CHSWC Recommendation to Improve Injuried Workers Information

Enclosed is an Institute analysis of recent draft recommendations to the Commission, including legislative proposals to overhaul laws and regulations governing information to injured workers. The recommendations were prepared by CHSWC consultants in response to injured worker surveys conducted by the Labor Occupational Health Program (LOHP) at UC Berkeley. The Institute believes the approach and recommendations outlined in this report would add further confusion, increased complexity and more delays for injured workers, while significantly increasing administrative costs and frictional expenses for employers and claims administrators. To label it an unmitigated disaster is probably not engaging in hyperbole.However, recognizing it is easier to criticize than create, the Institute Claims Committee has established a Benefit Notice Subcommittee to evaluate the current benefit notice system and develop industry recommendations to simplify and improve it. The subcommittee report is scheduled to be available the latter part of March. CHSWC staff will be invited to offer input to the subcommittee.A summary of the Institute’s detailed analysis of the draft recommendations will be developed and distributed to interested parties and placed on the Institute’s website. For more information or a copy of the Commission’s Draft Recommendations On Information For Injured Workers, please contact Bob Young or Mark Miller at the Institute. 

Cc: Claims Committee

Claims/Legal Executives

Benefit Notice Subcommittee

Ms. Christine Baker, Executive Officer

Commission on Health and Safety and Workers’ Compensation

455 Golden Gate Avenue, 10^th Floor

San Francisco, CA 94102

 Dear Ms. Baker, Thank you for the opportunity to respond to the December 20 draft recommendations relating to the Commission’s project to improve information for injured workers. Our staff has prepared the attached review, including comments on specific statutory proposals. As you will note, we have serious concerns about many elements of the proposal, as well as the overall direction of this project. We appreciate your consideration of these comments and your willingness to accept industry advice and input on the proposed recommendations.

Sincerely,  

Bob Young

Communications Director

 BY/

Enclosure

cc: Board of Directors

Claims Committee

Benefit Notice Subcommittee

Juliann Sum, L.O.H.P.

 Comments – Legislative Recommendations on Information For Injured Workers 12/20/99 Background CHSWC premises the need to overhaul general workers’ compensation information, educational materials and benefit notices on conclusions published in the 1996 Labor Occupational Health Program (LOHP) report, "Navigating the California Workers’ Compensation System: The Injured Workers’ Experience." That report was based on focus group interviews of 57 injured workers with disputed 1990-92 injury claims who lived near Berkeley, San Jose or Universal City, and excluded cases closed prior to 1993. Thus, the report is limited to opinions of workers who filed claims during the chaotic transition period following 1989 reforms and offers no insight from workers with less serious cases or claims filed after 1993 reform — hardly a representative sample of the million Californians who suffer job injuries each year. The LOHP report produced only limited, anecdotal information, and offered no indication as to how representative or widespread respondent’s problems and attitudes were within the injured worker population. The authors noted that the study "does not purport to describe quantitatively the prevalence among injured workers in California of the themes, issues and concerns expressed in the focus groups, nor does it describe from first-hand observation the services provided to injured workers." Despite its admitted weaknesses, the report has spawned several ongoing projects that are now generating extensive and potentially costly proposals of dubious value. The Institute believes no action, legislative or otherwise, should be based on this report.Simplification? The proposed legislation would require employers and claims administrators to provide "informational materials" recommended or approved after consultation with CHSWC (e.g. LOHP fact sheets designed in response to the "Navigating the System" report, instead of basic posting notices and pamphlets). However, because the LOHP information was not designed to (and does not) meet employer notice requirements, the proposal seeks to revise regulations and statutes to match the fact sheets rather than the other way around. Some information now in benefit notice letters would instead be covered by new required materials (e.g. a comprehensive guide), but in addition, "at necessary stages" of the claim, claims administrators would be required to send supplements prepared and published by DWC, as well as "claim-specific" letters directing the reader to related information in the supplements. There is no limit on the number of supplements or how often they must be sent, and no proposal to reduce the number of letters. DWC claim audits consistently show benefit notices are the most common source of problems cited by the state, underscoring the difficulty of meeting current notice requirements. Yet the proposal does not reduce the number of notices or simplify the process, it only changes the content of existing notices, requires new supplements and recommends a CHSWC committee incorporate "Navigating the System" findings into the notice process. Possible Solutions. The LOHP report admits it did not quantify the extent of any information problems in the system, nor even document that the issues and concerns expressed by focus group participants are even based in reality. Yet this proposal and ongoing CHSWC projects are grounded in conclusions drawn from the anecdotal information provided by these 57 people. The draft proposal says "many people feel" the state should develop and make available comprehensive, accurate, timely and understandable information, that employers and claims administrators would be required to provide to injured workers. That is a noble goal, but it fails to address the real problem – the underlying complexity of the system. To the contrary, the proposed solution would add paperwork, require repetitive mailings, and make it difficult to get current information out in a timely fashion, resulting in more administrative costs and penalties. Moreover, the "solution" puts the onus on DWC to make the information available, even though the state has a dismal track record in producing and delivering information for injured workers (e.g., DWC has not updated the vocational rehabilitation pamphlet "Help In Returning to Work – 94" in six years and still has not translated it into Spanish, even though it is required by law). Obviously, DWC is ill-equipped to go into the publishing business (ask anyone who tried to order a medical fee schedule between 1997 and 1999 when DWC ran out and refused to produce more because new regs were "pending"). With employee notice information, the saving grace for claims administrators has been that the law allows them to produce their own information if it meets state requirements and is approved by DWC, but by requiring the information be "prepared and published" by the AD, the proposal takes away that ability. Objectives. A review of the proposal’s stated goals shows they are redundant and unnecessary:  

