04 Nov 2015

Workers’ Compensation Emerging Issues: Will 2016 Be the Year Opt Out Legislation Catches Fire?

By Thomas A. Robinson, Co-Editor-in-Chief, Workers’ Compensation Emerging Issues Analysis

We are pleased to present the 2015 Workers’ Compensation Emerging Issues Analysis (“WCEIA”). With this third, annual edition, we offer a diverse collection of expert analysis, incisive commentary, interesting case summaries and legislative updates from all across our nation. Geared not just for practicing attorneys, this volume offers risk managers, insurance brokers and executives, claims adjusters, HR experts and academic researchers relevant insights, practice points, and other pertinent takeaways that will enhance your work.

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2016: Is This The Year Opt Out Legislation Catches Fire?

As depicted on this edition’s cover and as Lex Larson and I point out in the volume’s opening article, 2016 seems poised as the year of the opt out debate. The successful Oklahoma legislation is now two years old. Proponents and opponents alike are pointing to alleged successes and failures. Constitutional challenges to the law will likely move to the Oklahoma Supreme Court by mid-year. The debate has spilled over to other states.

For example, when both Tennessee and South Carolina closed their 2015 legislative sessions, each had pending one or more opt out bills that state legislators indicate will be resubmitted early in 2016 for debate and consideration. While most of the current opt out action is limited to the Southeast, workers’ compensation experts from all across the nation are waiting with bated breath to see what lies ahead. As Lex and I argue in our article, opt out legislation is a systemic threat to the grand bargain struck 100 years ago with the advent of the state-run workers’ compensation systems. Will South Carolina, Tennessee and other states jettison a system that seeks to spread the real cost of work-related injuries to those that consume the products produced and the services performed? By this time next year, we should know.

“Uberfication” of the Economy

This year’s edition also examines the “Uberfication” of the economy—the growing use of software and technology to supply rides, rooms, razors and a host of other products and services on demand. Those having a decent car, a cell phone, and some time on their hands can be matched with persons needing a quick ride across town or to the airport. Rather than drop $300 for a night’s stay in a hotel, one can link with persons with a spare bedroom to let via a smart phone. Ah, but the world of workers’ compensation is not known for its nimble gait. Bob Wilson, in his excellent piece entitled “Incompatible Worlds: Workers' Comp and the OnDemand/Sharing Economy” (see WCEIA pp. 12-15) ponders whether the expansion in the Internet’s bandwidth can be matched by the sometimes slow-moving pace of the comp world.

As noted in Part II—the 50-State (and D.C.) Legislature and Case Survey (WCEIA pp. 208 et seq.), at least 25 states and D.C. passed legislation dealing with “Transportation Network Companies” such as Uber, Lyft and AirBnb during 2015. California and several other states already had begun to regulate the enterprises prior to 2015, and more states considered legislation this year to do the same.

Part I. Expert Analysis and Commentary (WCEIA pp. 5-206)

In addition to the pieces devoted to opt out legislation and Uberfication already mentioned above, Part I contains a broad mix of relevant content. Whether it’s Mark Walls’ cautionary commentary on the erosion of the exclusive remedy defense (WCEIA pp. 16-18), Ryan Benharris’ incisive summary of a WCRI Annual Conference session that examined “Resilience and Renovation” of workers’ compensation laws in four important states: Texas, Pennsylvania, Oregon and Florida (WCEIA pp. 20-24), or Karen Yotis’ analysis of several study papers touting the power of “predictive analytics” and the use of “big data” (WCEIA pp. 63-71), the reader will gain important new insights and knowledge.

Building on the theme of last year’s edition—temporary and contingent workers—this year’s edition offers two additional pieces, one by Ms. Yotis (WCEIA pp. 149-153), and another by me (WCEIA pp. 143-148).

