Our host Sean Harris talks with attorney Rich Brian about handling workers’ compensation claims and how they differ from handling insurance claims.
Sean: Hello and Welcome to Civilly Speaking, OAJ’s podcast on trending legal issues. I am your host Sean Harris. Today we have with us Rich Brian with the firm of Brian, Zwick, Marchisio & Associates. Their main office is in North Canton. They also have offices in New Philadelphia and Cambridge. Among other practice areas, Rich spends a lot of time in the area of Workers’ Compensation. Rich Brian, thank you very much for being here.
Rich: Thank you Sean. It is a pleasure to be here.
Sean: We are going to talk today about workers’ comp in Ohio and specifically for those of us who don’t practice in that area, walk us through some of the particular issues that workers’ comp practitioners face. Talk to us about some of the differences between processing a workers’ comp claim and how does that compare to an auto personal injury case.
Rich: First of all there are two types of employers in Ohio, state funded employers – those who pay into the state insurance fund, it’s called the Ohio State Insurance Fund, and then there are the self-insured. These are the companies that are large enough, probably 500 employees or more, and have the financial wherewithal to be able to convince the bureau that they can fund their own workers’ compensation and cover their claims.
Sean: Your Walmart’s, your very large employers?
Rich: Very large employers, yeah exactly. I think for purposes of comparing and contrasting the processing of a workers’ compensation claim versus a civil complaint or civil action we will probably stick with talking about the Ohio State insurance agency and the state funds.
Sean: Ok. Is it primarily why if you were an employer you would choose to be self-insured? What’s the benefit to an employer?
Rich: Well the benefit is that you are holding on to your money. Instead of paying the state premiums, like state funded employers do, you’re controlling that money, you’re investing that money and you are paying any claim related expenses out of that fund. I think it’s like anything else, if you can control your own money it’s better than giving it to somebody else.
Sean: So we are going to deal primarily with state funded employers. Alright, tell us how a claim is initiated.
Rich: We have a system, that is an administrative system, but it’s not very different than what we do initially with a civil case. So what happens is, a client comes in, they have been injured at work, and we are going to file a workers’ compensation claim. Unlike the insurance side of things, this is a very standardized, very structured system where we have forms that we complete that get transmitted to the BWC. What we file first is what is called a first report of injury. I kind of liken this to when you send your letter to the insurance company saying I represent this person who was injured by your insured and I am going to bring a claim. We file this first report of injury and it gets assigned to a claims service specialist or CSS. When you file your claim it gets assigned to a claims adjuster and the CSS is essentially a claims adjuster. Pretty much what the claims adjuster is going to do the CSS is going to do. They are going to compile information, they are going to talk to the injured worker, they are going to talk to the employer to get the employers side of things. They are going to talk to the medical provider. We are going to assist by filing medical information. One of the differences in this standardize setting is there are various forms that we are going to have the physician of record fill out. We can talk about the different forms, MedCo 30’s, MedCo 14’s, or C30’s; these are forms that the doctor talks about the mechanism of injury, talks about what the injuries were, what body parts were involved, certifies periods of disability, if any, and most importantly gives an opinion. Where things might differ a little bit is that on this form that we use, the physician of record will give an opinion as to causal relationship, is there a relationship between the history of the injury and the diagnosis, and to the preponderance of the evidence just like in a civil case, medical probability or within a reasonable degree of medical probability, more likely than not. That’s the only medical testimony that is required at that level.
Sean: You said something that caught my ear and that is that the claims adjuster the CSS has the ability to talk to your client and has the right to talk to your client.
Rich: Yes and it is a very interesting part of it. There is no prohibition against the CSS having direct contact with the injured worker. Another thing that is very interesting in this process, once a claim is assigned to a CSS and there is a claim number, the injured worker can go to the BWC website and create an account to access their own file online so that they can see the daily notes on what is happening with their claim. They confirm that what we are telling them is getting filed is actually getting filed. So it is an interesting system and that is much different than the civil cases.
Sean: Do you as counsel end up being present for the conversations, whether it is in person or on the phone, between the CSS and your client?
Rich: We do not.
Sean: Why? Because you choose not to or because they won’t allow it?
