texas workers` compensation update

Transcription

TEXAS WORKERS’
COMPENSATION UPDATE
Developments Impacting the Texas Workers’ Compensation System
October 30, 2014
Commissioner Brannan Delivers Keynote Speech at ICT Workers’ Comp Conference
On September 18, 2014, Commissioner of Workers’ Compensation Ryan
Brannan delivered the keynote speech at the Insurance Council of Texas’
2014 Workers’ Compensation Conference. Brannan replaced Rod Bordelon
who retired at the end of August 2014.
Commissioner Brannan acknowledged and thanked former Commissioners
Albert Betts and Rod Bordelon for all of the work that they did to make the
Texas system a model for other states. Brannan said that he plan on
continuing the hard work of Betts, Bordelon and DWC staff.
Brannan noted that the Texas workers’ compensation system turned 100
years old last year and is doing well. “We have seen significant improvement with the performance of the system since 2005,” said Brannan.
Commissioner Ryan Brannan
Claims Are Down, Employer Participation is Up and More Carriers are Writing Insurance in Texas
Commissioner Brannan reported that there are fewer claims in the Texas workers’ compensation system.
“We have seen a 33 percent decrease in non-fatal workplace injuries since 2003,” said Brannan. “Fewer on
the job injuries means safer workplaces for Texas employees and lower costs for Texas employers.”
Brannan reported that we have seen lower workers’ compensation insurance costs for Texas employers. He
noted that the lower costs has resulted in more employers buying workers’ compensation insurance policies.
The commissioner said that workers’ compensation premium rates have declined 50 percent.
“The number of non-subscribers has decreased from 38% in 2004 to 33% in 2012,” said Brannan. Currently,
75 percent of Texas employers are in the Texas workers’ compensation system while 20 percent of nonsubscribers provide some other coverage for their employees.”
Brannan reported that with system costs down, workers’ compensation insurers are able to make an
underwriting profit. He noted that as a result of the ability to make an underwriting profit, more insurance
carriers are writing workers’ compensation policy in Texas.
Medical Costs Are Down and Fewer Prescription Drugs Are Being Taken by Injured Employees
Commissioner Brannan reported that system medical costs are down and a fewer dangerous prescription
drugs are being prescribed to and taken by injured employees. The commissioner noted that there has been
significant reduction in medical costs since 2001.
Continued on Page 8.
Copyrighted Publication of the Insurance Council of Texas
The Insurance Council of Texas (ICT) has been following several significant developments that
impact the Texas workers’ compensation system.
The following developments are reported on in this edition of the Texas Workers’ Compensation
Update newsletter:
Articles
Page Number
1
Message from the Executive Director of the Insurance Council of Texas
6
Centers for Disease Control Establishing Ebola Alert Team; Care Instructions Changed
10
State Health Commissioner Says Texas Health System Well Prepared to Deal with Ebola
Threat
14
Gov. Perry Calls for Travel Ban from Ebola Outbreak Countries
15
TDI Publishes Workers’ Compensation Health Care Network Report Card
16
Workers’ Compensation News Briefs
23
TDI Publishes Report on Dispute Resolution Trends: The Number of Disputes Have Dropped
25
DWC Determines Discount and Interest Rates for October 1, 2014 Through December 31,
2014
27
Spotlight on a Texas Insurance Industry World War II Veteran: Don Manthe
28
Over-the-Counter Pain Medications are more Effective for Acute Pain than Prescribed
Painkillers
37
Featured Articles
Page 1
Message from the Executive Director of the Insurance Council of Texas: The Texas Workers’
Compensation System Ten Years Later
Page 6
Page 16
Workers’ Compensation News Briefs
Page 23
TDI Publishes Report on Dispute Resolution Trends: The Number of Disputes Have
Dropped
Page 25
Page 28
Column: DePaolo’s Work Comp World – Ebola and Workers’ Comp
Page 40
DWC Proposes Amendments to Medical State Reporting EDI Rules
Page 48
Are You Ready for Medical Marijuana? Understanding the Medical, Legal, and Liability
Implications for Insurers
Page 52
What If the Terrorism Risk Insurance Act is Not Renewed?
Page 63
Copyrighted Publication of the Insurance Council of Texas – October 30, 2014
Page 2
Articles
Page Number
Column: DePaolo’s Work Comp World – Ebola and Workers’ Comp
40
NCCI Proposes Decrease for Workers’ Compensation Loss Costs in Texas
42
Division of Workers’ Compensation Announces Recent Enforcement Actions
45
TDI Considering Amendments to the Independent Review Organization Rules
46
DWC Finalizes Revisions to Two Forms
47
48
Are You Ready for Medical Marijuana? Understanding the Medical, Legal, and Liability
52
Implications for Insurers
Stone Loughlin & Swanson’s Workers’ Compensation Case Law News Shorts
57
Business Insurance Reports Terrorism Insurance Rates Decrease as Demand for Coverage
Increases
60
63
DWC Proposes Lifetime Income Benefits Rule
68
Significant Texas Case Law Update From WorkCompCentral
71
TDI Insurance Fraud Prosecutor Named for Dallas County
74
Division of Workers’ Compensation Issues Call for Presenters for 2015 Texas Safety Summit
75
New Online Form Option Helps Employers Comply with State Workers’ Comp Requirements
75
Workers’ Compensation Events Calendar
79
Navigating ICT’s Newsletter Is Easy
Did you know that you can navigate ICT’s workers’ compensation newsletter by clicking on the page number
located in the table of contents?
Page 3
TEXAS WORKERS’ COMPENSATION UPDATE
A Copyrighted Publication of the Insurance Council of Texas
Albert Betts, Jr., Executive Director
Steve Nichols, Manager, Workers’ Compensation Services and Newsletter Editor
[email protected]
Cynthia Haywood, Assistant Newsletter Editor
[email protected]
The Texas Workers’ Compensation Update, published by ICT Services, Inc., is Texas’ premier source
for news on developments in the Texas workers’ compensation system. The newsletter includes
articles written by Insurance Council of Texas staff and contributing authors who have extensive
experience with the Texas workers’ compensation system. The views expressed in articles that have
been contributed to the newsletter do not necessarily reflect the views, opinions, or position of the
Insurance Council of Texas or its member companies.
Subscription Price:
$150 per year for electronic
subscription
No Cost for ICT Members
and Associate Members
Comments and Inquiries:
Please send all comments or inquiries to Steve Nichols at the
following address, telephone number, or above referenced Email address:
ICT Services, Inc.
P.O. Box 15
Austin, Texas 78767-0015
Phone 512/ 444-9611 ● Fax 512/ 444-0734
Available as an electronic publication only.
Navigating ICT’s Newsletter Is Easy
Did you know that you can navigate ICT’s workers’ compensation newsletter by clicking
on the page number located in the articles table of contents at the beginning of the newsletter?
Page 4
ADVERTISEMENTS INDEX
Advertiser
Page Number
Insurance Council of Texas 2015 Workers’ Compensation Seminars
20
Insurance Council of Texas Workers’ Compensation Publications Available to Members
20
Happy Thanksgiving from the Staff of the Insurance Council of Texas
21
EK Health
22
The Insurance Record
24
The National WWII Museum
34
Smith & Carr, P.C.
35
Thornton Law Firm
36
Thompson Coe
38
WorkCompCentral
39
Flahive, Ogden & Latson
43
Downs Stanford, P.C.
44
myMatrixx
50
Progressive Medical
51
PRIUM
56
Stone Loughlin & Swanson, LLP
58
WellComp
59
Burns Andeson Jury & Brenner, LLP
61
UniMed Direct
62
GENEX
65
JI Companies
66
Jopari Solutions
67
The Texas Committee on Insurance Fraud
69
ODG Treatment in Workers’ Comp
70
Coventry Workers’ Comp Services
72
Mitchell SmartAdvisor™ Solutions
73
Property Casualty Insurers Association of America
76
Claims Litigation & Litigation Management Alliance (CLM)
78
Page 5
Message from the Executive Director of the Insurance Council of Texas
The Texas Workers’ Compensation System Ten Years Later
Next year will mark the ten year anniversary of the last set of major reforms in
the Texas workers compensation system. As we reach this milestone, I think
all industry participants need to look back and reflect on how different the
workers’ compensation system is today as compared to 2005. While today’s
workers’ compensation system may be far from perfect, it is “light years”
ahead of where it was ten years ago in terms of stakeholder conflict, turmoil,
regulatory approach, and uncertainty in expectations for stakeholder behaviors.
If you were around in 2004, during the Sunset Review of the former Texas
Workers’ Compensation Commission (TWCC), you may recall a series of
contentious hearings in which no stakeholder group-labor, insurance carriers, employers, healthcare
providers, or injured workers- expressed support for the TWCC or happiness with the workers’ compensation system.
Albert Betts, Jr.
Ultimately, the Texas Sunset Commission report recommended a serious of sweeping changes for the
TWCC and commented on the concerns with the system which included: the high cost of workers’
compensation insurance coverage, rising medical costs and utilization, limited access to quality medical
care, and poor return to work outcomes for injured workers. The Sunset report also raised questions
about the performance of the TWCC as the administrator of key parts of the system, including oversight
of the benefit delivery system, ensuring fair and reasonable reimbursement for health-care providers, and
resolving disputes in the system.
During the 2005, 79th Legislature, the Sunset report ultimately formed the basis for sweeping changes to
TWCC and to the workers’ compensation system. Most significantly, the TWCC was abolished and its
regulatory functions were moved to the Texas Department of Insurance. The new regulatory agency,
within the TDI, was renamed the Division of Workers’ Compensation. Also, instead of a six member
board of commissioner, the DWC was led by a single Governor appointed commissioner. Other changes
led to the creation of workers’ compensation networks, medical treatment guidelines, changes to
preauthorization, a drug formulary, and revamped fee guideline structures for medical providers and
hospitals.
Ten years later, the Texas workers’ compensation system is viewed by many across the nation as a model
for reform and stability. Among the system improvements: employer’s workers’ compensation premiums
have been drastically reduced; medical costs have declined from among the highest in the nation;
improved access to care for injured workers; declining injury rates; more injured employees returning to
work sooner with fewer days off; and increased employer participation in the system. The DWC has
become much more effective as the regulator of the system, and although the industry does not always
agree with the agency’s actions, there is a sense that we at least have an opportunity to engage in
meaningful discussion of our concerns and issues. Most importantly, for all system stakeholders,
whereas Texas was once a system viewed as a model of dysfunction, our workers’ compensation system
is now noted for its successes.
Does that mean there is no room for improvement? Of course not. There are always changes that can be
made to make the system work even better for all stakeholders and we, as members of the insurance
industry, should continue to work to improve the system where possible. The ultimate goal remains to
Page 6
ensure that when an employee suffers a workplace injury that he or she receives the appropriate medical
care with the goal of enabling that person to return to gainful employment as soon as possible. We
should continue to work towards that goal but at the same time appreciate how far our workers’
compensation system has progressed in the last ten years.
Albert Betts
Executive Director, Insurance Council of Texas
About the Insurance Council of Texas
The Insurance Council of Texas (ICT) is a multi-purpose, non-profit trade association of property and
casualty insurers writing business in Texas. ICT's purpose is to provide a mechanism through which our
members and associate members can collectively represent their interests in the regulatory process and
stay abreast of those events that affect the business of insurance in Texas.
ICT does not lobby, but follows the legislative process and reports to the membership on important
legislative initiatives and changes in insurance law. We are regular participants in regulatory matters and
employ an active committee system to guide our involvement.
Membership in ICT is open to all property and casualty insurance companies operating in Texas. At
present, our ranks include over 450 companies that are diverse in size, product line, and method of distribution. The diversity in membership is reflected in the composition of our board of directors which in turn
strengthens the leadership of the association.
Associate membership is available to any person, firm or corporation which provides services to property/
casualty insurance companies and whose interests are aligned with those of the industry. Admission to
associate membership is at the discretion of the Executive Director. Associate members are not eligible to
vote, but receive all of the other benefits of membership including the many bulletins, special announcements, and newsletters published by ICT.
ICT represents its members at regulatory hearings effecting residential property and private passenger and
commercial auto, and workers' compensation insurance. ICT's committee members and board of directors
play an active role in developing regulatory proposals as well as our responses to issues effecting the
member companies.
Visit ICT online to learn more about what we do for the Texas property and casualty insurance industry.
Page 7
Commissioner Brannan Delivers Keynote Speech at ICT Workers’ Comp Conference Continued from Page 1
“A 16-state study of medical costs by the Workers’ Compensation Research Institute compiled in 2001
reported that Texas was among the states with the highest workers’ compensation medical costs in the
nation,” said Brannan. “By 2011, Texas’s medical costs were almost 23 percent below the median costs
among those same 16-states which included Florida, Pennsylvania, Louisiana and Illinois.”
Brannan reported that Texas is continuing to see fewer Opiod drugs prescribed to injured employees in Texas
since the adoption and implementation of the Pharmacy Closed Formulary in January of 2011.
“We have seen a 10 percent decline in the total number of prescriptions in the Texas workers’ compensation
system while there has been a 15 percent decline in total pharmacy costs due to the adoption of the Pharmacy
Closed Formulary,” said Brannan. “The formulary has also helped to address the amount of prescription drug
abuse in the Texas system and help save lives while producing a more effective workforce.”
Brannan said, “Despite the lower medical costs, injured employee access to medical care has improved – we
have seen the average number of patients per doctor decrease from 18 claims per physician in 2004 to
approximately 12 claims per physician in 2013.”
Better Return to Work Outcomes and Fewer Disputes
Commissioner Brannan reported that there has been improvement in return-to-work outcomes in the Texas
workers’ compensation system. He noted that 79 percent of injured employees who are currently receiving
income benefits are returning to work within 6 months of their injury as compared to 74 percent in 2004.
The commissioner also reported that there has been a significant decline in the number of denial of claims
and disputes. “The vast majority of claims – 94 percent – are proceeding through the system without a single
dispute,” said Brannan. “Only 6 percent of all claims ever have a dispute arise – we are very proud of that
fact and hope to improve upon that number.”
Brannan noted that since 2003, there has been a 70 percent decline in the number of medical disputes. He
reported that there has also been a significant reduction of the time it takes for a medical dispute to be
resolved by the Division of Workers’ Compensation.
State of the Texas Workers’ Compensation System and New Initiatives for Further Improvement
Commissioner Brannan said, “The state of the Texas workers’ compensation system is very strong which is
the result of the hard work of my two predecessors – Albert Betts and Rod Bordelon – and the staff of the
Texas Department of Insurance’s Division of Workers’ Compensation.”
Brannan noted that even with the strong performance of the Texas workers’ compensation system, there is
still room for improvement. The commissioner reported that the Division of Workers’ Compensation will be
initiating several initiatives aimed at further improving the performance of the Texas system.
“One of the things we are going to be looking at is how to improve workplace safety,” said Brannan. “I
would also like to see the number of disputes decline further.”
Commissioner Brannan said another area where Texas can improve is decreasing the number of work-related
fatalities. He reported that Texas leads the nation in the number of on-the-job fatalities. “493 Texas
employees lost their lives while working this past year – we can decrease that number by making the
workplace safer,” said Brannan. “To achieve that – we are trying to find ways to reach out to employers,
employees, and different associations and find ways to improved workplace safety.”
Page 8
Commissioner Brannan reported that the DWC plans on rewarding good workplace safety behavior with
Peer Review Awards. He noted that the DWC would like to provide greater exposure for the awardees by
obtaining better press coverage for “Peer Review” awards.
Brannan asked insurers for their help in recognizing employers with excellent workplace safety and
identifying other ways to improve workplace safety. He reported that as commissioner he plans on doing
everything he can to emphasize workplace safety. The commissioner noted that the DWC has many
resources that employers can tap into for the purpose of improving workplace safety.
Commissioner Brannan said another area where the DWC can improve involves injured employee outreach
and education.
“I recognize that navigating the Texas workers’ compensation system can be both complicated and
frustrating for injured employees,” said Brannan. “I have been on the job for six weeks and am barely
understanding how it all works – I can imagine how injured employees must feel.”
Brannan said the DWC will be doing a lot more outreach to injured employees. He reported that the DWC
will be holding “Brown Bag” luncheons for injured employees so that they get to meet the Division staff who
can help them get answers to their questions.
“I want to look for ways to better inform injured employees about their rights and responsibilities,” said
Brannan. “It is not just the DWC’s responsibility to do this – it is also the responsibility of insurance carriers
who will be asked by the Division to make sure that their adjusters are properly trained and have the
appropriate knowledge of the law and rules.”
Commissioner Brannan said insurance carriers need to reinforce the importance of communications with
injured employees as a lot of the system friction could be alleviated if there was open and clear communications to injured employees about expectations and requirements.
Brannan said the DWC will be looking at ways to continue to streamline the dispute resolution system so that
disputes are resolved in a shorter timeframe. He noted that this initiative includes ensuring that the disputing
parties have exhausted all attempts to resolve a dispute before they ask the Division to resolve the dispute.
“When the Division does attempt to resolve the disputes, we will expect that the parties are adequately
prepared to go forward with the dispute resolution process,” said Brannan. “I have directed staff to look at
ways to promote low level dispute resolution.”
Commissioner Brannan reported that the DWC is in the process of updating interrogatories for claimants and
insurance carriers since those interrogatories have not been updated since the late 1990s. The DWC is also
looking at ways to improve its efficiency – we are looking at ways to automate forms and receiving
electronic records to reduce the flow of paper in the Texas workers’ compensation system.
