New NCCI board. The membership of NCCI has elected Tracy Ryan, William Berkley, Jr., and Russell Huffer, to the 2013 Board of Directors. ncci

New job. Fireman’s Fund Insurance Company has appointed Erik W. Matson to the position of commercial insurance field executive. BusinessWire

New money. Reynolds, Horne & Survant in Macon has settled a workers’ compensation claim for $4.5 million, possibly the largest settlement in Georgia history, according to the law firm. macon.com

New Jersey money. Three employees of the Paterson, N.J. Department of Public Works will get a total of $73,000 to settle separate workers' compensation claims against the city. northjersey.com

New Mexico panel member. Former State Insurance Superintendent Chris Krahling has been named to a panel that will select New Mexico's top insurance regulator. He and eight other committee members will select the next superintendent of insurance, who will take office in July. kob

New review. The California Department of Industrial Relations and the Division of Workers' Compensation are reviewing the delays in
processing represented injured workers’ requests for Qualified Medical Examiner panels. dir.ca

Dr. Thomas Bellavia transformed his traditional medical practice in Hasbrouck Heights, N.J., into a so-called medical home where patients are seen by teams of doctors and nurses. He says it has paid off in better, more coordinated care for his patients and healthier income for the nurse practitioners and physicians in his group.

Dr. Mark Holthouse took a different tack—limiting his El Dorado, Calif., clinic to 400 patients a year, and adding services such as acupuncture and fitness coaching. He said he and his team now spend more time with patients, who pay a monthly fee of $220 for a package of basic services, on top of what their insurance plans reimburse the practice.

Like Bellavia and Holthouse, many doctors are changing how they work in response to turmoil in the health care system. Both newly minted and veteran physicians face economic uncertainty amid sharpening demands from the government and insurers to improve quality while curbing costs—trends that accelerated under the 2010 health care overhaul.

The buzz, and anxiety, in the medical profession is palpable—trade magazines tout new coping strategies, doctor groups discuss the transformation of practices. Physicians are experimenting with business models and new practice techniques, hoping to find work that is both financially and personally rewarding.

"It's not just the financial piece," said Dr. Susan Turney, president and CEO of the Medical Group Management Association, the nation's largest membership group of medical practice managers. "It's also the clinical—it's bridging a gap so you can make the best decisions all around."

The changing landscape is reflected in the growing number of doctors who are employed by others, rather than working for themselves. Consulting firm Accenture reported in 2012 that the proportion of independently practicing physicians, working in groups or solo, will fall to 36 percent this year. One-third of those will choose a subscription-based model like Holthouse's.

The majority, though, are seeking steadier salaries and hours: about 91,300 doctors and dentists were employed by community hospitals in 2010, according to the American Hospital Association, 30,000 more than in 1998.

But clinicians remaining independent must invest and innovate.

Bellavia’s goal of offering integrated care has cost him an estimated $300,000 since 2011 for staff training and equipment. The medical home model’s focus on preventive care includes newer technologies, like a weighing scale that reports a patient’s weight directly from home to the clinic, and reminders to patients of routine diabetes or cancer screenings. The Heights Medical Center, as the practice is called, has also expanded from two to five doctors and nurses, and hired a patient coordinator who organizes doctor visits, referrals and prescriptions.

With a medical home accreditation from the nonprofit National Committee for Quality Assurance, the Heights receives higher reimbursement payments per patient from insurance companies like Horizon Blue Cross Blue Shield of New Jersey and Aetna. 

"It was all experimental," Bellavia said. "I had to transform my staff and the way I practice. But it has paid me back considerably." While Bellavia figured out how to increase his insurance reimbursements, doctors like Holthouse are trying to insulate themselves from the insurance system and government budget cuts.

In 2005, Holthouse started what is sometimes called a functional medical practice, a setup that incorporates acupuncture, herbal medicines and a nutrition and exercise program. He soon found that the only way to remain profitable was to increase the number of patients treated at the practice, now called the n1Health Center for Functional Medicine, something he thought would compromise the quality of care.

"We couldn't deliver the kind of care we wanted to with regular insurance," he said.

With the subscription, or concierge, model that he introduced in January,  Holthouse will treat about eight to 10 patients a day who pay about $2,600, in addition to the reimbursements paid by their insurance plans. By contrast, each provider at Heights Medical Center treats up to four patients per hour. Holthouse also has an herbal pharmacy with supplements and nontraditional remedies, and an acupuncturist on staff as part of his effort to offer alternative treatments along with traditional medicine.

Patients at Holthouse’s practice are still responsible for an insurance copayment for medical services that aren’t covered under the monthly fee, which accounts for basic diagnostic tests, physicals and screening. Despite the monthly costs, Holthouse said his patients supported the changes after the practice held 15 “town hall” meetings to explain the new model.

"By the time we did the conversion, one hundred percent understood why we were doing it," he said. "They feel like they're getting time and quality care." He also said that patients were spending less on medications and hospital fees, making the subscription a worthwhile investment.

Holthouse, like Bellavia, does not accept patients with Medicaid, the state-federal program for low-income people, because of the low reimbursement rates. He puts little confidence in the federal government when it comes to paying physicians fairly or streamlining the high cost of health care—one impetus for choosing the subscription-based model.

But James Doulgeris, a health care strategist at research and marketing firm HCP, said physicians who adopt innovative practices will benefit from the federal health law, because it gives financial incentives to doctors and hospitals that hold down costs while improving quality.  

"It's a 180-degree change, but physicians will have a great incentive to provide optimal care and focus on wellness," he said.

Holthouse, however, is not convinced. "Unless you remain independent, you will have no say in what kind of medicine you practice," he said.

Source: Ankita Rao is a staff writer with Kaiser Health News.

With a quarter-century of experience behind them, moot court volunteers are now focusing their efforts on the 26th Annual Earle Zehmer Moot Court Competition scheduled for August 18 and 19 at the 68th annual Workers’ Compensation Educational Conference.

Perennial volunteers Tracey Hyde, Jacqueline Blanton Steele, Richard Sicking, Barbara Wagner, and Mark Zientz are hard at work facilitating one of the most unique moot court competitions in the world. This program is dedicated to providing a stage upon which some of the best young legal minds in the country can display their prowess. Moot court is a program that most law schools include in their curricula. Students are presented with a fictional legal problem. They research the issues, write a brief, and then argue their case before panels of judges.

The Zehmer competition is unique, however. Most programs conduct the competition in rounds, and many rounds are typically judged by professors or attorneys. Few competitions have all rounds judged by sitting judges, like the Zehmer competition. The judges in the preliminary rounds of this competition (to be held on Sunday, August 18) are judges, commissioners, and other adjudicators who hear workers’ compensation cases on a regular basis. This year, judges will likely be from Florida, Georgia, Kentucky, Louisiana, Pennsylvania, South Carolina, Virginia and more. These judges are a challenge for the competitors, and the feedback provided to the contestants is invaluable. 

The final round of the Zehmer competition, which will be held on Monday, August 19, is judged by three current judges of the Florida First District Court of Appeal. The District Court has been responsible for hearing appeals of Florida workers’ compensation cases in Florida for many years. Judge Zehmer was a member of this court, and an avid supporter of this competition. Unfortunately, Judge Zehmer passed away in May 1996 at the age of 64. The Moot Court Competition was then re-named in his honor. Thus, the contestants who rise to the top in the preliminary rounds face the same challenge that will face any attorney at oral argument of a workers’ compensation case, a real appellate court panel. This is a real world experience that few law students will ever experience. The competition is fierce, the rewards are obvious.

The Zehmer competition is also unique in its focus on workers’ compensation issues. Most moot court competitions cover a variety of substantive law. It is the goal of this competition, however, to focus on the interest in workers’ compensation law. As the program has evolved, the fictional questions and issues have turned to a national perspective. This is indeed fortunate as the program attracts competitors from around the country. This year’s competition will include Baylor Law School (Texas), Charleston School of Law (South Carolina), Charlotte School of Law (North Carolina), Florida A&M University College of Law, Florida Coastal School of Law, Florida State University College of Law, Mississippi College School of Law, Nova S.E. University Shepard Broad Law Center, Stetson University College of Law, University of Miami School of Law, University of Pittsburgh School of Law, and University of St. Thomas School of Law.

