1. Summit County Safety Council August 18, 2010

2. SUCCESSFUL STRATEGIES FOR CONTROLLING WORKERS’ COMPENSATION COSTS By Hans A. Nilges, Esq. Morrow & Meyer LLC 6279 Frank Avenue NW North Canton, OH 44720 330-433-6000 E-mail: hnilges@morrowmeyer.com Copyright 2010

3. PART ONE: COMMON MYTHS AND MISCONCEPTIONS ABOUT OHIO WORKERS’ COMPENSATION Things You Need To Know But Nobody Will Tell You.

4. Myth No. 1: The Ohio Workers’ Compensation System is in great shape. Reality: The Ohio Workers’ Compensation System is a mess and it continues to drive companies out of business and/or out of state…why?

5. 1. Gradual Liberalization of the Workers’ Compensation System by Ohio Courts 1. Gradual Liberalization of the Workers’ Compensation System by Ohio Courts

6. EXAMPLE: Schell v. Globe Trucking, Inc. (1990), 48 Ohio St. 3d 1 (Claimant not required to prove “substantial” aggravation for claim to be compensable) - An aggravation, no matter how slight, is compensable!

7. RESULT: A CLAIMANT’S BONANZA!

8. 2. Bureaucratic Complacency 2. Bureaucratic Complacency

9. 3. Increased Pressure from Doctors and Injured Workers to Push Costs of Non-Occupational Illnesses onto the Workers’ Compensation System.

10. Myth No. 2: Workers’ Compensation Is Just Another Form of Insurance Reality: It is much more than that! The Ohio Workers’ Compensation System offers a veritable cornucopia of benefits and legal protections that are not available under traditional employee insurance programs.

11. The Horn of Plenty 1.Temporary Total Disability (TTD) 2.Permanent Partial Disability (PPD) 3.Wage Loss 4.Permanent Total Disability (PTD)

12. 5.Lifetime Health Care for Allowed Conditions 6.Additional Allowances 7.Violation of Specific Safety Requirement Awards (VSSR’s) 8.Job Protection (R.C. 4123.90)

13. Myth No. 3: Workers’ Compensation Fraud Is Rare Reality: Approximately one-third of all Workers’ Compensation claims involve some form of fraud or abuse

14. Myth No. 4: Workers’ Compensation Hearings Are Non-Adversarial Reality: Workers’ Compensation hearings can become very contentious, especially when the injured worker has hired a lawyer

15. Myth No. 5: Workers’ Compensation Hearings Are Fair and Impartial Proceedings That Do Not Favor One Party Over the Other Reality: The system is run for the benefit of the injured worker. Workers’ compensation laws are construed liberally in favor of the claimant (See R.C. 4123.95)

16. Myth No. 6: Your Company’s Interests Are Adequately Protected by Your Third-Party Administrator Reality: Third-Party Administrators (TPA’s) provide useful services but they are limited in what they can do for you…. Why?

17. 1. TPA’S CAN’T PRACTICE LAW

18. Cleveland Bar Assn. v. CompManagement, Inc. 104 Ohio St.3d 168 (Dec. 15, 2004) SYLLABUS OF THE COURT Non-lawyers who appear and practice in a representative capacity before the Industrial Commission and the Bureau of Workers’ Compensation in conformity to Industrial Commission Resolution No. R04-1-01 are not engaged in the unauthorized practice of law.

19. INDUSTRIAL COMMISSION RESOLUTION NO. R04-1-01: Third Party Administrators may not: 1.Examine/cross-examine witnesses; 2.Cite, file or interpret statutes, rules or cases; 3.Make or give legal interpretations regarding the evidence; 4.Comment upon the evidence;

20. 5.Provide legal advice; 6.Give or render legal opinions before, during or after, certification of a claim; 7.Provide stand-alone representation at hearings by charging a fee specifically associated with such representation.

21. Myth No. 7: The Most Cost Effective Way to Control Workers’ Compensation Claims is to Focus on Problem Claims After They Become a Problem Reality: The most cost effective strategy is to control costs up front…. Why?