“We may call upon some of you to “pilot” new ideas with us to include finding ways to electronically
exchange dispute packets for dispute resolution purposes or creating new “smart” forms,” said Brannan. “As
good stewards of state dollars, we owe tax payers to be “lean and mean” as possible.”
Commissioner Brannan concluded his remarks by stating that it is his goal to build upon the foundation that
my predecessors have provided for the Texas workers’ compensation system to ensure that Texas remains
the model for how good legislation combined with thoughtful implementation to produce outstanding results
that benefit all system stakeholders.
Page 9
Texas Workers’ Compensation System Performance Highlights
● 27 percent decline in workplace injury rates since 2004;
● 22 precent decline in workers’ compensation claims filed since 2004;
● 50 percent decline from 2003 through 2011 in workers’ compensation insurance rates;
● Decline in system medical costs from among highest in 2001 Workers’ Compensation Research
Institute study to 23 % below study median in 2011;
● Improvements in number employees returning to work, and decline in days off work for those
Employees;
● More Texas employers are opting to participate in the Texas workers’ compensation system – the
percentage of employers that are non-subscribers decreased from 38% in 2004 to 33% in 2012;
● 10 percent decline in the use of Opioid prescription drugs since the implementation the DWC’s
new closed drug formulary which has reduce prescription drug abuse in the Texas workers’
compensation system, saved lives and led to a more productive workforce;
● An improvement in access to medical care due to an increase in the number of physicians treating
injured workers. The average number of claims treated per physician has decreased from 18.3
claims per physician in 2004 to 16.1 claims per physician in 2010;
● More employees returning to work with almost 79% of employees currently receiving Temporary
Income Benefits returning to work within 6 months compared to 74% in 2004); and
● Employees returning to work faster with the median days off of work reduced from 26 days to 20
days which has reduced system costs.
Source: Texas Department of Insurance, Division of Workers’ Compensation April 22, 2014 Written Testimony of
Commissioner Rod Bordelon before the Texas House of Representatives’ Business and Industry Committee
Centers for Disease Control Establishing Ebola Alert Team; Care Instructions Changed
Insurance Information Institute Publishes White Paper on Potential
Ramifications the Spread of Ebola Might Have on the U.S. Insurance Industry
Two cases of the deadly disease Ebola have been
reported in Texas since the death of Thomas Eric
Duncan. Two nurses who had been part of the
medical team at the Texas Health Presbyterian
Hospital in Dallas treating Duncan, have contracted
Ebola.
The Associated Press has reported that more than 70
hospital staffers were involved in the care of Duncan
who died October 8, 2014 after losing his battle with
Ebola. The Centers for Disease Control and
Preventation (CDC) has said it is monitoring 48
potential contacts.
Page 10
The Dallas-Morning News reported that the first received a blood transfusion from American doctor Kent
Brantly who is an Ebola survivor. Brantly caught Ebola while working in West Africa treating Ebola patients
for the North Carolina missionary group.
On October 15, 2014, USA Today reported that the CDC announced that the second nurse would be
transferred to Emory University Hospital in Atlanta, Georgia for monitoring and treatment. The CDC has
reported that the second nurse traveled by air on October 13, 2014, the day before she reported symptoms.
Because of the proximity in time between the evening flight and first report of illness of the second nurse the
following morning, CDC reached out to passengers who flew on Frontier Airlines flight 1143 Cleveland to
Dallas/Fort Worth on October 13, 2014. The CDC asked all 132 passengers on Frontier Airlines Flight 1143
to call the CDC at 1 800-CDC INFO (1 800 232-4636).
On October 16, 2014, the first nurse infected with the Ebola virus was transferred to a National Institutes of
Health clinical center in Bethesda, Maryland. The second nurse was transferred from Dallas to a special biocontainment unit at Emory University Hospital in Atlanta, Georgia by air ambulance on October 15, 2014.
The Texas nurses’ Ebola cases are believed to be the first workers’ compensation Ebola cases in the nation.
The Texas Health Presbyterian Hospital in Dallas is a subscriber to the Texas workers’ compensation system.
The Risk of Contracting Ebola is Very Low
The CDC has reported that the risk for contracting Ebola is very low. People are at risk if they come into
very close contact with the blood, saliva, sweat, feces, semen, vomit or soiled clothing of an Ebola patient, or
if they travel to affected areas in West Africa and come into contact with someone who has Ebola.
CDC Establishes an Ebola Response Team
On October 14, 2014, CDC Director Dr. Thomas Frieden announced that his organization was establishing
an Ebola response team for hospitals with Ebola patients. Frieden said the team can be sent to any hospital in
the United States that diagnoses another Ebola patient, to make sure the local health workers can provide
care safely.
Frieden described the new response team as having some of the world's leading experts in how to care for
Ebola and protect health care workers from it. They would be charged with everything from examining how
the isolation room is physically laid out, to what protective equipment health workers use, to waste management and decontamination.
CDC Changes Ebola Care Instructions
The Dallas Morning News reported that Ebola care instructions at a Dallas hospital and across the country
were changed by the CDC on Monday, October 13, 2014.
Both Nurses Cured and Released from Their Respective Hospital
On October 24, 2014, Nina Pham, the first nurse that contracted Ebola while treating Thomas Eric Duncan,
was declared by the National Institutes of Health (NIH) to be Ebola free and was released from the NIH
hospital in Bethesda, Maryland. Pham visited President Barack Obama in the Oval Office after being
released from the hospital.
According to ABC News, the second nurse who contracted Ebola, Amber Vinson, was declared Ebola free
and released from Emory University Hospital in Atlanta, Georgia on October 28, 2014 and returned home.
Page 11
Insurance Information Institute White Paper on Potential Impact of Ebola on the Insurance Industry
On October 13, 2014, the Insurance Information
Institute (Institute) published a white paper about the
potential ramifications the spread of Ebola might have
for the insurance industry.
The Institute reported that the CDC does not expect
the Ebola virus to infect people other than a small
number of healthcare workers and others who have
had direct contact with the bodily fluids of an infected
person.
As of October 15, 2014 all but four of the cases were
in four countries in Africa (Guinea, Liberia, Sierra
Leone, and Nigeria). One was in Senegal, one in
Spain, and (as of October 12th) three in the United
States.
Potential Impact on the Life and Health Insurance Industries
The Institute reported that the effects on the Life and Health insurance industries will clearly depend on
whether the infected people are insured. Some of those who have died up to now were children and almost
certainly did not have life insurance.
The Institute reported that even in the unlikely event that the Ebola virus spreads to infect tens of thousands
of adults in the United States, the financial impact will likely be quite manageable. This is because perhaps
one third of adults in the U.S. have life insurance only through their employment, and the amount is typically
equal to one year’s income. Another one third have individual life insurance, with the average death benefit
in the $200,000 range. In a typical year life insurers pay about 2 million death claims, so another 100,000
would be only 5 percent more than typical. Moreover, most life insurers are well capitalized, and even the
largest life insurers have reinsurance to prevent a surge in death claims from imperiling their solvency, so
that the net effect would likely be, at most, a reduction in the profit they would otherwise record.
Potential Impact on the Property & Casualty Insurance Industry
The Institute reported that the main effect on the Property &Casualty insurance industry would likely be on
companies writing Workers Compensation insurance because healthcare workers could be most directly
exposed (as happened in Texas and in several African countries). Workers’ compensation pays for the cost of
medical care and lost income for people who become ill in the course of their work, and pays death benefits
if they die from a work-related cause.
The Institute report that it is unlikely that many workers in the main affected African countries have workers’
compensation type coverages. The white paper noted that the latest Swiss Re report indicates that the level of
premiums per capita for all non-life insurance coverages combined (not just Workers Compensation) in the
three most affected countries is so low as to not be listed.
The Institute noted that in the United States workers compensation coverage is nearly universal, but the
likelihood of claims is low, assuming that employers and their workers take CDC recommended precautions.
Page 12
What You Need to Know About Ebola
Ebola virus disease (EVD) is a severe, often fatal hemorrhagic disease that first appeared in 1976 in two
simultaneous outbreaks. One outbreak was in Sudan and the other was in the Democratic Republic of
Congo, in a village near the Ebola River -- from which the disease got its name. The Ebola pandemic in
West Africa began in a small Guinea village in March 2014, and is the largest and most complex outbreak
of the disease since it was discovered.
Humans are not the natural host of Ebola virus, and according to the Centers for Disease Control and
Prevention (CDC), the disease has been introduced into the human population through close contact with
the blood, organs or bodily fluids of infected animals like chimpanzees, gorillas, fruit bats, monkeys, forest
antelope and porcupines.
The disease is transmitted from human-to-human by direct contact with the blood, saliva, mucous or other
bodily fluids of an infected person – or from contact with contaminated surfaces and materials.
Symptoms of Ebola virus infection can take anywhere from 2 to 21 days to appear, and can include sudden
onset of fever, fatigue, muscle pain, headache and sore throat. Humans are not considered infectious until
the onset of symptoms. As the illness progresses, patients may experience vomiting, diarrhea, rashes,
impaired kidney and liver function, and in some cases, the CDC says, both internal and external bleeding.
Basic Information About the Transmission of Ebola from the CDC
You CANNOT get Ebola through:
You CAN get Ebola by:
● Touching the blood or Body fluids of a person
who is sick with or has has died from Ebola.
● The air.
● Through water.
● Touching contaminated objects, like needles.
● Through food.
● Touching infected animals, their blood or other.
Don’t Worry: Your Chances of Catching Ebola Are Very Low
Ebola Information and Resources
Comprehensive Factsheet from the Centers for Disease Control and Prevention
CDC Website on Ebola
Risk of Exposure
Signs and Symptoms of Ebola
Diagnosing Ebola
Cases of Ebola Diagnosed in the United States
How to Prevent Ebola
Treating Ebola
Information for Healthcare Providers
Facts, Perspectives on Ebola Pandemic
Experimental Treatments and Vaccines for Ebola
Advice for Travelers
World Health Organization’s Ebola Response Road Map
Questions and Answers about Ebola and Pets
Insurance Information Institute’s White Paper
Page 13
State Health Commissioner Says Texas Health System Well Prepared to Deal with Ebola Threat
By Robert Leakey, M.D., State Health Commissioner
The Ebola virus doesn't live particularly long once outside the body and
can be killed with standard hospital disinfectants. But it’s scary because
we've seen the heartbreaking images from impoverished countries in
West Africa overwhelmed by Ebola. We are right to be concerned about
a disease taking a humanitarian toll on places that lack the resources to
prevent its spread.
Ebola is one of the many diseases that state and national public health
agencies monitor constantly. In a world made smaller by frequent travel,
health officials know that diseases across the globe have the potential to
affect us all. The good news is that Texas was well prepared long before
Ebola landed on our shore. When a Dallas patient became the first Ebola
case diagnosed in the United States, a public health process with a
history of success kicked into high gear.
The Texas Department of State Health Services and our counterparts
across the nation have developed practices over the years that have
successfully contained measles, tuberculosis, hepatitis, and Middle East
Respiratory Syndrome (MERS) to name just a few. Strong working relationships with our local and federal
partners are crucial to staying prepared and being able to react quickly.
Dr. Robert Leakey, M.D.
Texas Commissioner of Health
No response to an emergency situation is perfect, and there have been challenges. But this tried and true
process is working in Dallas, too. The patient is getting excellent care in isolation, and we’re identifying
everyone at risk of possible infection from exposure to this single case of Ebola to ensure no other Texans
are exposed.
In African countries with Ebola outbreaks, rampant poverty and cultural practices contribute to the spread of
the disease. But the primary reason we can be confident that we will stop Ebola from spreading here is the
strength of our health system.
In the United States, our advantage starts with surveillance and the ability to quickly get information and
alerts to doctors and hospitals. Our state public health laboratory in Austin is among 13 in the nation than can
test for Ebola, along with a myriad of other diseases. This resource was crucial in the diagnosis of the Dallas
case.
We can take for granted things as simple as rubber gloves – found in every medical examination room in the
United States. This isn't the case in too many poor countries.
When our patient tested positive for Ebola, we knew what to do to contain the disease. Teams of public
health workers quickly identified even those who had the briefest of contact with the patient. Ebola is spread
only through direct contact with blood or other bodily fluids or exposure to contaminated objects, such as
needles. It cannot be spread simply by being near someone who is infected, and people become contagious
only after they begin to have symptoms.
We've identified those who had the type of contact with our patient that could put them at risk of potential
infection and will be monitoring them. That includes checking their temperature twice a day to make sure we
catch any secondary cases as early as possible. Health workers will check on those individuals daily
Page 14
throughout the three weeks it can take for Ebola symptoms to develop. This practice of contact tracing has
been developed and refined over decades of public health work involving countless diseases and public
health threats.
Ebola has caught the nation's attention in a way that very few of the health threats we work on daily do. It's a
serious disease with devastating consequences in nations that lack the facilities and resources to fight it. Rest
assured that's not the case here.
Doctors and hospitals in Texas are well trained and have responded to numerous public health threats over
the years. We have a history of successfully containing the spread of disease and protecting the public. I'm
confident we'll do the same with Ebola.
Gov. Perry Calls for Travel Ban from Ebola Outbreak Countries
Outlines New Recommendations on Disease Preparedness and Response
On October 17, 2014, Texas Gov. Rick Perry announced the first
recommendations issued by the Texas Task Force on Infectious
Disease Preparedness and Response. Gov. Perry created the task
force, headed by Dr. Brett P. Giroir, earlier this month to assess the
state's readiness and ability to respond to Ebola and other infectious
diseases.
Citing the need to stop Ebola before it comes to the United States,
Gov. Perry also called on President Obama to enact an air travel ban
from countries affected by Ebola outbreak, a message he conveyed
directly to the President yesterday during a telephone call.
Gov. Rick Perry
Gov. Perry has previously called for enhanced medical screening at
all ports of entry, as well as quarantine facilities to ensure public
safety.
"Air travel is how this disease crosses borders, and it's certainly how it got here to Texas," said Gov. Perry
"Based on recent and ongoing developments, I believe it is the right policy to ban air travel from countries
that have been hit hardest by the Ebola outbreak, provided there's an exception for aid workers to continue
their important work fighting this disease."
Among the initial recommendations being made by the task force to enhance our state's preparedness and
response to infectious disease are:
• Establishment of two Ebola Treatment Centers in Texas;
• Establishment of specialized patient transport teams;
• Expanded training of infectious disease protocols for health care workers;
• More testing labs for infectious disease; and
• Increased authority for DSHS chief to issue Enforceable Control Orders.
"The Task Force is providing technical recommendations to the operational teams responsible for the Ebola
response in Dallas, on topics ranging from decontamination to options for experimental therapeutics," said
Dr. Brett P. Giroir, director of the Task Force and CEO of Texas A&M Health Science Center. "The Task
Force's objectives are broad, and will require substantial inquiry to completely meet our charge, but there are
Page 15
key issues that deserve immediate attention. We are committed to communicating lessons learned, and in
turn recommending actions that will ensure Texans' safety and resilience."
The recommendations of the Governor’s task force can be found here.
The Texas Department of Insurance (TDI) Workers’
Compensation Research and Evaluation Group (WCREG)
has published the annual report card on the performance of
Workers’ Compensation Health Care Networks as required
under Chapter 1305, Texas Insurance Code.
The report card is the eighth to be published by the WCREG
since TDI certified the initial networks in early 2006.
Contained in the report card is a comparison of network and
non-network claims on a variety of measures, including
health care costs, utilization of care, satisfaction with care,
access to care, return-to-work outcomes, and health
outcomes. The report card also compares the performance of
certain political subdivision networks authorized under
Section 504.053, Texas Labor Code, with networks certified by TDI and non-network claims.
In March 2006, TDI began certifying workers’ compensation networks. There are currently 29 networks
covering 254 Texas counties certified to provide workers’ compensation health care services. Among the
certified networks, 21 were treating injured employees as of February 1, 2013. Since the formation of the
first network, a total of 416,551 injured employees have been treated in networks. Texas Star accounts for 33
percent of all claims that were treated in networks, with the smaller networks treating an increasing share of
injured employees.
Networks Continue to Show Improvement
Overall, the networks continue to show improvements in a variety of measures, including medical costs,
return-to-work outcomes, and health outcomes, compared to previous report cards. Generally, the networks
produced better lost time, return-to-work, and health outcomes compared to non-network claims. Nonnetwork claims continued to have lower average medical costs than network claims, but by just 0.7 percent,
down from 31 percent in 2010.
Data used to measure performance of the networks includes: workers’ compensation medical billing and
payment data collected by TDI for injuries that occurred between June 1, 2012 and May 31, 2013; results of
a survey of these injured employees conducted by the University of North Texas Survey Research Center;
and results from a February data call issued by TDI to 29 networks.
Network Costs and Insurance Industry’s Appraisal of Network Performance
Overall, Networks have improved cost performance relative to non-network. Networks’ average medical cost
fell by 7 percent, from $2,915 in 2010 to $2,700 in 2014. Over the same time frame, non-network average
medical cost increased by 21 percent, from $2,217 in 2010 to $2,681 in 2014.
Continued on next page.
Page 16
Steve Nichols, manager of workers’ compensation services at the Insurance Council of Texas, said insurers
are generally pleased with the performance of the workers’ compensation health care networks. He pointed
out that with few exceptions networks generally outperform non-networks in cost, return-to-work and health
outcomes.
Average Medical Costs of Non-Network and Network Claims
Source: Texas Department of Insurance’s Workers’ Compensation Research & Evalution Group
Page 17
Nichols noted that according to TDI’s 2014 network report card, most injured workers’ are reporting that
they are not having a problem getting the health care that they need.
With the exception of three networks, injured employees treated by a network are returning to work at a
greater rate than non-network injured employees.