1. to provide all workers basic, introductory information about workers’ compensation (right to predesignate a treater, how to get emergency treatment, and how to report an injury) prior to injury.

Comment: LC §3550 already requires this information and more on the posting notice (form and content prescribed in CCR §9881), while LC §3551 requires employers to "give every new employee, either at the time the employee is hired or by the end of the first pay period, written notice of the [posting notice] information contained in §3550" (pamphlet form and content prescribed in CCR §9880.) In addition, LC §3552 requires that upon employee request, employers must provide a form to predesignate a physician. Thus, the existing posting notice and new hire pamphlet already inform workers of their right to predesignate a physician, how to get emergency treatment, and how to report an injury.

1. to provide injured workers written information about workers’ compensation soon after injury, along with a claim form.

Comment: This already is required by statute and regulation. Labor Code §§138.4(a) and 139.6(a)(2) require a pamphlet published or approved by DWC to advise injured workers of their rights under workers’ compensation, ADA, and FEHA. The pamphlet must include information on circumstances in which workers are entitled to various benefits, protections against discrimination because of injury, procedures for resolving disputes, and the right to seek information and advice from an information and assistance officer or attorney (form and content prescribed in CCR §9882). Employers must provide the pamphlet within 5 working days of notice or knowledge of any injury [CCR §9882(a)], and the claim administrator must send this pamphlet with the first notice of payment or notice of delay [within 14 days of the employer’s date of knowledge of injury and disability] [LC§138.4, CCR §9810(d)]. LC §5401(a) lists necessary elements for the claim form and notice of potential eligibility, and requires employers to provide the information within one working day of notice or knowledge of injury. Form and content of the claim form are prescribed in CCR §10118, including a reminder that the worker should have received a pamphlet from their employer describing workers’ compensation benefits and procedures to obtain them.

1. to make written information materials available at state I&A Offices.

Comment: This is already required by LC §139.6 and CCR §9924 (c), and both pamphlets and fact sheets are available at I&A offices.

1. to require the claims administrator to provide the written information about workers’ compensation and a claim form if the employer did not do so.

Comment: Claims administrators already must send the injured worker pamphlet with first notice of payment or notice of delay (within 14 days of the employer’s date of knowledge of injury and disability) [LC§138.4, CCR §9810(d)]. CCR §10119(b) also requires that if a claims administrator has knowledge that an employer has not provided a claim form, the administrator must provide a claim form within three working days of that knowledge.

1. to improve content and clarity of benefit notices by removing basic information already provided in the informational materials, and instead refer workers to "relevant portions" of those materials. All benefit notices would be accompanied by I&A and attorney referral information "outside the main body of the letter."

Comment: The claims community strongly supports reducing the number of notices and simplifying the content by eliminating redundant, untimely and unnecessary information. As noted, the problem is most acute with VR notices, as required time frames often make compliance impossible and penalties inevitable. Yet the proposal does not streamline the process — it adds to material claims administrators must send, increases paperwork which will drive up costs and penalties and slow benefit delivery, and requires workers to hunt for information from multiple documents. References to the I&A are already required in benefit notices (CCR §9810). Unlike the current language, proposed language makes no mention that I&A services are free. At the same time, it would require attorney referral information in all notice letters, without informing workers of the potential cost or that hiring an attorney will severely limit their ability to communicate with their employer, claims administrator or the I&A about their claim.

1. to require claims administrators to send notices regarding the ending of benefits with, or prior to the final payment, and where TD was not paid, to require the first PD notice "soon after" the treating physician determines there is PD.