Rich: I don’t think it is either of those things. It doesn’t happen because it is just a situation of the CSS picking up the phone and calling the injured worker and saying tell me what happened. We’ve never really thought about asserting our right to be involved in that conversation. We don’t know when that conversation is taking place. Very infrequently an injured worker might call us and say should I be talking to this person and then we will caution them. We really don’t have any control over when that CSS calls the injured worker or conversely when the injured worker calls the CSS; which we see happening a lot too.
Sean: No concern on your part that your client may hurt their claim?
Rich: No, there is concern and they do sometimes. But there really is no mechanism to include us this stage to include us in that conversation.
Sean: Alright, very good. What has to happen for the next stage or what is the next stage?
Rich: Well, not to cite a bunch of law, but the Administrative Code gives the CSS’s the authority to publish orders and what will happen is that they review all of the evidence that we have submitted, all of the evidence that the employer has submitted, witness statements, their own defense medical examinations or whatever they may choose to do. The CSS can make a decision on whether or not this is a compensable claim and they can publish an order. Now, if the CSS doesn’t feel that there is sufficient medical evidence to make a decision and publish an order the CSS can send everything out to a BWC medical reviewer, who will review the medical and offer an opinion on the issue of compensability, what conditions should be allowed in the claim, and what period of disability should be paid. Or the BWC medical reviewer can say it’s not a compensable claim, or I agree with a neck sprain but not a herniated disc, or maybe the period of disability isn’t appropriate. In that case, a CSS can either publish an order that denies the claim in its entirety or the CSS can place an order that says yes it is compensable but we are only going to recognize these conditions and we are only going to pay this period of disability. I would liken that to the letter that you get from the adjuster in a civil case that says we’ve accepted liability, we’ve declined liability, or we are only going to pay this much, whatever the case may be. So up until that point I think there are a lot of similarities. But then things go off the rails.
Sean: You mentioned that one of the decisions might be that the claim is not compensable; because we aren’t looking at fault or we shouldn’t be…
Rich: Correct, it is a no fault system.
Sean: …Right, so the only determination should be whether or not the injury occurred on the job.
Rich: Well, I think it is a little bit more complex than that, in that it has to arise out of the course and scope of employment, and that’s been litigated for decades. If you file a first report of injury that says that I was walking down the hall and my knee gave out but I can’t identify that I tripped on anything or slipped on water, is that compensable? Did it rise out of the course and scope of your employment? Or if I am bending over to pick up a paper clip off of the floor and my back flares up, is that a compensable event? That’s why it is so important when we complete the first report of injury that we are careful about that mechanism of injury. So the bureau doctor could find that it is not a compensable event or doesn’t believe that whatever the event is caused the conditions that are being alleged.
Sean: Ok, so we have gotten this far in the claim…what happens next?
Rich: Well, backing up for just a second, the order is going to address compensability, conditions, periods of disability, and also set wages. This is where we get a little bit different from the insurance because arguably when you file a civil case you are going to be recovering your lost earnings. In a workers’ compensation setting we have two wage rates. We have what is called the full weekly wage and the average weekly wage. Full is the average of the six weeks prior to the injury. The average is the 52 weeks prior to the date of injury. The first twelve weeks of disability are paid at 72% of that FWW or 6 week average. Beginning with the thirteenth week of disability, and forever on, it is paid at 66 2/3% of the average weekly wage, which arguably is going to be a lot lower number. A smaller percentage of a lower number, which causes a lot of problems. The other issue that makes it so different is that there is a state-wide maximum for any year of injury. So I think in 2016 it is roughly $900 a week. So it doesn’t matter how much you make, if you qualify for that maximum rate that’s what you are going to get. What we are seeing, particularly in like the fracking industry, is that guys are coming in from out of state, going to work on these fracking platforms, and literally making thousands of dollars a week. And there AWW’s are $2,300 but they are only going to get nine hundred something dollars.
Sean: No matter what?