Page 18
What Did the WCREG Review and Consider?
Network and Non-Network Claims
The WCREG calculated medical cost and utilization
measures for all 17 network entities at 6 months
post-injury for injuries occurring between June 1,
2012 and May 31, 2013.
Medical Cost measures are based on payments by
insurance carriers to health care providers.
Typically, actual payments are less than charges
(billed amount).
Medical Utilization measures represent the services
that were billed for by health care providers,
regardless of whether those services were ultimately
paid by insurance carriers. The goal of this measure
is to calculate actual services delivered by health
care providers, not just paid-for services.
Other utilization measures that account for the
difference between services billed for and services
paid for are more appropriate for quantifying the
effectiveness of utilization review, and are therefore
not addressed in this report.
Health care costs and utilization measures were
examined across professional health care services,
hospital services, and pharmacy services.
Source: Texas Department of Insurance’s Workers’
Compensation Research & Evalution Group
Professional cost and utilization measures were also analyzed by eleven sub-categories of services
(evaluation and management services, physical medicine modalities, other physical medicine services, CT
scans, MRI scans, nerve conduction studies, other diagnostic tests, spinal surgeries, other surgeries,
pathology and lab services, and other professional services).
Similarly, hospital cost and utilization measures were examined separately for in-patient, out-patient hospital
services and other types of hospital services. Other hospital services include a broad range of services such as
skilled nursing, home health, clinic, and special facilities (including ambulatory service centers).
Finally, pharmacy prescription cost and utilization were examined by five drug groups (Opioid prescriptions,
anti-inflammatory prescriptions, musculoskeletal therapy drug prescriptions, central nervous system drugs,
and other therapeutic drug prescriptions).
The network report card can be found on the Texas Department of Insurance website.
Information on the networks certified by TDI, their service areas, and contact information can be found at
http://www.tdi.texas.gov/wc/wcnet/indexwcnet.html.
Remember Safety As You Prepare for the 2014 Holiday Season
The U.S. Consumer Product Safety Commission (CPSC) is urging consumers to make safety a factor in
holiday decorating. Follow their safety tips for decorating and have a joyous and safe holiday season.
Page 19
Insurance Council of Texas
2015 Workers’ Compensation Seminars
April 8, 2015
Crowne Plaza Austin Hotel
6121 N. IH-35
Austin, Texas
April 23, 2015
Crowne Plaza Dallas Hotel
14315 Midway Road
Addison, Texas
Available to Insurance Council of Texas Members
Is your company or firm a member of the Insurance
Council of Texas (ICT)?
Workers’
Comp
If yes, did you know that you can request access to the
following publications:
Workers’ Compensation Newsletter – the Texas Workers’
Compensation Update;
Workers’ Compensation Bulletins,
State of the Texas Workers’ Compensation System;
Workers’ Compensation Legislative
Bulletins, and
Access to ICT’s Texas Workers Compensation Appeals
Panel Decisions Digest Online Electronic Manual?
Workers’
Compensation
Bulletins
Workers’
Comp
Bulletins
State of the
Workers’
Compensation
System
DWC
Appeals
Panel
Decisions
To Receive Access to These Publications, Contact Steve Nichols at [email protected].
Page 20
Happy Thanksgiving from the Staff of the Insurance Council of Texas
Each year on the fourth Thursday in November, Americans gather for
a day of feasting, football and family. While today’s Thanksgiving
celebrations would likely be unrecognizable to attendees of the original
1621 harvest meal, it continues to be a day for Americans to come together
around the table—albeit with some updates to the pilgrim’s menu.
Thanksgiving Traditions – Traditions are a big part of the Thanksgiving
holiday, and every American family has their own way of celebrating. From
stuffing the turkey to taking in a football game, there are many holiday
traditions observed by Americans.
Thanksgiving Meal – From the first Thanksgiving to today's turkey
burgers, turkeys are an American tradition dating back centuries.
According to the National Turkey Federation, 95 percent of Americans eat
turkey at Thanksgiving. Regional twists offer variations on the traditional
roasted bird, including coffee rubbed turkey from Hawaii,
salt encrusted turkey from New England, and deep fried turkey from
the South.
Thanksgiving Football Games – Throughout the United States, football
on Thanksgiving Day is as big a part of the celebration as turkey and
pumpkin pie. Dating back to the first intercollegiate football
championship held on Thanksgiving Day in 1876, traditional holiday
football rivalries have become so popular that a reporter once called
Thanksgiving "a holiday granted by the State and the Nation to see a
game of football."
Thanksgiving Day Parades – The first American Thanksgiving Day parade
was held in 1920, organized by Gimbel's Department Store in Philadelphia,
not Macy's as most people believe. The NYC Macy's Thanksgiving Day
parade tradition actually began in 1924, and has grown into an annual event
of balloons, bands, and floats, enjoyed by more than 46 million people each
year in person and on TV.
Thanksgiving Wish – Does your family fight over the wishbone from the
Thanksgiving turkey? Known as a "lucky break" the tradition of tugging
on either end of a fowl's bone to win the larger piece and its
accompanying "wish" dates back to the Etruscans of 322 B.C. The
Romans brought the tradition with them when they conquered England
and the English colonists carried the tradition on to America.
Giving Thanks – Last, but certainly not least, Thanksgiving is about
giving thanks for the people and blessings of the past year. From premeal prayers to providing holiday meals to the homeless, the holiday is
truly a celebration of praise and thanksgiving.
Learn More About Thanksgiving at the History of Thanksgiving in the
United States.
Thanksgiving Day NFL Football Games Schedule.
Page 21
An Associate Member of the Insurance Council of Texas
Page 22
WORKERS’ COMPENSATION NEWS BRIEFS
Madison, Wisconsin, October 27, 2014 – IAIABC releases its video of the Work Comp The Musical that
was presented on October 1, 2014 at their Centinnial Conference in Austin, Texas.
New York, New York, October 24, 2014 – The monthly magazine Inside Counsel, formerly Corporate
Legal Times, reported that the two Texas nurses infected with Ebola cannot file an action in Texas state court
to recover damages since Texas Health Resources, the parent company for Texas Health Presbyterian
Hospital, the Dallas hospital where the nurses worked, has workers’ compensation insurance written by
Trumbull Insurance Company which is affiliated with The Hartford.
Camarillo, California, October 24, 2014 – WorkCompCentral reported that during the course of the
Division of Workers’ (DWC) Compensation’s Quarterly Insurance Carrier Meeting on October 23, 2014,
Amy Lee, the DWC’s special deputy commissioner for policy and research, said that while stakeholders
would like for TDI’s Workers’ Compensation Research & Evaluation Group to take a closer look at a host of
issues, including compound drugs, the DWC does not have good data on compounded drugs due to how the
data has been reported. Lee announced that the DWC has had several meetings with pharmacy benefit
management companies who report the data in an attempt to make sure that the data is reported correctly in
the future (Subscription Required).
San Diego, California, October 20, 2014 – The Insurance Journal published an article titled “Is Ebola
Compensable Under Workers’ Compensation?” and reported that two tests must be satisfied before an illness
or disease can be considered occupational and thus compensable under workers’ compensation.
First, the illness or disease must be “occupational,” meaning that it arose out of the course and scope of
employment. Second, ultimate compensability of an illness or disease is dependent upon the work or
occupation of the employee; the illness or disease must arise out of or be caused by conditions “peculiar” to
the work.
Austin, Texas, October 10, 2014 – Texas Tribune reported that the Texas Department of Insurance’s
Division of Workers’ Compensation (DWC) has not collected race data on injured workers’ covered by
workers’ compensation insurance for several years even though the Texas Labor Code requires the collection
of the data. Texas Tribune subsequently reported that the DWC refused to release records sought by reporter
Jay Root. The DWC says the records are priviledged communications between DWC staff and their
attorneys.
Dallas, Texas, October 2, 2014 – The Insurance Record published a story that reported on the Texas Senate
State Affairs Committee’s Sep. 15, 2014 hearing which included a discussion on Texas Mutual Insurance
Company’s desire to cut its remaining ties to the state to become a privately owned mutual insurance
company. Texas Mutual’s plan was meet by opposition from Senator Troy Fraser R-Horseshoe Bay.
Austin, Texas, September 15, 2014 – The Texas Department of Insurance’s Division of Workers’ Compensation recognized the 2014 recipients of the Texas Star Award which honors peace officers, firefighters and
emergency medical first responders who have been seriously injured or killed in the line of duty. Governor
Rick Perry presented these awards to selected first responders and their families on September 2, 2014.
Washington, D.C, August 2, 2014 – The US Drug Enforcement Administration (DEA) published a final
rule in the Federal Register reclassifying Hydrocodone combination drugs from Schedule III to Schedule II
in the Schedule of Controlled Substances. This federal rule takes effect on October 6, 2014. The Division of
Workers’ Compensation subsequently realeased a memorandum reporting that the reclassification action has
no direct impact on the application of DWC’s pharmacy closed formulary.
Page 23
Visit the Insurance Record Online at www.InsRecord.com.
Page 24
TDI Publishes Report on Dispute Resolution Trends: The Number of Disputes Have Dropped
The Texas Department of Insurance’s (TDI) Workers’
Compensation Research & Evaluation Group (WCREG)
has published the results of study that analyzed the dispute
resolution trends over a 10-year period: 2003 – 2013. The
report is available on TDI’s website.
Texas Workers’ Compensation
System by the Numbers
The report is timely in light of a series of articles by the
Texas Tribune which alleged that 44 percent of all workers'
compensation claims were disputed in 2013, 52 percent in
2009 and 45 percent from 2008 - 2013. TDI’s report noted
that the number of initial whole-claim denials and disputes
are down 43 percent since 2005. The report also noted that
the number of medical disputes fell 70 percent from 2003 to
2013.
The WCREG’s report, titled “Income Benefit Disputes in the Texas Workers’ Compensation System 2003–
2013,” also noted that the number of claims with DWC indemnity dispute proceedings at the lowest level
since 2008.
Initially Denied/Disputed by Insurance Carriers (Whole Claim Initial Denials/Disputes)
Injury Year
Number of PLN1 Denials
Reported to DWC
Number of
Reportable Claims
Denials as a Percentage
of Reportable Claims
2005
2006
2007
2008
2009
2010
2011
2012
2013
18,296
16,898
16,390
14,994
12,040
11,110
11,110
10,962
10,513
116,831
116,738
112,106
107,727
97,164
99,171
98,524
96,430
83,369
15.7%
14.5%
14/6%
13.9%
12.4%
11.2%
11.3%
11.4%
12.6%
Note: A PLN1 is a Notice of Denial of Compensability/Liability and Refusal to Pay Benefits. These numbers do not
reflect denied and disputed claims that were subsequently approved after the dispute proceedings.
Source: Texas Department of Insurance, Division of Workers’ Compensation, System Data Report, and Texas
Department of Insurance, Workers’ Compensation Research and Evaluation Group, 2014.
Editor’s Note: Insurance carriers are required by law to investigate claims when the claims are initially
filed. The initial review of a claim can lead to a determination that the alleged injury is not compensable
(not a work-related injury or medical condition). Insurance companies are required to monitor claims as
the claims progress through the Texas workers’ compensation system. In some instances, an insurance
company will dispute specific body parts or medical conditions that are not related to and are not a result
of the injured employee’ occupational injury or disease – these types of disputes are known as extent of
injury disputes. For example, a medical report may note that the injured employee is being treated for
hypertension or diabetes. The insurance adjuster handling the claim will dispute the unrelated medical
condition utilizing the PLN 11. The majority of extent of injury disputes do not proceed to a dispute
resolution proceeding at the DWC.
Page 25
The WCREG reported that the number of medical disputes in the Texas workers’ compensation system
have steadily declined between 2003 – 2013 with the exception of two years (2008 and 2009) when there
an approximately 3,000 medical disputes spike. The number of medical disputes continued to decline from
2010 – 2013.
Medical Disputes Submitted to TDI-DWC by Type of Medical Dispute
Year
Dispute
Received
Pre-Authorization
Disputes
Fee Disputes
Retrospective Medical
Necessity Disputes
Total Number
of Disputes
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
11%
13%
13%
16%
27%
22%
24%
41%
35%
35%
27%
70%
60%
68%
70%
72%
75%
74%
58%
63%
64%
72%
19%
27%
19%
14%
1%
3%
2%
1%
2%
1%
1%
17,433
14,291
13,257
9,706
8,810
12,244
12,293
7,596
7,795
7,939
5,068
The WCREG reported that the number of claims with dispute resolution proceedings have dropped from
2008 – 2013. The majority of workers’ compensation claims proceed through the system without a single
dispute.
Claims with Dispute Proceedings by Injury Year
Calander Year
of Injury
Total Number
of Claims
Number of Claims
with Dispute Proceeding
Percent of Claims with
a Dispute Proceeding
2008
2009
2010
2011
2012
2013
107,779
97,164
99,171
98,524
96,430
83,369
7,511
6,553
7,240
7,416
6,044
1,914
7%
7%
7%
8%
6%
2%*
* The percentage of claims with a dispute proceeding may continue to increase as issues arise on more recent injury
claims.
Other significant WCREG findings include:
●
The number of BRC requests fell by 76 percent from 2003 to 2013, while CCHs requests increased
in 2011.
Page 26
●
The number of concluded BRCs in 2013 is approximately 48 percent lower than in 2003, even after
substantial increases in 2011 and 2012.*
●
The most-frequently used reasons to reschedule BRCs and CCHs include needing more time,
pertinent information, and medical evidence, as well as scheduling conflicts.
●
Injured employees generally use more attorney representation than ombudsman representation for
both BRCs and CCHs.
●
CCH decisions for employees have decreased while decisions for insurance carriers have increased,
especially from 2011. **
Editor’s Notes:
* The Division of Workers’ Compensation implemented new BRC rules in 2011, which clarified that
disputing parties must request a BRC to stop the 90-day finality of the first impairment rating and date of
Maximum Medical Improvement (MMI) in accordance with the Texas Workers’ Compensation Act.
** In accordance with the Texas Workers’ Compensation Act, Designated Doctor (DD) decisions have
presumptive weight in BRC and CCH proceedings, but the presumptive weight can be overcome by a
preponderance of the evidence.
The WCREG’s report supports many stakeholders’ claim that the Texas workers’ compensation system is
performing very well. Disputes are down. The majority of all claims never have a dispute or dispute
resolution proceeding.
DWC Determines Discount and Interest Rates for October 1, 2014 Through December 31, 2014
The Texas Department of Insurance’s Division of Workers'
Compensation (DWC) has determined that any interest or
discount provided for in the Texas Labor Code shall be 3.63
percent. Section 402.023 of the Texas Labor Code requires the
DWC to calculate the discount and interest rates.
This rate is computed by using the treasury constant maturity
rate for one-year treasury bills (0.13 percent) issued by the
United States Government, as published by the Federal Reserve
Board on September 16, 2014 (the 15th day preceding the first
day of the calendar quarter for which the rate is to be effective),
plus 3.5% as required by Section 401.023 of the Texas Labor
Code.
The DWC announced that the rate shall be effective October 1, 2014 through December 31, 2014. The rate in
effect for the previous period of July 1, 2014 through September 30, 2014 was 3.61 %.
Questions about the calculation of the discount and/or interest rate should be referred to Dylan McCoy of
TDI’s Fiancial Services Department at (512) 322-4322 or via e-mail at [email protected].
Page 27
By Steve Nichols, Insurance Council of Texas, and Ron Cobb, American Insurance Association
Two years ago, the Insurance Council of Texas honored seven of the
insurance industry’s World War II veterans. Each of these veterans
went to war and returned from that war and made a major contribution to the building of a successful and vibrant Texas insurance
industry.
Don Manthe as the Chairman of
the TIAA Executive Committee
On September 6, 2012, the Texas insurance industry’s seven World
War II veterans were present and introduced by Major General Bob
Marquette, USAF, Retired, who said in his remarks, "… the service
of these men we honor today was so important then, and now. They
serve as an example of what makes this nation great. We must not
forget that what they sacrificed then allows for the quality of life and
liberty that we enjoy today. The Insurance industry along with other
segments of our society have benefited from their hard work,
dedication and commitment. The same characteristics they showed
when they were defending this nation. The prosperity we enjoyed
after the war, was in large part due to the energies and initiative of
the men who fought for us during the war. Truly they were the
Greatest Generation".
One of the Texas insurance industry’s World
War II veterans present that day was Don
Manthe. Like all World War II veterans, he
grew up in the years of the Great Depression.
Manthe was born and raised in the small
town of Estherville, Iowa. Estherville is
named for Esther A. Ridley, one of the first
white settlers in the area, had a population of
between 4,940 in 1930 and 5,651 in 1940.
th
A view of 6 Street in Estherville, Iowa.
The town was laid out in the late 1850’s and
incorporated in 1881.
Estherville, Iowa is known for the Estherville Meteorite which fell in a few miles north of the town. Portions of the
meteorite are on display in the Estherville Public Library, the Smithsonian Museum of Natural History, the
Museum Reich der Kristalle in Munich and the Naturhistorisches Museum in Vienna, Austria.
Growing Up During the Great Depression
Manthe was the second child of Oran and Amelia Manthe who had three boys (Richard, Donald and Robert). Oran
had been a member of the Miles Quartet which performed in vaudeville on gambling boats along the West Coast.
Amelia played the organ at the Methodist, Episcopal, Catholic and Presbyterian Churches in Estherville and later
as the choir director at the First Christian Church. She also taught piano for 30 years and managed her household.
