News and Analysis
Workers’ Comp Law Sets No ‘Survival’ Requirement for Scheduled Loss Benefit
Under provisions of Ohio’s workers’ compensation law, when a worker is rendered quadriplegic by a workplace accident and survives for a short time but does not regain consciousness before dying, the worker’s surviving spouse is entitled to scheduled loss compensation for her spouse’s loss of use of both arms and legs, according to a decision announced today by the Supreme Curt of Ohio.
The case involved William Moorehead, who suffered major spine injuries that rendered him a quadriplegic in a workplace accident where he fell approximately 15-20 feet and landed head-first on a concrete floor. He was taken to an emergency room, where he died less than two hours after the accident due to massive head trauma and hemorrhaging without regaining consciousness. His widow, Sandra Moorehead, filed a death claim under the state workers’ compensation program and was granted a death benefit.
Sandra subsequently filed a second claim seeking benefits under R.C. 4123.57(B), a section of the workers’ compensation statute that provides for the state to make continuing scheduled payments over a number of weeks to a worker who suffers the loss, or loss of use, of one or both arms or legs. If a qualifying worker dies before all of these loss-of-limb benefits have been paid, the statute allows the surviving spouse of the injured worker to continue receiving the scheduled weekly benefit payments under certain circumstances.
The Industrial Commission denied Sandra’s claim for scheduled loss-of-limb benefits. It held that Moorehead did not suffer an “actual” loss of use of his arms or legs because he was comatose for the brief time between the accident and his death, and therefore did not “perceive or experience” any suffering or disability as a result of his quadriplegia before he died. Sandra appealed the commission’s ruling. A magistrate of the 10th District Court of Appeals recommended that that court grant a writ of mandamus ordering the commission to recognize Moorhead’s injuries as an actual loss of use of his limbs and to process his wife’s claim accordingly. The 10th District rejected the magistrate’s recommendation, holding that the Industrial Commission’s ruling denying Sandra Moorhead’s loss-of-limb claim was not an abuse of the commission’s discretion. Mrs. Moorehead exercised her right to appeal the 10th District’s ruling to the Supreme Court.
In today’s decision, written by Chief Justice Thomas J. Moyer, the Court overruled the 10th District and held that Moorehead was entitled to scheduled loss benefits under the loss-of-limb provision.
The Chief Justice wrote that: “The court of appeals deferred to the commission’s interpretation that ‘loss of use’ does not occur when an injured worker ‘survives an industrial injury in an unconscious state for only a brief period and never actually experiences the disabling effects of the injury.’ We disagree.” Citing the plain language of the statute, Chief Justice Moyer noted that it “provides that compensation is payable to an employee when the employee loses a body part that is listed on a schedule set forth in the statute,” and said the statute makes no reference to either a worker’s duration of survival after an injury or cognizance of his injuries.
“We have long recognized that neither administrative agencies nor this court ‘may legislate to add a requirement to a statute enacted by the General Assembly.’ … Rather, in interpreting statutes ‘it is the duty of this court to give effect to the words used, not to delete words used or insert words not used,’ wrote the Chief Justice. “We therefore cannot condone the commission’s addition of a requirement that a worker survive for some extended period of time, left unspecified by the commission or General Assembly, when considering the worker’s entitlement to a scheduled loss benefit. Similarly, there is no language in R.C. 4123.57(B) requiring that an injured worker be consciously aware of his paralysis in order to qualify for scheduled loss benefits.”
Moyer concluded that “(t)his court should not graft duration-of-survival or cognizance requirements to R.C. 4123.57(B), because the statute has no text imposing them. Public policy arguments relative to the requisites of scheduled loss benefits pursuant to R.C. 4123.57 are better directed to the General Assembly.” The majority opinion was joined by Justices Alice Robie Resnick, Paul E. Pfeifer, Maureen O’Connor and Judith Ann Lanzinger.
Justice Evelyn Lundberg Stratton entered a separate concurring opinion, joined by Justice Terrence O’Donnell, in which she agreed with the majority holding that the commission’s denial of scheduled loss of limb benefits for Moorehead’s injury was not supported by R.C. 4123.57. She added, however, that in her view a recent Supreme Court ruling in State ex Rel. Estate of McKenney v. Industrial Commission should be applied to limit Sandra Moorehead’s award to one week of scheduled loss benefits.
