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WORKERS’ COMPENSATION REFORM UNDER O.S. TITLE 85A…

WHAT WAS BROKEN, AND HOW WAS IT FIXED?

Richard M. Fisher, President, Client RelationsConsolidated Benefits Resources

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“The Grand Bargain”

Source: National Council on Compensation Insurance, 2013, based on 2013 loss costs.

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“Why Change?”

Oklahoma Arkansas Texas Region Country0

0.5

1

1.5

2

2.52.13

0.750000000000001 0.65000000000

00010.93

1.41

Average Voluntary Loss Costs Per NCCI

State

Pure Loss Cost

Source: NCCI 4

Past Workers’ Comp Reforms Kept Inflation At Bay, But…

• 8810 Loss Cost, per $100 of payroll, 2002 $0.35

• 8810 Loss Cost, per $100 of payroll, 2012 $0.36

Source: NCCI 5

Loss Cost Comparison Between Surrounding States

Code 8810, "Clerical" $-

$0.05

$0.10

$0.15

$0.20

$0.25

$0.30

$0.35

$0.40 $0.36

$0.11 $0.11

OklahomaTexasArkansas

Loss Cost per $100 of Pay-

roll, 1/1/2013

Source: Oklahoma Workers' Compensation Court 6

“What Caused Oklahoma’s Workers’ Compensation Costs To Be So High?

1992 2002 20120

5,000

10,000

15,000

20,000

25,000

30,000

24,748

18,447

14,726

Form 3 (lawsuits) Filings

Form 3 Filings

Source: Oklahoma Workers' Compensatin Court 7

Did The Problem Lie With The Court System Itself?

Avg PPD Award-OWCC$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

$14,112

$34,579

20022012

Source: NCCI, based on 2008-2009 filings 8

What About Other States?

PPD Claims, per 100,000 workers0

100

200

300

400

500

600

700

800

900 845

233

343

OKARTX

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The New CommissionFor claims after 2/1/2014, cases heard by the Commission. Pre 2/1/14 claims stay with the Court. Old Court will now be called Court of Existing Claims.

3 Commissioners are appointed to run the system, who are political appointees, and serve staggered terms-6, 4 & 2 years.

Current Commissioners are Business Oriented.

The New Commission, cont.• The new Commissioners are:

• Troy Wilson• Denise Engle• Robert Gilliland

• Court Administrator has been replaced by an Executive Director-Dr. Rick Farmer

The New Commission, cont.• The Commission has established rules, procedures and

forms.

• Commissioners hire Administrative Law Judges to hear disputes. ALJ’s do not serve a term, and can be replaced by the Commissioners

• ALJ’s are primary hearing officers of the Commission. Focus on speedy resolution of claims and disputes.

• The 3 Commissioners will hear appeals from the ALJ orders.

The New Commission, cont.• The new Administrative Law Judges are:

• Tish Sommer

• Shane Curtain

• Mike Egan

Commission vs Court• Commission-Hearings are not governed by technical or statutory rules of evidence

• Commission-Hearing may be audio recorded

• Court-Trials are governed by rules of evidence

• Court-Court Reporter must be present

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LitigationNo attorney fee if claim not controverted. Commission wants to use an expanded Counselors department to offer assistance to help guide claimant through system, and keep claim from being litigated.

If settlement offer is made, and turned down for a hearing, then claimant’s attorney can only receive 30% of the difference in the amount awarded vs the amount offered .

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Medical Benefits• Employer gets to select Treating Physician, but must provide

treatment within 5 days of notice of injury.

• Only 1 change of physician allowed.

• The employer/insurer provides the list of 3 physicians, and the employee selects from the list.

• If an injured worker misses two medical appointments, not caused by extraordinary circumstances, he will no longer be eligible to receive benefits under the Act. Inability to get transportation is not a valid excuse

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Indemnity Benefits-TTDMax TTD rate has been lowered to $561 from $801.  

TTD only lasts a max of 2 years, from 3 previously. 

TTD payable after 3 days lost time; was previously retroactive to Day 1 if off more than 21 days

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Indemnity Benefits-PPDAllowable PPD was reduced by over 30%, by changing the maximum allowed from 500 weeks to 350 weeks.

No job loss, no impairment: No PPD award will be allowed if an employee returns to his previous employment, at pre-injury or equivalent job (same pay).   PPD will be set aside, and the amount owed reduced each week, according to a schedule based on amount of award divided by 70% of AWW, until the amount is zero.

Indemnity Benefits-PPD, cont. • If employee refuses to return to work, the PPD will be deferred and reduced each week he refuses.

• Permanent Impairment ratings must be in accordance with the AMA Guides to the Evaluation of Permanent Impairment, 6th Edition. We feel these ratings will be much more conservative, and result in savings.

Changes in filing timeframes• A claim for compensation must be filed within one year of date of injury (previously 2)

• A hearing must be requested within 6 months of the date of claim

• Claim barred if employee receives no medical treatment or benefits within one year of date of injury

• Employee must be on job for 180 days before being allowed to file for a cumulative trauma injury

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CC-Form 2, Employers Notice of InjuryMust be filed by employer, within 10 days after notification of injury (per Statute, but Commission Rules require 10 days from 4th day of Lost Time).

Employer can be fined $500 for failure to submit timely.   It is imperative for the employer to send in the CC-Form-2’s to CBR, as they have in the past…after notification of an on the job injury.  This is the only way for CBR to know about medical only claims, the majority of all workers’ compensation cases.

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CC-Form 2A CC-Form 2A, Employers notice to accept or deny claim. Will be filed by CBR.

TTD must be commenced or denied within 15 days of employer notice of injury, and a 2A must be filed, indicating payment or reason for denial.

There is a potential fine for not filing form.

15 days not enough time to get medical reports, investigate claim, in a lot of cases. Extensions for more time may be filed by CBR for additional time.

The New Law Will Help, butKeep Doing What You are Doing

• Safety• Communication• Employee Screening• Investigation• Light Duty• Compassion• Diligence

Jerry Whorton, CEO/PresidentConsolidated Benefits Resources (CBR)Email: jwhorton@cbremail.comPhone: 405-210-6002

Richard Fisher, President, Client RelationsConsolidated Benefits Resources (CBR)Email: rfisher@cbremail.comPhone: 405-715-5033

Workers’ Compensation Commission: www.ok.gov/wcc

Oklahoma Insurance Department: www.ok.gov/oid