Texas Workers Compensation Law Blog : Texas Workers' Compensation Lawyer & Attorney : John Gibson Law Firm : TX Injured Workers : Lubbock, Amarillo

 A new study by the Cambridge, Mass. based Workers Compensation Research Institute (WCRI) shows that Texas has major deficiencies in the amount of benefit payments and the overutilization of insurance carriers on cost containment efforts.

Medical costs per workers’ compensation claim in Texas were stable in 2007, following several years of dramatic decreases. However, in several key areas Texas showed key areas of poor performance in workers compensation, according to a new study by WCRI.

The study, Monitoring the Impact of Reforms in Texas: CompScope™ Benchmarks, 10th Edition, said that afte 2006, Texas medical costs per claim were 19 percent lower than the typical study state for claims with more than seven days of lost time. Fee schedule decreases combined with increased management of medical care by payors through utilization review and other means were behind the decline.

At the same time, though, WCRI reported that medical cost containment expenses per claim continued to grow rapidly in Texas, even after medical costs began to decline. At an average of $2,818, Texas had the highest medical cost containment expenses per claim among the study states in 2007/2008, 37 percent higher than typical. This means that even though the state legislature enacted reforms to contain costs, insurance carriers were aggressively seeking to reduce legitimate costs even further.

The study noted that indemnity benefits per claim rose ten percent in 2007, largely due to a nearly 25 percent increase in the maximum benefit for statutory weekly temporary total disability. But, despite this significant increase in the maximum benefit, the percentage of workers whose benefits were limited by the maximum was 17 percent, more than double the percentage in the typical study state. Thus, Texas lags far behind other states in calculating the maximum benefit paid under workers comp.

The study also found that from 2002 to 2006 indemnity benefits per claim decreased 9 percent overall, largely the result of a decrease in the duration of temporary disability. Since 2002, WCRI said the average duration of temporary disability for injured workers in Texas declined by more than three weeks for claims at an average of 36 months of experience, likely related to the decrease in medical utilization under HB 2600 and payor focus on managing medical care.

In addition, the study said Texas had lower permanent partial disability/lump-sum payments compared to the typical study state.

The Workers Compensation Research Institute is a nonpartisan, not-for-profit membership organization conducting public policy research on workers’ compensation, health care, and disability issues. Its members include employers, insurers, governmental entities, insurance regulators and state administrative agencies in the U.S., Canada, Australia and New Zealand, as well as several state labor organizations.

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 Texas is an employment at-will state. What this means is that your employer can fire you at any time for any reason because your employment is at the will of the employer. However, there are situations where your employer cannot fire you. Often times when a workers' compensation claim is filed, the injured employee is worried about his/her job and rightfully so, since the employment is at-will. But here are some things to watch for to use as leverage in keeping your job:

1. Race/Sex/Age/Religious Discrimination - you cannot be fired for one of these reasons.
2. Public Whistleblowers - you cannot be retaliated against for blowing the whistle on a public employer.
3. Refusing to commit a crime.
4. Jury Service - You cannot be fired for missing work for jury duty.
5. Subpoena Compliance - You cannot be fired for missing work for obeying a subpoena to appear in court.
6. Military Duty - You cannot be fired for missing work for military duty.
7. Voting - You cannot be discriminated against for voting.
8. Union Membership - You cannot be denied employment based upon union membership.
9. Because Your Employer has been given a Child Support Withholding Order.
10. Agricultural Laborer Protections - Agricultural workers cannot be discriminated against for seeking information or working with authorities regarding hazardous chemicals in use.
11. Handling Hazardous Chemicals - Likewise, anyone who handles chemicals of more than 55 gallons or 500 pounds is protected.
12. Nursing Home Workers - nursing home employees are protected from reporting abuse and neglect that takes place in the facility.
13. Health Care Facility Workers  - You are protected from reporting abuse, neglect, illegal, unethical or unprofessional conduct of persons associated with health care facilities.
14. And finally, you cannot be fired or discriminated against for filing a workers' compensation claim.

If you have been fired and you believe one of these exceptions to the at-will nature of you employment applies to you, then you should seek out a lawyer as soon as possible.

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 The new maximum and minimum weekly benefit rates for 2010 have been published. The rates can be found here.

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The Office of Injured Employee Counsel was created by the legislature to better assist injured workers in the handling of their workers compensation claims than had been had previously by an ombudsman program administered by the Division of Workers Compensation. When the current workers compensation system was created, ombudsman worked within the Division to assist injured workers. This created problems for insurance carriers as it gave the ombudsmen access to files and information that insurance carrier attorneys might not have access to. In addition, the ombudsman program was overseen by personnel within the Division of Workers Compensation. Because the Division has to maintain impartiality, the ombudsman program suffered because there was no incentive to help injured workers. Excellence in customer service was valued over the results obtained for the claimant.

When the changes were passed by the legislature creating the Office of Injured Employee Counsel, what was lost on the legislature was the fact that the ombudsmen were not advocates, they were there to assist workers. The legislature explicitly stated that the office's purpose was to advocate for workers as a class, but anyone could see that the office would not distinguish between advocating for workers as a class and merely assisting workers individually.

So, with an office that is advocating for workers individually, what do you do when your customers have competing interests? This is exactly the problem confronted by our office recently. We took over a death benefits file for a claimant-beneficiary who had previously used the services of the Office of Injured Employee Counsel. However, while our client was the spouse of the deceased, another claimant emerged claiming to be common-law married to the deceased during a period when our client and the decedent were separated. When these two women were both "assisted" by the Office of Injured Employee Counsel, it was comical to see the notes taken by their office. One ombudsman would write that she had recommended woman number one to get a piece of evidence to establish her claim. Then, a second ombudsman, assisting woman number two would see that notation in the file and recommend that her customer go get some evidence to refute that piece of evidence. And around and around this went--until one of these women came to us for representation.

