50 State Legislative Survey At a Glance for Workers’ Compensation

50 State Legislative Survey At a Glance for Workers’ Compensation

Quite a few years ago I had the pleasure of participating, along with Emeritus Professor Arthur Larson and a few others, in a small, lively, interactive, non-musical “jam session” at Duke University Law School, during which we discussed various aspects of American jurisprudence. The ad hoc moderator of the discussion was Arthur’s close friend and fellow Duke Law professor, Robinson Everett. At one point in the discussion, as we began to consider the somewhat peculiar, but vibrant American system that has so carefully carved out room for both federal and state jurisdictions, one of the students opined that things would certainly be simpler if the American legal system didn’t offer the chance of significant disagreement between and among the 50 states.

Seizing upon the statement, Professor Everett turned to Arthur and asked him if he thought that America’s decision to leave the issues of workplace injuries largely in the hands of the various states had proved worthwhile. Arthur answered that in spite of the differing treatment afforded some state’s injured employees vis-à-vis those of another jurisdiction, the “grand experiment” of utilizing a state-by-state approach to workers’ compensation law had worked well, that it gave the states the opportunity to test and retest various hypotheses of exclusion and coverage, and that the “fragmented” system allowed variations suited to the states’ own experience, needs, and creativity.

Arthur finished with his usual flair. Alluding to the great Gershwin tune, Arthur said, “one state says ‘tomato,’ another says ‘tomahto,’ but for Heaven’s sakes, let not call the whole thing off.”

“Tomato/Tomahto:” Divergent Treatment of Same Issue by Different States

Indeed, New York says “tomato,” generally allowing recovery of benefits for mental injuries—other than those caused by bona fide personnel decisions. Its close neighbor, Connecticut, says “tomahto.” Its definition of injury does not allow recovery for a claim associated with purely mental phenomena. A few states allow apportionment for pre-existing conditions; most do not. Some allow an exception to exclusivity where the injury was “substantially certain” to occur from the employer’s actions. Most do not. The American workers’ compensation system embraces the fact that the states have the opportunity to decide the compensability of these sorts of claims using the state’s own standards. There is no one-size-fits-all approach to injuries within the American workplace.

2013: Time of Bold and Not-So-Bold Legislative Activity

Building on that theme—that the states are relatively free to experiment with their statutes—we have included for your review a summary highlighting this year’s important workers’ compensation legislation. Within this summary, one should be able to see the continuation of the “grand experiment.” For example, in the case of Oklahoma, we see a state clearly endeavoring to “think outside the box.” The decision by that state’s legislature and the governor, after last year’s widely publicized unsuccessful effort, to allow employers, under certain conditions, to opt-out of the state-run system has prompted significant discussion—both pro and con. Bear in mind that the “opt-out” program passed and signed into law is but one part of a total re-creation of Oklahoma’s comp system. For those employers remaining within the system, use of state courts to handle the claims process has also been jettisoned and a framework for an enhanced system of alternative dispute resolution has been added to the mix.

While not as revolutionary as the efforts in Oklahoma, other states have passed, or at least debated, major “reform” legislation. For example, Tennessee legislators finally became convinced that their state’s system of resolving workplace injury disputes within the state courts has been a recipe for high expense, inefficiency and inconsistency. Accordingly, both Tennessee state houses passed new legislation, signed by the governor, to place the determination of workers’ compensation issues inside an administrative body, with two levels of administrative review.

Significant legislative activity regarding workers’ compensation laws took place in a number of states, including Maine, Nevada, and Connecticut. In several states, special attention was given to first responders. For example, the Nevada legislature passed a bill providing that volunteer members of a county search and rescue organization are to be deemed employees of the county at a wage of $2,000 per month for purposes of industrial insurance. Connecticut had its own story. Reeling from the Sandy Hook shootings, the legislature passed a provision providing medical treatment and wage replacement benefits for responders and Sandy Hook Elementary School workers who suffered mental trauma from the shooting crisis during the period December 14–15, 2012. As noted above, Connecticut workers generally may not recover for such mental trauma. As appropriate as the legislation might be, many within and without the state are left wondering why those suffering trauma from the single, isolated incident are to be specially compensated, whereas EMTs, police officers, firefighters, and others facing other traumatic experiences are left with non-compensable claims.

Much of this year’s legislative activity dealt with very specific issues. For example, in Maine, a bill that gained approval allows the injured worker to choose his or own pharmacy. North Dakota has a new statutory provision clarifying that no deference is to be given the opinion of a treating physician. This latter piece of legislation has produced a crescendo of criticism from the claimants’ bar.