Page 28
Like most parents during the Great Depression, Oran and Amelia Manthe worked hard to put food on the
table and keep a roof over their three boys’ heads. Manthe has many fond memories growing up with his
brothers and the music that filled his home. He also has many special memories of his parents.
Like most boys who grew up during the
Great Depression, Manthe held down a job
and made do with what he had.
“Every summer a carnival would come to
town,” said Manthe. “I had a paper route and
used some of the money I made to go to the
carnival.”
He recalls having had only two sets of
clothes...the ones he wore and the ones in the
wash!
Like most boys of that era, Manthe played
many games that didn't cost a penny. Many
of the games were made up…like marbles.
He also played baseball and football in vacant lots with neighborhood kids.
The Manthe Boys, 1937: Dick, Bob and Don (on the right).
Since there was no television when he was growing up, Manthe and his family listened to the radio that
featured the news and radio programs such as the Jack Armstrong, All American Boy; Little Orphan Annie;
Fibber McGee and Molly; and The Lone Ranger. The radio entertained millions of Americans during what
was known “The Golden Age of Radio.”
War Comes to America
On December 7, 1941, Manthe was 14 years old and a
freshmore attending high school at Estherville High
School when World War II began for the United States.
Manthe heard about the attack by the Japanese on Pearl
Harbor and other military installations in the Hawaiian
Islands as he was leaving the local movie theater. Like
most Americans, Manthe did not know where Pearl
Harbor was when he heard about the attack on the U.S.
Fleet that was stationed there. But he knew one thing
was certain – the United States of America was at war.
Like most Americans, Manthe and his family listened
to the news about the attack on the radio. They also
followed the news of the war via the local newspaper.
The Manthes also experienced food and gas rationing.
A Scene from Pearl Harbor: A small boat rescues a
And like every American boy his age, Manthe wanted
seaman from the 31,800 ton USS West Virginia
to go fight fascist Japan and Nazi Germany. He would
burning in the foreground (Library of Congress).
have to be satisfied with watching newsreels at the
local movie theater as he finished high school. Manthe waited three years before he could answer his nation’s
call to arms.
Page 29
Answering the Call to Arms
After biding his time from 1941 until he turned 17 in 1944, Manthe joined the U.S. Navy at the first
opportunity that presented itself. He and several of his friends enlisted in the Navy in January 1944 and off
he went to Navy basic training.
Manthe excelled so much in boot camp that he was recommended for the Naval Academy Prep School. He
resolutely declared "I did not join the military to go back to school!" He immediately asked for transfer to
sea duty!
Ignoring Manthe’s request, the Navy sent Manthe to the Naval Academy Prep School at Bainbridge,
Maryland. Manthe repeatedly requested sea duty. The Navy eventually acted on his request and sent him to
Orange, Texas where he was assigned as a member of the commissioning crew of a new Navy destroyer.
Manthe, a Seaman First Class, was assigned to the USS O'Hare DD889 as a gunner on the forward 40mm gun mount. His ship was named
after LT Edward “Butch” O’Hare, a U.S. Navy Medal of Honor
recipient and ace fighter pilot who was shot down on November 26,
1943 during a night fighter mission.
The USS O'Hare was a Gearing-Class destroyer – a fast and maneuverable ship intended to escort larger vessels in the fleet, convoy or battle
group and to conduct anti-submarine operations. The USS O’Hare also
served as a “plane guard” during aircraft carrier operations. The
destroyer was assigned to the Atlantic Fleet.
The United States Navy commissioned 99 Gearing-Class destroyers in
1944 and 1945. Many of the Gearings would serve in the U.S. Navy
Seaman First Class Don Manthe until the 1970s. The O’Hare was in commission until May 1978.
After a shakedown cruise, led by the
battleship USS Wisconsin, the O’Hare
began operations in February 1946 in the
Atlantic Ocean. The O’Hare’s operations
ranged from conducting operations off of
New Brunswick, Canada down to the
Florida Keys.
Like many young men his age, he missed
the big naval battles of WW II. But
nonetheless, he answered his nation’s
call to arms. Manthe served our nation
at a critical time in our history.
USS O’Hare DD-889
The End of the War – Going Home
Manthe was discharged, at the ripe old age of 20, in June of 1946 from Key West, Florida where his ship was
docked at the time. With his military service completed, he embarked on the next chapter of his life.
After being discharged from the Navy, Manthe made his way home. One of his first experiences on the way
home was to have a celebratory drink. He was refused because of age and after everyone had a good laugh he
was served!
Page 30
Although his home was in Estherville, Iowa, Manthe traveled by way of the nearest big city, Minneapolis. To
get the 12 cents per mile the Navy paid for travel home…he hitchhiked! He then became an automatic
member of the 52/30 club, as it was known, meaning that veterans upon discharge who did not have a
job were eligible to receive a government stipend of $30.00 per week up to 52 weeks.
Manthe returned to an Iowa that had been forever changed by World War II. When he left to join the Navy,
Iowa was primarily a rural state. In Iowa, the primary slogan associated with the war effort Iowans
contributed to was “Food Will Win the War.” In 1940 there were 212,318 farms in Iowa with a production
value of $561,836,688. In 1945 there were 208,934 farms in Iowa, with a production value of
$1,232,010,705. Many factories in Iowa were converted to the production of war materials. Among these
were Solar Aircraft in Des Moines, the John Deere plant in Ankeny, and the Army Ordinance Plant in West
Burlington. Value of manufactured products in Iowa rose from $243,390,000 in 1939 to $671,100,000 in
1947.
During World War II the induction of young men into the armed forces led to labor shortages at home.
Women were employed outside the home in greater numbers than ever before, doing work customarily
thought to be "men's work" such as assembly line jobs in factories. Returning Iowa servicemen, called "GIs",
came back to a different society where women did all kinds of work, urban jobs outnumbered farm jobs, and
where a federal program called the "G.I. Bill" allowed veterans to attend college at government expense.
Thousands of Iowa veterans received college degrees as a result of this program.
As with thousands of other Iowans, the end of the war signaled the end of a chapter of Manthe’s life. Official
records report that 226,638 men and women from Iowa served in the armed forces. Of those, 8,398 died.
Among the Iowans killed in the war were the five Sullivan Brothers who lost their lives when the light
cruiser USS Juneau (CL-52) was sunk in 1942. World War II took its toll on the world and on Iowa.
The Start of a New Chapter in Manthe’s Life – College, Marriage and Children
Upon returning home, Manthe wasted no time in starting college. He enrolled at the University of Minnesota
in the Fall of 1946 and earned a college degree utilizing the G.I. Bill.
Shortly before graduation from college in 1950 he – in his own words – got lucky! He met the love of his
life, a beautiful young woman named Vivian who he met on a blind date. Unlike Manthe’s Iowa upbringing
during the depression, Vivian was a Minnesota girl who spent most of her youth growing up in orphanages.
Vivian’s mother passed away from tuberculosis at the age of 23. At the time Vivian was living at a home
associated with the TB Sanitarium in Deluth where her mother was being treated. After being transferred to a
Duluth children’s home she was transferred to the Sheltering Arms Children’s Home in Minneapolis.and
later, at the age of 11, was transferred to the State Orphanage known as the State Public School in Owatonna,
Minnesota. To this day she is actively involved with the Public School Orphanage Museum in Owatonna, the
only orphanage museum in the country. She is also featured in a documentary produced by museum entitled
"The Children Remember". Vivian recently visited the museum to see her many friends.
Getting there is easy... leaving may be a little harder,
because the Museum will enthrall you and Fredericksburg
will charm you. Open every day from 9am to 5pm, except
on Thanksgiving, Christmas Eve, and Christmas.
Page 31
Manthe and Vivian were married on December 29th, 1951. Shortly thereafter, they made a huge and wise
decision…they moved to Texas in 1952, the same year Texas-born Dwight D. Eisenhower became President
of the United States. Don and Vivian Manthe have been blessed with four children, Colyer, Kimberly, Julia,
Whitney and 5 grandchildren. The Manthes will celebrate their 63rd wedding anniversary in December.
Today, their love and commitment to each other is as strong – if not stronger – than when they first married.
A Career in the Insurance Industry
Manthe started his insurance career in 1952 when he went to work at the Floyd West & Company General
Agency (Floyd West). His first job was as a Map Clerk – one who records the company's property lines on
actual large Sanborn maps of every city and town in Texas in order to avoid unusual exposure on any one
block or area for fire and extended coverage. Being a map clerk was often the first step to becoming a fire
underwriter which applied to Manthe as well, except he also began learning the re-insurance. In 1955, he
became a Special Agent in Beaumont and two years later was appointed Branch Manager on the Harlingen
Office in the Rio Grande Valley.
After Floyd West was bought by Crum & Forster and after
assimilating his agencies with the new owner, Manthe was
transferred to Dallas in 1962 as manager of the Property
Department. His first responsibility was to become immersed in
the development of the Texas Multi-Peril Program. This led to
an invitation by Tom Lee General, Manager of the Texas
Insurance Advisory Association (TIAA) to serve on its Board
of Directors. This in turn led to him working out details of the
multi-peril program and other programs both with insurance
carriers and the State Board of Insurance where he frequently
testified at rate and rule hearings. Manthe was made both a vice
president of Floyd West and manager of all commercial lines
Dallas, Texas circa 1962
for the new entity, Crum & Forster. The territory he was
responsible for included not only Texas, but also seven other states from Louisiana to Wyoming. Manthe
became immersed in windstorm issues in Texas and was Chairman of the governing committee of the Texas
Catastrophe Property Insurance Association (TCPIA) for 13 years.
TCPIA was established following Hurricane Celia in 1971. Hurricane Celia was the costliest storm to ever
hit Texas until Hurricane Ike 38 years later. In the wake of Hurricane Celia, insurance carriers began
restricting windstorm coverage. TCPIA was created by the Texas Legislature to provide windstorm and hail
insurance coverage for coastal properties due to the decline in the voluntary insurance writings. Manthe
travelled the nation speaking about the TCPIA. TCPIA became the Texas Windstorm Insurance Association
(TWIA) in 1997.
Over the span of his career Manthe was involved in every facet of the insurance business. He served on
virtually every industry committee including commercial casualty, automobile, workers’ compensation,
marine, farm, insolvency. Manthe was also the Chairman of the governing committee of the Fire Prevention
and Engineering Bureau prior to their merger with ISO.
The World War II Memorial honors the 16 million who
served in the armed forces of the U.S., the more than
400,000 who died, and all who supported the war effort
from home. The memorial is a monument to the spirit,
sacrifice, and commitment of the American people.
Page 32
During his last years with Crum & Forester, Manthe took on the job of Legislative Affairs Vice President for
a seven state region dealing with legislative work and regulatory agencies. He retired in 1992 when Xerox
informed Crum & Forester they did not have employees over 65 year of age.
In July of 1998 with, Vivian looking on with pride, Manthe was the very first recipient of the prestigious
Raymond Mauk Leadership Award presented annually by the Insurance Council of Texas. During the
presentation of the award by Russell Seifert, the immediate past chairman of the Texas Insurance
Organization (now Insurance Council of Texas), it was said of Manthe:
“The recipient of today's award was also a notable contributor and a leader who I have known since the early
1960's when we were employed by rival Texas companies. Don had some grit about him, as we used to say.
He tackled tough problems for his company and the industry and was one of those who had the courage to
say what we all thought but were often reluctant to express publicly,” said Seifert.
Seifert also said, “When we had a tough, thankless job that needed doing, we called on Don because we
knew he would figure it out and he was not afraid to ruffle a few feathers along the way if it meant fixing
something that was broken or doing what was right. To his credit, Don loved people and valued a good
friendship. Don Manthe made alot of friends who still inquire about him and remember him for his humor
and the importance he placed on personal relationships. In the final analysis, he was a leader who made a
difference."
Don Manthe Poses with a Certificate of
Recognition of his service in World War II
signed by Texas Governor Rick Perry,
September 6, 2012.
Tom Brokaw wrote in his book, “The Greatest Generation,”
about Manthe’s generation – America’s Greatest Generation:
"At a time in their lives when their days and nights should have
been filled with innocent adventure, love, and the lessons of the
workaday world, they were fighting in the most primitive
conditions possible across the bloodied landscape of France,
Belgium, Italy, Austria, and the coral islands of the Pacific.
They answered the call to save the world from the two most
powerful and ruthless military machines ever assembled,
instruments of conquest in the hands of fascist maniacs. They
faced great odds and a late start, but they did not protest. They
succeeded on every front. They won the war; they saved the
world. They came home to joyous and short-lived celebrations
and immediately began the task of rebuilding their lives and the
world they wanted. They married in record numbers and gave
birth to another distinctive generation, the Baby Boomers. A
grateful nation made it possible for more of them to attend
college than any society had ever educated, anywhere. They
gave the world new science, literature, art, industry, and
economic strength unparalleled in the long curve of history. As
they now reach the twilight of their adventurous and productive
lives, they remain, for the most part, exceptionally modest.”
The description of Don Manthe as a leader who made a difference rings true. Manthe’s drive and ultimate
success is something he has in common with other World War II veterans. Manthe played a significant role
in building the vibrant insurance industry which insures the lives and property of millions of Texans today in
Texas. For his service to our country, state and the insurance industry, we are eternally grateful.
We can never adequately pay tribute to the men and women who served in World War II. What we can do to
honor this great generation of Americans is to make sure that they and their stories are never forgotten.
Page 33
The National WWII Museum in New Orleans opened on June 6, 2000, as
The National D-Day Museum. Founded by historian and author, Stephen
Ambrose, the Museum tells the story of the American Experience in the
war that changed the world — why it was fought, how it was won, and
what it means today — so that all generations will understand the price of
freedom and be inspired by what they learn.
2
Designated by the U.S. Congress in 2003 as the America’s National WWII
Museum, the campus includes the Louisiana Memorial Pavilion,
showcasing large artifacts of the war and exhibits on D-Day at Normandy,
the Home Front and the Pacific; the Solomon Victory Theater, a 4-D
theater showing the exclusive Tom Hanks production, Beyond All
Boundaries; the Stage Door Canteen, where the music and entertainment of
the “Greatest Generation” comes to life; the John E. Kushner Restoration
Pavilion where staff and volunteers restore artifacts in public view; and the
American Sector restaurant and Soda Shop — delicious onsite dining
options by Chef John Besh.
The museum founder, historian Stephen E. Ambrose’s (January 10, 1936 –
October 13, 2002) efforts resulted in the opening of an unparalleled
museum in New Orleans, Louisiana. Ambrose wrote an acclaimed, multivolume biography of Dwight “Ike” Eisenhower’s presidency and his
service as the Supreme Commander of the Allied assault on Nazi Germany.
Ambrose also other bestseller history books about World War II. These
include: Band of Brothers, D-Day, Wild Blue and Citizen Soldiers. He was
the military advisor for the movie Saving Private Ryan and served as an
executive producer for the award winning HBO mini-series Band of
Brothers.
Stephen Ambrose inspired and guided the development of The National
WWII Museum until his passing in 2002. His dream of a museum honoring
our nation’s “Greatest Generation” reflected his deep regard for our
nation’s citizen soldiers, the workers on the Home Front and the sacrifices
and hardships they endured to achieve victory.
Help Honor America’s Greatest Generation
The generation of Americans who came to adulthood during the 1930s
grew up in a world shadowed by extraordinary economic and military
threats. A financial depression gripped much of the globe, throwing
millions out of work. In some countries, economic hardship contributed to
the power and appeal of political extremists. These leaders offered simple
solutions to their countries’ problems, solutions that included extreme
nationalism, military expansion, and doctrines of racial superiority.
America’s “Greatest Generation” answered the call to arms. They fought,
defeated the Axis powers and preserved Democracy.
In September of 2012, the National WWII Museum joined with the
Insurance Council of Texas to honor the Texas insurance industry’s WWII
veterans.
Take an Online Tour of the Museum
View NOLA TV’s video about The National World War II Museum Here
and the museum’s Fly-Thru Video Here. Listen to Tom Hanks talk about the
National WWII Museum. Plan your visit to the museum today.
Page 34
Collective Years of Legal Experience
SMITH & CARR, P.C.
ATTORNEYS AT LAW
More Information About the Firm
(Right Click on Information Topics)
Representative List of Clients
Seminars Information
Attorney Profiles
SMITH & CARR, P.C. is a litigation boutique founded by Stephen T.
Smith and Charles M. Carr, III. Their collective years of legal experience
provide a background for the handling of claims in both judicial and
administrative forums, as well as the alternative dispute resolution
process.
Smith & Carr, P.C. is dedicated to providing efficient economical and aggressive
representation of its clients in both litigation and administrative matters. The
firm's strength lies in its collective years of legal experience together with a solid
work ethic based upon the belief that providing cost effective legal
representation is paramount. The firm's attorneys concentrate on trials and
appeals in state and federal court, as well as before administrative tribunals.
SMITH & CARR, P.C. Primarily handles personal injury defense (insurance
defense), insurance coverage, employment and commercial issues. Areas of
practice include:
Employment:
Defense of employers in litigation involving
Americans With Disabilities Act, Fair Labor
Standards Act, Family Medical Leave Act,
Hour/Wage and Unemployment claims,
Retaliatory Discharge and Wrongful
Termination.
Insurance:
Defense of insurance carriers in Bad Faith and
Deceptive Trade Practices/Consumer Protection
litigation, Coverage Opinions, Declaratory
Judgment Actions, and Insurance Subrogation.
Personal Injury:
Defense of insured's in litigation involving
Automobile, Construction Liability, Employer's
Liability, Jones Act/Maritime, Longshore and
Harbor Workers' Compensation Act, Defense
Base Act, Premises Liability, Products Liability,
Trucking and Workers' Compensation.
