Many Work-related Disabilities Go Uncompensated: Compromising "The Great Compromise"

By John Stahl, Esq.

Evidence that many workers’ compensation claimants have not received payments under “The Great Compromise” – the bargain that traded the right to sue employers regarding employment-related harm for the right to timely and appropriate benefits – has prompted calls for reform. An article written by Emily A. Spieler and John F. Burton, Jr. in the June 2012 American Journal of Industrial Medicine analyzed this situation.

Motivations for examining this deprivation include data from the Occupational Safety & Health Administration, which indicated that the number of employees who sustained work-related harm greatly exceeded the population of those workers who pursued workers’ compensation benefits.

The significance of denying large numbers of employees workers’ compensation benefits is that they often ended up with little or none of the reimbursement that the workers’ compensation system was created to provide. This is because the exclusive remedy rule that requires pursuing benefits through that system applied even if an employee did not file a workers’ compensation claim or if a filed claim was denied.

Reporting Rates

Research revealed that many employees who experienced arguably compensable harm did not pursue workers’ compensation benefits. Aside from workers’ compensation systems’ methodologies and other relevant factors, the article concluded that “studies consistently demonstrate that workers’ compensation claims actually filed are substantially lower than the number of legitimate claims that would have been expected.” In simpler terms, even fewer injured workers than predicted exert their workers’ compensation rights.

Reasons for not reporting compensable harm included:

  • Unawareness of workers’ compensation rights
  • Wish to avoid perceived complexity of the workers’ compensation system
  • Fear of employment termination, deportation, or other retaliation

Retaliation is of particular concern because it reflects an employee’s generally subservient position in employment relationships. Further, especially in a tough job market, actual and anticipated retaliation has prevented many injured workers from pursuing workers’ compensation claims.

Current Trends

Even among claimants who sought benefits, higher costs of medical treatment have contributed to a 20-year trend toward restricting workers’ compensation coverage. Difficulty proving harm and/or causation are common reasons for that practice. Examples include:

  • Musculoskeletal injuries for which a claimant has not provided “objective medical evidence”
  • Persistent debilitating pain that was not easily medically documented
  • “Cancers and diseases that result from multiple causation or cannot be distinguished from” non-compensable harm

The issue of multiple causation related to the basic tenet that receiving workers’ compensation required that a claimant demonstrated that the relevant harm had an adequate nexus with an incident that “arose out of the course and scope” of that person’s employment.

The article determined that the compensability of relevant harm and diseases depended on which category of causation best related to that condition. These categories are described below:

  • Harm regarding which the sole cause was work-related was usually compensable.
  • Harm that resulted solely from a congenital or degenerative medical condition, “or some other nonwork related factor,” was generally not compensable.
  • Harm in the “it depends” category in which “a combination of work-related and nonwork-related factors” caused the relevant injury may or may not be compensable and generally required administrative and/or judicial proceedings.

Activity of Daily Living

The research also showed that some restrictions were tied to apparently illogical requirements. One such case was conditioning a ruling that a disability was compensable on finding a restriction in an activity of daily living (ADL). That requirement was contrary to the evidence that some claimants who could independently complete personal daily tasks “may be limited in work because of the nature of his or her occupation.”

Other variables that demonstrated the wisdom of requirements that provided for gray areas regarding the degree and compensability of disability were “the adequacy of medical care received by the individual [claimant], the person’s individual characteristics, the delivery system for workers’ compensation or other social benefits, [and] the individual’s situation within family and community.” In other words, examining personal circumstances made the most sense.

Permanent Disability Benefits

It is worth noting as well that varying forms of guidelines among states regarding permanent disabilities have impacted whether a claimant received benefits. Some states based benefits on guidelines such as the AMA Guides that conditioned the right to compensation only on causation and the degree of the harm. The controversial Sixth Edition of the AMA Guides, which was published in December 2007, claimed that the latest edition addressed flaws in earlier editions and reflected “significant evolution in the impairment evaluation process.”

Other states only paid compensation for permanent disabilities that resulted in lost wages. Arthur Larson, who the article described as “the foremost legal scholar in the history of the U.S. workers’ compensation program,” advocated this model. He asserted that the sole purpose of permanent disability benefits was to compensate a claimant for “loss of earnings, actual or presumed.” [See Larson’s Workers’ Compensation Law (LexisNexis)]

The remaining states used either a combination of the approaches described or another method for determining an entitlement to permanent disability benefits.

Occupational Diseases

Some permanent disabilities are associated with occupational diseases, which are typically long-term medical conditions that resulted from extended work-related exposure to asbestos or other harmful substances. The article concluded that “there is no question that most occupational diseases are never compensated” despite extended provisions for that coverage in the workers’ compensation laws of many states.

The cited reasons for this statistic included:

  • “Many workers with occupational diseases do not know their condition is work-related.”
  • “Many [claimants] who do file [claims regarding occupational diseases] find that there is considerable resistance from employers, insurers, and adjudicatory bodies.”

The resistance, and other factors, partially stemmed from claimants’ exposure to chemicals and other substances that caused numerous occupational diseases often not being limited to a workplace. The article described this challenge as “when a disease is readily linked to both workplace exposures and nonwork exposures, and the only evidence is that there is increased risk in certain jobs, then it is much more difficult for claimants to prevail.”

Research showed as well that potentially astronomical costs related to recognizing a medical condition as an occupational disease has hindered claimants’ efforts to obtain that status for harm that warranted that recognition.

Bottom Line

The most effective workers’ compensation reform involves applying the good faith standard that governs everyone in a contractual relationship.

© Copyright 2012 LexisNexis. All rights reserved.

___________________________________________

Larson's Workers' Compensation Law, the nation's leading authority on workers' compensation law.

Larson’s Workers’ Compensation Law

For more information about LexisNexis products and solutions connect with us through our corporate site.