Governor Acts to Thwart Legislators’ Consensus

Sometimes the Governor pushed back against an energetic legislature. For example, Maine Governor LePage vetoed a number of bills dealing with workers’ compensation. One bill killed by the executive pen would have rolled back the 2012 workers’ comp reforms with respect to lifetime benefits, as well as change job search requirements for injured workers with partial disabilities. Another veto blocked a workplace bullying bill, which would have required the state’s Workers’ Compensation Board to conduct a study addressing psychological and physical harm to employees caused by abusive work environments and to report back its findings to the legislature with any recommendation for changes to the state’s legislative scheme.

“Extraneous” Legislation Often Directly Impacts Workers’ Compensation World

Drug Compounding

Practitioners should remind themselves that it isn’t just the bits of legislation labeled “workers’ compensation” that affect the rights of injured employees and the employer’s or carrier’s obligations. Recall the October 2012 outbreak of meningitis connected to three lots of medication used for epidural steroid injections. The medication had been packaged and marketed by the New England Compounding Center (NECC), a compounding pharmacy in Framingham, Massachusetts. Doses from those three lots were distributed to 75 medical facilities in 23 states and administered to approximately 14,000 patients, 48 of whom subsequently died, with more than 700 others having to be treated. In the wake of that tragedy, a number of states, including Georgia, Idaho, Oklahoma and New Hampshire enacted legislation to regulate the compounding practice. Legislation is pending in still other states, including California and Massachusetts.

Prescription Drug Abuse

Many states continue to be concerned with prescription drug abuse, a problem that affects all too many injured workers. Minnesota passed legislation providing for a prescription monitoring program to review records of those prescribed controlled drugs. Washington legislators successfully moved through their chambers a bill prohibiting the refilling of a prescription for controlled substances more than six months after it is initially issued. That state also passed a law making it more difficult for out-of-state physician assistants and osteopathic physicians to write prescriptions for controlled substances. A new Indiana law allows the attorney general to issue a civil investigative demand to obtain immediate access to records related to the sale of synthetic drugs. A number of states, including New Hampshire, established committees or other bodies to continue to investigate the extent to which opiates are being abused.

Generic Drug Reimbursements

Another effort reaching across state borders this year is the effort to increase the transparency for generic drug reimbursements. Arkansas joined Kentucky, North Dakota, Oregon, and Texas as the first states in the nation to address generic drug reimbursements or “maximum allowable costs” (MACs), and to establish transparency into how Pharmacy Benefit Managers (PBMs) determine reimbursement to pharmacies for generic drugs. The MACs set forth the maximum amount or upper limit that a PBM will pay for certain products.

Social Media

As employers and carriers seek additional mechanisms to help them surveil injured employees, the states are reacting with broad-based Social Media legislation. Again, this legislation is not targeted so much at the workers’ compensation scene; it has, however, immediate and important impact with regard to surveillance activity. Most legislation follows the pattern of Arkansas, whose House Bill 1901 prohibits an employer from requiring or requesting a current or prospective employee from disclosing his or her username or password for a social media account or to provide access to the content of his or her social media account. Legislation of this type was passed in 2013 in Colorado, Illinois, Nevada, New Mexico, and Washington. Several other states, including Maryland and California, already have these laws in place. Social Media legislation is pending in still other states, including Massachusetts and Wisconsin.

Workers’ Comp Laws as Economic “Weapon”

As I mentioned above, the impetus for the Oklahoma opt-out program, as well as the Tennessee “Reform Act,” was almost totally economic. Each state perceived that it was falling behind other states in its efforts to attract and keep employers, payrolls and, therefore, taxes. That is to say that some state legislators wanted to change their proverbial workers’ compensation “accents,” to stop saying “tomahto” and instead to say “tomato,” like their neighbors to the South (or, as was the case of Tennessee, not just the neighbors to the South, but also to the East and West).

Will the experiment succeed for Oklahoma and/or Tennessee? Will employers from the Sooner state opt to utilize ERISA plans (with a few additional benefits) and, based upon the broad and powerful preemption provisions contained within ERISA, remove a broad swath of the Oklahoma workers’ compensation system from the state’s control? Will the much less controversial “reforms” in Tennessee provide for a more efficient and consistent determination of claims? We’ll have to wait and see. While we’re waiting, you might peruse the other legislative highlights found within these pages.

Final Words; Caveat

This article, which contains selected legislative highlights as determined by the Publisher that would be of interest to the workers’ compensation community, is a snap shot in time, the cut off being September 14, 2013. At the time this book went to press, several states still had pending legislation. Be sure to check the status of the bill before citing to it.

© Copyright 2013 LexisNexis. All rights reserved. This article is excerpted from Workers’ Compensation Emerging Issues Analysis, 2013 Edition.

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