According to a study conducted by the non-partisan Workers’ Compensation Research Institute (WCRI), North Carolina’s workers’ compensation payment per claim costs are significantly higher than average when compared to similar costs in other states. The study, CompScope TM Medical Benchmarks, revealed that North Carolina workers’ compensation payments per claim exceeded the average of a group of 13 states by 13%. State lawmakers have already reacted to the problem by imposing fee schedule changes; these began taking effect in July 2009. Various policy groups have also proposed initiatives to reduce payouts for certain hospital costs, physical medicine, and outpatient services. The Office of State Budget and Management has calculated that the fee schedule changes for 2009 should save the state over $35 million.

What was driving the abnormally high payments per claim in the state?

The CompScope survey points to many culprits. For one, the state has a higher surgery rate than other states surveyed. In addition, both outpatient and inpatient payments per claim and payments to providers are much higher than the median for the states studied. Bear in mind that these figures don’t mean that North Carolina workers’ compensation claimants are necessarily getting more money or a better deal on their medical services. The costs have gone up for almost every party within the healthcare system across the board.

Workers` Compensation Payments Per Claim to North Carolina Hospitals Higher Than Typical of 14 States and Growing, Says WCRI Study, Reuters, Fri Jul 10, 2009

North Carolina: Study finds payments per claim growing rapidly, Risk and Insurance.com, July 30, 2009

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CompScope

Workers’ Compensation Research Institute

A relatively high profile North Carolina workers’ compensation case has ended in victory for the defendant, Nash Community College. The case involved a GED instructor named Jamaal Johnson, who had worked for the college in 2007.

According to the facts as stipulated by the North Carolina Court of Appeals, the petitioner sought workers’ compensation in connection with a work absence from April 26th through June 19th of 2007. Mr. Johnson had a note from Dr. Raymond Baule, which claimed that Mr. Johnson would not physically be able to work during this period. However, the college’s HR department noted that Dr. Baule was not regarded as a qualified workers’ compensation physician. HR thus set an appointment for Mr. Johnson with a second doctor, Dr. Robert Saul, to reevaluate the complaint. After observing the petitioner, Dr. Saul concluded that there was “no reason” why Mr. Johnson could not return to work. The HR department sent several letters to Mr. Johnson, alerting him to the fact that he had not qualified for North Carolina workers’ compensation needed to return to work. But the petitioner never claimed (or possibly ignored) those letters. Eventually, the college fired the instructor for his absence. Mr. Johnson subsequently sought unemployment benefits pursuant to North Carolina law and got turned down. In March of 2009, he appealed to the state’s Employment Security Commission for a more positive ruling, but the ESC turned him down as well because it weighted Dr. Saul’s opinion (as an official workers’ comp doctor) more highly than it did Dr. Baule’s.

Jamaal Johnson v. Nash Community College, North Carolina Court of Appeals, March 3, 2009

The ballad of Jamaal, Baule and Saul, The HR Specialist, June 21, 2009

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Nash Community College

Workers’ Compensation Rules in NC

Is there a non-profit state agency that can provide unbiased information about North Carolina workers’ compensation benefits, eligibility and rights?

Yes. The North Carolina Industrial Commission (based out of Raleigh) is reachable at (919) 807-2500. You can also contact workers comp info specialists directly toll free at (800) 688-8349 or email someone for assistance at infospec@ic.nc.gov.

If your employer does not report your injury, for whatever reason (e.g. negligence, refusal to assist), is there anything you can do?

Yes. Collect a claim Form 18 or Form 18-B and file it with the NC Industrial Commission within two years of your on the job injury.

Can injured employees get benefits for using chiropractic services?

In some cases, yes. If your employer’s insurer allows, you can have up to twenty visits to a designated chiropractor paid for, provided that the services are “medically necessary.” If you require more chiropractic services, the chiropractor needs to contact the employer directly.

If you have been injured at work, what steps should you take immediately?

First of all, tell your employer — both verbally and in writing. It’s very important that you keep track of all of your correspondence and file it and date it. You should make sure to do this within thirty days of your injury, unless your recuperation has rendered you unable to make such a communication.

In the event that your employer lacks North Carolina workers’ compensation insurance, do you have any recourse to collect benefits?

Yes. First of all, the North Carolina Industrial Commission’s fraud hotline should be notified. You can call toll free at (888) 891-4895 or email a government representative at fraudcomplaint@ic.nc.gov. If you’ve been injured and then you discover that your employer lacks insurance, contact the Commission. You’ll likely have to fill out two forms — Form 33 and Form 18 — to attempt to collect benefits.