Citing the Court’s holding in McKenney that “the loss of earning capacity that scheduled loss compensation was intended to ameliorate ceases upon the death of the injured worker,” Justice Stratton wrote that “the presumed loss of earning capacity ceased upon William Moorehead’s death. At that point, Sandra Moorehead became entitled to apply for death benefits under R.C. 4123.59. I do not believe that the General Assembly intended for duplicate awards under these circumstances.”
(From the Ohio Supreme Court)
BWC To Save $24.5 Million through Administrative Improvements
BWC To Save $24.5 Million through Administrative Improvements
The Ohio Bureau of Workers’ Compensation (BWC) announced Thursday it has mailed contracts to 25 managed care organizations (MCOs) for the 2007 calendar year.
According to BWC, “The contracts reflect BWC’s desire to increase the MCOs’ focus on productive and cost-efficient medical case management for injured workers. It also provides better value for employers that pay into Ohio’s workers’ compensation system by reducing costs by nearly $24.5 million. MCOs will have until Dec. 27 to sign the contract.”
“Providing the best care to injured workers and the best value to Ohio employers requires continual review and adjustment to business practices, including care management,” said BWC Administrator Bill Mabe. “The new contract is a significant first step towards enabling MCOs to focus on managing the medical care for injured workers and will streamline the processes involved, making the entire system more efficient and effective.”
Specific changes to the MCO contract include a reduction in basic compensation from the current eight percent of premium dollars to 7.25 percent, which will save $16.5 million annually. In addition, BWC announced it has initiated an early retirement program to reduce personnel over the next year, cutting costs by an additional $8 million.
Beyond compensation, BWC worked with the MCOs to implement process changes that will optimize the system. “These enhancements will eliminate much of the redundant paperwork related to filing claims and allow MCOs to focus their resources on case management, not data entry,” said Mabe.
First, BWC will introduce a series of technological improvements designed to simplify and streamline the medical care processes, such as filing first reports of injury and paying providers. These changes will result in increased accuracy, faster provider payments, and greater value for employers paying premiums.
Auditing and compliance standards for contracting MCOs have changed, too, BWC said. In 2007, audits will be based on a risk assessment against stated criteria and will be conducted as necessary, rather than on an annual or calendar basis.
Finally, BWC will give MCOs better access to pharmacy information to facilitate better overall medical management.
BWC Projects Positive Financial Results
The Bureau of Workers’ Compensation Oversight Committee was told this week (11/16) that BWC’s efforts to complete Agenda ’06 projects are producing positive financial results for the first quarter of Fiscal Year 2007. Net assets have increased from $1.6 billion on June 30, 2006 to $2.1 billion on Sept. 30, 2006.
Net investment income contributed $602.2 million to the growth of net assets. This growth is partially offset by an operating loss of $177.3 million. While premium and assessment income increased, workers’ compensation benefits and compensation adjustment expenses also increased from the prior fiscal year.
FY07 results are being positively affected by growth in private employer premiums resulting from the 3.9 percent rate increase for the July 1, 2006 policy period.
Discounts issued to eligible employers for participating in the safety council incentive program reduced premium income by $22.9 million in September 2006 compared to a $6.8 million reduction in September 2005. The amount of the discount increased from two percent to four percent and the number of employers eligible for the discount increased.
The increased expenses in FY07 are primarily due to increases in the projected reserves for permanent total disability (PTD) claims compared to the projected reserves for these claims in the prior fiscal year. Medical payments in FY07 are $23.5 million lower than in the same period of FY06. Payouts for lump sum settlements have increased by $10.3 million this fiscal year due to the settlement pilot focusing on higher reserve PTD and death claim settlements.
The preceding article is an excerpt from The Hannah Report, Ohio’s daily legislative newsletter providing independent, timely and comprehensive coverage of state government. For more information, please contact Hannah News Service at 614.228.3113. From Hannah News Service
BWC Transfers Audit Investigation to Inspector General
Ohio Bureau of Workers’ Compensation (BWC) spokesperson Nancy Smeltzer Thursday (11/02) told Hannah News that the investigation of rate adjustments has been transferred to the Office of the Inspector General. She said, “This should lend assurance that the investigation is being conducted in a thorough and independent manner. Any review of the records will be done through the attorney general and the inspector general.”
Wednesday, Democratic attorney general candidate Marc Dann had made another public records request to BWC concerning the internal audit of employers’ premium rate adjustments, giving them until 2 p.m. on Thursday to produce the records. He asked for:
• All public records (regardless of whether maintained electronically or otherwise) used/reviewed in connection with the Manual Override Special Audit released on Nov. 1, 2006.