You see, despite how easy it is to trash lawyers, we do have rules that we must follow regarding conflicts of interest. These rules make sure that a client's secrets and a client's strategies remain confidential. This is one of the reasons why hiring a lawyer is important. Not only is a lawyer trained in the law and knows the law--a lawyer has certain rules to follow that insure that what you tell a lawyer stays private. And when you go to a lawyer, all lawyers have file systems in place to guarantee that you do not hire a lawyer who is already working for the other side on your case. Your lawyer is your advocate, no one else's. And what you tell a lawyer is confidential--the other side doesn't find out until your hearing date what your trial strategy is. Isn't that the way it should be?

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 Nothing going on in workers compensation this week. Almost all attorneys, hearing officers and a few insurance adjusters are at the State Bar Advanced Workers Compensation Course in Austin.

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Texas is the only state that doesn't make workers compensation insurance mandatory for at least some employers. This is a shame, because workers' compensation insurance is beneficial to both employees and employers as Sally Spooner, a school teacher, and the Cody School District, her employer, recently found out.

The Cody School District is the local school district in Cody, Wyoming. Recently, the district decided to discontinue providing workers compensation insurance for their employees as the superintendent and school board felt that $175,000.00 in annual premiums was not a good way to save money for the district. They couldn't have been more wrong. One of their teachers, Sally Spooner, slipped and fell and ended up having to have her right let amputated just below the knee after suffering serious injuries. Now, this incident will likely cost the district far in excess of what they would have paid in annual workers' comp premiums.

This incident illustrates the give and take of the workers' compensation system. For employers, workers' compensation insurance protects them from the big money judgments for pain and suffering, loss of future earning capacity, loss of consortium, disfigurement, etc. Typically, workers' compensation claimants recover their medical expenses, lost wages and some kind of future impairment benefit. They downside for the employer is that workers compensation is no-fault insurance. Thus, even if an employee is injured through no fault of the employer, the insurance compensates the claimant. For the claimant, obviously they receive benefits without having to prove fault--and typically those benefits start being paid very quickly versus the length of time it would take if you had to prove negligence in a court of law. However, the injured claimant gives up the right to sue their employer for their employer's negligence in causing the injury. Thus, the injured party cannot recover the big money damages that we often hear about in the news. Thus system serves both parties equally. But more importantly, providing workers' compensation insurance for employees is the right thing to do. Just look at the comments to the hyperlinked article about Ms. Spooner, above, to see what I mean.

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 This week the Eastland Court of Appeals affirmed an order by the trial judge for sanctions against two Attorneys General for frivolous filing of a lawsuit.

The case, titled State Office of Risk Management v. Foutz, involved a Texas Department of Criminal Justice corrections officer who witnessed the stabbing and murder of an inmate and was powerless to stop the event. As a result, she developed Post-Traumatic Stress Disorder, or P.T.S.D., and filed a workers' compensation claim. The State Office of Risk Management (SORM) is the state agency charged with handling workers compensation claims for state employees. SORM disputed the claim but requested that Officer Foutz be seen by one of their doctors. When even SORM's own doctor concluded that Officer Foutz suffered from PTSD, the Division of Workers Compensation found in favor of Officer Foutz. As a result, SORM appealed the division finding by suing Officer Foutz in state court to overturn the Division of Workers' Comp's finding. After a jury heard the evidence and ruled for Officer Foutz, the trial judge ordered the two trial attorneys to explain why they and SORM should not be sanctioned or fined for taking up the Court's time by filing such a frivolous lawsuit. After hearing their explanation, the trial judge sanctioned the two attorneys $5,000 and $3,000 and sanctioned SORM $100,000. The Court of Appeals upheld the sanctions but sent the matter back to the trial judge to explain the $100,000 sanction against SORM.

What is important about this case, besides the fact that this brings to light the misdeeds of SORM, is that in Texas you cannot sue the State Office of Risk Management for bad faith handling of a workers' compensation claim. The only way to punish SORM is through the imposition of sanctions. Thus, until the Texas Legislature changes the law to allow its own employees to seek justice when their workers claims are mishandled, we will have to rely upon the courage of judges like those in the Foutz case. Unfortunately, the trial judge in this case was retiring (which may explain his courage in assessing these sanctions). Judges in Texas are elected and are often reluctant to impose sanctions despite such egregious behavior because of the effect it might have on their re-election efforts.

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While large, multi-national insurance companies like AIG are struggling to stay solvent, one workers compensation carrier in Texas is doing quite well. Texas Mutual Insurance Company is the largest workers compensation insurer in the state. It was created in 1991 by the Texas Legislature because of the lack of insurers doing business in Texas. In 2001 the Texas Legislature redesigned their charter and they became a mutual insurance company. What this means is that the company is owned by the policy holders rather than being a publicly held corporation. What this also means is that instead of paying dividends to stock holders, it pays dividends to its policy holders.

Yesterday, Texas Mutual Insurance Company announced they were paying $818,000 in dividends to policy holders in the retail and construction purchasing groups. What this means is that retailers like Walmart or construction companies like Linbeck Construction, if they have workers compensation insurance with Texas Mutual, enjoyed a rebate check from Texas Mutual for the financial success Texas Mutual is experiencing. This announcement comes on the heels of a $446,000 dividend payment in November to policyholders in the manufacturing group.

Even more significant was the announcement by Texas Mutual that in the past ten years they have paid policyholders more than half a billion dollars in dividends. Those familiar with Texas politics are aware that the favorite whipping boy of the insurance industry and the Texas Legislature is the workers compensation industry. While Texas Mutual is enjoying healthy profits, in the last ten years claimants have seen increasing restrictions to their right to recover benefits. 

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