Major issues we have considered

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Advisory Council Annual Report 2003 - New Mexico Workers ...

Year 2003 Annual Report of the New Mexico Advisory Council

on Workers’ Compensation and Occupational Disease Disablement

page 4

The conference we propose will have attendees recruited from the various

sectors (employers, workers, insurers, attorneys, health care providers, etc.) and

from all geographic areas of the state, to ensure broad representation from all

interest groups. There will be a pre-planned agenda with specific issues to

consider, in hopes that “best practices” recommendations can emerge after one

intensive day.

Following this conference, the Advisory Council will be prepared to make

recommendations on changes at both the legislative and regulatory levels.

Recommendation:

Study of injured workers’ experiences:

Many of our questions are related to the general theme of whether, or to

what degree, injured workers understand their rights and responsibilities.

We propose that a study be conducted by a qualified contractor, focusing

on the experience of injured workers in the New Mexico workers' compensation

system, with respect to their knowledge of rights and responsibilities,

information services received, case management, return-to-work opportunities,

and other areas to be identified. This study may be a continuation of other

studies previously conducted by the Workers' Compensation Administration.

The information obtained from this proposed study will complement the

information obtained from the “best practices” conference to help guide our

recommendations for future changes in statute, rules, and administrative

procedure.

Major issues we have considered:

Issue: workers' compensation judges are restricted from ordering

independent medical examinations (Ramirez v. IBF Prepared Foods, 2001-

NMCA-036, 2001, cert. denied 2001)

In the Ramirez case, the Court of Appeals ruled that a workers'

compensation judge may not order an independent medical examination of an

injured worker on the judge’s own motion. This is an unnecessary restriction

and is different from the authority that is enjoyed by judges in virtually all other

jurisdictions. Workers' compensation cases are often about medical issues and

the judge sometimes needs an additional, independent medical opinion to

resolve complex issues.


Year 2003 Annual Report of the New Mexico Advisory Council

on Workers’ Compensation and Occupational Disease Disablement

page 5

In the same decision, the court restricted the ability of the independent

medical examiner to testify regarding the cause of the worker’s injury --

specifically, whether or not the injury was work-related and therefore covered by

workers' compensation.

The Advisory Council supports a legislative change to remove this

restriction. We believe this will serve the interest of fair and expeditious

hearings.

Issue: workers who get a job other than with their old employer receive full

TTD (Grubelnik v. Four-Four, Inc., 2001-NMCA-056 (2001, cert. denied 2001))

Prior to the Grubelnik case, it was generally understood that if an injured

worker, while receiving temporary total disability (TTD) benefits, went back to

work for any employer and was earning the same as, or greater than, his preinjury

wage, temporary total disability benefits should be terminated. The

worker might still be entitled, later, to permanent partial disability benefits based

on the physical impairment.

The New Mexico Court of Appeals changed this general understanding by

observing that the law said “THE employer” (emphasis added), not “any

employer,” and therefore a worker who finds work with a different employer is

still entitled to receive TTD benefits.

This appears to be an abuse of the purpose of workers' compensation.

However, in considering what would happen if the law were changed, we raise

another issue: How well does the injured worker understand his rights and

responsibilities regarding return to work, and who is responsible for ensuring

that worker is made to understand?

If the law is changed without clarifying this responsibility, some workers

who did not understand their responsibilities could find themselves charged

with fraud. This is a reason to review the statutory and regulatory

responsibilities of all parties in the workers' compensation system.

This issue is also one of many issues that have led us to recommend

mandatory continuing education for insurance adjusters who adjust workers'

compensation claims. New Mexico has no continuing education requirement

at all for insurance claims adjusters.


Year 2003 Annual Report of the New Mexico Advisory Council

on Workers’ Compensation and Occupational Disease Disablement

page 6

With continuing education, we can ensure that adjusters are informed of

their responsibility toward claimants and other critical aspects of the law. We

recommend that the legislation allow the Workers' Compensation

Administration to set minimum standards for the education for adjusters

licensed to adjust workers' compensation claims.

Issue: communication between doctor and employer/insurer is limited

(Church's Fried Chicken v. Hanson, No. 13153, 1992, cert. denied 1993)

The decision in the Church’s case restricts ex parte communication between

the health care provider and the employer or insurer (communication without

the worker’s presence). The restriction has the effect of preventing

communication that would prejudice the health care provider against the injured

worker. This is important because decisions of the health care provider control

many issues in workers' compensation, including such critical matters as the

timing of termination of benefits.