With a broad geographic appeal, a specific workers’ compensation focus, and sitting judges deciding all rounds, the Zehmer competition is unique. The competitors are bright, enthusiastic and exceptionally skilled. The demonstration of appellate advocacy skills they will stage is not to be missed.

Register today for the 68th annual Workers' Compensation Educational Conference.
See more on this topic and other 2013 conference programs and speakers.

What’s in a name? Sometimes, it is everything. On June 24, 2011, the North Carolina General Assembly enacted a set of reforms for the workers’ compensation system entitled “An Act Protecting and Putting North Carolina Back to Work by Reforming the Workers’ Compensation Act.” By its title alone, the ostensible purpose of the reform was to encourage claimants to return to work.

Indeed, prior to these new legislative reforms, it was nearly impossible to return an injured employee to work. For claims arising before June 24, 2011, the old rules regarding suitable employment still apply. For claims arising on or after June 24, 2011, however, these legislative reforms create a new definition of “suitable employment” and should encourage claimants to accept a new job, even if it pays less than their pre-injury earnings. Although a handful of injured workers may continue to resist returning to work, these new reforms should level the playing field by giving carriers and employers new options to make it easier to get employees back to work. 

The most apparent change to the Workers’ Compensation Act is the inclusion of a definition for “suitable employment” in N.C. Gen. Stat. § 97-2(22). With a statutory definition for “suitable employment,” all parties involved in a workers’ compensation claim, especially the Industrial Commission, now have a much clearer tool to analyze return to work issues. Under the new statutory definition of “suitable employment,” the Act distinguishes pre-maximum medical improvement (MMI) work and post-MMI work.

Prior to reaching MMI, “suitable employment” includes any available employment that is within the claimant’s work restrictions. The employment is appropriate if it is within the claimant’s work restrictions and includes rehabilitative or other non-competitive employment that is approved by the employee’s authorized treating physician. 

Carriers should be cognizant of two important components of pre-MMI suitable employment under the New Reform Act. First, if the injured worker has not reached MMI, carriers must obtain approval of the written job description by the claimant’s authorized treating physician. As a practical point, it is helpful to send the written job description to the authorized treating physician with a Workers’ Compensation Questionnaire requesting approval of the job description.

Next, pre-MMI “suitable employment” under the reforms now includes “make work.” As a result, any job approved by an authorized treating physician prior to the claimant reaching MMI will be held to be suitable. As such, carriers and employers are encouraged and rewarded by getting creative to find and create jobs to get a claimant back to work prior to reaching MMI. 

Once an injured worker reaches MMI, the reforms establish a different set of requirements for “suitable employment.” Under the Act, post-MMI suitable employment is defined as employment which the employee is capable of performing considering the employee’s pre-existing and injury-related physical and mental limitations, vocational skills, education, experience, and is located within a 50-mile radius of the claimant’s residence at the time of the injury.

Notably, the reform excludes the wage component of “suitable employment” once a claimant has reached MMI. As such, carriers and employers do not need to consider the claimant’s pre-injury wages identifying suitable employment once a claimant reaches MMI. Additionally, the definition of post-MMI “suitable employment” does not specifically require approval of the position by the claimant’s authorized treating physician.

Although it may be safer to obtain approval of the position from the claimant’s physician, carriers may obtain added bargaining power by aggressively pushing for the claimant to return to work while awaiting approval of the job description by the authorized treating physician.

The purpose behind this change is to encourage claimants to return to work even if the job is not as financially munificent as the pre-injury position, because the carrier can pay TPD benefits for a limited period to supplement the injured worker’s wage. In other words, the legislators apparently would rather that a claimant returns to work in some capacity and have his wages supplemented with TPD benefits rather than be paid ongoing temporary total disability benefits.

As carriers and employers witnessed under the old “suitable employment” laws, one of the hardest fought battles in a workers’ compensation claim was trying to return a claimant to work. The battle will surely continue, but, with these new reforms, carriers are given new opportunities to get injured employees back to work.  

ABOUT THE AUTHOR
Colin Cronin is an attorney with McAngus Goudelock & Courie. Founded in 1995, MG&C is a full-service law firm with offices in Columbia, Greenville, Charleston and Myrtle Beach, S.C., and Asheville, Charlotte and Raleigh, N.C. The firm’s practice areas include workers’ compensation defense, employment, banking and consumer law, administrative law, government relations, construction litigation, commercial litigation, products litigation, business law, real estate law and health care and regulatory issues. Cronin may be reached at 704-405-4648 or by email.

New captive. Eastern Alliance Insurance and Westfield Insurance have jointly formed a multi-line captive program, known as EastWest Alliance, for mid-to large-size employers. ibr

New president. A.I.M. Mutual Insurance Companies has promoted Mike Standing to be the company’s new president, effective June 1. The organization provides workers’ compensation coverage for 16,000 employers throughout Massachusetts and New Hampshire. Insurance Journal

New brochure. Distracted driving, and in particular texting while driving, are important occupational safety issues, and employers need to act, the U.S. Occupational Safety and Health Administration says in a new brochure called “Distracted Driving: No Texting.” JD Supra

New location. A California real estate agent is being held at the Santa Clara County Jail on a $1 million bail on suspicion of workers' compensation insurance fraud. patch

New partners. The Hartville Group Inc., a pet insurance provider, is merging with Crum & Forster's United States Fire Insurance Co., a wholly owned subsidiary of Fairfax Financial Holdings Ltd. The agreement is subject to customary conditions and is expected to close in Q3 2013. insurancenetworking

"These grants will fund programs that will supply hard-to-reach workers, those in high-hazard industries and small businesses with the knowledge and tools they need to support safe and healthful workplaces," said acting Secretary of Labor Seth D. Harris.

Two types of safety and health training grants will be awarded: targeted topic training grants, and training and educational materials development grants.

Both types of grants are for one year, and will support the development of quality training materials and programs addressing workplace hazards and prevention strategies for workers and employers. OSHA has designated the following topics: fall protection in construction, agricultural safety including grain handling operations, hair and nail salon hazards, ergonomic hazards, hazard communication for chemical exposure, injury and illness prevention programs, and workplace violence. Target audiences include underserved, low-literacy workers in high-hazard industries.

Agencies of state and local governments are not eligible to apply for these grants. However, state and local government-supported institutions of higher education may apply in accordance with 29 Code of Federal Regulations Part 95.

The solicitation for grant applications is available online. Applicants must register prior to completing the application. They are encouraged to begin the process as soon as possible, as it takes multiple days to complete. Applications must be submitted and received electronically no later than 4:30 p.m. EDT on Thursday, June 13. No extensions of the deadline will be granted.

OSHA has developed a webinar to assist prospective applicants in understanding the application process. Questions alo may be directed to Heather Wanderski or Jim Barnes or 847-759-7700.

Employers typically require workers to undergo fitness for duty exams (FFDEs) when employees return after an injury. But can you also require an FFDE for employees who have shown mental instability? And can you demand an FFDE from employees who work at home? A court recent ruling last week in favor of Coca-Cola says you can if safety issues are the real thing ...

Case in Point: Franklin Owusu-Ansah worked for Coke as a quality-assurance specialist responsible for monitoring the performance of frontline call center associates. He mostly worked from his Georgia home, but sometimes came into the call center for meetings.

During one such meeting with his manager, he complained that he'd been discriminated for years because he was from Ghana. During that meeting, he became agitated and banged his hands on the table and stated, “someone was going to pay for this.”

Owusu-Ansah refused to discuss his complaint with Coke's HR people. But he agreed to meet with an independent consulting psychologist who specialized in threat assessments. The psychologist wanted Owusu-Ansah to talk with a specialist but he refused. At that point, the pscychologist recommended Owusu-Ansah be placed on paid administrative leave pending an FFDE “to rule out the possibility of a mental condition that could interfere with his ability to successfully and safely carry out his job duties.”