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North Carolina Industrial Commission

NC Workers Compensation Act

Who is in charge of directing your medical care?

In general, your employer or the employer’s insurance company is in charge of offering and directing your course of treatment. If you don’t like the physician that your employer commends you to, it’s up to you to petition the North Carolina Industrial Commission to compel your employer to find another doctor. Be sure to get any changes in writing prior to receiving treatment, or you may not get reimbursed. In some cases, in which your employer or your employer’s insurance company does not behave fairly, the Commission may mandate certain terms of treatment. In the event that you need emergency medical assistance, obviously you should get it. If your employer or the insurance company subsequently refuses to pay for that treatment, you should contact the NCIC as quickly as possible within reason to discuss your situation.

Is it true that you can’t collect compensation for the first week you’re off of work?

In general, the first seven days you miss work due to your disability will not be covered by so called “Lost Wage Compensation.” However, if your disability lasts longer than 21 days, you will be able to start collecting — just not for days 1 through 7.

Are compensation payments always made weekly?

Under most circumstances. However, the NCIC can in some situations mandate that you get monthly checks instead.

How much money should you expect in terms of benefits?

In general, you should expect two thirds of your weekly wage with a maximum of $816 per week (according to 2009 rules).

Can you continue receiving benefits after you return to your job?

In general, no. Once an employee is able to go back to work, his or her benefits end.

How can you find out your North Carolina Workers’ Compensation claim number and the insurance carrier that your employer uses?

The North Carolina Industrial Commission maintains a statistics hotline at (919) 807-2506 to answer these questions.

What should you do if your employer does not acknowledge or otherwise refuses to honor your claim?

In general, it’s a good idea to connect with a North Carolina workers compensation attorney ASAP. You also should notify the NCIC and all relevant healthcare providers.

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North Carolina Industrial Commission

NC Workers Compensation Act

North Carolina workers’ compensation insurers, independent employers, and laborers paid close attention to California Insurance Commissioner Steve Poizner’s July 8th announcement that rejected increases for workers’ compensation rates. Poizner, who many believe might be positioning to run in California’s next gubernatorial election, argued that inefficiencies in workers’ comp bureaucracy indicate that rates should not be arbitrarily raised. Various parties reacted predictably to Poizner’s announcement. For instance, California’s State Compensation Insurance Fund, the largest insurer in the golden state and a model for many North Carolina workers’ compensation insurers, vowed to increase rates by 15%. The Workers’ Compensation Insurance Rating Bureau argued that the state rate should be raised by almost 24%.

Nevertheless, Governor Schwarzenegger and other California GOP operatives lauded Poizner’s decision not to advocate a “pure premium” increase. But industry watchers believe that compensation rates will likely continue to climb in California and elsewhere, particularly in states with diverse economies, such as North Carolina. Whether CA’s regional moves will influence policy in North Carolina remains to be seen. California traditionally serves as a policy bellwether for other states. But North Carolina is often slow to follow the lead of its counterpart on the opposite coast.

Poizner Says No to Workers’ Comp Rate Increases, Sacramento Business Journal, July 8, 2009

Poizner Balks at Workers’ Comp Hike, Los Angeles Business Journal, July 8, 2009

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‘Pure Premium’ Q&A

Steve Poizner

According to a recent Fitch Ratings report, unexpected underwriting losses in 2008 have challenged the North Carolina workers’ compensation insurance industry’s financial support structures. The combination of increased competition (which generally leads to reduced rates) and fewer claims filed (which generally leads to higher rates) has thrown many North Carolina workers’ compensation insurance companies for a loop. Many NC executives in the industry vividly remember the mid-1990s, when an unusual string of bad luck sent blue-chip companies out of business and upset both the regional and national workers’ comp markets. Excessive competition and a sudden, surprising surge in claims drove that particular “perfect storm,” which forced companies to make good on policies that they had sold at reduced rates.

What do the latest numbers suggest about how future North Carolina workers’ compensation insurance claims will be processed? At this point, it’s too early to say. The North Carolina economy is still struggling to recover from the crippling effects of the national economic downturn. When the economy shrinks, employers take fewer risks and thus expose workers to less vulnerability. This theoretically should drive insurance prices down. At the same time, however, hard-pressed North Carolina entrepreneurs may be tempted to go without insurance or to under-insure to cut costs. This should theoretically drive prices up.

In any event, if you’re a North Carolina worker laboring in this environment, you should learn about your employer’s workers’ compensation policies. If you get hurt on the job and your employer does not have adequate insurance protection, you may not be able to get compensation owed to you – at least without a drawn-out legal fight.