Rich: No matter what and they freak out. So, the order is placed, all of those things are covered in the order. This is where things really deviate from the insurance industry because now we are going to go into an administrative proceeding through the Industrial Commission of Ohio. So, either party can appeal the BWC order, 14 day appeal period. The BWC then transmits that file electronically to the Industrial Commission (IC) of Ohio. The IC will set it for a hearing; there are some statutory time frames within which they must set that hearing. It’s going to be set for hearing in front of a district hearing officer. A district hearing officer (DHO) is just a… the only qualification is really only to be a lawyer with so many years of practice. We will come into a hearing at the IC, the injured worker with their representative, the employer with their representative. Both sides will present their case and the DHO will make a decision.
Sean: Now, let me back up and I mentioned to you earlier, that for a non-workers’ compensation practitioner I hear about the BWC, I hear about the IC, what are those two entities?
Rich: Two completely separate entities. The BWC is the agency that is charged with making that initial determination of compensability. If the order is placed allowing the claim and nobody appeals it never gets to the IC and the BWC processes payment of medical bills, payment of compensation, resolves medical issue disputes through the managed care organization process. The IC doesn’t become involved until, again a completely separate state agency, a party disagrees with what the BWC has decided or in the case of a self-insured employer the BWC has little to no involvement. The IC resolves disputes between self-insured employers and injured workers.
Sean: You told us about a hearing at the IC, is that a full blown trial? What goes on at that?
Rich: No, of those of you who practice personal injury you would be kind of appalled because what happens is that these hearings are scheduled four in the hour, so we have 15 minutes or 7.5 minutes per side.
Sean: 15 Minutes?
Rich: 15 Minutes. If either party feels that that is not a sufficient amount of time, you can ask for more time. I have asked for and received dockets that are two or three hours if I think there is enough involved. But generally speaking they are a 15 minute docket. And a decision is made by the DHO on whether a new order is placed now coming out of the IC and the BWC must follow that IC order.
Sean: So, the 15 minute hearing is taking testimony from the client?
Rich: Taking testimony and counsel for both parties arguing law, facts, medical.
Sean: Very good. What happens next?
Rich: Well, we aren’t done with the IC because if either party doesn’t like the DHO’s order, we file an appeal and now we are in front of a staff hearing officer. The staff hearing officer (SHO) is simply a more seasoned hearing officer; they have been there longer and have a staff designation. We have a new hearing and that hearing is exactly the same as the first hearing. It is a de novo hearing. We are going to present the same evidence in most cases; something new might come in. It’s going to be a 15 minute hearing unless somebody asks for more time. The SHO is going to issue a new decision either affirming the DHO, saying I think he got it right, or saying no I think this should be what happen. So the SHO is going to determine compensability, injury compensation and wages.
Sean: By the way, these multiple levels of review, is this a good thing or a bad thing?
Rich: I think overall in the Workers’ Compensation setting it’s a good thing because the whole idea behind the workers’ compensation program when it was created however many years ago was to prevent a situation where injured workers’ have to prove that their employer was negligent and possibly have to file lawsuits and wait years to recover. If we aren’t doing it that way there has to be a process to resolve these claims in a timely fashion. From the time of filing of the first report of injury to the DHO hearing should only be a month and a half to two months. Now things get delayed for a variety of reasons but the process allows us to get relatively quick resolution of these issues. So I think it is a good thing overall.
Sean: Very good. Is there another step?
Rich: There is another step. There is one more administrative step and this is what we call the discretionary appeal to the full Industrial Commission. That is to the full commission here in Columbus and that is a three member commission. It is discretionary because the commission can refuse the appeal. They will only accept an appeal in cases where, and it has to be supported, there is an allegation of a mistake of law, mistake of fact, fraud, information that wasn’t obtainable during the prior process, or instances where the issue is so unique that they want to make public policy. They rarely if ever do that. 99% of all discretionary appeals are refused. Then we are done administratively. Now keep in mind, we are talking about just the initial processing of the first report of injury. The majority of the hearings that we have at the Industrial Commission come about from things that are happening in claims that have already been established and allowed. Now, we go through the same processes that are involved but what is unique hear happens after this step, once that refusal order is published.
Sean: And so the additional hearings are going to be for new injuries, new claims allowed?
Rich: New injuries, different types of compensation that the injured worker might be entitled to.