Comment: LC §138.4 (a) (b) already requires that the employee receive notice of TD, PD and death benefits, and any change in the amount or type of benefits, the termination of benefits, and an accounting of benefits paid, with copies to the AD. But, it is not always possible to send an ending benefit notice with or prior to a final check (e.g. a claim administrator may mail a TD check, and later that day be notified that the worker can return to work without restrictions. No further TD would be due, so notice of termination of TD would arrive after the final check.) Many similar situations can arise and claim administrators should not be penalized in such cases. Presumption of Injury In an attempt to shorten the 90-day time frame for determining compensability, the proposal recommends considering incentives to quickly accept a claim, disincentives for claims administrators to wait 90 days, and the allowance of provisional or presumptive care during the 90-day period. Comment: Despite the assertion that workers "often" can’t obtain medical care during the 90-day period, and "face aggravation of their injuries and long-term deterioration of their health," CHSWC has no data on the extent to which care is delayed while compensability is determined or the impact on workers whose injuries are ultimately deemed compensable, so these key proposals are based completely on anecdotal information rather than empirical data. Claims administrators report that typically in these cases workers obtain care through their group health provider or their attorney arranges treatment through a provider on a lien basis. These proposals also ignore the claims administrator’s fiduciary responsibility to employers to adequately investigate claims, and that LC 9812(I) already provides for audit penalties if the worker is not notified within 14 days of determination of compensability. In many cases, the 90-day period is not long enough to collect records, perform medical exams and take depositions, and these factors are not always under the claims administrator’s control. Furthermore, requiring provisional or presumptive care during the 90-day period would increase employers’ loss experience as a result of medical costs and/or litigation expenses related to the recovery of costs in claims found to be noncompensable.  Specific Statutory Proposals/Amendments – Practical Issues and Implications LC §138.4 extends the notice requirement (claim form and a new notice of potential eligibility) from "injuries involving loss of time" to "injuries resulting in lost time beyond the date of injury or medical treatment beyond first aid" (one time treatment of minor cuts, scratches, burns, splinters, or minor industrial injury, which do not ordinarily require medical care, or any follow-up visit for observation). Of the 1 million work injury claims each year in California, more than 2/3 are medical-only claims involving little or no lost time. In most cases, injured workers are given a claim form with the notice of potential eligibility information on the back, while the injured worker pamphlet is provided in claims involving 3 or more days of lost time. Has anyone considered the necessity (not to mention the cost) of requiring additional "written information" – presumably an expanded pamphlet, binder, or guide — to hundreds of thousands of workers with medical-only claims who are fully recovered and back to work after a day or two? The proposal would require employers in all of these cases to provide the claims administrator and the worker a statement verifying that the worker received the written information on potential eligibility for benefits, though the information is on the claim form which is provided to the worker and claim administrator. If a claims administrator did not receive the new verification within 14 days after the employer’s notice or knowledge of injury, the claim administrator would be required to send the notice. Presumably, failure to do so would result in audit penalties, even though in about 20% of the cases the insurer isn’t even notified of injury until after 14 days. LC §138.4(b) compounds the confusion by keeping current language on notices for injuries involving lost time, but makes no reference to "lost time beyond the date of injury" or first aid. This section also adds the requirement that the claims administrator not only provide injured workers the initial copy of the guide, but at "necessary stages" of the claim, send "informational materials for employees" (e.g., "fact sheets") recommended by CHSWC, any additional copies that the worker may request, and any updated versions of the materials. Given that there are already 6 CSHWC "fact sheets" (12 if you count Spanish translations) this would be a huge task requiring massive amounts of time, paperwork, programming and money, and creating enormous potential for audit penalties. Do most injured workers even want all this information? This requirement would wreak havoc in claims departments and inundate injured workers with a flood of unsolicited paper, all of which would advise them of their right to an attorney and tell them how to contact one without explaining the costs or implications. Furthermore, in attempting to comply with statutory requirements and address the issues and concerns of the 57 workers, LOHP keeps expanding its fact sheets. The draft information provided, "Working After A Job Injury" is 10 pages long, and gets longer with each revision. In contrast, CWCI’s current pamphlet, approved by DWC, meets all the basic notice requirements – including information on how to get help – all in 2 pages (single sheet, printed 2-sided). Providing longer versions of existing publications and relabeling them "informational materials" instead of "pamphlets" and "posting notices," will not make them more readable, timely, or accurate – it will make workers less likely to read them, drive up administrative costs and require DWC to produce, update and distribute millions of copies of new publications every year. One final point: before the state mandates that employers and claims administrators provide these materials, shouldn’t we assess how the fact sheets and materials have been received by the community as a whole? Feedback from employers and claims administrators suggests they have chosen not to use the materials because they contain negative messages that seem to promote antagonism, distrust and litigation rather than fostering cooperation and communication. LC §138.4 (b)(2)(3)(4) calls for new regulations on how claims administrators are to serve "claim-specific" benefit notices. The extent to which claim operations would have to customize benefit notice letters to make them claim specific is unclear, but