Tn Workers’ Compensation Reform J eff Francis Assistant Administrator Division of workers’ compensation

1. Tn Workers’ Compensation ReformJeff FrancisAssistant AdministratorDivision of workers’ compensation

2. Why Reform? Workplace injuries are a serious matter • Cost to employees • May jeopardize their position • May leave them with impairments • May hurt them financially • May not be able to support families • Cost to employers • Money, disruption of operations and loss of productivity. In FY 2011-12: • 60,541Medical-Only Claims • 40,360Lost Time Claims

3. Why Reform? • Complaints about WC costs in TN • Higher than surrounding states • Discourages new jobs from coming to TN • Some TN firms expand to other states instead of in TN • Increased interest in “opting out” • Perception that process is too lengthy and complicated • Perceived incentives to stay off from work

4. Why reform? • Concerns about court system • Too litigious • Only TN and AL use trial courts • Inconsistency in court rulings • “Race to the courthouse” • Timeliness; it can take years for a claim to move through the court

5. Governor Listened, Appointed “working group” and asked, How Can the System Be Improved?

6. Sixteen Months LaterPublic Chapter 289 An act To Reform Tennessee’s Workers’ Compensation System was signedFor dates of injury on/after july 1, 2014

7. Major changes in the reform • Definition of Injury • Change in Construction of Law • Move from Chancery and Circuit Courts to Workers’ Compensation Court in DWC • Change in Medical Provider Panels • Change in Physician Communications

8. Major changes in Legislation • Enhanced Mediation • Introduction of Treatment Guidelines • Change in Temporary Total Disability Benefit • Change in determination of permanent partial disability benefits • New Penalties

9. Major changes in the reform • Change in Administrative Structure • DWC autonomous unit of DOL • Court of Workers’ Compensation Claims • Board of Workers’ Compensation Appeals • Ombudsman Program/Enhanced Mediation • Continuation of Existing Programs

10. Expected impact of reform On Employees: • Process that is easier to understand • Emphasis on resolving disputes • Faster access to court • Quicker Medical Treatment • Quicker return to pre-injury employment On Employers: • Fairer, more predictable environment • Quicker, simpler resolution of claims • Less concern about venue • Lower administrative costs • More conducive to bringing jobs to TN

11. Definition of Injury • Currently, there is a “could be” standard when it is supported by lay testimony • New Law: Injury is compensable if it arose “primarilyin the course and scopeof work” when all other possible causes are considered • Primarily had applied to gradual injuries since 6/6/11.

12. Meaning of “primarily” An injury arises primarily out of the employment if the employee can show that it “contributed more than fifty percent (50%) in causing the injury, considering all causes.”

13. Medical Proof Treating physician must state that work primarily caused the injury to a “reasonable degree of medical certainty.” • Reasonable degree of medical certainty means, “ in the opinion of the physician, it is more likely than not considering all causes, as opposed to speculation or possibility.” T.C.A. 50-6-102(12)(D) • Treating physician’s opinion is presumed to be correct

14. New Medical Provider panel process • PC 289 simplifies the process by requiring only one panel. • Three or more independent physicians, specialists, chiropractors, or practice groups (or any combination thereof) • Initial Treating physician may refer injured worker to a specialist • Employer has 3 business days after notification of referral is received to offer a panel or referral stands.

15. Physician communications • Now: Legislative requirement for a signed waiver form from injured worker before ER could speak to medical provider. (Response to Overstreet case) • New: Employer is allowed to communicate with treating physician (orally or in writing), only about the treatment for the workers’ compensation injury.

16. New Provider panel process • Providers must be willing to treat the injured worker. • If not, ER must provide additional choices. • Maintains the “community” rule, but allows a 100-mile radius if not available in the community. • EE still gets travel reimbursement if outside 15-mile radius • NEW—Division can enforce a penalty for improper panels

17. NewMedical Treatment Guidelines--To be adopted by 2016 • Guidelines for the diagnosis and treatment commonly occurring workers’ compensation injuries • Intended to reduce disputes, improve quality and timeliness of medical treatment • In consultation with medical advisory committee

18. Medical Treatment Guidelines • Medical Advisory Committee • Physicians with experience in WC with representatives of insurance, employers, and employees • Any treatment that follows guidelines presumed to be medically necessary • Rebuttable by clear and convincing evidence • Addresses an area of concern to employees and physicians

19. Alert! Employer Opportunity Employers who do not provide injured workers appropriate, timely panels hurt themselves. • Lose control of claims when they do not act quickly to manage the claim. 19

20. Alert! Employer Opportunity Employers who do use the panel process proactively can better manage claims: • Can negotiate discounts with the providers on panel. • Panel physician has a presumption of correctness regarding causation. • Can be overcome by preponderance of evidence. • Employers can more easily monitor the medical progress of the claim.