Owusu-Ansah passed the FFDE. He then turned around and sued Coke under the Americans with Disabilities Act (ADA), claiming the company unlawfully forced him to submit to the FFDE because the ADA says employers may not “require a medical examination and shall not make inquiries of an employee as to whether such employee is an individual with a disability or as to the nature or severity of the disability.”

The ruling: A lower court sided with Coke, saying the ADA medical-test rules also include an exception “for medical inquiries and exams that are shown to be job-related and consistent with business necessity.” The court found that Owusu-Ansah’s situation fell under that exception. 

On appeal, Coke won again. The court ruled that Coke was justified in requiring Owusu-Ansah to undergo an FFDE. The court observed, “An employee’s ability to handle the reasonable and necessary stresses of his position and to work reasonably well with others are essential functions of any job.” (Owusu-Ansah v. Coca-Cola Co., 11th Cir., 5/8/13).



3 Lessons Learned … Without Going To Court

1. Know the ADA “medical inquiry exception.” Even the court, however, reminded employers that employees “don’t have to prove they are disabled under the ADA to claim protections that prohibit employers from making unlawful medical inquiries.”
2. FFDEs apply to remote workforces. The court noted “safety” issues justify FFDEs, but employers must show the issue is job-related and a business necessity. Note it’s an “and,” not an “or.”  You need to show both.
3. Don’t forget to investigate underlying claims. In this case, the employee claimed discrimination and harassment. Don’t forget to take prompt effective action to investigate all claims. You don’t need another lawsuit for failing to investigate.

When can you ask about medical info or require an exam? According to the EEOC's guidance on employer medical inquiries:

“Generally, an employer only may seek information about an employee's medical condition when it is job related and consistent with business necessity. This means that the employer must have a reasonable belief based on objective evidence that:

• An employee will be unable to perform the essential functions his or her job because of a medical condition; or,
• The employee will pose a direct threat because of a medical condition."

Employers also may obtain medical information about an employee when:

• The employee has requested a reasonable accommodation and his or her disability or need for accommodation is not obvious;
• The employer is required to do so by another federal law or regulation (i.e., truck drivers);
• The employer offers voluntary programs aimed at identifying and treating common health problems, such as high blood pressure and cholesterol.

Source: Business Management Daily.com; Mindy Chapman, Esq., Mindy Chapman & Associates

About time. Ten years ago, a fire at the Station Nightclub in Providence, R.I. claimed the lives of 100 people. The owners of the nightclub have now been fined more than $1 million for failing to purchase workers' compensation insurance for their employees. wpri

New USAA division president. Carl C. Liebert III, former president and CEO of 24 Hour Fitness Worldwide, has been named president of USAA Capital Corp., reporting to USAA President and CEO, retired Army Maj. Gen. Joe Robles. Liebert will lead USAA Federal Savings Bank, Investments, Life Insurance Co. and Real Estate Co. Fort Mill Times

Woman named to Hartford board. Virginia P. Ruesterholz, 52, has been elected to The Hartford's board of directors. Ruesterholz, who retired in 2012, most recently served as executive vice president of Verizon Communications. BusinessWire

Claims up. The number of questionable insurance claims being flagged by insurers as potentially fraudulent rose again in 2012 in Ohio and the U.S., according to a report released today. ColumbusDispatch

“By many measures, the industry condition is indeed improving,” said NCCI President and CEO Steve Klingel. “While we are pleased to see that the positives are beginning to outweigh the negatives, there remains great opportunity for improvement. Our optimism is tempered by knowing that external forces such as the economy, healthcare reform, and new legislation may still negatively affect the market. But for now, we view the overall industry condition as encouraging.”

“The workers’ compensation line continues to deal with a variety of significant challenges. These include poor underwriting results, low investment yields, and continued uncertainty regarding the impact of the implementation of the federal healthcare reform bill,” added NCCI Chief Actuary Dennis Mealy. “But despite the long-term challenges, workers compensation saw some positive developments in 2012. Premiums grew for the second consecutive year, the combined ratio declined six points, and claim frequency continued to improve at a pace slightly greater than its long-term historic rate of decline.”

As noted above, the workers’ compensation calendar year combined ratio for private carriers was 109 for 2012. Although a 109 combined ratio is far from satisfactory, the decline is welcome. And the accident year combined ratio experienced a similar six-point improvement. NCCI estimates that the accident year combined ratio for 2012 is 108, following 114 in 2011.

In other good news, lost-time claim frequency improved significantly in 2012—down 5 percent on average in NCCI states. The 5 percent decline is slightly larger than NCCI’s long-term annual estimate of a 2 to 4 percent decline per year. Previous NCCI research indicated that distortions in the calendar year premium data resulting from the recession and subsequent recovery affected our measure of claim frequency for 2010 and 2011. Current research indicates that those distortions are no longer significant for 2012.

Other market indicators/trends highlighted in the report include:

• Net written premium (including state funds) increased to $39.63 billion in 2012. This 9 percent increase follows an 8 percent increase in 2011, a welcome shift from the cumulative 27 percent decline in premium of 2006–2010.
• The impact on premium of changes to bureau loss cost/rate filings was about 2 percent in NCCI states for 2012. For 2013, the impact of bureau loss cost/rate filings is basically flat in NCCI states. In the last filing cycle, NCCI filed 25 increases and 13 decreases, mostly for effective dates in 2013. Carrier discounting from bureau loss costs and rates declined about 2.5 percent in 2012 in NCCI states. About 40 percent of the increase in premiums in 2012 can be attributed to increases in bureau loss costs and rates, and the decline in carrier discounting. 
• The private carrier reserve position continued to deteriorate in 2012 for the fifth consecutive year. NCCI’s estimate of the reserve position for the private carriers as of year-end 2012 is a $13 billion deficiency.
• Investment returns for the workers' compensation line remained strong. For the third consecutive year, the ratio of investment gains on insurance transactions to premium was at or above 14 percent.
• Investment results combined with underwriting results produced a workers compensation pretax operating gain of 5 percent for 2012. This is in line with the industry’s long-term average, and a welcome improvement following three years of near-zero operating gains or losses.
• In NCCI states, the average indemnity cost per lost-time claim increased a modest 1 percent in 2012, after increasing 2 percent in 2011 and declining 3 percent in 2010.
• The average medical cost per lost-time claim increased by 3 percent in 2012 after increasing 3.6 percent in 2011 and increasing 1.4 percent in 2010. Combined, the total lost-time claim cost increased about 2 percent in 2012, which is about the same rate as the change in average wages.
• The workers’ compensation residual market experienced significant growth in 2012. Premiums grew by close to 50 percent, and the average market share in the residual market increased from 5 percent to 7 percent. The pace of growth is continuing into the first quarter of 2013.
• Although the volume of business in the residual market is growing as the market tightens, the combined ratio actually improved from 117 in policy year 2011 to 112 in 2012. The total underwriting loss in the residual market pools serviced by NCCI was $99 million for policy year 2012, up slightly from the $85 million in 2011.

Looking Ahead
In 2012, the workers' compensation line showed some signs of recovery. Results improved materially, including:

• The combined ratio for workers’ compensation improved for the first time since 2006
• Premium grew for the second consecutive year
• Claim frequency declined significantly for the first time since 2009
• Claim severity increases remained modest

Even with the improvements, workers' compensation is faced with some ongoing challenges:

• The combined ratio, while lower, still remains too high
• Slow growth in employment, particularly in the manufacturing and construction industries, is impeding additional premium growth
• In addition, the impact of the implementation of the Patient Protection and Affordable Care Act in 2014 looms as a huge uncertainty for the line

USA still No. 1. The United States held on to its status as the most popular location for professionals moving overseas, followed by Britain, Australia, Singapore, Canada and Switzerland. Carrier Management

Easy in Missouri. The Missouri Legislature has voted to create an online database allowing businesses to check whether job applicants have a history of filing workers' compensation claims. sfgate

Gold to ProspX. ProspX, Inc. has named former AIG executive Steve Gold as president and chief executive officer. Co-founder and former president and CEO Todd L. Young will become ProspX's executive vice president responsible for sales, marketing, and business development. ProspX

Man’s best friend? Dog bites accounted for more than one-third of all homeowners insurance liability claim dollars paid out in 2012, costing more than $489 million, according to the Insurance Information Institute and State Farm. Insurance Journal

New CFO. Kevin English has joined One Call Care Managemen as Chief Financial Officer. BusinessWire

And, thank you. In 1962, President John F. Kennedy signed a proclamation that designated May 15th as Peace Officers Memorial Day and the week in which that date falls as Police Week. policeweek

Stage was employed as CEO of CAOM from 1993 until his retirement in July 2012. CAOM is a non-profit corporation providing administrative and customer service support for the Michigan Workers' Compensation Placement Facility. It collects data from member insurers licensed to sell workers' compensation insurance in Michigan and is not associated with state government.
 