A number of this year’s articles drawn on scholarship and analysis beyond the workers’ compensation arena, e.g., see my reporting on a provocative article, “Overkill,” in The New Yorker by noted author and physician, Atul Gawande, M.D., who posits that fully 30 percent of total health care spending—some $750 billion annually—does nothing to make anyone better (WCEIA pp. 76-79), and that of Karen Yotis related to a Kaiser Permanente paper examining the heath care systems and drug cost containment initiatives in Australia, Germany, and the United Kingdom (WCEIA pp. 126-129).

This year’s edition, of course, contains articles on perennial topics, see, e.g., Vernon Sumwalt’s excellent piece on workers’ compensation’s secondary payers: Medicare and Medicaid (WCEIA pp. 51-54), Robin Kobayashi’s analysis of a new study on worksite wellness clinics and ER visits (WCEIA pp. 195-197), and Ms. Kobayashi’s review of a study published in the Journal of Occupational and Environmental Medicine pointing to gains that could be achieved if workers’ compensation insurers and small businesses teamed up in implementing worksite wellness programs (WCEIA pp. 204-206).

The use of opioids in the treatment of non-cancer pain continues, of course, to be the foci of controversy. Robert G. Rassp’s article, “Opioids – The Grand Debate,” (WCEIA pp. 105-114) is a must read. Rassp discusses the revised ACOEM Practice Guidelines for Opioids and provides a clear and concise bullet-list summary of important points. See also my examination of two recent studies by WCRI (WCEIA pp. 119-122).

Part II. 50 State & D.C. Legislative & Case Survey (WCEIA pp. 208-389)

Part II, which contains a discussion of this year’s important workers’ compensation-related legislation, with commentary, as well as Larson’s Spotlight on Interesting Cases (short summaries of workers’ compensation cases) is alphabetically arranged on a state-by-state basis. Like the year before it, 2015 was a relatively quiet legislative year. Nevertheless, there are a host of provisions that should interest the reader.

Transportation Network Companies

In 2015, at least 25 states and the District of Columbia (Arizona, Arkansas, Georgia, Idaho, Illinois, Indiana, Kansas, Kentucky, Louisiana, Maine, Maryland, Minnesota, Montana, Nebraska, Nevada, North Carolina, North Dakota, Oklahoma, South Carolina, Tennessee, Texas, Utah, Virginia, Washington and Wisconsin) passed some sort of legislation regarding transportation network companies like Uber, Lyft and AirBnb. Several (e.g., Arkansas, North Carolina, South Carolina, WCEIA pp. 217, 319, 350, respectively) appear to favor the categorization of drivers as independent contractors. Other state laws are much more restrictive. As Bob Wilson noted in his article, following the passage of the Kansas law (WCEIA p. 261), Uber suspended activity within that state.

Telemedicine

Idaho, Nevada, New Hampshire, Washington, and Wyoming (WCEIA pp. 250, 300, 304, 381, 388, respectively) passed or amended legislation outlining, among other things, the acceptable use of telemedicine. The legislation also defines how the patient-provider relationship may be established using telemedicine, and places limitations on prescriptions that can be prescribed without face-to-face contact.

Medical Marijuana

A number of states passed legislation related to the use of medical marijuana including, but not limited to: Arizona, Colorado, Georgia, Hawaii, Illinois, Louisiana, Maryland, Nebraska, Nevada, North Carolina, Oklahoma, Oregon, Texas, and Washington (WCEIA pp. 214, 225, 243, 248, 252, 265, 271, 297, 300, 319, 332, 337, 361, 381, respectively). Some bills will have little effect on workers’ compensation claims, however. For example, the North Carolina and Oklahoma laws limit use of the controlled substance to the treatment of epilepsy.