21. Different construction of law • Will replace current construction that the law must be liberally construed in favor of the employee. • New: Statute must be construed fairly, impartially and in accordance with basic principles of statutory construction.

22. The Ombudsman Program… • Will provide education and assistance to any party to a workers’ compensation claim that is not represented by an attorney. • Will be staffed by persons trained in Tennessee Workers’ Compensation law and rules of the various programs. • An ombudsman is not an attorney, and cannot provide legal advice, cannot sign documents on behalf of a party.

23. Duties of the Ombudsman • The ombudsman will have the basic responsibilities of: • Advising parties of the basics of workers’ compensation laws and procedures • Answering the questions of parties • Assisting parties in the completion of forms • Acting as a liaison among the parties to ensure communication among parties and efficiency in the administration of claims

24. Mediation Process • The new Mediation Program will function similarly to the current Benefit Review Process, but from the start of the claim. • Includes temporary and medical benefits • NEW—Additional requirements to act in good faith • Rules will be promulgated regarding “good faith” • Violation of those rules may lead to a penalty of up to $5,000

25. The Workers’ Compensation Mediation Program • All disputed claims must be mediated before a hearing in the workers’ compensation court will be scheduled. • NEW - certification of dispute process • If parties cannot agree, disputes must be certified before appearing before judge

26. WORKERS’ COMPENSATION COURT • Judicial function moved from courts to DWC for permanency issues – DOI 7/1/14 • Judges appointed by Administrator • Licensed attorneys at least 30 years old • Must have at least 5 years appropriate experience • Will serve a 6 year term; maximum of 3 terms • There will be one Chief Judge • Selection process

27. Workers’ Compensation Court • Judges will be located across state and will receive training prior to serving. • Judges can be removed for non-performance or for cause • Tennessee Code of Judicial Conduct • Court hearings will be conducted in accordance with TN Rules of Civil Procedure and Rules of Evidence

28. Duties of a WC Judge • Conduct hearings • Render orders, decisions and determinations in a timely manner • Approve settlements • Issue subpoenas • Compel obedience to judgments, orders and process through the assessment of civil penalties

29. newBoard of WC Appeals • Will render and decisions on appeals of decisions by WC judge. • Wholly separate from the Court of Workers’ Compensation. • 3 Appeal Judges • Appointed by Governor • 6 year term, limit of 2 terms • Licensed attorneys with 7 years experience • Parties will still have right of appeal to the Supreme Court.

30. Alert! Employer opportunity • Employer/Insurance Company can have a better outcome if they: • Provide a representative with authority to settle the claim at all mediations • Provide the opposing party all documentation and information pertinent to the claim that is necessary to engage in fruitful negotiations • Arrive at ADR proceedings on time

31. Temporary Total Disability (TTD) Benefits • Amount unchanged for those employees out 7 or more days • NEW—Ends when employee reaches MMI • “when the treating physician ends all active medical treatment and the only care provided is for the treatment of pain” with one exception—Mental/Mental claims • NEW— If TTD payments made post MMI, automatically offset against PPD

32. NewImpairment Rating process • Authorized treating physician’s (ATP) rating has presumption of correctness • Presumption can be overcome by a preponderance of the evidence • MIR Registry is still available when there is a dispute over the ratings • MIR rating trumps treating physician's • All impairment ratings will be BAW

33. Current Permanent Partial Disability (ppd) Benefits • The current PPD benefits are capped at: • 1.5X the impairment rating for cases where the EE returns to work at the same ER earning at least 100% of pre-injury wage; and, • 6 X the impairment rating for cases when the EE doesn’t. • The number of weeks of benefits are due varies. There is a list of 31 scheduled members that range from 10 weeks to 400 weeks. • For injuries to non-scheduled (BAW) members, the max number of weeks is 400.