Under this case law, any time the health care provider communicates

with the employer or insurer, the communication must be in writing or, if it is in

person or on the phone, the worker or the worker’s attorney has to be offered the

chance to be present.

This restriction prevents employers and insurers from having useful

conversations with the doctor to help get the injured worker back to work.

However, there is anecdotal evidence that some adjusters overstep the

appropriate boundaries in their conversations with doctors.

The Advisory Council finds that this issue is the tip of the iceberg in the

complicated area of medical-related communication in workers' compensation.

Related issues include the widespread use of broadly worded medical

release forms, in which workers are asked to waive the protection this case law

has provided to them. Our predecessors on this Council were uncomfortable

with this practice. They believed that an individual in a stressful situation, such

as an injured person in need of treatment, may tend to sign any document given

to him without understanding the consequences. Under law, a worker cannot

be denied medical treatment because he refused to sign a broad release, but most

workers probably don’t know they have the right to refuse.

Case management is another related issue. Case management, if

provided, is usually provided by the insurer. The WCA also has a case

management program, in which the case manager is assigned at the request of


Year 2003 Annual Report of the New Mexico Advisory Council

on Workers’ Compensation and Occupational Disease Disablement

page 7

one of the parties and reports to the WCA, not the insurer. This program is

currently rather small.

Case management can be an excellent tool for cost-effectiveness in medical

treatment of injured workers and may be very valuable. However, the WCA

ombudsmen hear complaints of workers distressed by case managers who

discuss their cases with the doctors in secret. The Church’s decision was

intended to prevent these private conversations.

“MMI notification” is yet another related issue. MMI, maximum medical

improvement, is the point in time when the worker has fully healed or has

improved as much as he or she is likely to, in the opinion of the doctor. When a

worker reaches MMI , the worker’s benefits are sometimes terminated entirely

and sometimes reduced substantially. MMI should be the signal to the worker

that it is now time to go back to work, whether with his former employer or

elsewhere.

However, we hear the complaint that it takes several weeks or even

months for workers to be notified that MMI has been decided in their case, and

they are unprepared for this change in circumstance when it comes.

Our predecessors on the Advisory Council, in their Annual Report for

2002, rather than recommending legislation, asked the insurance and selfinsurance

industries to find a solution to this problem by reviewing their

communication practices. To our knowledge, this initiative has not occurred,

and the problem has not been solved.

To consider these issues in context and in relationship to one another, we

propose a “best practices” conference to be held in 2004. Until this conference

has opened the way for more comprehensive solutions, we will oppose any

legislation in this area.

Issue: Payments for medical services

The New Mexico workers' compensation law requires the Workers'

Compensation Administration to promulgate fee schedules for medical and

hospital services, which specify the maximum fee that may be paid.

For all services other than hospital, the law specifies a method to be used

by the WCA in developing the fee schedule. This method has proved to be

cumbersome and difficult to implement.


Year 2003 Annual Report of the New Mexico Advisory Council

on Workers’ Compensation and Occupational Disease Disablement

page 8

The Advisory Council will work with the Director to revise the method of

developing the fee schedule. We will seek to develop a method that allows

annual updates to be implemented simply, and that provides reasonable

adjustments in medical fees, which are accurate, within reasonable limits, and

which ensure a fair and equitable result for the employer and worker.

Increases in medical costs are a major driver in the premium increases of

the last few years. We are concerned about this, and we are also concerned about

injured workers’ access to medical care. Therefore we will look for new

solutions to control costs while not reducing access. We will look especially for

new efficiencies to reduce the administrative costs of health care delivery in

workers' compensation, and we hope that our proposed “best practices”

conference will help to develop new ideas for cost saving. Meanwhile, the

medical cost issue is a critically important reason why we cannot support

indemnity benefit increases at this time.

Issue: Uninsured Employers' Fund

The Uninsured Employers' Fund is a new program enacted in 2003

(Senate Bill 771).

This program created a revolving state fund to provide workers'

compensation benefits to injured workers whose employers were illegally

uninsured at the time of the worker’s accident.