Other legislative highlights

·   California’s new law mandating that cheerleaders utilized by a California-based professional sports team are employees of the team and not independent contractors (see WCEIA p. 221)
·   The District of Columbia provision that generally prohibits employers from testing job applicants for marijuana until a conditional offer has been accepted (see WCEIA p. 234)
·   Florida’s new law that essentially prohibits the use of drones to conduct surveillance on individuals or property within the state (see WCEIA p. 237)
·   Louisiana’s new law that prohibits the dispensing or distributing of any drug or device to a patient pursuant to a prescription written by a practitioner or a member of the practitioner’s group practice if the practitioner or an immediate family member of the practitioner has a direct or indirect financial relationship with the dispensing or distributing pharmacy unless the financial relationship meets certain requirements as specified (see WCEIA p. 265)
·   Maryland’s extension of the occupational disease presumption for heart disease or hypertension to certain county detention officers, projected to result in significant increases in costs for Arundel County (see WCEIA p. 271)
·   Michigan’s creation of a “First Responders Presumed Coverage Fund” (see WCEIA p. 280)
·   New Hampshire’s passage of a bill establishing a commission to study the feasibility of developing a “first responder’s” fund similar to that in Michigan (see WCEIA p. 304)
·   A New Mexico provision that provides that the 700-week lifetime cap on indemnity benefits applies to TTD (see WCEIA p. 309)
·   Oregon’s amended law that relates to the circumstances under which attorney’s fees may be awarded and the amount of attorney fees awarded in workers’ compensation claims (see WCEIA p. 337)

Larson’s Spotlight on Interesting Cases

As noted above, this 2015 edition also contains recent interesting and important workers’ compensation cases from around the nation. Arranged on a state-by-state basis at the end of each respective section highlighting the state’s legislative update, the case summaries include:

·   A decision by the Supreme Court of Colorado holding that an employee who engages in the use of medical marijuana—permitted under state law—may nevertheless be fired, since the activity is illegal under federal law and the employer had the right to a zero-tolerance policy regarding the use of the controlled substance, Coats v. Dish Network, 2015 CO 44, 2015 Colo. LEXIS 520 (June 15, 2015) (WCEIA p. 225)
·   A determination that the California statute, Labor Code § 3701.9, that generally prohibits temporary services employers and leasing employers from self-insuring their workers’ compensation liability is constitutional, Kimco Staffing Servs., Inc. v. State of Cal., 2015 Cal. App. LEXIS 394 (May 8, 2015) (WCEIA p. 223)
·   A decision from Pennsylvania, in which a divided appellate court found the statutory requirement [77 Pa. Stat. Ann. § 511.2(7)] that physicians use the “most recent edition” of the AMA’s Guides to the Evaluation of Permanent Impairment was unconstitutional since it amounted to an improper delegation of legislative authority, Protz v. Workers’ Comp. Appeal Bd. (Derry Area Sch. Dist.), 2015 Pa. Commw. LEXIS 404 (Sept. 18, 2015) (WCEIA p. 345)
·   A determination by the Supreme Court of Iowa that most surveillance materials are protected by the work product rule, Iowa Ins. Inst. v. Core Group of the Iowa Ass’n for Justice, 2015 Iowa Sup. LEXIS 68 (June 12, 2015) (WCEIA p. 258)
·   A decision by Florida’s 3rd District Court of Appeals striking down the much-discussed “Padgett” decision by Circuit Court Judge Jorge Cueto, which in August 2014, had declared the state’s exclusive remedy defense unconstitutional, State of Florida v. Florida Workers’ Advocates, 2015 Fla. App. LEXIS 9531 (June 24, 2015) (WCEIA p. 239)
·   A decision by a federal bankruptcy court that a Medicare Set-Aside is not subject to administration by a bankruptcy trustee since it is not property of the bankruptcy estate, in spite of the fact that it might be held in a personal bank account maintained by the Chapter 7 debtor, Carr v. Arelliano, 2015 Bankr. LEXIS 9 (M.D. Pa., Jan. 5, 2015), (WCEIA p. 277)

Request for Comments

We are grateful for the contributions offered by so many of our colleagues. As one can tell from even a glance at the Table of Contents, this volume is a collaborative effort. We’d like to make it even more so next year. We welcome your comments and suggestions. We also welcome submissions. Please address them to: trob@workcompwriter.com or Robin.E.Kobayashi@lexisnexis.com.