34. New Permanent Partial Disability benefits If worker does not return to work for any ER at 100% wage after initial disability period Date of Injury Date Injured Worker Reaches Maximum Medical Improvement

35. New Permanent Partial Disability (ppd) Benefit • Employee eligible for PPD benefit whether they return to work or not when they reach MMI • The initial PPD Benefit equals: impairment rating X 450X 66 ⅔ % of the EE’s average weekly wage • This benefit is for the period determined by multiplying 450 by impairment rating • Impairment ratings “shall not consider complaints of pain”

36. Permanent Partial Disability (PPD):how to calculate initial benefit • Example: If the EE’s Average Weekly Wage is $750 and Impairment Rating is 7% : • Multiply .07 (rating) X 450 (weeks) X $500 (comp rate) = $15,750 during initial compensation pd. • .07 X 450 = 31.5 weeks (compensation period) • If the EE hasn’t returned to work 31.5 weeks after MMI, he/she is entitled to additional benefits

37. ppd benefit after initial benefit • If EE does not return to work or does, but makes less than the pre-injury wage, the EE is eligible for additional benefits. • The additional benefit is determined by multiplying the initial benefit by all that apply: • Factor of 1.35 because of loss of job or pay • Factor of 1.45 if no HS diploma or GED • Factor of 1.2 if employee > 40 years of age • Factor of 1.3 if unemployment in county where employed > 2 points above state average for year prior to initial period of compensation

38. Ppd Benefit after initial benefit • EE received $15,750 during the 31.5 weeks after the initial compensation period. • Lump sum or periodic payments • EE may be eligible for additional benefit(s): • Loss of job or lowered pay factor (1.35) • Education factor (1.45) • Age factor (1.2) • Unemployment factor (1.3) • The actual benefit will depend on which factors apply.

39. PPD Example: 3 of 4 Factors • Injured worker is 45, 8th grade education, worked in Davidson County • Comp rate is $500 • Impairment rating is 7% • 0.07 X 450 X $500 X 1.35 X 1.2 X 1.45 = $36,996.75 in total benefits • Employee would have already received $15,750 in the initial benefit period • Additional benefit is $21,246.75

40. New Penalties • Failure to mediate in good faith • Failure to comply timely with order or judgment issued by a WC judge • Failure of employer to timely provide appropriate medical treatment • Failure of employer to provide panel • Wrongful failure of employer to pay TTD • Wrongful failure to satisfy terms of approved settlement

41. Reforms are Only part of the solution • What Employers Can Do To Make the System Better: • Know the law • Respond quickly and effectively to claims • First Report of Injury even if you dispute the claim • Contact Insurance Co. or TPA • Medical Panel • Wage Statement • Meet deadlines in law • If a claim is denied, file appropriate form

42. How DWC can Help • Local DWC office can provide information and assistance • Education programs about Reforms and current law • Listen to your issues and look for solutions • Provide fair, impartial service to all parties

43. Division of Workers’ Compensation Offices 1-800-332-2667 Website: www.state.tn.us/labor-wfd/wcomp Pickett Sullivan Clay Johnson Montgomery Robertson Hancock Claiborne Sumner Stewart Scott Fentress Hawkins Trousdale Campbell Lake Obion Jackson Overton Henry Washington Cheatham Weakley Grainger Macon Carter Houston Union Smith Davidson Wilson Hamblen Greene Morgan Dickson Putnam Anderson Gibson Carroll Dyer Unicoi Benton Knox Jefferson Humphreys De Kalb Cumberland White Cocke Williamson Roane Rutherford Crockett Hickman Cannon Lauderdale Sevier Loudon Blount Van Buren Warren Henderson Perry Decatur Madison Rhea Haywood Maury Bledsoe Meigs Lewis Bedford Coffee Tipton Monroe McMinn Chester Sequatchie Marshall Shelby Grundy Moore Wayne Hardeman Giles Hardin Fayette McNairy Lincoln Fayetteville Bradley Franklin Lawrence Hamilton Marion Polk Nashville--Metro Center 2222 Rosa L. Parks Blvd. Nashville, TN 37228 Telephone: 615-741-1383 Fax: 615-253-2480 Cookeville 444-A Neal Street Cookeville, TN 38501-4027 Telephone: 931-520-4290 Fax: 931-520-4316 Knoxville 1525University Avenue Knoxville, TN 37921-6741 Telephone: 865-594-5177 Fax: 865-594-5172 Memphis 170 N. Main Street, 11thFl Memphis, TN 38103-1820 Telephone: 901-543-6077 Fax: 901-543-6039 Murfreesboro 845 Esther Lane Murfreesboro, TN 37219 Telephone: 615-848-6743 Fax: 615-217-9378 Chattanooga 540 McCallie Ave, Ste W600 Chattanooga, TN 37402 Telephone: 423-634-6422 Fax: 423-634-3115 Kingsport 1908 Bowater Drive Kingsport, TN 37660-4136 Telephone: 423-224-2057 Fax: 423-224-2056 Jackson 225 Dr. MLK Drive, 1st Fl Jackson, TN 38301-6985 Telephone: 731-423-5646 Fax: 731-265-7022 Revised:07/13/2011

44. Questions?