• All public records (regardless of whether maintained electronically or otherwise) reflecting communications to or from employees and/or agents of the Ohio Bureau of Workers’ Compensation regarding the reasons for, scope of, methodology for, and/or assignment of personnel for the Manual Override Special Audit released on Nov. 1, 2006.
• All public records (regardless of whether maintained electronically or otherwise) regarding communications to or from employees and/or agents of the Ohio Bureau of Workers’ Compensation requesting and/or directing the initiation of criminal investigations related to the Manual Override Special Audit released on Nov. 1, 2006.
However, the deadline came and went with Dann’s receiving no records.
BWC Releases Audit Showing Gaps in Adjusted Rates
The Ohio Bureau of Workers’ Compensation (BWC) released an internal audit this week (11/01) that showed gaps in records for rate adjustments for employers and a lack of controls on the overall process.
BWC Administrator William Mabe said a special internal investigation has been launched to look into 27 cases where there were questions on the adjustment. According to the audit, these cases did not appear to follow fixed and equitable rules regarding rate making, appeared to contravene existing policy, and there was no documentation authorizing or explaining the reason for the adjustments.
Mabe said at this point, he doesn’t have any evidence of fraud, but there were enough questions to investigate further. He said the inspector general, state auditor and attorney general’s offices have been notified of the investigation.
During a press conference held on Wednesday, Mabe said the bureau was not ready to release the audit because it is an ongoing investigation, but said there were enough inquiries into it that he felt at least a partial report should be released. He said it was not a final product and more will be added later.
The report found a lack of controls over what the bureau calls “manual overrides.” It does not mention names or discuss if any of the overrides were performed under political pressure.
Some of the cases that are highlighted in the report include one where a company was hit with a claim from an electrical employee who died after he retired from asbestosis. The company was faced with being removed from their group rating program, but the company told the BWC that it would be forced to close and move to another state. The company would not meet with BWC representatives to discuss an alternative to reduce the impact of the claim and would only consider the complete elimination of the claim. The entire claims cost was later removed from the company’s record and authorization for the removal came through an email from management.
The audit recommended new policies be written for claims adjustments, called for overrides to be moved to a different department within the bureau’s finance division to eliminate any conflicts of interest and called for strengthening quality assurance on the rates and claims.
Sen. Marc Dann, Democratic candidate for attorney general, said the audit raises more questions than answers, and called for the U.S. attorney’s office to investigate. He said the audit failed to name who has been responsible for the adjustments and whether political pressure had been used to get them.
“If somebody’s rate was arbitrarily reduced as a political favor, that means all the other rates for small businesses go up,” Dann said.
He also said he is making a public records request into all manual overrides for the past six months and said he will sue if necessary to get them.
Voters Face Up to Five Ballot Issues in November
By the time voters hit the polls in November, they may have up to five statewide issues to vote on. Two of the five issues hit employment law matters and will be of great interest and concern to manufacturers.
After a year in which it seemed like dozens of potential issues were starting up, five dealing with smoking, gambling, workers’ compensation and minimum wage were the only ones submitted before the deadline on Wednesday.
James Lee, a spokesman for Ohio Secretary of State Ken Blackwell, said the issues must be certified by Sept. 8, at which time the office will inform county boards of elections which candidates and issues are on the statewide ballot so those boards can set their voting machines. In the meantime, the Ohio Ballot Board is expected to meet soon to finalize the language of the issues as they appear on the ballot.
One issue that won’t be on the ballot is the Tax Expenditure Limitation amendment that had been pushed by Blackwell. Although the signatures had been certified, Lee said the office has received the necessary letter from the amendment’s organizers asking for it to be withdrawn. He said the office won’t submit it as a ballot issue on Sept. 8 with the others.
OMA members should pay special attention to the 1) SB 7 Referendum, and the 2) Minimum Wage Ballot / Employment Privacy issue. Both issues have the potential to distort Ohiolaw-making and will result in greater employer liability and costs. Some level of individual company advocacy will be needed in the coming weeks and months if manufacturers are going to impact these outcomes. The OMA has been leading an effort to challenge efforts to put the SB7 repeal on the ballot. OMA member financial support have greatly aided in this effort.