Sean: The hearing officers and members of the commission, these are political appointees?
Rich: The members of the commission are. The hearing officers, you and I could go apply for that position.
Sean: It’s just a job that you can go get. Alright. So, lots of levels here, lots of stages. What happens next?
Rich: Well what happens next is very interesting because it takes us back into what I think is very comparable to the civil arena. And it is because either party has the right to file an appeal from that refusal order within 60 days to the Court of Common Pleas of the county in which the injury occurred. If it is the employer’s appeal, they file the notice of appeal and the injured worker has 30 days to file a complaint. If it’s the injured worker’s appeal and we file the notice and complaint, what’s different from the civil aspect is that regardless of who files the appeal the injured worker is the plaintiff and carries the burden of proof and what happened administratively is not admissible. So we are starting over at this point. We have gone through that administrative process and we are starting over. But once it gets on track it is just like any other civil suit. We are going to have discovery, depositions, interrogatories, requests for production of documents, request for admissions. We are going to have pre-trial, settlement conferences, mediations. A lot of these cases resolve by way of mediation. We are going to have final pre-trail and ultimately a trial if it goes that far. The big difference at this level is that jury in what we call a statutory 41.23(5)(1)(2) appeal, which creates this animal, the jury is only going to decide the plaintiff’s right to participate in the insurance fund. They are not going to award monetary damages. They are going to say yes this individual got hurt at work and this is what was injured and then we go back to the BWC to determine what compensation and medical benefits are going to be paid and we can be back into hearings as a result of that.
Sean: How common are these trials in common pleas court?
Rich: Well, I can tell you that the complaints being filed are very common. A lot are filed. Going to trial, not so much. These are usually resolved by way of settlement, but annual we try a few. We do a lot of 5(1)(2) appeals. We do them for other firms, because other firms don’t want to get involved with them. It is kind of our niche. So we are very involved in these 5(1)(2) appeals.
Sean: Then, I take it, there could be an appeal on up, Court of Appeals on up,
Rich: Sure, Court of Appeals, it wouldn’t be an appeal right to the Supreme Court.
Sean: Rich, tell us about premiums for employers. Tell us how those are determined and paying into the fund.
Rich: It’s actually kind of interesting because premiums are a function of risk and experience. And risk is just what it sounds like a tree trimming company is far riskier than a secretary sitting at a desk working for you. So you pay a premium based upon your risk and a tree trimmer pays premiums based upon their risk. What’s interesting is that the Ohio State Insurance Fund uses the National Counsel of Compensation Insurance to classify employers and that’s interesting because the Ohio State Insurance Fund is a monopolistic insurance fund that only employers pay into. Insurance companies are prohibited from coming in and competing with the state of Ohio to provide workers’ compensation coverage at a lower rate even though we are using all of these insurance classifications. As a side note, the current administration has toyed with the idea of trying to privatize the Ohio State Insurance fund, the workers’ compensation program which would allow insurance companies to come in and offer insurance to cover work related injuries. Right now, the governor is a little distracted, so that is on the back burner. It’s OAJ’s position that any attempt to privatize the BWC would require a constitutional amendment. If you’re a private employer running a law firm you are charged about 17 cents for every $100 of payroll for your premiums on the risk side.
Sean: So it’s based on payroll.