The fund was established with an initial appropriation of $500,000 from

the Workers' Compensation Administration Fund. It is to be replenished from

two sources: payments and penalties recovered from the illegally uninsured

employers; and a new assessment on insurers, self-insured employers, and selfinsured

groups and pools.

As enacted, the method of assessing contributions from employers and

insurers mirrored the language that had been used for the now-repealed

Subsequent Injury Fund. After close review it has been determined that this

process is inefficient compared to the workers' compensation fee process.

The Advisory Council supports the intent and purpose of this new

program and will support legislation to clarify the program and revise the

method of collection of the new assessment.

Issue: Workers' compensation fee


Year 2003 Annual Report of the New Mexico Advisory Council

on Workers’ Compensation and Occupational Disease Disablement

page 9

The Workers' Compensation Administration is funded by an earmarked

tax paid by all New Mexico employers and workers covered by workers'

compensation, known as the workers' compensation personnel assessment fee or

simply the workers' compensation fee. The fee is collected by the Taxation and

Revenue Department, which receives five percent of the revenues collected to

cover its administrative cost.

The Workers' Compensation Administration has noted a number of

administrative and customer service problems in this tax program and proposes

by legislation to specify a realignment of agency responsibilities aimed at

improving the program. The Advisory Council will support such legislation.

What is the Advisory Council?

The Advisory Council on Workers' Compensation and Occupational Disease

Disablement was created as a part of the historic reform of New Mexico’s workers'

compensation system, in what became known as the 1991 Act.

In 1990, when the system was in crisis, the then-Governor and legislative

leaders created a task force to develop a workers' compensation reform. The

“ground rules” of that task force were based on the principle that workers'

compensation existed to serve workers and employers, and that all other

participants in the system – insurers, lawyers, doctors, etc. – were there to

provide services, not to run the system. It was believed that the workers and

employers should have the final say in how this system was run and what its

laws should provide. Therefore, in the task force, only worker and employer

representatives had a vote.

The Advisory Council was created to be the successor to the task force and to

carry on the spirit of reform, cooperation, and mutually beneficial solutions.

The Council is established in statute at §52-1-1.2. The Council is composed of

three members representing employers and three representing workers, all appointed

by the Governor. The Director of the Workers' Compensation Administration is an exofficio

member. Under law, the Workers' Compensation Administration provides staff

services to the Council.

The Council’s primary purpose is to provide support and guidance to the

Governor and Legislature by developing informed recommendations on workers'

compensation issues. The statute permits us (paragraph C) to:

1. Make recommendations relating to the adoption of rules and legislation;


Year 2003 Annual Report of the New Mexico Advisory Council

on Workers’ Compensation and Occupational Disease Disablement

page 10

2. Make recommendations regarding the method and form of statistical data

collections; and

3. Monitor the performance of the workers’ compensation and occupational disease

disablement system in the implementation of legislative directives.

The Advisory Council has been in existence since 1991. The Council has worked

hard to maintain a consensus of its business and labor members by developing

positions that support the mutual goals of New Mexico employers and workers.

In recommending legislation or other public policy, the Advisory Council

has an advisory role only and has no power to make binding decisions.

The principles guiding this Council are:

1. The workers' compensation system exists to serve workers and employers. The

members of this Council represent these two interest groups. Our mission is to

safeguard their interests and to support policies that will preserve the stability and

reliability of the system for their benefit.

2. The Council takes the position that workers and employers share a mutual,

common interest in the workers' compensation system. This Council serves that interest

by supporting a balance between fair and adequate benefits for workers and costeffectiveness

for employers.

3. The workers' compensation system is constantly changing, due to changes in

judicial interpretation of law and changes in its operating environment. Therefore, the

Council serves its mission by seeking input from individuals and organizations

representing all sides of the workers' compensation system and by open-minded

examination of evidence, periodically renewed from time to time, on all aspects of the

workers' compensation system.

The Advisory Council has become increasingly recognized by legislators and

opinion leaders as a sounding board for issues on the entire range of workers’

compensation subjects. Legislation on workers’ compensation has been introduced

virtually every year since the Advisory Council’s inception. The Advisory Council has

reviewed and commented on all such legislation. We have been pleased that in most

cases our views have been considered and appreciated by legislators. We also have a

key advisory role in helping to shape the rules and practices of the Workers’

Compensation Administration.

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