As CEO, Stage had the authority to issue checks, but company policy required two signatures on any check over $1,000. To evade that requirement, it is alleged Stage wrote checks to himself for $995 over a 14-year period, totaling approximately $1 million. Stage was also issued a company credit card to pay for business-related incidentals that he allegedly used for personal expenses.

Following Stage's 2012 retirement, CAOM undertook a review of expenditures to assess the company's financial health. Upon the discovery of a number of financial reporting irregularities, the company consequently retained Plante Moran to conduct an official audit. Plante Moran discovered Stage had allegedly embezzled approximately $2.6 million. It is alleged Stage paid Bauer to help him cut checks to himself, paying Bauer for his silence. Plante Moran alerted the state Office of Financial and Insurance Regulation (OFIR) with its concerns of embezzlement and OFIR referred the case to the Department of Attorney General for further investigation. Attorney General Investigators confirmed Plante Moran's findings.

Stage also allegedly submitted false or inflated expense reports for events including: week-long family vacations at Disney World, tuition, wedding expenses, pet care and family dinners. Allegedly using this scheme, Stage embezzled approximately $1.4 million. This conduct was not discovered during annual audits because as CEO, Stage did not have to submit documentation of his expenses, as other employees were required to do. The false expense reports were submitted to allegedly cover the amount of funds Stage was siphoning from the company.

The rest of the embezzled funds allegedly came from Stage inflating his own pay raises and bonuses, totaling to approximately $200,000.

Stage was charged with one count of embezzlement over $100,000; and, one count of conspiracy to embezzle over $100,000. Each count is a 20-year felony with a fine of up to three times the amount embezzled.

Bauer was charged with one count of conspiracy to embezzle over $500,000 but less than $100,000, a 15-year felony.
           
Both defendants surrendered and waived their right to a preliminary examination and were bonded over to the Wayne County Circuit court.

In 1935, South Carolina Gov. Olin D. Johnson signed the first workers’ compensation law in South Carolina. It was said that under the 1934 workers’ compensation system, a co-worker in South Carolina was to acquaint himself with the bad habits of his peers and exercise constructive influence upon them. If the co-worker was a heavy drinker, he had to cure the co-worker’s alcoholism, or quit. If a co-worker’s negligence caused the injury of another co-worker, the employee was liable, not the company.

South Carolina was one of only four states without a workers’ compensation law. At the time, employers assumed that an employee understood all the risks of a job. If an employee was injured, he could only recover damages if he reached a settlement with management or could prove in court that the employer’s negligence contributed to the work accident. 

Times have changed. Today, the presumption has flipped and we have a well-established “no-fault” workers compensation system. The commonly held belief today is that if an employee suffers an injury at work, then he is entitled to benefits under the Act, with few exceptions. While we have a “no-fault” system, a work accident is still defined by statute or judicial decision in nearly every state. The difficulty in determining what qualifies as a work accident arises when the resulting injury is accidental but the cause of the injury is not accidental; intentional acts fall into this category.

No compensation is due where the injury or death results from the employee’s intoxication or the willful intention of the employee to injure himself or another. Horseplay, assault, suicide, intoxication, and speeding can be considered intentional acts in South Carolina. Jones v. Hampton Pontiac, 405 S.E.2d 395 (1991), is a South Carolina Supreme Court case, and my personal favorite, on the topic of horseplay.

The court determined that the injured claimant was not entitled to compensation because the claimant, during a coffee break, slipped and fell while demonstrating a karate kick to a co-worker. The claimant was an instigator of horseplay because karate kicks were not a natural incident of the type of work carried on at Hampton Pontiac. Interestingly, if a co-worker had inadvertently walked in front of the karate kick on the way to pour her coffee and suffered an injury, the non-participating victim or innocent bystander would be compensated for her injuries.    

Two other examples of intentional acts come up from time to time: intoxication and speeding. While intoxicated speeding would certainly disqualify a claimant from receiving compensation, taken separately, it is difficult to successfully apply the defense of intoxication or the defense of speeding. 

First, the employer bears the burden of proving intoxication. The employee must be incapable of functioning in the workplace without endangering himself or others and intoxication must be the proximate cause of the injury. In other words, simply drinking alcohol is not enough. In Baggott v. Southern Music, 330 S.C. 1, 496 S.E.2d 852 (1998), the claimant had consumed a portion of a beer when he was assaulted by a co-employee. The Supreme Court noted that the consumption of alcohol was not the proximate cause of the injury. Therefore, the claimant was entitled to benefits under the Act.  

Likewise, speeding must be a substantial deviation to remove claimant’s actions from the course and scope of his employment. In Stembrig Builders, Incorporated v. Industrial Commission, the claimant worked as a courier and was injured while he was doing what he was hired to do—deliver goods. The court determined that the claimant’s act of exceeding the speed limit in the performance of his duties was not a substantial deviation from his employment.   

Today’s workers’ compensation system if a far cry from what it was in 1934. No one is expected to cure a co-worker’s bad habits. However, a claimant’s intentional acts must still be considered. Whether it is karate kicks at lunch, excessive speed, or gross intoxication, intentional acts still have the potential to derail a claimant’s entitlement to benefits.    

ABOUT THE AUTHOR
Scott Winburn is an attorney with McAngus Goudelock & Courie. Founded in 1995, MG&C is a full-service law firm with offices in Columbia, Greenville, Charleston and Myrtle Beach, S.C., and Asheville, Charlotte and Raleigh, N.C. The firm’s practice areas include workers’ compensation defense, employment, banking and consumer law, administrative law, government relations, construction litigation, commercial litigation, products litigation, business law, real estate law and health care and regulatory issues. {Insert author} may be reached at 803-227-2268 or by email.

Tina Clark is a nurse practitioner at Glide Health Services, a clinic in San Francisco's Tenderloin district, a low-income section of the city. Glide is run by nurses with advanced training. A physician visits the clinic 12 hours a week, to sign forms and consult on difficult cases. Even under current law, Clark can see patients without a doctor in the room.

Anastacia Casperson, who has struggled with homelessness and drug addiction, came to the clinic because she was alarmed about swelling in her legs. Clark spends a half hour with Casperson, gives her a prescription for a diuretic and talks to her about quitting smoking. Casperson says she's been coming to this clinic for a few years.

"They have compassion for a client. They have understanding for a client," Casperson says. "I like the nurses here because they're like one big family, and they all work together."

Right now, California law says nurses must follow procedures set after consulting a doctor. But lawmakers are considering eliminating that requirement. And that idea doesn't sit well with some doctors. 

"Nurses and nurse practitioners are a very, very important part of the health care team, but they are part of a team," says Dr. Paul Phinney, president of the California Medical Association.

Phinney’s group is opposed to allowing more independence for nurses. He says they don’t have as much training and may not know as much about testing and technology as doctors.

Plus, he says, there’s nothing in the bill that would require the empowered nurses to go where they are needed most. "I would be very surprised if—should this bill pass—that all of a sudden, you'll see a massive egress of nurse practitioners out into medically underserved areas. I just don't see that happening," he says.

But University of California San Francisco health care economist Joanne Spetz says research shows otherwise. "Nurse practitioners are more likely to practice in settings that serve large shares of Medicaid patients, and they’re somewhat more likely to practice in rural communities," Spetz says. Nurse practitioners can be trained much more quickly than a physician, and their compensation is lower, Spetz points out.

"So when a legislature is looking at the insurance of hundreds of thousands of people and the demand for care that those people are going to have, getting health professionals to meet their needs as quickly as possible and as cost-effectively as possible is a real need," Spetz says.