Professional Injury: Accounting, Insurance Agent and Insurance Claims
Malpractice.
The attorneys of SMITH & CARR, P.C. are licensed to practice law in the courts
of the States of Texas, Louisiana and Oklahoma. They are also licensed in
federal courts in Texas and Louisiana.
Smith & Carr, P.C.
900 Woodway, Suite 1200
Houston, Texas 77056
Phone: 713.933.6700
Facsimile: 713.933.6799
Email : [email protected]
Website: www.smithcarr.com
Page 35
Page 36
Over-the-Counter Pain Medications are more Effective for Acute Pain than Prescribed Painkillers
New White Paper Released as Hydrocodone is Reclassified as a Schedule II Drug
On October 6, 2014, the National Safety Council (NSC) released a white
paper, Evidence for the efficacy of pain medications, compiling research
showing the combination of over-the-counter pain medications ibuprofen
and acetaminophen are more effective at treating acute pain than opioid
painkillers. As patients find that they are unable to refill their
hydrocodone prescription, this paper presents alternatives that should be
discussed with their physician.
The release of the white paper coincides with the U.S. Drug Enforcement
Administration’s reclassification of hydrocodone combination products,
such as Vicodin, from Schedule III to Schedule II drugs. The
reclassification makes the drugs more difficult for doctors to prescribe,
and patients cannot have prescriptions refilled without seeing their doctor.
“There are alternatives to highly-addictive opioids for treating severe pain,” said Deborah A.P. Hersman,
president and CEO of NSC. “Prescription opioid overdoses resulted in more than 16,900 deaths in 2011. We
must change the paradigm of treating pain if we are to curb this national health crisis.”
Drug overdoses are the leading cause of unintentional injury-related death for adults ages 25-64, and opioid
painkillers are driving the increase in these deaths.[i] Over-prescribing and liberal prescribing have
contributed to the epidemic. Many people who struggle with painkiller addiction began using opioids with
valid prescriptions following an injury or surgery. In the last 20 years, consumption of opioids has increased
600 percent in the U.S.[ii] The NSC white paper noted:
“The opioid medications are often referred to as “powerful painkillers.” In fact, the evidence shows
that they are mild to moderate painkillers and less effective than over-the-counter ibuprofen. They
have, however, powerful side effects that harm hundreds of thousands of individuals every year in
the U.S. Even if one disregards the public health problems created by the use of opioid pain killers,
these medications still are not a good choice for the treatment of acute pain – regardless of the
severity.”
In certain circumstances, opioid painkillers are an appropriate treatment option. NSC Medical Advisor Dr.
Donald Teater points to research showing short-term opioid painkiller use can be helpful when treating
patients recovering from surgery. These medications also can be effective in treating chronic pain associated
with terminal cancer because opioids have positive psychotherapeutic effects that help offset depression and
anxiety.
Founded in 1913 and chartered by Congress, the National Safety Council, nsc.org, is a nonprofit
organization whose mission is to save lives by preventing injuries and deaths at work, in homes and
communities, and on the road through leadership, research, education and advocacy. NSC advances this
mission by partnering with businesses, government agencies, elected officials and the public in areas where
we can make the most impact – distracted driving, teen driving, workplace safety, prescription drug
overdoses and Safe Communities.
Author’s Note: [i] According to Injury Facts 2014 and [ii] Paulozzi, L. J., & Baldwin, G. (2012). CDC
Grand Rounds: Prescription Drug Overdoses — a U.S. Epidemic. MMWR, 61(1), 10–13.
Page 37
Page 38
Page 39
Column: DePaolo's Work Comp World
Ebola and Workers’ Comp
By David DePaolo, CEO, President, Editor-in-Chief, WorkCompCentral
As the Ebola scare was developing there was speculation about the
applicability of workers' compensation to such cases.
Now that 2 nurses have contracted the disease from
occupational exposure the debate is not about AOE/COE, but
how far this is going to go.
The first nurse, identified several days ago by friends and
family as Nina Pham, was in “clinically stable” condition, and
in isolation at Dallas’ Texas Health Presbyterian Hospital,
where she helped treat another Ebola patient, Thomas Eric
Duncan.
We now have two nurses who contracted Ebola.
The second health care worker also cared for Duncan and was immediately isolated at Texas Health
Presbyterian Hospital, the Texas Department of State Health Services said in a statement.
“Health officials have interviewed the latest patient to quickly identify any contacts or potential exposures,
and those people will be monitored,” the department said.
This second nurse case apparently traveled back and forth from Cleveland, Ohio before showing symptoms,
which officials say indicates she likely was not contagious at that time, but nevertheless precautions are
being taken to reduce the risk of transmission to others, such as taking one of the planes out of service and
contacting all passengers and crew members.
A total of 78 healthcare providers at the hospital treated Duncan. Up to 48 other persons were exposed to
Duncan.
I read a commentary a couple of days back that basically concluded that there was no workers' compensation
risk from Ebola because a disease, to be compensable, must be a unique exposure for a worker - the author
comparing Ebola to the flu.
Ebola, is far, far different than the flu because it is basically fatal; the flu might be fatal but more often than
not one just feels lousy. The fatality rate in the current Ebola outbreak, however, is about 70 percent
according to reports.
Health care workers, medical waste workers, indeed, any person involved in the business of medical care is
uniquely exposed.
“It’s really concerning that health workers wearing full personal protective equipment have developed
Ebola,” said Raina MacIntyre, a professor of infectious diseases epidemiology at the University of New
South Wales in Sydney in a Reuter's report on October 15, 2014.
Page 40
But is the workers' compensation system ready to deal with Ebola? And I don't mean from a claim severity or
frequency standpoint.
I mean from the point of providing quality medical care in such a specialized situation - because there aren't
too many medical professionals, or facilities (as demonstrated by infectious disease handling failures at
Texas Health Presbyterian Hospital) that are trained, have adequate protocol (indeed even the Centers for
Disease Control has been rapidly changing guidelines as this situation unfolds), or have the equipment to
deal with this disease; ergo, this is a disease for which there likely is no fee schedule, likely no good
treatment guidelines, likely nothing to give claim departments any guidance whatsoever.
Workers' compensation medical treatment has devolved into fights about utilization and other reviews which
ultimately delays (though it's not supposed to) the delivery of care, if not outright denial of care; but dealing
with Ebola requires immediate action. There is no time for utilization review or independent medical review.
Protocol is lacking, and risk of spreading the disease increases exponentially with every single contact.
And forget about workers' compensation - the entire medical delivery system is proving incapable of dealing
with the disease, from the CDC on down.
We will likely see more Ebola cases from among the other healthcare providers who treated Duncan.
I worry about the spouses and children of the healthcare providers.
I also worry about Ebola spreading to schools in the event one or more of the children on the hospital staff
contract the disease.
More than 8,900 people have been infected with Ebola in the three countries, with more than 4,400 deaths,
the World Health Organization said. The number of new Ebola cases in three West African nations may
jump to between 5,000 and 10,000 a week by December 1 as the deadly viral infection spreads, the WHO
said.
There’s no cure for Ebola, which jumps to humans from animals such as fruit bats and chimpanzees. The
virus spreads from contact with bodily fluids such as blood, vomit and feces.
If ever there was a situation where there should be no distinction between workers' compensation medical
treatment and general health, the current Ebola situation is it. Delivery of medical care in workers'
compensation is just fine for broken bones, even for something like black lung disease.
The way medical care in workers' compensation is delivered creates a real, and significant, national health
problem when confronted with a potential pandemic like Ebola.
Work comp is woefully, in fact dangerously, inadequate for something as radical as Ebola.
Market Your Company or Event with WorkCompCentral
WorkCompCentral has advertising opportunities for nearly any budget. Call
Advertising Services at 805-484-0333 ext. 126 for a consultation with Christina
Childers. See WorkCompCentral’s Media Kit and Advertising Rate Card Here.
Visit WorkCompCentral online today and keep abreast of fast breaking news.
Page 41
David DePaolo
Editor’s Note: David DePaolo is the author of this column. After
practicing workers' compensation law for nearly 18 years, David
founded and grew WorkCompCentral into the most respected news and
education service in the workers' compensation industry. He publishes a
popular blog “DePaolo’s Work Comp World”. David is a regular
public speaker on workers' compensation to industry trade shows,
educational seminars, radio and television, and have been quoted or
cited in general media publications such as Fortune Magazine, the LA
Times and Wall Street Journal. He has been published in leading
industry journals and scholarly publications on topics ranging from the
underlying financial issues that led to an historic makeover of the
California workers' compensation system, to the new paradigm in work
injury protection and national trends in the workers' compensation
industry. The views expressed in his article are not those of the
Insurance Council of Texas.
NCCI Proposes Decrease for Workers’ Compensation Loss Costs in Texas
On September 30, 2014, NCCI delivered a workers’ compensation loss cost filing to the Texas Department
of Insurance. Based upon NCCI’s most recent available data, the loss cost filing includes a proposal for an
overall average workers’ compensation loss cost level reduction of – 10.9% to become effective July 1,
2015.
NCCI shared the following key observations from their review of data that prompted the loss cost filing:
● The experience period used in the filing is Policy Years 2011 and 2012. Texas continues to report
an improvement in the loss experience;
● Frequency has declined for a second year in a row;
● Indemnity average cost per case in excess of wage growth increased at the latest point; and
● Medical average cost per case in excess of wage growth has been relatively stable in recent years.
NCCI has provided ICT with the following information regarding the loss cost filing:
Loss Cost Filing Components
Due to the Change in Experience and Trend
Due to Change in Benefits
Due to Change in Loss Adjustment Expenses
Overall Loss Cost Level Change
Impact
-8.7%
+0.1%
-2.5%
-10.9%
Source: National Council on Compensation Insurance, September 30, 2014
NCCI has reported that the overall average loss cost impact at an industry group level would be as follows:
Industry Group
Manufacturing
Contracting
Office and Clerical
Goods and Services
Miscellaneous
Total
7-1-205 Filing
-9.6%
-9.7%
-14.3%
-11.4%
10.5%
-10.9%
Source: National Council on Compensation Insurance, September 30, 2014
Page 42
For the last sixty years, Flahive, Ogden & Latson has
defended workers’ compensation claims before three
state agencies and state courts at every level. Our
practice is limited to workers’ compensation defense
throughout the State of Texas. Twenty-one lawyers in the
firm have been designated as board certified specialists
in workers’ compensation law by the Texas Board of
Legal Specialization.
504 Lavaca Suite 1000 P.O. Box Drawer, 13367
Capitol Station Austin, Texas 78711
Tel 512.477.4405 | Fax 512.867.1700
Email [email protected]
____________________________________
Flahive Ogden & Latson Texas Workers’
Compensation Manual
Our insurance carrier clients include six of the largest
workers’ compensation insurance groups in Texas: The
American International Group, The Hartford Insurance
Companies, The Liberty Mutual Insurance Companies,
The Travelers Insurance Companies, Texas Mutual
Insurance Company and The Zurich Insurance
Companies. We also represent a large number of midsize as well as small carriers, many third party
administrators, three self-insured groups, thirty-four
certified self insurers, and approximately 2,500 cities,
school districts, and other governmental self-insureds.
Among the lawyers in the firm, one is a former Justice on
the Court of Appeals and one is a former Contested Case
Hearing Officer for the Texas Workers’ Compensation
Commission. Four of the firm’s lawyers were honors
graduates, three were editors of their respective law
school Law Reviews, four were selected by the Texas
Court of Appeals to prestigious judicial clerkships, and
one served as a clerk to a Justice on the Texas Supreme
Court. Three of the firm’s attorneys were members of
their respective law school national competition teams
(mock trial, moot court, or negotiation), and five are
certified specialists in fields other than workers’
compensation (personal injury law, appellate law, and
administrative law).
Visit FOL online at www.fol.com.
Page 43
2001 Bryan Street, Suite 4000
Dallas, Texas 75201
(214) 748. 7900
(214) 748. 4530 Fax
Since 1989, Downs • Stanford, P.C. has been engaged in the practice
of civil litigation throughout Texas, and, occasionally, in other
states. We excel in defending civil litigation cases, including
personal injury, workers' compensation, labor/employment law, and
prosecuting or defending business litigation. We also have
accomplished attorneys who concentrate in family law, probate and
estate planning, and civil appellate law.
The Firm is recognized with the prestigious AV rating by the
national legal directory Martindale-Hubbell and is promoted by
Best's Directory of Recommended Insurance Attorneys and
Adjusters. In addition the firm is recognized by the International
Society of Primerus law firms.
Providing insurers with quality legal
representation in workers’ compensation
claims and proceedings.
With Offices in Dallas and Austin, our docket
covers all venues throughout Texas.
Dallas
http://www.downsstanford.com/
* Unless indicated in the individual attorney biographies, not
certified by the Texas Board of Legal Specialization
Downs • Stanford maintains a strong presence before the Texas Workers' Compensation
Commission. Our attorneys are highly trained in the requirements of the Texas Labor
Code and the Rules of the Texas Workers' Compensation Commission. This expertise
covers both the "Old Law" and the "New Law". We are prepared to handle all aspects of
workers' compensation claims ranging from legal consultation on a specific claim issue,
medical dispute resolution, defending administrative violations, and the prosecution and
defense of judicial review matters and matters before the State Office of Administrative
Hearings.
We actively represent numerous insurance carriers, third-party administrators, employers
and certified self-insurers for all types of hearings before the Texas Workers' Compensation Commission, including Benefit Review Conferences, Contested Case Hearings and
appeals to the Appeals Panel of the Texas Workers' Compensation Commission. We
maintain an active trial docket of workers' compensation cases that have been appealed
beyond the Texas Workers' Compensation Commission into judicial review.
Austin
Downs • Stanford maintains a high success rate on workers' compensation trials. We have
also successfully defended our client’s interests before the Court of Appeals.
Downs • Stanford also provides a full service Board Representative Service to further
service all aspects of an insurer and self-insured company before the Texas Workers
Compensation Commission.
Our expertise covers all types of workers' compensation claims ranging from back strains
to complex multi-chemical sensitivity claims.
Page 44
Division of Workers' Compensation Announces Recent Enforcement Actions
On October 20, 2014, Commissioner of Workers' Compensation
Ryan Brannan announced final disciplinary actions taken by the
Division of Workers' Compensation (DWC). The final actions
include administrative penalties ordered against insurance
carriers, employers and health care providers in the workers'
compensation system.
The final actions include administrative penalties ordered against
insurance carriers, health care providers and employers in the
workers’ compensation system. Since January 1, 2014, the
Commissioner of Workers’ Compensation has ordered administrative penalties totaling $1,774,345 for system participants. The
penalties include $1,658,245 in fines ordered for insurance
carriers, $65,600 in fines ordered for health care providers, $49,500 in fines ordered for other entities and
$1,000 in fines ordered for employers.
Violations of the Texas Labor Code by insurance carriers cited in recent orders include failure to timely pay
income benefits to an injured employee, failure to timely pay a medical bill, and retrospectively reviewing
the medical necessity of a preauthorized medical service or treatment.
Violations cited in orders naming health care providers include failure to document an injury to justify
ongoing treatments and medications and failure to timely file and/or accurately complete DWC forms,
reports or records.
Violations cited in orders naming other entities include adjusters performing utilization reviews and issuing
medical necessity denials without allowing health care providers a reasonable opportunity to discuss with a
medical doctor.
Summaries of disciplinary actions are available on the TDI website. Specific order summaries also can be
viewed by searching by the subject of the order here.
Holiday Safety Tips
Believe it or not, the holiday season is almost upon us. Thanksgiving is less than 30 days away.
Christmas is less than 60 days away!
The holidays are the most wonderful — and hurried — time of the year. With so many parties and
commitments and so little time to complete everything, the holidays can get hectic. However, feeling
rushed and harried should never affect your holiday travel safety. Because being safe this holiday
season is the best gift you can give your family and friends. Following holiday travel safety guidelines
will help you keep your holiday season safe for your family and you.
Annually, during the two months surrounding the holiday season, more than 14,000 people are treated
in hospital emergency rooms due to injuries related to holiday decorating. Following 10 holiday
decorating safety tips can go a long way in preventing fires and injuries during the upcoming holiday
season.
Page 45
TDI Considering Amendments to the Independent Review Organization Rules
The Texas Department of Insurance published informal draft
amendments to the Chapter 12 Independent Review
Organizations (IRO) rules. The bulk of the rule changes deal
with the TDI application, review, certification, and recertification processes for IROs. The informal draft rules also make
changes to the personnel and credentialing rules. The informal
draft rules also implement provisions of House Bill (HB) 2645
that was passed during the 2013 regular session of the Texas
Legislature.
HB 2645 changed the certification requirements for independent
review organizations and require the Commissioner of Insurance
to appoint an advisory committee to advise the Texas Department of Insurance (TDI) on changes to be made
to the rules and processes, at a minimum of once a year. A detailed analysis of the bill, prepared by its
author, Rep. Chris Turner (D-Arlington), is available on the Texas House of Representative’s website.
Rule 12.403, which establishes fees that are to be paid to IROs by utilization agents and other payors, is the
only rule that directly impacts insurers and utilization review companies.
The IRO fees are structured into two tiers. Tier one fees are for independent review of medical or surgical
care rendered by a doctor of medicine or doctor of osteopathy. The current Tier one fee is $650. Tier two fees
are for the independent review of health care services rendered in the specialties of podiatry, optometry,
dental, audiology, speech-language pathology, master social work, dietetics, professional counseling,
psychology, occupational therapy, physical therapy, marriage and family therapy, chiropractic, and chemical
dependency counseling, and any of their subspecialties. The current Tier two fee is $460.
