Noe could find himself testifying at the Statehouse about the origins of Coingate. One matter that has never been established is how in the heck Noe ever persuaded the state to fork over $50 million to invest in rare coins in the first place. Noe is currently serving an 18-year prison sentence, but he has an appeal hearing on February 17.

AIG VP convicted - Christian M. Milton, a former AIG Vice President is facing a 4-year prison term and a a $200,000 fine following his conviction on charges of conspiracy, securities fraud, false statements to the U.S. Securities and Exchange Commission and mail fraud. " ...Milton and his co-defendants, Ronald E. Ferguson, Elizabeth A. Monrad, Robert D. Graham and Christopher P. Garand, all former General Reinsurance Corp. executive officers, engaged in a scheme to falsely inflate AIG's reported loss reserves, a key indicator of financial health to insurance industry analysts and investors. According to trial evidence, the fraud was carried out through the use of two sham reinsurance transactions between subsidiaries of AIG and Gen Re in response to analysts' criticism of a $59 million decrease in AIG's loss reserves for the third quarter of 2000."

NJ uncovers multi-million dollar fraud scheme - Seven individuals, 11 corporations and a Pennsylvania broker have been indicted for money laundering, racketeering and other charges in a workers' comp fraud racket. Defendants netted as much as $1.5 million. Nearly three-quarters of a million dollars were misappropriated from clients who thought they were paying their workers comp insurance premiums, leaving many employers and employees without workers comp coverage.

Posted by Julie Ferguson at 8:11 AM Link to, Comment (0), or E-mail this post
February 4, 2009

Big Holes in the Comp Safety Net

We know how James Strickland died. Strickland worked for Bay Area Regional Transit (BART) in San Francisco. On October 14, he was walking east on the westbound track, checking for safety problems. An eastbound train, traveling 70 mph, slammed into him. (Now there's a safety problem!) He died instantly. But when you review the post-accident activities of BART, you get the impression that they are not quite sure Strickland is really dead.

We read in SFGATE.com that Strickland's widow Linda is still waiting for workers comp benefits, nearly four months after the accident. According to BART, they are lacking some paperwork - not enough, mind you, to prevent them from paying the $5,000 burial benefit, Strickland's final paycheck and a life insurance policy.

Systemic Failures
Linda Strickland complains that BART failed to contact her directly on the day her husband was killed. BART responds that they tried unsuccessfully to reach her. Mrs. Strickland first learned about the accident on the radio; a friend later informed her that her husband was involved.

BART has apparently told Linda that Strickland himself was at fault in the incident: he should have known that BART was single-tracking trains on the day of the accident. Of course, under workers comp laws, even if Strickland was at fault, the accident is still compensable and Linda is entitled to benefits. (A more gracious employer might avoid placing blame directly on the deceased, especially in the course of informal conversations with the grieving widow.)

As far as the missing documentation goes, it's easy to understand why BART needs a copy of the marriage certificate. But why are they asking for the death certificate, the coroner's report and earnings statements? Don't they know the circumstances of the death and how much they paid Strickland? Don't they have enough information readily available to commence weekly benefits and adjust them later, if necessary?

The comp system is designed to provide prompt benefits, usually commencing (by law) within 14 days of an injury. Sometimes there are significant questions of compensability, which under rare circumstances might delay the initial payments. In this case, it's hard to imagine the rationale for any delays. BART prides itself in providing on-time transportation for its customers. They should approach benefits for their own employees with the same determined attitude.

Posted by Jon Coppelman at 3:41 PM Link to, Comment (0), or E-mail this post
February 3, 2009

Social networking for the safety community

You'd have to be living under a rock to be oblivious to the revolution that is online social networking - blogging (hey, that's us!); networking sites like Facebook and LinkedIn; social bookmarking services like delicious.com or Stumble Upon; photo sharing sites such as Flickr; video sharing sites like YouTube; microblogging and texting, such as Twitter; and Google mashups. The list could go on. If you find all this confusing, here's a good little video clip: Social networking in Plain English.

The insurance industry could hardly be described as an early adapter to new web technologies, but now, with safetycommunity.com, we have a social networking site designed for "safety managers, foremen, safety engineers, factory and construction workers, and anyone for whom workplace safety is a profession or passion." A group with such a shared interest is natural for collaboration, networking and sharing. As of today, there are about 1,000 members registered. We've only just begun to explore, but there are shared videos, blog posts, discussion boards, scheduled chats, Twitter feeds, and links to safety communities on some of the major established networking sites. Check it out - there's a lot to explore. And kudos to Ansell Healthcare of New Jersey, which sponsors and maintains the site.

Next on the agenda - social networking for actuaries?

Posted by Julie Ferguson at 8:51 AM Link to, Comment (2), or E-mail this post
February 2, 2009

Wyoming Workers Comp: Frontier Justice?

Cody, Wyoming, was founded in part by "Buffalo Bill" Cody, the renowned slaughterer of buffalo. The town bills itself as the eastern gateway to Yellowstone National Park. "A small western town with a big city attitude." Sally Spooner, a long-time school teacher in the town, might question the "big city attitude." Sally tripped and fell at school in December. She suffered serious injuries, resulting in the amputation of her right leg below the knee. A simple matter of workers comp, right? Think again, cowboy.

The Cody school district, along with 45 of 48 districts in the state, has opted out of comp coverage for most teachers. (Wyoming, a monopolistic state, does not require coverage for all employees.) Using a rather crude risk management assessment, the Cody district provides comp coverage only for "higher risk" teachers: those working in wood and machine shops, along with those in special ed and transportation. The rest - the "low risk" employees" - are factored out of the comp premiums. Nothing ever happens to ordinary classroom teachers, does it?

Superintendent Bryan Monteith admits to feeling terrible about Sally Spooner's situation, but he has no regrets about the decision to eliminate comp coverage for most teachers. "We looked at it and said spending $175,000 a year for workers comp was not a good use for our money in terms of providing risk protection for the district. We decided using the money for salaries was a way to benefit the entire district."

Monteith admits that Sally is a great teacher. They would like to do something for her, but given "fiduciary responsibilities" to the district and the potential for setting a bad precedent, they probably will let Sally fend for herself. Call it frontier justice.

Pretty Scenes, Ugly Scenario
I expect that Sally will pursue a little frontier justice of her own. Because she is not subject to the "exclusive remedy" of workers comp, Sally can sue the district for her lost wages and medical bills. In addition, she can access the open-ended benefits excluded by comp, including her (considerable) pain and suffering and possibly loss of consortium. Depending upon the school's insurance arrangement for general liability, the ultimate cost of the settlement might wipe out the relatively modest comp savings.

Despite its cost, comp is generally a good deal for employers. For a relatively small premium, you are protected from the usually unforeseen, large losses like Sally Spooner's. Tort liability is off the table. Even more important, comp provides an immediate safety net for the employee: there is no anxiety about the (extraordinary) medical expenses and lost wages in the days, weeks and months following an injury.

Given a choice, Sally Spooner probably would have preferred the prompt, if somewhat limited, payments of comp, as opposed to the potential down-the-road payoff of a lawsuit. Alas, she is the victim of frontier justice, and unlike Old Faithful in Yellowstone, it's not a pretty sight.

Posted by Jon Coppelman at 1:37 PM Link to, Comment (2), or E-mail this post