(SB 491 was passed by a 4 to 4 voted on Monday, May 13, at a hearing in the state Senate Appropriations committee.)

Source: Kaiser Health News in partnership with Capital Public Radio and NPR.

ERM has also become the foundation for a more risk-based, company-specific approach to regulatory solvency requirements (e.g., Solvency II). Opportunities to reduce regulatory capital requirements has increased use of internal company models to better relate overall capital levels to the full range of risks assumed. 

“Use test” requirements in regulatory solvency rules have encouraged use of internal models in managing company and group business. Enhanced modeling approaches (e.g., economic capital) allow risk aggregation and disaggregation to better plan business strategies for business mix, pricing and capital allocation, and to manage unit risk assumption.
 
Traditionally, reinsurance was used within particular lines of insurance business to transfer risk beyond feasible retention levels and to provide additional capacity to support business growth. It was also used to provide surplus relief. It was the province of the underwriting and risk management stream of companies, separate from the CFO functions of capital management and financial analysis.
 
Over the last few years reinsurance has become more integrated in financial planning and management. Risk-based capital analysis has illustrated that line-by-line assessment of reinsurance protection needs did not fully account for, or optimize, the aggregate impact on capital application to the various risks. 

This integration does not do away with the need for consideration of risk coverage needs at the line and geographic level. It does require a reassessment at a company and group level to assure the most efficient use of capital.
 
Aggregate analysis of reinsurance leads to a different view of the role of reinsurance.  It becomes an alternate capital tool for spreading risk. Retention analysis becomes an optimization exercise for efficient use of capital, reinsurers capital becoming an alternative basis for supporting primary underwriting.
 
At the same time, capital markets have become an important alternative to traditional reliance on reinsurer capital. Insurers and reinsurers now weigh the relative merits of deploying their own capital to support certain risk pools with the potential for relying on capital markets via insurance-linked securities (ILS).
 
As capital management is integrated with overall risk management, companies look at once fragmented activities, such as reinsurance purchase, product design, pricing, reserving, business origination and capital management, together
 
Risk considerations in such diverse lines as natural catastrophe coverage and life insurance guarantees present complex capital/reinsurance coverage questions. But, considered as a whole, companywide reinsurance programs may be made more efficient, at lower cost, while maintaining appropriate coverage structures by line. 

Risk appetite, risk tolerances and risk limits by line, are now part of comprehensive ERM risk profiles and help to refine retention limits and create desired insuring capacity.  Integration in ERM programs can then lead to consideration of alternative reinsurance types and structures, including reinsurer credit exposures, that take best advantage of the overall pool of risks assumed by the company or group.
 
The recent financial crisis dampened enthusiasm for ILSs, but there have been growing signs of resumption of market growth with new issues of catastrophe bonds and other structures. The ILS market developed a broad spectrum of investors prior to the crisis and appears poised to reestablish and broaden investor interest. ILS offer a wide range of loss protection with some structures paying off on the occurrence of certain types and severities of natural disasters, on particular areas, or losses over a particular amount. 

The March 2011 Japan earthquake/tsunami is not expected to trigger a significant portion of the estimate $12 billion market in outstanding catastrophe bonds. Though still relatively small, the ILS market is expected to grow as investors seek diversity of risk from traditional stock and bond markets.
 
ILS is becoming just another capital option to be considered in determining efficient risk-based capital positions in insurers and reinsurers. The lessons of the recent financial crisis and catastrophe events are not that use of capital markets is a bad idea but rather that the risks need to be understood. The systemic risks need to be taken seriously even when they can’t be measured completely.
 
As the analysis and financing structures become increasingly complex and interdependent there is the risk that we lose our understanding of our net exposure. As was the case when reinsurers accepted risk through slips representing portions of risk pools, that made it difficult to maintain a good accounting of aggregate risk on particular areas, use of sophisticated models to determine risk-capital optimization can result in a false sense of security. 

Models can be very powerful tools so long as the underlying assumptions are sound and the results are understood for what they say and don’t say. As illustrated in the recent crisis, the potential for extreme tail loses, including those that historical data don’t represent, must be part of the analysis.
 
Apart from capital efficiency, integrated risk-based analysis provides important performance measures and a better opportunity to optimize performance within risk tolerances. Risk capital management is not just for determining capital requirements for a given risk pool. Disaggregation by subsidiary company and line of business provides valuable information that should be used to reassess business strategies, business mix, new market entry, market exit, pricing, underwriting standards, reserving and other operating systems.
 
Source: International Insurance Society. The IIS, founded in 1965, is the world’s largest industry organization with almost 900 members representing global insurance leaders, international regulatory authorities and worldwide insurance scholars from over 90 countries.

Lunch money. Local governments and schools in Ohio could see almost $113 million in rebates from the state insurance fund for injured workers under a proposal from the governor. therepublic

AIA praise. The American Insurance Association today hailed the signing of HB 1320, workers’ compensation reform legislation, by Indiana Gov. Mike Pence. AIA says the bill contains important cost containment provisions while it also includes several indemnity benefit increases. aia

Delaware report. A state panel examining soaring workers compensation rates in Delaware is recommending that the state implement a two-year inflation freeze on medical providers’ fee schedules. wgmd

New compensation law. The family of a student killed or injured while boarding or exiting a school bus in Mississippi can now qualify to receive money from the state Crime Victim Compensation Fund. Insurance Journal

Food safety handbook. ISO now is offering "How to use ISO 22000," a handbook to help small and medium-sized enterprises that may be hampered by their size or lack of in-house technical expertise when it comes to deploying a food safety management system. ohsonline

The statute of limitations provides for filing deadlines for injury and occupational disease claims. It is probably the strongest defense in Kentucky workers’ compensation. It must be pled through a Special Answer within 45 days of the filing of a claim. Except in instances where the onset of occupational disability is simultaneous with the accident that caused it, the period of limitations for a work-related injury does not run from the date of "disability" as it is defined by KRS 342.0011(11).

Although a finding of occupational disability is required for an award of income benefits, the onset of occupational disability has no bearing on determining the date from which the period of limitations begins to run or on determining an injured worker's entitlement to medical benefits. KRS 342.020; See also, Cavin v. Lake Construction Co., Ky., 451 S.W.2d 159 (1970); Allen v. Com., Dept. of Highways, Ky., 425 S.W.2d 283, 285 (1968); Mountain Clay, Inc. v. Frazier, Ky. App., 988 S.W.2d 503 (1999).

The regulations of the Department of Workers’ Claims requires the filing of a special answer regarding the statute of limitations within 45 days of notice that a worker has filed an application for benefits or within 10 days after the discovery of facts supporting the defense if it could not have been discovered earlier in the exercise of due diligence. The regulation specifically provides that a special defense is waived if it is not timely raised. 803 KAR 25:010E,

KRS 342.270(1) and KRS 342.185(1) provide that injury claims must be filed within two years of the date of the accident, or last payment of voluntary income benefits (Temporary Total Disability benefits - TTD) whichever last occurs. "Income benefits" are defined in KRS 342.0011(12) to be those payments made per KRS 342 to the disabled worker or his dependents in case of death, excluding medical and related benefits.  Income benefits do not include PIP benefits.

Where TTD has been terminated, then per KRS 342.040(1), the employer must notify the Department of Workers’ Claims or the termination so that the employee can be advised of his/her right to file a claim. Failure to notify the Department of Workers’ Claims will toll the statute. City of Frankfort v. Rogers, Ky. App., 765 S.W.2d 579 (1988).

KRS 342.316(4)(a) provides for occupational disease claims to be filed within three years of the last date of exposure. However, there is a five-year statute of repose for pneumoconiosis, and a twenty-year period in cases of radiation disease or asbestos-related disease.

KRS 342.670(2) addresses filing deadlines for compensated extraterritorial claims, allowing two years from the date of injury.