Workers’ compensation healthcare network, disputes involving preauthorization, concurrent, or retrospective medical necessity payment of the IRO review fee by the insurer must be made within 15 days after
receipt of an invoice from the IRO.
In disputes involving preauthorization or concurrent review, or an employee reimbursement dispute, the
insurer must remit payment to the assigned IRO within 15 days after receipt of an invoice from the IRO.
In non-network retrospective medical necessity disputes the requestor (usually a physician, non-physician
health care provider, or health care facility) must remit payment of the IRO fee to the IRO within 15 days of
receipt of an invoice from the IRO. If the requestor prevails after the IRO review, the responding party
(usually the insurer) must reimburse the requestor the amount paid for the IRO review not later than 15 day
after the IRO decision is rendered. Reimbursement of the IRO review fee is required even if the decision of
the IRO is appealed by the responding party.
The injured employee is never required to pay for any part of an IRO review. Insurers are required, by rule,
to pay the IRO review fee when the injured employee is the requestor in medical necessity disputes
associated with proposed health care for which preauthorization has been denied.
Information about the review of workers’ compensation medical necessity disputes by an IRO can be found
on the DWC’s website.
The DWC rule regarding the medical dispute resolution process by IRO for medical necessity disputes is
available here.
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IROs Seeking Increase in Review Fees
IROs are seeking a 43 percent increase for the two-tier IRO fees. They are additionally seeking a new fee of
$1,500 for reviews of life-threatening medical conditions and injuries. At least one IRO wants to be able to
determine if the standard fee will apply or if the life-threatening medical conditions and injuries fee would
apply.
The IROs have reported that the primary reason they are requesting an increase of the IRO fees is that the
number of workers’ compensation medical necessity disputes have dropped dramatically. IROs are not
receiving the anticipated number of medical necessity disputes that was projected by TDI when the rules
were last amended in 2010. TDI had anticipated a spike in the number of workers’ compensation medical
necessity disputes as a result of the implementation of the DWC’s Closed Pharmacy Formulary. The
anticipated increase in disputes regarding prescription drugs did not materialize.
The American Insurance Association, Insurance Council of Texas, Property Casualty Insurers Association of
America and several Texas professional medical associations filed comments that expressed their respective
opposition to increasing the IRO fees.
TDI does not appear to be amenable to increasing the fees by 43 percent and adding a $1,500 fee for the
review of life-threatening conditions as has been requested by the IROs.
DWC Finalizes Revisions to Two Forms
On September 5, 2014, the Texas Department of
Insurance’s Division of Workers’ Compensation
announced it has finalized revisions to DWC Form026, Request for Reimbursement of Payment Made by
Health Care Insurer and DWC Form-069, Report of
Medical Evaluation.
The revisions replace the term "ICD-9" with the term
"diagnosis code."
The purpose of the revisions is to facilitate the transition from ICD-9 coding to ICD-10 coding for workers’
compensation medical billing, processing and reporting
purposes in order to maintain consistency with federal
regulations. ICD-9 and ICD-10 refer to the 9th edition and the 10th edition, respectively, of the International
Classification of Diseases, Clinical Modification and Procedure Coding System. Additionally,
DWC added instructions for injured employees on DWC Form-069, Report of Medical Evaluation.
The finalized forms are available on the Texas Department of Insurance website. The finalized forms are
effective January 1, 2015.
Not an Associate Member of the Insurance Council of Texas?
Does your company or firm provide vendor or other services to property and casualty insurers? If so, your
company or firm may be eligible to join the Insurance Council of Texas . Contact Mark Hanna at
[email protected] or Steve Nichols at [email protected] to become an associate
member of the Insurance Council of Texas.
Page 47
On October 24, 2014, the Texas Department of Insurance‘s
Division of Workers’ Compensation (DWC) announced
proposed amendments to Rules 134.802 – 134.805,
134.807, and 134.808 regarding definitions, reporting
standards, reporting requirements, records required to be
reported, state specific requirements, and insurance carrier
EDI compliance coordinator and trading partners.
The DWC announced that the purpose of the proposed
amendments to Rules 134.802 – 134.805, 134.807, and
134.808 is to reiterate the existing technical requirements
associated with insurance carriers’ reporting medical
charge and payment data to the Division, with minimal
change to the technical infrastructure.
The proposed amendments also include some additional requirements to improve the quality of data
submitted. The submission of accurate data is necessary to allow the Commissioner of Insurance and the
DWC to better fulfill their statutorily imposed duties of adopting and administering medical policies, fee
guidelines, and rules. The a viability of quality data better assists the DWC in detecting practices and
patterns in medical charges, actual payments, and treatment protocols as required by Section 413.007 of
the Texas Labor Code.
Proposed amendments to Rules 134.802 – 134.805, 134.807, and 134.808 include the adoption by
reference of an updated Texas EDI Medical Data Element Requirement Table, Texas EDI Medical Data
Element Edits Table, and Texas EDI Medical Difference Table.
The DWC noted that the proposed amendments provide clarification of the existing requirement that an
insurance carrier must report the same prescription number for each reimbursable component of the
compound medication; an emphasis on proper sequencing that requires an ‘00’ original medical EDI
record to be submitted before an ‘01’ cancel or ‘05’ replacement; the clarification of ‘W3’ as a Texas –
specific claim adjustment reason code that identifies requests for reconsideration or appeal; and other
minimal technical amendments.
DWC Launches Enhanced Texas Electronic Data Interchange Resources Webpage
On October 23, 2014, the DWC launched a enhanced Texas Electronic Data Interchange Resources
webpage that provides additional information to insurance carriers and their EDI vendor companies. The
revised webpage is part of the DWC’s response to request by the insurance industry to enhance their
communications and resources associated with the EDI data submission process.
The DWC has included the following EDI resources and information on the enhanced webpage:
● General Information to include agendas and presentations associated with the quarterly Texas
EDI meetings;
● Medical state reporting resources and rules;
● State claims reporting resource;
● Proof of coverage resources;
● Health plan claim matching resources; and
● eBill – electronic medical billing resources.
Page 48
Amended Rules Proposed as the DWC Winds Down Its EDI Related Enforcement Activity
The proposed rules come on the heels of the DWC’s recent EDI related enforcement activity. In August of
2013, the Texas Department of Insurance’s (TDI) Enforcement Division announced that they would be
initiating enforcment actions “against almost every insurance carrier” to address “failure to submit accurate
medical billing and payment data.” Penalties ordered to date for insurers total $1,658,245 for EDI data
related and other enforcement issues.
The majority of the enforcement actions focused on the national provider identification number data element
that had been added to required data elements that must be submitted to the DWC with an insurance carrier’s
medical state reporting data. Several of the enforcement actions included other data accuracy issues.
In response to the announcement about the EDI related enforcement actions that TDI planned on taking
against insurers, the Insurance Council of Texas formed an EDI Task Force and worked with the American
Insurance Association, Property Casualty Insurers Association of America, a large number of workers’
compensation insurance companies, insurance defense law firms, and EDI vendor companies to identify data
submission requirements that needed to be clarified and barriers preventing the filing of accurate EDI data.
The Task Force meet over a one-year period and completed a review of the EDI process of the medical data
state reporting requirements and identified rule provisions and EDI table elements that needed to be clarified.
In June of 2014, the insurance industry’s EDI Task Force presented recommendations to the DWC for
changes to the EDI rules and associated EDI tables that would clarify data reporting requirements. The DWC
has incorporated some of the recommended changes in the recently proposed rule and proposed amended
EDI tables. The DWC is reviewing other changes recommended by the EDI Task Force.
Other Actions Taken by the DWC to Clarify Medical State Reporting EDI Requirements
The proposal of amendments to the EDI rules are not the only steps being taken by the DWC. The DWC has
prepared and published a Frequently Asked Questions (FAQ) document that reflects the current rules. DWC
staff have announced that the FAQ document will be updated and aligned with the changes made to the rules
once the proposed EDI rules are adopted.
On October 23, 2014, the DWC held an inaugural Texas EDI Quarterly Meeting. Teresa Carney, the DWC’s
Director of System Monitoring & Oversight, provided an overview of the medical state reporting EDI
process and requirements. The meeting, which was well attended and received, generated an open dialogue
between DWC staff and the meeting attendees (insurance company compliance and EDI staff, insurance
industry trade group lobbyists, and EDI vendor company staff).
Carney asked the meeting attendees to provide the DWC with input as to what topics should be included on
agenda for the next meeting which will be held in January of 2105.
Insurance Industry’s Reaction to the Proposed Rule Amendments and Other EDI Clarification
Initiatives
“The insurance industry is pleased that the DWC has proposed amendments to the medical state reporting
EDI rules,” said Steve Nichols, Manager of Workers’ Compensation Services at the Insurance Council of
Texas. “Along with the recently published FAQs, the Texas EDI Quarterly Meetings, and an enhanced Texas
Electronic Data Interchange (EDI) Resources webpage, the rules are the right step towards clarifying medical
state reporting EDI data requirements.”
Nichols said the insurance industry and EDI vendor companies look forward to continuing to work with
DWC staff on the clarification of medical state reporting EDI data requirements.
Page 49
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Are You Ready for Medical Marijuana?
Understanding the Medical, Legal, and Liability Implications for Insurers.
By Mark Pew, Senior Vice President, PRIUM
While Texas has not legalized marijuana – either for
recreational or medical use- it is surrounded by states
that have. New Mexico’s Court of Appeals used
the “Compassionate Use Act” in May 2014 to require an
employer to reimburse the use of medical marijuana for
chronic pain. Marijuana is legal for medicinal and
recreational use in Colorado, and marijuana tourism is a
burgeoning business. As of October 2014, a total of 23
states and the District of Columbia have legalized
medical marijuana while another 11 states have limitedaccess product laws (courtesy of National Conference of
State Legislatures). So whether there are Texas work
comp claimants who now live in one of those states,
Texas-based claims adjusters who manage claims in one
of those states, Texas legislators who consider moving
forward to legalization, or those outside of Texas (the federal government) who advocate for legislation,
what we believe as being unthinkable could certainly become a reality.
The legalization of medical marijuana appears to be a societal inevitability. As of June 2014, 22 states and
the District of Columbia have legalized it, and nearly all of the remaining states are considering it. In
addition, Colorado, Washington, and the city of Portland in Maine have legalized the recreational use of
marijuana.
An August 2014 ballot initiative in Alaska would regulate and tax marijuana like alcohol and would
essentially legalize recreational use, and advocates in Oregon are striving to countermand the legislature’s
refusal to allow a ballot initiative in November 2014 to legalize recreational marijuana. Despite the obvious
momentum behind legalization, evolving social policy around marijuana will bring a host of difficult-toanswer questions.
Many payers think that their pharmacy benefit managers (PBMs) will block all medical marijuana
prescriptions because there are no national drug codes. But there already are FDA-approved prescription
drugs on the market that contain natural or synthetic marijuana, such as Marinol and Cesamet. Another,
Sativex, is undergoing clinical trials in the U.S.
The more controversial forms of medical marijuana are typically seen in recreational use, the kind that is
usually smoked, vaporized, or eaten. These still are illegal at the federal level as the Drug Enforcement
Agency categorizes marijuana as a Schedule I drug.
States of Mind
States have taken different approaches to regulation. Some jurisdictions, like California, have relatively lax
rules regarding how medicinal marijuana may be obtained. Usage is largely subject to an individual saying,
“I have pain.”
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On the other hand, Florida’s Governor Rick Scott has pledged to sign the recently passed SB 1030, which
would only decriminalize “Charlotte’s Web,” a marijuana extract high in cannabidiol that has been shown to
treat certain seizure disorders. Kentucky would limit medical marijuana’s use to certain conditions and
diseases, including terminal illnesses, peripheral neuropathy, cancer, and AIDS.
It’s hard to argue with the tax revenue that marijuana is capable of producing. A June 2005 report from
Harvard University’s Dr. Jeffrey Miron estimated that replacing marijuana prohibition with a system of
taxation and regulation similar to alcohol would produce combined savings and tax revenues of between $10
billion to $14 billion per year.
According to a March 2014 article on Forbes.com, Colorado sold $14 million worth of recreational
marijuana in January 2014, delivering $3.5 million in total tax revenue to the state ($1.5 million came from
medical marijuana). In Denver, total taxes are as high as 21.12 percent. The fact that Colorado potentially
could reap $40 million a year in marijuana tax revenue certainly provides strong motivation for other states
to consider legalization.
Following are some considerations for states as they contemplate the legalization of medical marijuana:
(1) Deal with the dissonance between federal and state laws.
(2) Determine the scope of treatment. Should use be limited to specific disorders/diagnoses?
(3) Understand the entire constituency’s beliefs and values about marijuana. Does the majority of the
population favor legalization, or is it just a vocal minority?
(4) Consider reciprocity. What are neighboring states doing, and will their policies be acceptable?
(5) Remember the law of unintended consequences. We can foresee intended consequences and develop
what-if scenarios around them. Unintended consequences come from the things you cannot predict,
such as pets getting sick from eating marijuana or fourth graders selling pot, as has happened in
Colorado. So building agility into the system to deal with the unintended consequences is critical.
Comp Concerns
Workers’ compensation payers and their medical management partners also face a tough task. Medical
marijuana use is complicated and multidimensional, with nearly as many pros (anti-nausea, anti-seizure, antianxiety, and pain relief) as cons (increased risk of schizophrenia, reduced motivation, and potential lung
damage). Some studies suggest that marijuana cigarettes pose as much risk for lung damage as tobacco;
others say casual smoking does not cause lung damage. It will take the type of randomized, controlled,
multiphase clinical trials required for FDA drug approval to know the answers.
Advocates suggest that marijuana is preferable to manufactured anti-anxiety drugs and may be a safer
painkiller than opioids, although they lack clinical evidence to back those assertions. Because marijuana is
not FDA approved, studies on its efficacy and safety have been largely flawed and, therefore, inconclusive.
Patient safety regarding drug interactions also is important. The American Medical Association affirmed its
opposition to the legalization of marijuana in November 2013, saying that it “is a dangerous drug and, as
such, is a public health concern.” Just as states are embracing prescription drug monitoring programs,
medical marijuana could come along and bypass the scrutiny of pharmacists who know much more about
drug interactions than people working at marijuana dispensaries.
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Employers and other payers need to understand the medical issues, legal implications, and liabilities, which
includes potential violations of federal law if parts of their businesses involve federal contracts. Then they
must create enterprise-wide policies for managing medical marijuana. Most payers are multi-jurisdictional
and have to comply with a mosaic of legal issues and jurisdictional perspectives.
The following are considerations for that process:
(1) How do federal RICO statutes affect the reimbursement of marijuana, and do they put your
organization at risk?
(2) What kind of PBM formulary should be in place to deal with FDA-approved medical marijuana?
Should there be prior authorization to allow case-by-case decisions or outright blocks to disallow?
Will your policies be the same or different for medical marijuana that is not FDA approved but is
legal in individual jurisdictions?
(3) What precedents have been set by case law at the individual state and federal levels, and how
should they influence your individual policy?
(4) Although cancer and seizures are not prevalent diagnoses in workers’ compensation, should they be
individual decisions, given the anecdotal evidence that medical marijuana can be helpful?
(5) As legalization of medical marijuana expands, how will your policies keep pace?
To remove any personal biases from decisions on reimbursement, the payer’s executive team needs to
develop enterprise-wide policies for addressing requests for cannabis. Have legal counsel analyze the
legislative landscape, medical directors examine the physiological and pharmacological aspects, and risk
managers weigh in on worksite safety issues to lay the groundwork for organizational policy.
Even with that groundwork, the decision
may not be yours fully. In the recent case
Vialpando v. Ben’s Automotive Service and
Redwood Fire & Casualty (2014), the New
Mexico Court of Appeals required an
employer to pay for an injured worker’s
medical marijuana. While this may be
appealed, it shows that states (and injured
workers) may force the issue.
Regardless, the workers’ compensation
industry needs to prepare for expanded use
of medical marijuana and requests for
reimbursement. This is a complex circumstance that should not be ignored or deferred.
SIDEBAR: How Payers Can Prepare for
Medical Marijuana
● Understand legal implications. Understand jurisdictional differences,
compliance issues, and neighboring
states’ statutes and any reciprocity.
Page 54
● Evaluate medical/pharmacological aspects. Does it do more harm than good? What are the dangers, and
how can they be mitigated?
● Consider impact on workplace, workplace safety, and drug-free workplace policies.
● Develop an enterprise-wide policy for addressing the use and reimbursement of medical marijuana for
workers’ compensation illnesses and injuries.
● Implement jurisdictionally specific policy. This might include prior authorization and case-by-case
decisions, PBM formulary, and urine drug testing.
A SPECIAL REPRINT
© Entire contents copyright 2014 by Claims Management magazine, a publication of The CLM. All rights
reserved.
Editor’s Note: This article originally appeared in the July 2014 edition of the Claims Management magazine
and has been reprinted in this edition of the Texas Workers’ Compensation Update newsletter with a special
reprint permission from Claims Management. The article includes a special update regarding medical
marijuana and Texas. The article does not represent the views of ICT and are those of the author.
The author of article is Mark Pew, Senior Vice President at PRIUM. Mark has worked in a variety of roles
with PRIUM since 1989, with current responsibilities including educational outreach, product development
and marketing. His current focus is to develop strategies for managing the overutilization of prescription
drugs and the education of stakeholders. Mark created PRIUM’s Medical Intervention Program in 2003 and
has since refined the program and created several other services to address the prescription drug epidemic.