Rich: it’s based on payroll. Again, 17 cents for every $100. Now a tree hauling company is charged $4.75 per $100 of payroll. So you can see the difference. So then we go to experience and experience is simply how many claims have you had filed against you in the past five years. Cause if you have had a lot of claims filed against you then you are probably running an unsafe work place and you are going to be penalized for that. Historically the bureau has said that we are going to charge you premiums based upon your experience for five years after the injury is filed with the year of injury being year one. So if you got hurt on January 1st or December 31st it didn’t matter. The year of injury was the first year so you added four to that and then it came off of your experience. Because the bureau changed from prospective premium billing to retrospective billing they changed what they call the impact date to September 30th. If the date of injury is 1/1 to 6/30 you add four years to the year of injury. If it’s 7/1 to 12/31 you add five years to the year of injury. So if a person is hurt March 1st of 2011 you add four years. The impact date is 9/30 of 2015, 2011 plus four. If the date of injury is October 1st of 2011 you add five years. The impact date is now 9/30 of 2016. The question of why is that important to us because unlike a civil case where you go to trial, you get a judgment, the judgment gets satisfied, your client gets paid, you collect your fees, you close the file, you move onto the next case. In the Workers’ Compensation world if I prevail at trial or I get a claim allowed and there is no appeal to court, the case can go on for years. Ohio has one of the longest tales of statute of limitations. It’s currently five years from the last payment of compensation or medical benefit; not date of injury. So if the bureau pays one doctors visit every year it’s going to be perpetually open forever. I have clients who are getting medical care in claims that are 5, 10, 15, 20 years old. So the experience is important because if we prevail at trial or the claim is not appealed and it’s allowed, for five years I am dealing with lawyers coming in and contesting everything that I am asking for because they are trying to keep the cost of that claim down to protect their premiums. As soon as it goes out of their experience on that impact date, they don’t care anymore. so you get some unique situations where right up until Sept. 30th they are vigorously defending these claims but on Oct. 1st they are out. Get whatever you can because it is out of our experience. The other thing that happens sometimes is you might have an employer come to you and say this is out of our experience next month, wait; don’t file this and we will not contest it. So, it leads to some interested scenarios.
Sean: I am curious whether you have ever come across a situation where for whatever reason an employer thought they had paid into the state fund but in fact were delinquent and what happens there?
Rich: That’s an excellent question. I have that case right now and I’ve had them in the past where they were either delinquent or they just they thought they paid but they didn’t. I have one right now where they just flat out didn’t pay. In that case, the injured worker is not penalized. The injured worker would go through the same process. The injured worker has a complete right of recovery as if it was covered. It’s called a non-covered employer. Nothing changes with respect to the injured worker. What happens to the employer though, instead of having that benefit of paying a premium the bureau is going to come back and say we want dollar for dollar reimbursement for what we have paid out on this claim because you didn’t have coverage. So it is a huge impact on the employer. Now in the case that I have right now, we withdrew the claim to allow, because the guy still works for this company, to allow the employer to go get retroactive coverage. I think that’s fair. Now at some point if he can’t get it we will do what is best for our client; we will refile the claim. But that is a good question because it has a huge impact on these claims.
Sean: I know, again from the outside as a non-work comp practitioner, there is part of the claims paying medical, part of it paying wages. But then there can be a lump sum at the end. Tell us what that is designed to compensate for, how that’s calculated and all of those kinds of things.
Rich: There is actually four different types of compensation that can be paid. Temporary total disability paid for loss time, can’t work at all. Wage loss compensation which is to make the person whole, to some extent. If they go back to work on restrictions or have a lower paying job or they are no longer employed by the employer of record and they can’t find work because of restrictions. You have working wage loss, non-working wage loss. Then we have permanent partial disability. It’s the way Ohio compensates injured workers for their injuries. We don’t use the term “pain and suffering” which is a big different obviously. Permanent partial is doctors examining the injured workers coming up with a percentage of impairment which is converted into dollars. There are charts and we use the Guidelines to Permanent Partial Impairment, currently 5th edition. Then there is permanent total disability where if an injured worker has had such a devastating injury that they can never work again then they can get permanent total disability which is a lifetime benefit; there is no age stop. They get a bi-weekly benefit for the rest of their life and never even have to go to a doctor again. If they are permanently and totally disabled, they get it for life. Then you mentioned lump sum; no statutory right to a lump sum settlement but many cases resolve by way of settlement. You reach a point where no medicals are being paid out, they’ve gotten their permanent partial, the employer wants it out of their experience so you settle it. On out of the experience settlements we deal directly with the state. So cases are settled early on, but I think for the most part we really only settle the older cases that have been around for a while and nothing has been happening.
Sean: Do you in the workers’ compensation arena interact with the workers’ compensation subrogation statute?