Unprecedented hike in workers’ comp insurance rates is unnecessary, Capitol Weekly, June 18, 2009

WC market faces considerable challenges in ’09, group says, Risk & Insurance, June 29, 2009

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Fitch Ratings

Workers’ Comp Insurance

After a drawn-out legal battle that consumed much of the political oxygen in Minnesota for over half a year, Al Franken was finally sworn-in as the junior senator from Minnesota this week, giving Democrats a filibuster-proof majority of 60 votes in the U.S. Senate. Franken beat Coleman by a nose, notwithstanding obstacles such as a 2005 claim from the Workers’ Compensation Board of New York that Franken’s company, Alan Franken Inc., had failed to pay for workers’ comp insurance for three years. (Similar North Carolina workers’ compensation claims often beset small business owners in NC.) The charges against the former comedian came in the midst of a heated battle for the Democratic Party’s nomination and nearly cost Franken the election.

Franken’s troubles began in 2005, when New York’s Department of Labor noted that Alan Franken Inc. had employed up to 17 people as independent artists and writers. The NY Workers’ Compensation Board sent Franken a number of notices, to which neither he nor his company responded, after which the state issued a judgment against the comedian. Following the public revelations of his workers’ compensation insurance mishap, Franken quickly paid off monies owed.

Local politicos embroiled in North Carolina workers’ compensation insurance problems similar to Franken’s would do well to take heed of this cautionary tail and manage their insurance issues prior to launching their campaigns.

Franken faces $25,000 workers’ comp penalty, Star Tribune, March 12, 2008

New York State Fines Al Franken’s Corporation $25,000 for Not Carrying Workers’ Compensation, FOX News, March 5, 2008

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Al Franken

Norm Coleman

North Carolina workers’ compensation insurance underwriters have struggled to parse news about the employment sector to determine best practices for the new fiscal year. Even the National Counsil on Compensation Insurance’s top economist has voiced consternation about a shrinking premium base. Part of the fretting has to do with the national recession. With fewer employers able to hire, fewer North Carolina workers’ compensation policies are needed. At the same time, some employers have been taking on riskier kinds of work to compensate for shrunken staffs. For instance, an independent contractor who in better times might hire out the cleaning of his industrial machinery might in the present climate take on the work himself to cut costs. By taking on potentially dangerous work that they haven’t effectively trained for, business owners may put themselves at greater risk for getting hurt (and, therefore, for filing workers’ compensation claims).

While the debate rages about whether the slumping economy may help or hurt the North Carolina workers’ compensation insurance industry, employers and workers alike have been clamoring for stability. Employers worried about volatile insurance costs will generally be more likely to hold off on hiring new employees, promoting from within, or expanding operations. (Some employers may even illegally forgo purchasing workers’ comp insurance to trim costs.) To jumpstart the North Carolina economy, therefore – particularly the industrial and manufacturing sectors — state employers need budgetary flexibility, and employees need better guarantees of their financial and physical protection.

Recession a Bane and a Boon to Workers’ Comp Writers, Insurance News Net, June 6, 2009

No Return to Normal, Washington Monthly, April 2009

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National Counsil on Compensation Insurance

Workers’ Comp Insurance Underwriting

The US House of Representative’s Bill no.635, also known as the National Commission on State Workers’ Compensation Laws Act of 2009, may hold significant implications for North Carolinians who have been hurt on the job. The House Bill will require a congressional commission to examine the recommendations and findings from last year’s commission and to reevaluate the adequacy of current workers’ compensation laws in North Carolina and elsewhere. The commission has the power to suggest extra remedies for workers, including increased benefits, medical coverage, and legal resources. Currently, the Bill is in the House Committee on Education and Labor.

The Act may also provide extra benefits for sick North Carolina firefighters who have been exposed to carcinogenic elements during the course of work. Emergency responders often enter environments filled with smoke, volatile organic compounds, and other carcinogens. Research suggests that professional and volunteer firefighters suffer higher than average rates of related cancers, lung ailments and other conditions. An amendment to the current North Carolina workers’ compensation rules to provide extra benefits to cancer stricken firefighters and first responders might have retroactive applicability. This is because lung ailments, cancers, and other chronic conditions often take years (if not decades) to manifest. A single acute inhalation from one fire, for instance, can result in melatomas decades later. Repeated exposure to low, but not negligible, levels of carcinogens can increase risk for diseases and certain cancers. Firefighters also show higher rates of asbestos inhalation damage, psychological trauma, and certain repetitive stress injuries.

Workers Compensation Benefits To Be Extended To Firefighters With Cancer, WebWire, May 26, 2009

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House Committee on Education and Labor

US House of Representatives