In 1972, KRS 342.730 and KRS 342.750 were enacted to provide for the continuation of workers' compensation benefits to surviving dependents. As set forth in KRS 395.278, the period during which an action may be revived by the successor or personal representative of a deceased party is limited to one year. This provision operates as a statute of limitations; therefore, the period set forth in the statute is mandatory and not subject to enlargement. Mitchell v. Money, Ky. App., 602 S.W.2d 687 (1980). If a motion to revive the action and to substitute the successor or personal representative of the deceased party is not made within the prescribed time, the action may be dismissed as to the deceased party. CR 25.01(1). Hammons v. Tremco, Inc., 887 S.W.2d 336 (1994).

With regard to those injuries that develop gradually from the cumulative or repetitive trauma, the point at which the statute of limitations begins running is when the employee has been told by a health care professional that the condition is work related. A worker is not required to self-diagnose his condition and is not required to give notice of a gradual work related injury until he is advised of that fact. 

In Hill v. Sextet Mining Corp., 65 S.W.3d 503, 507 (Ky. 2001), the Kentucky Supreme Court explained: Medical causation is a matter for the medical experts and, therefore, the claimant cannot  be expected to have self-diagnosed the cause of the harmful change to his cervical spine as being a gradual injury versus a specific traumatic event. [The claimant] was not required to give notice that he had sustained a work-related gradual injury to his spine until he was informed of that fact. Holbrook v. Lexmark International Group, Inc., Ky., 65 S.W.3d 908 (2001).

In Special Fund v. Clark, 998 S.W.2d 487, 46 11 Ky. L. Summary 34 (Ky. 1999), the court determined that if a worker's injury becomes manifest more than two years before a claim is filed, the worker is entitled to benefits for harmful changes due to trauma incurred within the two-year period before a claim is filed.

In Alcan Foil Prods. v. Huff, 2 S.W.3d 96, the claimant experienced symptoms at work.  The company physician informed her from the outset that her symptoms were not work-related. She was entitled to rely on that information. Brown-Forman Corp. v. Upchurch, 127 S.W.3d 615.

Once the statute of limitations has run, we can close the file.

ABOUT THE AUTHOR


Walter E. Harding has been a partner with Boehl Stopher & Graves LLP in Kentucky for 31 years. He has tried numerous legal actions, focusing on the practice areas of workers’ compensation, civil litigation, labor and employment, state and federal Black Lung defense; admiralty and maritime law; OSHA; municipal litigation; bad faith and unfair claims practice; and appellate practice before the Kentucky Court of Appeals and Supreme Court), Eastern and Western Federal Courts, FCC, and Sixth Circuit Court of Appeals.

Now that the Affordable Care Act (ACA) has been signed into law by the president, declared constitutional by the U.S. Supreme Court, and rules are being developed, the realities of the law are being analyzed in detail by the American public. This includes the workers’ compensation industry, where health care remains an extremely significant component in overall benefits provided.

Concerns are being expressed by all segments of the industry, including injured workers, medical care providers, hospitals, employers, insurance companies and regulators. Because of the unknown—and realizing the potential adverse consequences of this most dramatic change in health care in decades in the United States—the Workers’ Compensation Institute has established as one of the central themes in this year’s annual Workers’ Compensation Educational Conference a review of this new law, its expected consequences on the workers’ compensation industry as a whole, and in particular, specific employer groups.

This comprehensive two-day study begins on Tuesday, August 20, in the annual Centers for Excellence breakout with a comprehensive review of the Act, how it affects all stakeholders in the health care system, and changes to be expected. This non-partisan, “tell it like it is” presentation appropriately labeled “The ACA-101” is sponsored by the American Health Lawyers Association in Washington, D.C., the conference’s newest partner. Presented by health care experts from throughout the country, this initial breakout is intended to give attendees a basic understanding of the far-reaching effects of the new law without focusing on any particular segment of the health care industry. Speakers are Barry Alexander of Nelson Mullins Riley & Scarborough, LLP in Raleigh, N.C.; Jennifer A. Kraft of Seyfarth Shaw, LLP in Chicago; and Arthur N. Lerner of 
Crowell & Moring LLP in Washington, D.C.  

After participants gain this basic understanding of the law, the next segment will relate to how this new law affects workers’ compensation specifically. This presentation will be made by two individuals who have devoted their professional careers to workers’ compensation, who understand the nuances of the system, and through this knowledge can reasonably predict the new law’s impact, good or bad, on workers’ compensation. 

Judge David Torrey is a workers’ compensation judge in the state of Pennsylvania and President of the National Workers’ Compensation Judiciary, positions that put him squarely “within the know” of the uniqueness of workers’ compensation and the importance of medical care to the success of a viable workers’ compensation system. 

Dr. Dean Hashimoto brings academia and practical experience on this issue to the conference. He is a professor at the Boston College University College of Law and also a licensed physician. Dr. Hashimoto’s unique qualifications include not only being a teaching attorney but also a medical doctor currently acting as Chief of Occupational and Environmental Medicine, Partners Healthcare System, that provides clinical services to 60,000 employees at eight hospitals and the administration of a centralized self-insured workers’ compensation claims system.

On Wednesday, August 21, Dr. Sanford Silverman, a Board Certified Pain Medicine Physician located in Pompano Beach, Fla., will moderate a panel on “Drug Repackaging and Physician Dispensed Mediation—A Growing Dilemma That Needs Resolution.” Panel members include Gary Cannon, Executive Director, South Carolina Workers’ Compensation Commission in Columbia, S.C.; Rod Bordelon, Commissioner, Texas Division of Workers’ Compensation in Austin, Texas; Lori Lovgren, Division Executive-State Relations, NCCI, Boca Raton, Fla.; and Gary Newcomer, M.D., First Care of Gainesville, Gainesville, Fla.

Dr. Silverman also will moderate a second discussion that day, “Emerging (Disturbing?) Trends in the Adoption of Treatment Guidelines.” Panel members are Phil Denniston, President, Work Loss Data Institute, Encinitas, Calif., and Ken Eichler, Director of Government Affairs, Reed Group, New York, N.Y.

The final session is “The Use and Abuse of Narcotics in the Treatment of Pain in the Workers’ Compensation System” moderated by Jay Kruefer, EVP of PMSI in Tampa. Speakers include Maria Sciame, VP Clinical Services, PMSI; Jill Rosenthal, M.D., Medical Director, Zenith Insurance Co., Sarasota, Fla.; Julie Fortune, Chief Claims Officer, Arrowpoint Capital,  Charlotte, N.C.; Suzanne Novak, President, Austin Outcomes Research, Inc., Austin, Texas.

The conference goes one step further and presents separate breakout sessions on the effect of the new health care law on particular employment groups within the workers’ compensation industry. Sponsored by the American Staffing Association (ASA), the National Association of Professional Employer Organizations (NAPEO), and the Florida Association of Professional Employer Organizations (FAPEO), discussions will take place and breakouts presented on how the new law will affect the temporary staffing and PEO industries.

Special presentations will also be made to the attendees of the College for Workers’ Compensation Judiciary, held in conjunction with the annual conference. This college is the only college in the United States specifically designed for workers’ compensation judges, and is attended by representatives from throughout the nation. Knowledge of the impact of the ACA on workers’ compensation adjudicators is essential for these decision makers when it comes to resolving disputes between the parties in workers’ compensation litigation.

Finally, attendance at these breakouts will be part of the recommended track for state regulators attending the conference sponsored by the Southern Association of Workers’ Compensation Administrators (SAWCA). There is no question that this new law will impact the future of health care in workers’ compensation (either directly or indirectly) and knowledge by regulators of this new Act is of paramount importance.

Register today for the 68th annual Workers' Compensation Educational Conference. See more on this topic and other 2013 conference programs and speakers.

During the course of our practice as workers’ compensation mediators in Florida, from time to time, we are contacted by claimant’s counsel or a pro se claimant and advised that the injured worker will be incarcerated at the time of the scheduled mediation. There are several ways in which this situation may be addressed. At the time of the scheduled mediation the mediator may indicate that the claimant is not present and therefore the mediation cannot go forward; the parties may agree to reschedule the mediation within the timeframes allowed for mediation; the parties may request a continuance of the mediation from the Judge of Compensation Claims; or the parties may request that the Deputy Chief Judge waive mediation in a particular case.