He has over 30 years of experience in building enterprise strategies for businesses in healthcare, finance,
and technology including work at Equifax, ChoicePoint, CoreSpeed and MedicaView International.
Considered a thought leader in workers’ compensation, Mark is regularly quoted in articles, written several
articles and white papers, and from Feb 2012 thru June 2014 presented 159 times to 9,580 people in 31
states on best practices around the treatment of chronic pain. He is a member of the medical issues
committee of International Association of Industrial Accident Boards and Commissions (IAIABC).
Mark will be a featured speaker on the topic of medical marijuana at the Insurance Council of Texas’ 2015
Workers’ Compensation Seminars which will be held in Austin, Texas on April 8, 2015 and Dallas, Texas on
April 23, 2015.
An Ameritox solutions provider, PRIUM sets the industry standard for workers’ compensation medical
interventions through its ability to secure higher agreement rates and to help ensure compliance with
modified treatment plans. The hallmark of the medical intervention company’s success is a collaborative
physician engagement process encompassing evidence-based medicine, clinical oversight, and jurisdictional guidelines to facilitate optimal financial and clinical outcomes. PRIUM helps eliminate unnecessary
treatment through a comprehensive approach that includes complex medical interventions, utilization
reviews, urine drug monitoring, and independent medical exams. Based in Duluth, Georgia, PRIUM can be
reached at prium.com or 888.588.4964.
Pledge Your Support to ICT’s Scholarship Program Today
Together We can Make a Difference
Information about the Insurance Council of Texas Education
Foundation and how you can become a contributor is available on our website.
Page 55
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Stone Loughlin & Swanson’s Workers’ Compensation Case Law News Shorts
Continuous coverage? Not so much.
The Dallas Court of Appeals issued a decision which explains that the Acontinuous coverage rule@ is not
exactly what the name implies. It held that a Texas-based worker was not covered when killed while on a
business trip to New York City.
Ronald Davis worked in Texas but had a business meeting in New York scheduled for a Monday. He flew to
New York on the previous Saturday and checked into a hotel. The next day, Sunday, he was crossing a street
near Central Park at 10:30 a.m. when he was hit by a bicyclist and killed. He was 10 blocks away from his
hotel. No one knows where he had been or where he was going.
Mr. Davis= family argued that he was covered under the “continuous coverage” rule. Under that rule, an
employee whose work entails travel away from the employer=s premises is in the course of his employment
when the injury has its origin in a risk created by the necessity of sleeping or eating away from home, except
when a distinct departure on a personal errand is shown.
The Division of Workers= Compensation found the injury to be non-compensable, so the Davis family had
the burden of proof on judicial review. Although there was no evidence that Mr. Davis was on a personal
errand at the time of the accident, the court found the injury to be non-compensable. It reasoned that the
Davis family had the burden of showing that Mr. Davis was not on a personal errand at the time of the
accident and, because they could make no such showing, they could not meet their burden of proof.
Davis v. Texas Mutual Insurance Company, ___ S. W.3d ___, 2014 WL 3705130 (Tex. App. B Dallas 2104).
Settlement agreement in Aold law@ case cannot circumvent DWC=s jurisdiction
The San Antonio court of appeals has reinforced the exclusive jurisdiction of the Division of Workers=
Compensation to resolve disputes, even when the parties might prefer to go elsewhere.
In this Aold law@ case the parties wrestled with several disputes over the years, one of which they settled
with an agreement which provided that future disputes would be subject to non-binding mediation and then,
if mediation were not successful, Avenue shall lie in the District Court of Zavala County, Texas.@ When
another dispute arose, the worker argued that this provision allowed him to bypass the Division and proceed
directly to district court. The district court of Zavala County agreed, but the San Antonio court of appeals did
not. It held that exclusive jurisdiction lies first with the Division and that the parties could not change that by
agreement.
In re Liberty Mutual Fire Insurance Company, 2014 WL 3747332 (Tex. App. B San Antonio 2014).
Editor’s Note: The case law news shorts were prepared by Stone Loughlin & Swanson, LLP for inclusion in
this edition of the Insurance Council of Texas’ Workers’ Compensation Update newsletter.
Stone Loughlin & Swanson’s passion is administrative law. They have distinguished themselves as a "go to"
law firm in the areas of health and workers' compensation insurance regulation. Their innovative challenges
to agency action have saved their clients millions of dollars and changed the regulatory landscape for all
system participants. Martindale Hubbell, the nation's premier rating group for lawyers, has rated the firm
"AV" which is their highest distinction. In addition, they are the only law firm in Texas chosen to be a
member of the National Workers' Compensation Defense Network.
Page 57
Innovation. At Stone Loughlin & Swanson, LLP our passion is administrative law and we have distinguished ourselves as a
"go to" law firm in the areas of health and workers' compensation insurance regulation. Our innovative challenges to agency
action have saved our clients millions of dollars and changed the regulatory landscape for all system participants.
Expertise. We are eight attorneys, a registered nurse, and a dedicated support staff all focused on the same area of practice,
day in and day out. The firm is rated AV by Martindale Hubbell, the nation's leading rating group for lawyers. In addition, we
are the only law firm in Texas chosen to be a member of the National Workers' Compensation Defense Network.
Presence. We live and work in Austin, home of state regulatory agencies, the State Office of Administrative Hearings
(SOAH), and the Travis County courts (venue for substantial evidence judicial reviews). Our presence in the state capital
allows us to closely monitor agency actions and deliver cost-effective representation in administrative proceedings. In
particular, our proximity to the Texas Department of Insurance, Division of Workers' Compensation makes us perfectly
positioned to assist system participants in the development, certification, and regulation of workers' compensation health care
networks and to assist insurance carriers and self-insured employers with workers' compensation medical necessity and fee
disputes.
P: (512) 343-1300
F: (512) 343-1385
Visit Us Online at: http://www.slsaustin.com/index.html
3508 Far West Blvd., Suite 200
Austin, Texas 78731
Member National Workers’ Compensation Defense Network – A Nationwide Network of Law Firms Practicing in Workers’ Compensation
Page 58
Associate Member of the Insurance Council of Texas
Page 59
Business Insurance Reports Terrorism Insurance Rates Decrease As Demand for Coverage Increases
October 12, 2014, the insurance trade magazine Business
Insurance, published an article that reported terrorism
insurance rate have decreased as the demand for coverage has
increased. Experts have reported that the private insurance
market has been active, despite uncertainty whether Congress
will extend the federal terrorism insurance backstop
established by the Terrorism Risk Insurance Act of 2002
(TRIA).
The article reported that demand is up for terrorism insurance
in the private market amid increased capacity and greater
competition that have dropped rates as much as 40% in the
lowest-risk locations of the nation, while rates are flat in cities
considered at greatest risk of a terrorist attack.
The article reported that despite the uncertainty, new capacity has entered the stand-alone market this year.
That has created competition and softer pricing outside of peak peril zones, where capacity continues to be
tight in so-called Tier 1 cities such as New York, Chicago and San Francisco.
Congressional Action to Extend the the Terrorism Risk Insurance Act of 2002 Pending
On June 17, 2014, the U.S. Senate passed a bi-partisan bill that would extend the Terrorism Risk Insurance
Act of 2002 (TRIA). The legislation provides a seven year extension of TRIA until December 31, 2021 and
improves existing taxpayer protections by gradually raising the insurer co-payment from 15% to 20% over
five years and by gradually raising the mandatory recoupment threshold from $27.5 billion to $37.5 billion
over five years.
The U.S. House of Representatives has yet to pass a House bill that would extend the program for five years,
a bill that won the approval of the House Financial Services Committee. Business Insurance has reported that
both bills contain a provision that would establish the National Association of Registered Agents and Brokers
(NARAB), which would set up an independent nonprofit body to allow multistate licensing of insurance
producers. Business Insurance also reported House bill would establish NARAB permanently, the Senate bill
would do so only for two years.
The Senate bill keeps the threshold at $100 million for all terrorism, but the House bill raises it to $500
million for all terrorism except for nuclear, radiological, chemical or biological attacks. Congress adjourned
for the elections without having taken action on either bill.
Business Insurance reported that Congress is expected to consider the reauthorization of the program, which
is scheduled to expire December 31, 2014 during a lame duck session following the November midterm
elections. The article noted that should Congress not act by the deadline the private market likely would see
disruption as buyers rush to secure affordable private-market terrorism coverage following expiration of the
federal backstop.
There simply is NO other Daily News Outlet that
provides you with timely coverage of developments
impacting the Texas workers’ compensation system.
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Associate Member of the Insurance Council of Texas
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On October 16, 2014, Fox Business published an article
reporting on the failure of the U.S. Congress to pass
legislation that extends the Terrorism Risk Insurance Act
(TRIA). Fox Business reported that if TRIA isn’t
reauthorized, the real-estate and construction industries
will take the biggest hit.
Fox Business noted that terrorism insurance is generally
necessary to secure bank financing for construction
projects. It’s also required in 49 states as part of workers’
compensation insurance.
The terrorist attacks of September 11, 2001, produced
insured losses larger than any natural or man-made event
in history and that claims paid by insurers to their policyholders eventually totaled some $32.5 billion dollars-$40.0 billion in 2011 dollars and to this day remains the
second most costly insurance event in United States history. 1
The Terrorism Risk Insurance Act (TRIA) was passed into law in 2002, after companies encountered
difficulty finding insurance – at reasonable rates – that covered terrorism in the United States in the aftermath
of Sept. 11, 2001 terrorist attack that targeted and brought down the World Trade Center in New York City
and struck the Pentagon in Washington, D.C.
Failure to Renew TRIA Will Impact the Availability of Terrorism Risk Insurance
In April of 2014, the U.S. President's Working Group on The Long Term Availability and Affordability of
Insurance for Terrorism Risk issued a report that noted some insurance industry sources say "as little as" $6
billion to $8 billion of "global reinsurance is available for terrorism risk" in the United States. The report
noted that:
"Industry sources report concerns that the long-term availability and affordability of insurance for
terrorism risk will be adversely affected if (the Terrorism Risk and Insurance Act) is not renewed
before it expires at the end of 2014, and that the market is already tightening in anticipation of the
termination of the federal government backstop.”
Robert P. Hartwig, Ph.D., CPCU, President of and Economist for the Insurance Information Institute, has
provided testified before the U.S. Congress and the City of New York’s Council of the City of New York
Committee on State and Federal Legislation that much of the capacity in the market today is predicated on
the existence of the Terrorism Risk Insurance Program. “In the absence of the program, reinsurance capacity
would be greatly reduced,” said Hartwig.
On October 22, 2014, the Insurance Journal reported that Evan G. Greenberg, chairman and CEO of ACE
Limited, said during a teleconference call with the failure of Congress to renew federal terrorism reinsurance
legislation is “shameful” because both political parties know it needs to be done and their differences are
minor.
1
Testimony of Robert P. Hartwig, Ph.D., CPCU, President of and Economist for the Insurance Information Institute,
before the Council of the City of New York Committee on State and Federal Legislation, June 17, 2013.
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The Insurance Journal reported that Greenberg said the failure to renew TRIA would be “bad” for the
country, the economy and business. “I consider it irresponsible of Congress to keep a question mark around
the certainty of a backstop,” he said.
TRIA expires December 31, 2014 and several organizations, including Risk and Insurance Management
Society Inc. (RIMS), have called for the U.S. Congress to extend it. Three separate bills proposing to extend
TRIA were introduced in 2013 in the House of Representatives and referred to committee. 2
In order to be a certified by the U.S. government, a terrorist act would have to result in losses exceeding $5
million in the U.S. and be certified by the U.S. Secretary of State, Attorney General and Secretary of the
Treasury. 3
According to a 2013 paper published by the Risk and Insurance Management Society, Inc. (RIMS), titled
Terrorism Risk Insurance Act: The Commercial Consumer's Perspective, such an incident attack would have
to result in aggregate losses to the insurance industry of more than $100 million. An insurer's deductible is
calculated at 20% of its annual direct earned premiums from commercial P&C lines. Once that deductible is
exceeded, the federal government covers 85% of the insurer's loss above the deductible, until the total losses
are $100 billion, RIMS reported in its 2013 paper, titled. In that report, RIMS contends that TRIA should be
renewed and should require property and casualty insurers to include coverage of acts of terrorism involving
the use of nuclear, biological, chemical and radation weapons. The paper is available on the RIMS website.
Failure to Renew TRIA Would Increase the Amount of Federal Government Spending in the
Aftermath of a Terrorist Attack
The RAND Corporation has reported in its paper titled The Impact on Federal Spending of Allowing the
Terrorism Risk Insurance Act to Expire that for terrorist attacks with losses less than about $50 billion,
having the Terrorism Risk Insurance Act (TRIA) in place will lead to less federal spending than if TRIA
were eliminated. The RAND Corporation’s report noted that eliminating TRIA could increase federal
spending by $1.5 billion to $7 billion for terrorist attacks with losses ranging from $14 billion to $26 billion.
“One important dimension of the debate about whether to reauthorize the act is its impact on government
spending,” said Tom LaTourrette, lead author of the study and senior physical scientist at RAND, a nonprofit
research organization. “If, as many expect, allowing the program to expire causes a sharp decline in the
number of businesses with terrorism coverage, we find that the federal government could spend billions more
in disaster assistance after an attack than it would with the program in place.”
Extenstion of TRIA Considered Essential for Maintaining Availability of Terrorism Risk Insurance
Proponents of the extension of TRIA contend that an extension of the backstop program is essential to
maintain the availability of terrorism risk insurance for business around the nation. They argue that without
the extention, the availability of terrorism risk insurance is expected to drop while premium costs increase
significantly.
“Availability, affordability of terrorism insurance in U.S. 'at risk' if TRIA is not renewed: Working group.” Canadian
Underwriter, April 21, 2014, retrieved from http://www.canadianunderwriter.ca /news/availability-affordability-ofterrorism-insurance-in-u-s-at-risk-if-tria-is-not-renewed-working/1003021443/?&er=NA, October 27, 2014.
2
“Availability, affordability of terrorism insurance in U.S. 'at risk' if TRIA is not renewed: Working group.” Canadian
Underwriter, April 21, 2014, retrieved from http://www.canadianunderwriter.ca /news/availability-affordability-ofterrorism-insurance-in-u-s-at-risk-if-tria-is-not-renewed-working/1003021443/?&er=NA, October 27, 2014.
3
Page 64
Page 65
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even file claims online 24/7 anywhere you have access to
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A Full Suite of Integrated Services
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Count on Us as Your Partner
As a JI Companies client, you are never alone in
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Contact us today. Let us take the worry out of your Workers’ Compensation, Liability and
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Page 66
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Jopari eBill Compliance Services
Jopari is changing the way insurance payers manage bill and payment processing needs. Now payers can
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Payers of all industries use Jopari Pay™ to significantly reduce both operational costs and the drain on
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Implementing Jopari Pay™ is easy and noninvasive. There’s no software to install and never periodic
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Contact Jopari now and learn how we can implement a strategy that will increase your bottom line and
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Page 67
DWC Proposes Lifetime Income Benefits Rule
On October 6, 2014, the Texas Department of Insurance’s
Division of Workers’ Compensation (DWC) announced the
agency is accepting comments on proposed new Rule 131.1
regarding the initiation of lifetime income benefits (LIB).
The DWC has also posted two options for plain language
denial notices for public comment. The first option is
amended PLN-04, Notice Regarding Eligibility for Lifetime
Income Benefits, which includes a denial notice to conform
to the proposed rule. The second option is a separate plain
language denial notice with new PLN-13, Notice of Denial of
Lifetime Income Benefits (LIBs)and Refusal to Pay Benefits.
LIBs equal 75 percent of your average weekly wage, with a 3 percent increase each year for injured
employees with specific types of injuries.
Injured employees who have the following loss or disability are entitled to LIBs:
total and permanent loss of sight in both eyes;
loss of both feet at or above the ankle;
loss of both hands at or above the wrist;
loss of one foot at or above the ankle and the loss of one hand, at or above the wrist;
an injury to the spine that results in permanent and complete paralysis of both arms, both legs, or one
arm and one leg;
a physically traumatic injury to the brain resulting in incurable insanity or imbecility;
third degree burns that cover at least 40 percent of the body and require grafting, or
third degree burns covering the majority of either both hands or one hand and the face.
The proposed rule:
requires that an insurance carrier must review an injured employee’s eligibility for lifetime income
benefits (LIBs) in a timely fashion, including when an injured employee requests LIBs, and must
review all of the statutory criteria;
outlines the timeframes for determining LIBs eligibility in situations where an injured employee
requests LIBs in writing, as well as timeframes for the payment of LIBs after the insurance carrier
reasonably believes the injured employee is eligible;
ensures that if the insurance carrier denies LIBs eligibility, communication between the insurance
carrier and the injured employee will be consistent, documented, and that all parties will be informed of
their right to initiate dispute resolution; and
retains the statutory eligibility requirements for LIBs.
The public comment period closes Monday, November 10, 2014 , at 5:00 p.m. Central Standard Time.
The Insurance Council of Texas (ICT) publishes an Appeals Panel Decisions Digest that includes summaries of
significant decisions. The electronic manual, prepared in conjunction with the Austin-based law firm of Burns,
Anderson Jury Brenner, L.L.P., is available to ICT’s member-ship as a member’s only benefit. If you are
employed by a member company of ICT, contact Steve Nichols to obtain access to the manual.
Page 68
Workers’ Compensation Insurance Fraud Is A Problem!
What is Insurance Fraud?
Insurance fraud is an intentional deception committed by applicants,
policyholders, claimants, providers, agents and company employees.
It may occur during the process of buying, using, selling or
underwriting insurance and is usually motivated by greed.