Rich: We do. The subrogation statute is important for a couple reasons from the claimant’s side. This is created by revised code 4123.931. It creates a statutory subrogee at the BWC who has the right of recovery against the third party who is responsible for the injuries. We see this in most cases in automobile accidents where our client’s job involves occupational driving duties, FedEx drivers, UPS drivers, things of that nature. So we file first report of injury, we establish a workers’ compensation claim, we file a civil action with the insurance company against the tortfeasor. 4123.931 says we want some of that money back from the guy that caused the problem. Now, what is interested about the subrogation statutes is that arguably the BWC has a right of full recovery to get back everything. The statute says, that if a claimant statutory subrogee and third party settle or attempt to settle a claim that is claimed against a third party, the claimant shall receive an amount equal to the uncompensated damages divided by the sum of the subrogation interest plus the uncompensated damages, multiplied by the net amount recovered and the statutory subrogee shall receive an amount equal to the subrogation interest divided by the sum of the subrogation interest plus the uncompensated damages multiplied by the net amount.
Sean: So you are going to make sense of that?
Rich: No, and I don’t know anybody who can. It’s amazing to me that that’s even in the statute. But what the statute goes on to say is that the parties can come to an agreement. What we see in reality is that when we’re negotiating the settlement in the civil suit we are on the phone with the BWC subrogation unit and we are saying we know what you have paid out, this is what we are going to be back to recover, what are you willing to take? Our experience has been that they are pretty happy if they get some money back. So we are seeing a lot of, counsel gets one-third, plaintiff gets one-third, and BWC gets one-third. The more important thing about the subrogation statute is that you can’t ignore it. You have an affirmative duty to protect the subrogees interest. If you don’t and you settle the claim the statute says that the claimant and the third party are jointly-liable to the statutory subrogee for the full amount of the surrogated interested. If you leave them out and you get to that point they are not going to be so willing to negotiate.
Sean: Get in touch with them sooner than later.
Rich: Get in touch with them sooner than later and get them on board. If you keep them in the loop they are more likely to settle with you.
Sean: Rich, we have come to a time here in our podcast, where we play a little game that I like to call five questions. The first question for you is, other than being a lawyer what is the most interesting job that you have ever had?
Rich: I would say that the most interesting job other than being a lawyer was being a house painter in Denver, Colorado where I ended up going to undergraduate. For whatever reason at that point in my life I had no fear, I was in my early twenties, and I was the guy that was three stories up leaning over painting the soffits. Which is kind of funny because now that I do workers’ comp I would be leaning over, thirty feet up, painting soffits, with no ropes, no safety harnesses, nothing.
Sean: Little different perspective.
Rich: Little different perspective but it was a fascinating job. I loved it.
Sean: Question number two, do you have a guilty pleasure when it comes to music? Is there a musician that you actually like that you are ashamed to admit?
Rich: Anybody that I listen to I don’t know that I would be ashamed to admit.
Sean: Are there any that you should be ashamed to admit?
Rich: I am trying to think of all of the stuff that I listen to primarily. I listen to all of the stuff that is popular now, Adele. I am a huge Tom Petty fan. I have Tom Petty Radio in my car on my Sirius radio. I don’t know if that is a guilty pleasure but he is one of my top.
Sean: Question number three, what did your parents do?
Rich: My father was in the ceramic industry. He sold materials to companies that made china, the plates that we eat on. My mother for the most part was a stay at home mom, but at one point worked at the shoe department at JC Penny.
Sean: Question number four, what was your first automobile?
Rich: My first automobile was a 19868 Ford Mustang three speed 298 horsepower. I would give anything to have that car back.
Sean: Mmhmm, and how long were you the proud owner of the mustang?
Rich: From about age 16, probably a couple of years. I will tell you it was purple with white lace on it, if you remember what lace is.
Sean: What caused you to depart from it?
Rich: If memory serves me the car just, it was it. It was over.
Sean: Question number five, true or false you are also skilled in outdoors survivor techniques like the survivor man who is your doppleganger?
Rich: I really want to say true, but I would be harking back I guess to my days in Colorado when I used to hang out in the mountains a lot. So maybe at one point in my life I was but I think now I would probably die in a very short period of time.
Sean: So the answer is false, let’s be honest.
Rich: The answer is false.
Sean: Very good. Rich Brian, thank you very much for joining us here today.
Rich: it’s been a pleasure. Thank you.