It is our general practice, when this situation arises, barring strenuous objection by the defense, to mediate with the injured worker via telephone from the facility at which the claimant is located. While not optimal, it is possible for a mediator who is mediating with an injured worker who is incarcerated to fulfill his obligations to the judge, the parties, and the process. 

The primary hurdle in these cases is that inmate calls in and out of detention facilities are monitored and /or recorded. Prior to mediating with an incarcerated claimant the mediator should assure that the claimant is placed in a confidential location and given a secure telephone line for purposes of the mediation. This is typically arranged through discussions with the corrections staff where the injured worker is being held.

Given the facts of incarceration and the telephonic mediation, it is imperative to assure that the injured worker understands the process, the voluntary requirement of mediation, and the confidentiality requirement of the mediation, as well as who is participating in the process and the role of each of the participants to the process.

Further, prior to entering an agreement or impasse, the mediator should be vigilant to determine that the claimant understands the process, that the decision making is voluntary and that the process is confidential. Additionally, the mediator should ascertain whether the injured worker is under the influence of any drugs or medication that may be impairing his ability to make a decision and whether, notwithstanding his incarceration, he is making his decision freely and voluntarily. 

In those instances when the injured worker is unrepresented, it is essential that the mediator allow the claimant the opportunity to obtain counsel, should he so desire.

In the event the parties are able to conclude the mediation, the issue of the claimant’s signature should be resolved. In most instances counsel for the claimant, after reading, reviewing, and discussing the mediation report with the claimant, will sign for the claimant. In some instances the attorney may elect to obtain the claimant’s signature in person at the detention facility. We are not aware of any way to correspond in writing in a confidential manner with an incarcerated injured worker and in the case of the pro se claimant, the defense may be responsible for providing a hand courier to obtain the claimant’s signature.

The role of the mediator is to facilitate the resolution of the workers compensation dispute with professionalism. Mediation may be handled effectively and ethically, and the mediator may fulfill his obligation to the parties, the judge, and the process, notwithstanding the incarceration of an injured worker at the time of mediation.

ABOUT THE AUTHORS
K.A. Day is a State Mediator-OJCC for the Jacksonville District and in this capacity he has mediated more than 5,000 disputes. Day is a Life Fellow of the American Bar Foundation and has written and presented on mediation and mediation ethics. Alan M. Gordon is a State Mediator-OJCC for the Jacksonville District and in this capacity he has mediated more than 5,000 disputes. Gordon is president of the E. Robert Williams American Inn of Court and has written and presented on mediation and mediation ethics.

As it did in its inaugural year in 2012, World Risk Day 2013 will feature global virtual summit webinars, interviews, live social media debate, and live Q&A sessions with best-in-class project managers and risk practitioners from around the world. Additionally, an online resource center will collate risk and project management white papers, reports and surveys from subject matter experts around the globe. This year’s theme is “Shattering the Project Myth.”

World Risk Day 2013 webinars include:

• Using Risk Modeling, Analysis, and Assessment to Inform Homeland Security Policy and Strategy – Assistant Secretary Alan D. Cohn, US Department of Homeland Security
• High Risk Projects – A Global Perspective – Drew Slaton, Project Manager, Bechtel
• Major Project Risk Management: Aligning Contractor, Owner, and Oversight Agencies – Daniel D’Angelo, Deputy Chief Engineer, New York State Department of Transportation
• New concepts in understanding and managing risk in projects – David Hillson, The Risk Doctor
• Developing an holistic approach to risk management – Christoph Schwager, Chief Risk Officer, EADS
• Strategies for successful collaborative risk management with contractors and the supply chain – Rob Halstead, Head of Risk Management, Crossrail
• Shattering the project myth: Managing cost and schedule alone doesn’t equal project success – Chris Bell, Chief Marketing Officer, Active Risk
• What lessons can be learned from the world’s Top 100 infrastructure projects. How can knowledge be shared? – Norman Anderson, President & CEO, CG/LA Infrastructure
• What makes a great risk manager and how innovation projects influence risk management success – Michael Lopez, Senior Associate, Strategic Innovation Group, Booz Allen Hamilton
• ISO 31000: A Risk Management Standard for Decision Makers – Alex Dali, President, Global Institute for Risk Management Standards

Launched in 2012, the first annual World Risk Day on June 26, 2012, attracted 2,300 registered delegates to its 20 webinars, which featured 25 expert speakers from a variety of industries, including energy, mining, major global infrastructure projects, and government organizations.
World Risk Day supporters include the Institute of Risk Management (IRM), G31000 the Global Institute of Risk Management Standards, the Major Projects Association (MPA), CG/LA Infrastructure, ALARM – the UK Public Risk Management Association, Risk Management Monitor, the Project Management Institute – Arabian Gulf Chapter (PMI-AGC), and Active Risk.

The World Risk Day Virtual Summit is free to attend and open to all. People who attend the virtual summit webinars earn Category B Professional Development Units (PDUs) for Project Management Professionals (PMPs), as certified by the Project Management Institute.

First responder law. A New Jersey Senate committee has advanced legislation that would make it easier for first responders to get workers' compensation for ailments resulting from exposure to hazardous materials. newsworks

Profits up. Fitch anticipates P&C premium growth to remain favorable in the near term; core loss ratio improvement is expected along with a favorable trend in expense ratios. The industry statutory forecast in 2013 is for a calendar year combined ratio of 99.5 percent. This would represent only the fourth year in the last 35 years in which the market has achieved an underwriting profit. BusinessWire

New specialty program. Bliss & Glennon, Inc.’s Complex Casualty division of has launched a new specialty program for the nutraceutical/health/nutrition/natural products industry. Clients will be accepted from all 50 states. Insurance Journal

All OK here. Tennessee Valley Authority officials say tests of safety systems at its newest nuclear reactor have not detected any problems despite issues with the documentation of certain parts. Claims Journal

The organization representing state pharmacy regulators Thursday endorsed federal legislation that would give the Food and Drug Administration (FDA) authority over large compounding pharmacies, similar to the Massachusetts company whose tainted drugs last year sickened or killed 741 people in 20 states. A rare form of fungal meningitis was traced to contaminated steroids made and sold by the New England Compounding Center in Framingham.

The tragedy revealed confusion over who should have been overseeing drug compounders that produce large quantities of custom-made medicines. Drug manufacturers are regulated by the FDA, while state officials oversee pharmacies, which have long customized medicines based on individual prescriptions. But in recent years, large-scale makers of customized medicines have emerged, and they were poorly regulated by federal and state governments.

The National Association of Boards of Pharmacy Thursday supported proposed Senate legislation that would give the FDA increased oversight over the compounding industry. "We welcome the clarifications provided by the proposed legislation to the regulatory uncertainties that currently exist and were one of the primary factors leading to the meningitis tragedy," Carmen Catizone, the group’s executive director, said at a hearing of the Senate Committee on Health, Education, Labor and Pensions.

The legislation is not without its critics, including Public Citizen. The consumer organization has argued strenuously that the proposed law would enable drug compounders to produce drugs but under lesser quality standards required of conventional drug manufacturers. “These second-tier manufacturers would be permitted to mass-produce standardized drugs and sell across state lines without obtaining FDA approval or meeting federal labeling requirements intended to ensure the safe use of drugs—requirements currently mandated for all drug manufacturers,” Public Citizen said in advance of the hearing. An earlier Stateline story related concerns about poor regulation of these manufacturers.

Source: Michael Ollove is a staff writer with Stateline, the daily news service of The Pew Charitable Trusts.

Zero from Zagat. A worker at a San Francisco Nordstrom Café may have infected customers with typhoid fever, according to the city's Department of Public Health. The worker, who was diagnosed with typhoid fever, came into contact with food served to customers multiple days. ohsonline

Millions from Texas. The policyholder owners of Texas Mutual Insurance Company will share a $175 million dividend distribution this year. Texas Mutual

Mutual from Oklahoma. The Oklahoma legislature passed legislation Tuesday partially privatizing CompSource, the state’s last-resort workers’ compensation insurance fund. Under the bill, it would become CompSource Mutual Insurance Co. PC360

Rankings from Fortune 500. Berkshire Hathaway was listed fifth overall on the 2013 Fortune 500; Berkshire was the top-listed insurer out of the 46 that appeared overall. Eleven insurers landed in the top 100. In 2012, 14 insurers were in the top 100 and 46 were listed among the Fortune 500. insurancenetworking

Connecticut legislators already created a privately funded foundation to help those who responded to the second deadliest school shooting in U.S. history, but there’s still legislation pending that would provide individuals access to workers’ compensation benefits if they are emotionally impaired after a traumatic event.

