>>My cousin is in such an uproar about this issue.
He might like this one too.
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The Work Comp "Titanic"
Are State Revenue Interests Sinking The Work Comp "Titanic?" – ProviderLAW Commences Multi-Part Series on WHY the Workers' Comp Crisis in Texas and Nationwide May be Occurring, How it Began with the Recession in the Mid-1980s, and How, Since Then, State Revenue Interests and / or Conflicts of Interest May be Substantially Undermining the Ability of Injured Employees to Compel Carriers to Pay for Statutory Benefits. Is California on the Same Collision Course?
In 2004, Mike Hachman, Chairman of the Texas Workers' Comp Commission, referred to the TWCC as the "crew on the Titanic." Ironically, his comment begs another question altogether. If the TWCC is the "crew," who is the captain? WHO or WHAT is really calling the shots on the Texas Titanic?
Part 1 – The History and Anatomy of the Work Comp Crisis Since the National Recession in the Mid-1980s: In this section, ProviderLAW analyzes the anatomy of the current workers' compensation crisis including how the recession in the mid-1980s may have prompted a number of states to "ratchet down" on the ability of employees to compel carriers to pay for statutory benefits and to receive care. ProviderLAW also explores how the recession may have prompted some states to abolish carrier subsidization of high-accident industries and small businesses, which in turn may be perpetuating the belief that "medical costs are skyrocketing." Lastly, ProviderLAW analyzes how as carriers began to "withdraw" from the State of Texas, the State assessed the carriers over $1 billion in assessments – much of which the State appears to have actually collected over subsequent years. The actions of the State raise numerous questions including, did the assessments cause the dissolution of the Texas Employers Insurance Association (TEIA), a massive workers' comp carrier established by the State in 1913? Did the State effectively hand control over the workers' comp system to the remaining carriers? Did the State form a new state workers' comp fund – currently named, "Texas Mutual Insurance Company" – with the intent of growing the new fund as quickly as possible and taking back control over the workers' comp system? What is the purpose of the Texas Mutual Insurance Company? Click here for reports.
Part 2 – Non-Enforcement... Do States Have an Incentive Not to Enforce Law Against Workers' Comp Carriers Based on Overriding Financial Interests and/or Conflicts of Interest? With Respect to State Workers' Comp Funds, is it Possible that the Funds, Being State "Entities," are Being Left to Enforce Law on Their Own and in Their Own Domain Without Interference From the Other State Regulatory Agencies? The stated purpose of many state workers' comp funds is two-fold: (1) serve as "insurer of last resort," and (2) reduce rates through "competition." Over time, a number of state funds not only have managed to capture a huge portion of the workers' comp market in their respective states, they also have managed to amass substantial monetary surpluses (despite reportedly lower rates and "skyrocketing medical costs"). The increasing surpluses have led some states to take – or attempt to take – millions of dollars from fund coffers and to use the money for other purposes. Combined with other facts (e.g., the funds' status as state entities), such attempts raise serious "conflict of interest" issues when it comes to the state's constitutional duty to enforce law against the fund and other carriers, and to render fair and unbiased decisions in the absence of a jury (see Part 1). In Texas, these root "conflict" issues are magnified by the fact that the state has been running a massive deficit budget in recent years, and resolved to build a new state workers' comp fund as quickly as possible in the aftermath of the dissolution of the Texas Employers Insurance Association. This section also addresses how the new state fund – Texas Mutual – may be poised to grow significantly if and when Texas reintroduces rate regulation (referred to by some as rate "suppression"). Click here for reports.
"Workers' comp insurers [in Texas] have ... complained that the Fund undermines their ability to compete in the market, a justified 'screaming and hollering' according to [Tony Korioth, former member of the Industrial Accident Board, the predecessor of the TWCC].... 'Of course it's justified,' he said. 'Because of their surpluses, they can write so far below the market that other companies can't compete. But they've recognized the screaming and they've pulled back....'"
"Workers' Comp Reform: Ten Years from Ground Zero," Parten, Constance, Insurance Journal, April 2, 2001, para. 9-13 (emphasis added).
Part 3 – Texas Mutual v. ProviderLAW: Two Free Speech Lawsuits Revolving Around the Issue of Non-Enforcement. On May 27, 2003, Texas Mutual – a mammoth state-sponsored workers' comp fund in Texas – filed two lawsuits against a health care advocacy group called ProviderLAW to have a certain brief and theory of ProviderLAW declared inaccurate. The lawsuits were filed approximately six months after ProviderLAW announced its intention to challenge the Texas Workers' Comp Commission's failure to enforce law against the insurance industry. Aside from the glaring and alarming Free Speech issues presented by these cases, Texas Mutual's lawsuits raise numerous questions. WHY would Texas Mutual file such actions in the first place? Were they "SLAPP" actions to stop a class action based on ProviderLAW theories? Or was something even larger at stake? Click here for reports.
Part 4 – Other Resources
"State of Denial: Texas Workers' Compensation System in Crisis" – A series of investigative reports by WFAA-TV (Dallas / Ft. Worth), reported by Brett Shipp and produced by Mark Smith. According to the WFAA web site:
"Reporter Brett Shipp and Producer Mark Smith found state regulators often fail to enforce labor laws and penalize those insurance companies that unjustly deny benefits and medical treatment to injured workers. As a result, many of the most seriously injured Texas workers go untreated and remain unable to work, ultimately turning for support to public welfare.
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"Shipp and Smith found state regulators may have lost sight of their assigned role: 'Ensure appropriate and efficient health care for all injured employees.' Instead, in an effort to control health care costs, state regulators and insurance carriers developed a shockingly cozy relationship.
"Several stories detail possible fraud or questionable actions practiced by at least several major insurance carriers, but ignored and unpunished by regulators. The WFAA-TV series has revealed how some insurance companies send peer review doctors medical files 'stripped' of records important to the possible approval of workers' comp claims. Those peer review doctors who routinely deny care receive lucrative contracts, while those who approve care fail to be rehired."
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