22. PART TWO: THE ANATOMY OF THE RUNAWAY CLAIM

23. Anatomy of the Runaway Claim 1. Employee claims minor injury (e.g. minor LB sprain), and a claim is filed 2. Claim is allowed without investigation and TT is started (usually allowed for minor condition, e.g. LB sprain)

24. Anatomy of the Runaway Claim 3. Employee fails to return to work after 3 months 4. Company/TPA begins process for finding employee to be MMI (thus terminating TT) 5. Employee reacts by seeking additional testing (e.g. MRI) and/or filing motion for additional allowance (e.g. herniated disc)

25. Anatomy of the Runaway Claim 6. Company/TPA grants additional allowance (usually no investigation) OR fights additional allowance but loses (no investigation/bad IME report)

26. Anatomy of the Runaway Claim 7. Claim is now recognized for the more serious (i.e. more costly) condition 8. Employee requests surgery and physical therapy and Company/TPA grants request (no choice at that point)

27. Anatomy of the Runaway Claim 9. Employee takes > 6 months to recover from surgery 10. Company/TPA files second motion to terminate TT and recommends getting an attorney involved. TOO LATE!

28. PART THREE: HOW DO YOU STOP THE RUNAWAY CLAIM?

29. BE PROACTIVE: ADOPT THE TEN KEY ELEMENT STRATEGY – IT WORKS!

30. WHAT ARE THE TEN KEY ELEMENTS OF AN EFFECTIVE WORKERS’ COMPENSATION PROGRAM? 1. ASSUME PRIMARY RESPONSIBILITY FOR YOUR WORKERS’ COMPENSATION PROGRAM

31. 2. CONTROL COSTS UP FRONT (Don’t Wait Until It’s Too Late!)

32. 3. OBTAIN DETAILED INFORMATION ABOUT THE CLAIM

33. Injury Reports 1. Should be signed and dated by the injured worker 2. At a minimum, it should request the following information:  description of injury and accident;  time the injury occurred;  list of witnesses and their location at time injury occurred;  specific area of body affected; and  list of prior injuries and prior claims involving the same body part

34. 4.OBTAIN DETAILED INFORMATION ABOUT THE CLAIMANT a.Obtain a Medical Authorization and a List of Medical Providers b.Conduct an Immediate and Thorough Accident Investigation c.Obtain and Review Medical Records d.Review Prior Claims and Company Medical/Personnel Records

35. 5. FIGHT FRAUD AND ABUSE

36. EXAMPLES OF FRAUD AND ABUSE  Claimant receives disability compensation while working elsewhere.  Claimant is Able to Work but Won’t  Claimant is Hurt Outside of Work  Claimant Fails to Disclose Prior Injuries and Treatment  Natural Deterioration  Work Activities are not a Causative Factor

37. 6.Raise Legal Defenses

38. Legal Defenses a.Claimant is Ineligible for TT b.Accident occurred through fighting or horseplay c.Aggravation of Pre-Existing Occupational Disease d.Idiopathic Injuries e.Injury Occurred Outside the Scope of Employment f.Injured Worker was under the influence of alcohol or drugs

39. 7.AGGRESSIVELY DEFEND AGAINST ILLEGITIMATE CLAIMS a.Effective Independent Medical Exams (IMEs) b.Utilize Private Investigators c.Effective Use of Legal Counsel  cross-examination  subpoena information and witnesses  legal arguments and defenses

40. 8. ACTIVELY MONITOR ONGOING CLAIMS a.Review medical bills (for non-allowed conditions) b.Fight additional conditions c.Fight excessive PPD awards d.Termination of TT (MMI or treatment for non-allowed conditions) e.Settle Old Claims

41. 9. TAKE ADVANTAGE OF COST- SAVING OPPORTUNITIES a.Group Rating b.Light duty c.Salary continuation/first $15,000 medical program d.Drug-Free workplace program e.Handicap reimbursement f.Subrogation g.Safety Council Incentive Program h.Develop and implement an effective safety program

42. 10.WHEN IN DOUBT JUST SAY NO!

43. CONCLUSION