The bill is on the Senate calendar and it would apply to both public and private employers.

The state’s largest municipal lobby says the bill could devastate local budgets if it is passed.

“They’re trying to leverage the Newtown tragedy to their own benefit,” Jim Finley, executive director and CEO of the Connecticut Conference of Municipalities, said last week. “The Newtown first responders were handled in an appropriate way.”

In March, lawmakers unanimously passed legislation to establish a privately funded foundation to assist school staff and first responders suffering from psychological trauma as a result of the Newtown shooting. The foundation will be funded through private donations and and will help people directly impacted by the Dec. 14 murders at Sandy Hook Elementary School.

Supporters of the legislation like Rep. Peter Tercyak, D-New Britain, said in states where workers’ compensation already covers the psychiatric side of the equation, claims data is about the same as it is in states that don’t cover mental trauma. He said Sandy Hook showed that there was a need, but not all of the first responders are receiving coverage. He said one of the state employees who responded to the event is running out of sick time and will have to return to work soon. If the event had been covered by workers’ compensation, Tercyak said the employee wouldn’t have to worry about what the future holds.

House Majority Leader Joe Aresimowicz said the fund the state created for the Newtown first responders “didn’t entitle them to benefits.” He said the bill addresses the larger issue about whether workers’ compensation should cover mental health claims unrelated to physical injury. He said a neutral third-party, who isn’t from an insurance carrier, can be appointed to review the claims and decide which ones move forward.

Tercyak acknowledged that rates may go up as a result of expanding coverage to psychiatric events, but he said that’s the case any time more risk is assumed.

Municipalities and businesses oppose the legislation.

“In essence, what we are witnessing is a very methodical campaign to mandate special expanded benefits—all at local residential and business taxpayers’ expense,” Finley said. “In these difficult budgetary times, town and city officials need their state partners to say ‘no’ to special interests’ grab for more benefits.”

Sen. Steve Cassano, who served as Manchester’s mayor for 14 years, agreed with Finley. It will increase costs to towns and businesses at a time when the economy is still recovering, he said. “I’ve got long-time friends who have never complained about any legislative issue asking me to oppose this bill,” Cassano said Monday.

The bill passed out of the Appropriations Committee and is currently on the Senate calendar awaiting possible action. The Senate Democratic caucus has yet to discuss the bill behind closed-doors, so it’s unclear where most of the Senators stand on the issue.

Adam Joseph, a spokesman for Sen. President Donald Williams, said Monday that “we haven’t caucused either bill yet, but they are on the calendar so there’s the potential to take them up at any moment.”

The Connecticut Conference of Municipalities also is opposed to a bill that would allow a police officer or firefighter who has a cardiac event 24 hours after being on duty access to the workers’ compensation system.

Rep. Jason Rojas, D-East Hartford, said he’s been receiving emails from constituents who work at a large insurance company asking him to oppose the bill that would give workers’ compensation benefits to someone who experienced a traumatic event in the workplace. Rojas said these are individuals he’s never heard from in the past.

Lawmakers in the Labor Committee where the bill originated had a tough time quantifying the number of mental health claims unrelated to physical injuries that would come into the system and exactly what it would cost municipalities and employers.

According to the Connecticut Business and Industry Association, the cost of workers’ compensation insurance has risen on average 7.1 percent in 2013. Increases in the cost of medical benefits as well as the length of time injured employees are staying out of work have been cited as major reasons for the rise.

Opponents of the legislation, argued that mental health already is covered for some employees through programs like the Employee Assistance Program. However, unlike workers’ compensation where most costs are covered, employees have to pay co-pays for the treatment and any medication they receive as part of that treatment. The visits to the program also are capped at six.

Sgt. Andrew Matthews, president of the state police union, testified in February that if an officer has post-traumatic stress disorder and seeks treatment, the Employee Assistance Program doesn’t cover the cost of the treatment or the time off work necessary to get it. He said that luckily the state police union has a bank of donated sick days for officers who need more sick leave.

It’s still unclear whether Gov. Dannel P. Malloy would sign it even if the bill did pass both chambers.

“The governor is deeply sympathetic to anyone who has been affected by witnessing a tragic event,” Malloy’s spokesman Andrew Doba said.

“As you know, the Governor introduced a bill earlier this year to that would establish the CT CARE Fund, an entity that would collect private money that could be used to help people following a catastrophic event. On this particular bill, the legislature has wrestled with this issue for some time, and the details are important, so the governor will give it a thorough review once it is passed by the legislature.”

Source: CT News Junkie

A new NSC report, “Crashes Involving Cell Phones: Challenges of Collecting and Reporting Reliable Crash Data,” funded in part by Nationwide Mutual Insurance Company, reviewed 180 fatal crashes from 2009 to 2011, where evidence indicated driver cell phone use. Of these fatal crashes, in 2011, 52 percent were coded in the national data as involving cell phone use.
 
That number is not reliable, experts say. “We believe the number of crashes involving cell phone use is much greater than what is being reported,” said Janet Froetscher president and CEO of the National Safety Council. “Many factors, from drivers not admitting cell phone use, to a lack of consistency in crash reports being used to collect data at the scene, make it very challenging to determine an accurate number.”

Indeed, there is strong evidence to support that under-reporting of driver cell phone use during crashes is resulting in a substantial under-estimation of the magnitude of this public safety problem. The difficulty is that there currently is no reliable method to accurately determine how many crashes involve cell phone use. Therefore, it is impossible to know the true scope of the problem. Among the challenges to verifying that cell phone use was a contributing factor in a motor vehicle crash:

• Police must often rely on drivers to admit to cell phone use. This is not possible when drivers are not forthcoming or are seriously injured or deceased.
• Witness memories and statements may be inaccurate.
• Police may not fully investigate cell phone use if it is not a violation in their jurisdiction, if a more obvious violation such as speeding or lane departure is identified, or if a more serious violation is involved such as alcohol or other drug impairment.
• If cell phone use is identified as a contributing factor during the police investigation, or criminal or civil court cases, crash reports may not be updated.
• Cell phone records can be difficult to obtain from wireless companies.
• If cell phone records are obtained, data must align with the precise moment of the crash, a moment which is not always known.

 Even when drivers admitted cell phone use during a fatal crash, the NCS analysis found that in about one-half of these cases, the crash was not coded in federal data (the National Highway Traffic Safety Administration’s Fatal Analysis Reporting System). In addition, there are an unknown number of cases in which cell phone use involvement in crashes is impossible to determine. One example would be a driver reading an email or text message on a phone who dies in a crash without any witnesses. 
 
The report also revealed that large variances in reporting across states were observed when reviewing crashes in Fatality Analysis Reporting System (FARS) that were coded as cell phone-affected in 2010 and 2011. For example, Tennessee reported 71 fatal crashes involving cell phones in 2010 and 93 in 2011. However, states with much larger populations of drivers reported far fewer crashes involving cell phones. New York reported 10 such crashes in 2010 and one in 2011. New Jersey reported five in 2010 and four in 2011. Texas reported 40, but its neighboring state Louisiana reported none.
  
NSC uses the term “cell phone involved” because NSC review of driver use of cell phones includes all behaviors drivers were engaging in with their cell phones when crashes occurred: talking; typing or reading text or email; dialing phone numbers; using music, navigation or other apps; looking at phone; and reaching for the phone if it was ringing. A cell phone simply being present in the vehicle does not qualify as “cell phone involved;” there must have been evidence identified that a driver was engaging with the phone.

Compounding oversight. Bipartisan Senate health committee leaders have released draft legislation that would give the Food and Drug Administration greater oversight of compounding pharmacies, in response to last year’s fatal meningitis outbreak allegedly caused by a contaminated compounded drug. lexology

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