Insurance Fraud is a crime in Texas!
Workers’ Compensation insurance fraud is a problem.
The National Insurance Crime Bureau (NICB) has reported that
studies indicate up to 10 percent--perhaps more--of all property/
casualty insurance claims are fraudulent. The NICB has also
estimated that workers' comp fraud costs the insurance industry as
much as $5 billion annually.
Workers’ compensation fraud includes the padding of bills by health
care providers, injured employees claiming injuries that do not occur,
employers falsely classifying employees in different occupations to
obtain lower premiums, and injured employees receiving income
replacement benefits while working.
We Need Your Help!
“Disabled” Injured Worker Playing Golf
The Texas Committee on Insurance Fraud needs your help in
fighting workers’ compensation fraud.
You can help us fight workers’ compensation insurance fraud by
reporting it to the Texas Department of Insurance at 1-888-372-8818.
Online Reporting of Fraud Available
“Disabled” Injured Worker Changing a
Flat Tire
Online reporting of insurance fraud is available at:
http://www.tdi.state.tx.us/fraud/frsiufrrpt.html.
Take a bite out of crime by reporting workers’ compensation
insurance fraud.
Get Involved with the Texas Committee on Insurance
Fraud
Contact Mark Hanna at (512) 444-9611 or at the following e-mail
address [email protected] to become involved in the
Texas Committee on Insurance Fraud.
Help Us Fight Workers’ Compensation Insurance Fraud
Page 69
An Associate Member of the Insurance Council
Page 70
Significant Texas Case Law Update From WorkCompCentral
Lumbermens Mutual Casualty Co. v. Portillo, 13-13-0219-CV, (10/09/2014): A Texas appellate court for the
second time ruled that a report from a worker's treating doctor, which had been accepted by a trial court
judge, was insufficient to establish the worker's impairment rating of 20%.
Mission Petroleum Carriers v. Kelley, 14-14-00072-CV, (10/09/2014): A non-subscribing employer that
persuaded an employee to sign paperwork to enroll in its health and safety plan – while he was in the hospital
and under the influence of morphine after being seriously injured in a big-rig accident – can still enforce the
arbitration provision included in those documents, the 14th District Court of Appeal of Texas ruled.
Beacon Construction Co. v. Alonso, 09-13-00295-CV, (09/25/2014): A Texas appellate court ruled that
workers' compensation provided the exclusive remedy for a group of workers who were injured in a crane
collapse on a worksite that was subject to a contractor-controlled insurance program.
B & S Welding Work Related Injury Plan v. Oliva-Barron, 05-13-00394-CV, (09/15/2014): The 5th District
Court of Appeals at Dallas ruled that a non-subscribing employer's alternative benefit plan wrongfully
terminated its payments to a seriously injured worker less than three months after his near-fatal fall.
Pena v. SORM, 13-12-00712-CV, (09/11/2014): A Texas appellate court ruled that summary judgment
dismissing a claim based on a worker's car accident was inappropriate as there were triable issues as to
whether he was within the course and scope of his employment at the time of his wreck.
Texas Department of Insurance v. De Los Santos, 04-13-00419-CV, (08/27/2014): A Texas appellate court
ruled that a heavy equipment operator's hand and arm injuries had left him unable to find employment
requiring the use of his hands, and therefore that he was entitled to lifetime income benefits.
Texas Mutual Insurance Co. v. Palmer, 05-12-00893-CV, (08/29/2014): A Dallas-area carpenter who had
secured a jury verdict against the Texas Mutual Insurance Co. for engaging in unfair and deceptive acts in the
handling of his workers' compensation claim will not be getting the $483,716.69 he was awarded by a jury,
due to a snafu in his pleadings.
WorkCompCentral Offers Workers’ Comp Research Library for Texas and Much More
If you have a full access paid subscription to WorkCompCentral, as opposed to a news only subscription,
you can access the WorkCompCentral Research Library - TX. In order to access this resource, you must
first log in, then click on Law in the upper horizontal menu of the site header.
WorkCompCentral was founded by David J. DePaolo in 1999. DePaolo became a member of the California State
Bar in 1984 and practiced workers' compensation law in private practice with Miller & Folse, Adelson Testan
Brundo & Popalardo, and as a sole practitioner prior to starting WorkCompCentral. DePaolo holds a J.D. from
Pepperdine University School of Law (1984), a Masters in Business Administration from California Lutheran
University (1997) and a Bachelor of Arts, English, from San Diego State University (1981).
WorkCompCentral reports on developments impacting workers’ compensation systems in all 50 states and
the District of Columbia and offers online continuing education courses in several states.
Page 71
3200 Highland Avenue
Downers Grove, IL 60515
(630) 737-7900
[email protected]
Coventry WC Network Services, a business segment of Coventry Health Care Workers' Comp Services, Inc. ("Coventry
Workers' Comp Services"), is the comprehensive outsourcing solution for containing health care and disability costs.
Serving the occupational health care market, Coventry Workers’ Comp Services provides employers, insurers and claims
payors with a variety of integrated health care services. These services include in-network and out-of-network medical
claims review and re-pricing, access to specialized Preferred Provider Organizations ("PPOs"), early intervention and case
management-driven Return-To-Work ("RTW") services and other cost management and related services.
Recently formed from the combination of First Health and Concentra’s Workers’ Compensation Cost Management
businesses, Coventry Workers’ Comp Services delivers increased medical, indemnity and administrative (“total cost”)
savings by offering our customers a fully integrated suite of services.
Coventry WC Networks have focused our workers’ compensation expertise, technology and work process re-engineering
resources to deliver the following value to our customers:
Increased cost savings (medical and total costs)
Improved communications and quality of decision-making
Service innovation, consistency and reliability
Increased information accuracy and usefulness; and
Increased frequency of superior claims outcomes.
With more than three decades of experience and as one of the industry leaders in our field, Coventry WC Network Services
provides services that successful reduce the high cost of workers’ compensation medical and total costs while delivering
improved claims outcomes for injured workers, employers, third-party administrators and insurers.
Coventry WC Network Services reviews, re-prices, and reduces medical bills received by claims payors (third-partyadministrators and insurers) and also achieves customer savings through fee negotiation and access to PPO networks.
Document management solutions and Adjuster Desktop informational interfaces contribute proven capabilities that
facilitate adjuster effectiveness and improve the timeliness and flow of meaningful information to support both better
decision-making and lower operating costs.
Visit us online at http://www.coventrywcnetworks.com/.
Page 72
Page 73
TDI Insurance Fraud Prosecutor Named for Dallas County
On October 24, 2014, the Texas Department of Insurance announced Amy
Allen as a fraud prosecutor who will work exclusively with criminal prosecutors in the Dallas County District Attorney’s Office to combat insurance
fraud. Texas consumers pay an estimated $200 to $300 in additional
insurance premiums each year to offset the costs of insurance fraud.
Amy Allen
TDI has partnered with local law enforcement in Dallas County since
2005. Following the successful partnership with Dallas County, TDI added
prosecutors in Harris and Bexar counties. Cases assisted by TDI fraud
prosecutors in all three offices have netted more than 250 criminal indictments and brought back $7.5 million in restitution to insurance fraud
victims.
“Insurance fraud affects all Texans by driving up the cost of premiums they pay for insurance coverage,”
Texas Insurance Commissioner Julia Rathgeber said. “Our Fraud Unit is dedicated to detecting and assisting
in the prosecution of insurance fraud and it is my pleasure to welcome Amy Allen to our highly qualified
team of criminal specialists.”
Allen worked previously as an assistant city attorney and community prosecutor for the City of Dallas. She
has litigation experience in Dallas, Tarrant and Harris counties and worked in Washington, D.C., for an
international prison ministry. She is a Special Assistant United States Attorney for the Northern District of
Texas as part of the national Project Safe Neighborhood program. Allen graduated from the University of
Houston – Bates School of Law in 1991 with a Juris Doctorate and earned a bachelor’s degree from
Louisiana State University.
TDI’s Fraud Unit Special Prosecution team includes Jesse McClure (Harris County) and Nicole Thornbro
(Bexar County). The team works collaboratively with the respective district attorney offices on the
prosecution of insurance fraud cases.
What is Insurance Fraud?
Insurance fraud occurs when companies, agents, adjusters, health care providers, or consumers intentionally
deceive others or misrepresent facts for financial gain. It usually happens during the process of buying, using,
selling, or underwriting insurance and is usually motivated by greed. Insurance fraud is a crime in Texas.
TDI’s Insurance Fraud Unit
Section 701.101 of the Texas Insurance Code requires the Texas Department of Insurance Fraud Unit to
report annually in writing to the commissioner of insurance the number of cases completed and recommendations for regulatory and statutory responses to the types of fraudulent activities encountered. The TDI
Fraud Unit has full state police powers (armed, make arrests, and conduct investigations into violation of
state laws), and statewide jurisdiction. The unit specializes in financial crime, and investigators may conduct
joint investigations with city, county, state, and federal law enforcement agencies.
In fiscal year 2013, the Texas Department of Insurance Fraud Unit surpassed all prior years in the number of
cases opened for investigation and referred for prosecution, and in the number of judgments from referred
cases. In 2013, the Fraud Unit received 12,444 reports of fraud , opened 559 investigations, referred 222
cases for prosecution, and obtained 108 criminal indictments convictions. The courts assessed restitution
totaling $7,533,941 against individuals convicted of insurance fraud.
Page 74
Division of Workers’ Compensation Issues Call for Presenters for 2015 Texas Safety Summit
Workplace Safety
On October 28, 2014, the Texas Department of
Insurance’s Division of Workers’ Compensation
announced that the agency is seeking presenters for its
19th Annual Workplace Safety and Health Conference,
the Texas Safety Summit, which will be held in Austin on
May 19-21, 2015. The statewide conference is open to all
segments of the Texas workforce, including small and
large employers, public and private sector employers in all
industries, and workers' compensation subscribers and
non-subscribers. A goal of the Texas Safety Summit is to
help employers reduce injuries and their associated costs
through workplace safety and return-to-work programs.
Speaking opportunities at the Texas Safety Summit
include four pre-conference sessions (three hours each),
four keynote speakers (one hour each), and approximately 25 breakout sessions (one to two hours each)
over the course of the conference.
Presentations should provide information that will improve knowledge and understanding of occupational
safety and health issues that Texas employers face. Particular areas of emphasis requested by the DWC
include preventing transportation related incidents, falls, contact with objects and equipment, and
workplace violence. Presentations that provide practical information for employers to use in their
workplaces to improve their safety and health management systems and safety outcomes are also desired.
Topics may be broad or specific to a particular industry or occupation.
The deadline for submissions is December 5, 2014. Submission details and instructions can be found on the
DWC website.
New Online Form Option Helps Employers Comply with State Workers’ Comp Requirements
On October 19, 2014, the Division of Workers’ Compensation (DWC) announced that it now offers a new
option for employers or those filing on their behalf, such as third-party administrators and employer
representatives who file the DWC Form-005, Employer Notice of No Coverage or Termination of
Coverage with DWC.
Texas employers that do not have workers’ compensation insurance coverage must submit the DWC Form005 to DWC, along with the DWC Form-205, Locations of Employer’s Business(es) if the employer has
multiple locations. This option is designed to help employers increase their compliance with this
requirement.
Employers and those filing on their behalf now have the option to file up to 500 forms online with one
submission in XML format. This option reduces the effort needed to file each form individually, and it will
also be useful for those submitting a single form with many business locations. The XML file includes all
of the information required on the DWC Form-005 and DWC Form-205.
The option assists those who file the form frequently by allowing them to program their systems to submit
the information automatically. Instructions to prepare and submit an XML file are on the Texas Department
of Insurance website at http://www.tdi.texas.gov/wc/forms/xmlformat.html.
Page 75
The Property Casualty Insurers Association of America (PCI) provides a
responsible and effective voice on public policy questions affecting
insurance products and services in an effort to foster a competitive
insurance marketplace for the benefit of insurers and consumers. The
proverbial adage “strength in numbers” rings true at our association, for
no insurance company can solely create the type of influence, wealth of
information and networking opportunities that PCI provides. Our
greatest value to members is the ability to save companies time and
money by creating individual and collective victories through a healthier
legislative and regulatory environment. Members benefit from the
advocacy, knowledge, networking and value that PCI offers.
Advocacy: The unmatched skills of PCI staff and local lobbyists, a
group that includes former state legislators and commissioners,
enables the association to inform and influence state and federal
public policy makers. Retained lobbyists are used in each state to
advocate PCI positions on issues. Expert staff exists at PCI
headquarters in Des Plaines, our federal government affairs office in
Washington, D.C., and regional offices in Albany, Atlanta, Austin,
Boston, Denver, Harrisburg, Tallahassee, Trenton, Seattle and
Sacramento to better manage industry activity.
Knowledge: The information members receive is specifically targeted
to their interests. Our more than 80 publications — including bulletins,
committee communications, reference and research documents and
statistical analysis — enlighten members with understanding that is
necessary to stay on top of new industry activities.
In particular, the Legislative Database tracks thousands of bills and
regulations each year, reporting on their introduction, enactment, and
court challenges. This service analyzes and interprets effects of bills and
regulations on insurers — saving members the cost of noncompliance.
Besides the written word, the sharing of information takes place through
seminars, where industry experts editorialize and clarify issues, and
committee meetings that facilitate information sharing among members.
Networking: Gleaning competitive tips from peer-to-peer contact leads
to peak performance. PCI provides a multitude of opportunities to meet
with colleagues and establish new business associates each year through
its 8 seminars and numerous committee meetings. PCI has at least one
member headquartered in each of the 50 states, bringing more contacts,
knowledge and expertise to the association — and creating partnerships
across the nation.
Enhance your business, your bottom line, your industry environment. E-mail [email protected] or call her
at 847-553-3634.
Page 76
INSURANCE COUNCIL OF TEXAS
Become An Associate Member Today
The Insurance Council of Texas (ICT) is a multi-purpose, non-profit
trade association of property and casualty insurers writing business in
Texas. ICT's purpose is to provide a mechanism through which our
members and associate members can collectively represent their interests
in the regulatory process and stay abreast of those events that affect the
business of insurance in Texas.
Our Accomplishments
● ICT is an opinion leader in the Texas
workers’ compensation system.
● ICT has commented on every new rule
proposed by the state’s workers’
compensation regulatory agency and
shaped the rules that have been adopted.
● ICT provides our membership with
timely analysis of new laws and rules
not available from any other source.
More information about our workers’
compensation program is available on ICT’s
website.
Our experienced and knowledgeable staff provides a variety of services
and products that give our member companies the information and
resources they need to be successful in the Texas insurance marketplace.
ICT does not lobby, but follows the legislative process and reports to the
membership on important legislative initiatives and changes in insurance
law. We are regular participants in regulatory matters and employ an
active committee system to guide our involvement.
ICT’s Workers’ Compensation Services program provides our members
and associate members with representation before the Texas Department
of Insurance (TDI) and the TDI Division of Workers’ Compensation on
regulatory matters, timely reports on developments impacting the Texas
workers’ compensation system and information not available from any
other source.
Associate Membership Benefits
■ Your company/firm would join the collective voice of ICT's 500
plus member insurance companies and a growing number of
associate members;
■ Access to ICT's "members only" website;
■ Access for an unlimited number of company/firm staff members
to our workers' compensation newsletter, association newsletter,
workers' compensation bulletins and other insurance lines
bulletins, and our members-only confidential legislative report;
■ ICT’s Workers’ Compensation Committee provides our members
with a forum to discuss workers’ compensation policy issues;
■ Free access to ICT's on-line, electronic workers' compensation
manuals, e.g. Texas Workers' Compensation Law and Rules
manual and Appeals Panel Digest; and
Contact Mark Hanna, ICT’s
Manager of Public Affairs, at (512)
444-9611 to obtain additional
information about joining ICT.
■ New associate members and associate members who renew their
membership are entitled to have a full-page, multi-color advertisement in each edition of the Texas Workers' Compensation
Update newsletter.
Visit Us Online at http://www.insurancecouncil.org/.
Page 77
Page 78
Workers’ Compensation Events Calendar
Texas Department of Insurance
Public Meetings and Hearings
The Texas Department of Insurance (TDI) has no workers’ compensation related public meetings or hearings
scheduled.
Stakeholder Meetings
The Texas Department of Insurance has no stakeholder meetings scheduled at this time.
Division of Workers’ Compensation
Public Meetings and Hearings
The Division of Workers’ Compensation (DWC) does not currently have any public meetings or hearings
scheduled.
Stakeholder Meetings
The Division of Workers’ Compensation (DWC) does not currently have a stakeholder meetings scheduled.
The DWC continues to hold a series of educational seminars for doctors and other stakeholders throughout
Texas. The event dates and locations are available on the Agency Calendar on the TDI website.
Insurance Council of Texas
2014 Mid-Year Property & Casualty Insurance Symposium
ICT and AFACT will host the 2015 Mid-Year Property & Casualty Insurance Symposium in Austin, Texas next
year. The symposium, date, location and agenda will be available on ICT’s website at a future date.
2014 Workers’ Compensation Conference
ICT will host its 2015 Workers’ Compensation Conference in Austin, Texas. The conference agenda and online
registration for this event will be available on ICT’s website at a future date.
2015 Workers’ Compensation Seminars
ICT hold its 2015 Workers’ Compensation Seminar – What the Heck Is Going On? on April 8, 2015 in Austin,
Texas and April 23, 2015 in Dallas, Texas The seminar agenda and online registration for the seminars will be
available on ICT’s website at a future date.
Page 79

texas workers` compensation update

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