The ballot issues that were submitted are as follows:
2006 Ballot Issue Summary
August 9, 2006
Portions of the preceding article is an excerpt from The Hannah Report, Ohio’s daily legislative newsletter providing independent, timely and comprehensive coverage of state government. For more information, please contact Hannah News Service at 614.228.3113. From Hannah News Service. From Hannah News Service
Strickland’s Running Mate Criticizes Blackwell Turnpike Plan
Over the past few days Ted Strickland’s campaign has been targeting gubernatorial opponent Ken Blackwell’s plan to lease the Ohio Turnpike for criticism.
Strickland’s running mate Lee Fisher issued press releases this week highlighting a study and media reports that found tolls on privatized roads have increased.
“Expert analysis of other toll-road privatization schemes confirm what we’ve feared all along — leasing off our Turnpike will increase tolls, plain and simple,” Fisher said. “Selling off one of our state’s most valuable assets that was built by Ohioans and has been run by Ohioans to a foreign company and tying our hands for the next 99 years is incredibly short-sighted. It’s just one more of Mr. Blackwell’s quick-fix, short-sighted political gimmicks.”
Fisher cited stories from the Houston Chronicle, which said privatization studies in Harris County found officials would have to give up control of toll prices if an 83-mile toll system were privatized, and from a Toronto Star story in which officials said a privatized highway had become “a privately run vacuum cleaner for sucking money out of commuters’ pockets.”
Fisher also noted that truckers left the Ohio Turnpike and were traveling on local roads to avoid high tolls.
Dems Respond to DeWine Ad, Start War of Words
The negative advertising in the U.S. Senate race is going full force with nearly four months to go to the election.
The Ohio Democratic Party unveiled its response to a recent ad by U.S. Sen. Mike DeWine that attacked his opponent, U.S. Rep. Sherrod Brown, for being “weak on national security.”
The new ad criticizes DeWine for using 9/11 images in his advertisement and tries to paint him as being weak on security.
The party also put out a statement criticizing DeWine for his negative ad, saying negative campaigning is not new to DeWine and highlighting a series of ads he ran against former U.S. Sen. John Glenn when he ran in 1992.
“Mike DeWine should be ashamed of exploiting the hallowed ground of 9/11 for his partisan purposes,” said party Chair Chris Redfern in a statement. “When you look at his own voting record, as a member of the Senate Intelligence Committee, his exploitation of 9/11 and attacks on Sherrod Brown show how out of touch he really is with his own responsibility for homeland security issues.”
The Ohio Republican Party responded by releasing excerpts of media stories about Brown’s voting record on national security.
“The Democrats are trying to paint over a rusty bucket,” Ohio Republican Party Chairman Bob Bennett said in a statement. “Sherrod Brown can gloss over his pathetic record on national security, but the truth will eventually eat its way through. Brown has done more to leave our country vulnerable to terrorism than nearly anyone in the U.S. House. Anyone who looks at his record on national security knows it’s toxic, even his fellow Democrats.”
Group Continues Fight To Keep Issue 1 on Ballot
Issue 1, which would have overturned certain reforms to the Ohio Bureau of Workers’ Compensation passed by the General Assembly this year, remains up in the air after a court ruling that the secretary of state’s office was reasonable when it announced the effort had failed to get the required number of signatures.
Proponents of the ballot issue had claimed that the secretary of state’s office had prematurely set a 10-day deadline for them to get more signatures while they were still in the process of challenging the rejection of some of the signatures on the county level.
Don McTigue, an attorney representing the proponents, said an appeal was filed with the Ohio Supreme Court on Thursday along with a motion to keep it on the ballot. He said he believes it makes more sense to leave the issue on the ballot for people to vote on pending a court review.
McTigue said the group is also planning further action on a number of signatures that were thrown out on the county level. He said they found cases such as signatures that were disqualified on the grounds of the person’s not being registered to vote, and the group’s finding the person’s registration upon further examination.
He said the secretary of state’s office put pressure on the county board of elections to quickly certify the signatures, causing mistakes.
“We had a rush job in checking petitions,” he said.
Issue One – Court of Appeals Opinion
Opinion of the Tenth District Court of Appeals reversing Judge Connors decision. The Court concluded that the Secretary did not err in sending the notice of deficiency when he did and triggering the ten-day period. They also found that Judge Connor abused his discretion in in issuing the preliminary injunction and reverse his ruling. The stay is lifted.
Issue One – Court of Appeals Opinion