customization works against automation, and would slow the notice process. This section would require claims administrators to provide information (e.g., a new guide and fact sheets), and to "refer the injured employee to the relevant portions of the informational materials…" (i.e., both the fact sheets and the guide). This could be extremely time consuming, repetitive and costly, and it would be confusing and frustrating for a worker to have to refer to multiple publications just to get basic information. In a prime example of overkill, amended language within LC §138.4 (b)(2) would mandate a new benefit notice for payment, nonpayment and or delay in payment of medical services, even though these services are paid by the insurer, not the injured worker. Aside from confusing the worker, in our opinion this change would have a huge impact, probably requiring notices to go to the worker regarding the payment decision on every medical bill in the California workers’ comp system. To get a sense of the scope and cost of this proposal, the Institute generated medical payment data from the Industry Claims Information System (ICIS) database and found there are an average of 18 medical payment transactions for all types of claims (ranging from 7.6 transactions per med-only case to 73.3 transactions in PD claims). With a million claims a year in California, this change alone would translate to 18 million additional notices to injured workers. Estimating an average cost of $10 to generate each notice, this proposal would add $180 million in administrative costs to the system – and considerably more if you add in the costs of required copies to attorneys, the WCAB, and claim files; required notices on bills that are delayed or denied; and whatever supplements would be required "at necessary stages." The cost would be staggering, not to mention that sending notices on millions of bills – most of which are not even disputed – would overwhelm injured workers with still more paper. This provision flies in the face of efforts to simplify the process and would add hundreds of millions of dollars in unnecessary new expense. LC§138.4 (b)(2) would be amended so that instead of providing the information in a single document, employers and claims administrators would be required to provide multiple documents (e.g. the basic guide and fact sheets) prepared and published by the AD. At the same time, the proposal would delete the provision that basic information for injured workers may be produced as "a pamphlet published or approved by the administrative director." This would take away employers’ and claims administrators’ right to produce or customize their own DWC-approved pamphlets or use those produced by CWCI, retired WCJ O’Brien, and others, even though the companies and outside suppliers have done a good job of keeping the materials up-to-date, translated and available. DWC is not equipped to produce and distribute millions of guides, fact sheets and/or pamphlets each year, and forcing the community to rely on the state as the sole source of this mandatory information would lead to logjams, delays and potential penalties. LC §138.4 (c) removes a claim administrator’s obligation to repeat basic information from the informational materials in benefit notice letters if the initial guide was sent, relevant fact sheets are sent at "necessary stages," and the letters refer the worker to relevant sections of both. It’s likely the same materials would have to be sent repeatedly to the injured workers. Again, given the number of fact sheets, the vague requirement to somehow make notice letters "claim specific," and the need to include multiple citations, the cure may be worse than the disease. Every notice letter would be required to include a statement outside the main body of the letter instructing the worker on how to contact the I&A or an attorney, without advising them to contact the claims administrator to work out problems or issues. The information, also required in the guide and fact sheets, would list phone numbers of the State Bar or legal referral service(s) "approved by the administrative director." Thus, workers in a no-fault system would continually be referred to an attorney, encouraging more litigation and expense. No criteria are provided for the AD’s approval of a legal referral service, but it is reasonable to expect such services would be subject to monitoring, licensing, and sanctions should they fail to provide adequate service. LC §139.6(a)(2) deletes the requirement for an injured worker pamphlet and instead requires "informational materials." The size and scope of these materials is undefined and could be unlimited. The form and content would be recommended to the AD by CHSWC, thus expanding the Commission’s role from advising the Legislature to advising state regulators as well. Last year the state attempted a similar project, combining CHSWC/LOHP factsheets to produce a publication called "The Injured Worker," which it falsely claimed complied with new hire, injured worker and claim form notice requirements. A review of the publication found it failed to meet the requirements on several counts, including failure to include information on minimum TD rates, failure to explain the employee’s right to request a change in treating physician during the period of employer medical control, failure to mention reasonable accommodation in the context of voc rehab eligibility, and the use of obsolete TD rates for injuries on and after 7/1/94 and 7/1/95. Thus, the state produced and distributed a publication derived from the LOHP materials that failed to comply with key employee notice requirements, resulting in a potential liability for employers and doing a disservice to injured workers. LC §3550 changes posting "notice" to "information." Why use a more imprecise term? Use of the term "information" could mean the single page posting notice would be replaced by several documents. The current poster already outlines basic benefits, rights, obligations, and where to get more information, and it can be printed on a legal size sheet which is readily identifiable. Adding more detailed requirements will make it longer, more complex, less likely to be read, and could be misleading. For example, instead of simply advising workers to report injuries immediately, the proposal mandates an explanation of "the time limit for the employer to be notified of an industrial injury." That is a very loose (often contested) time limit – one year from the date of injury or the point at which the worker should have known the injury was work related. Getting into a detailed explanation of what that means is too complex for a work site poster and still doesn’t cover all the bases – (e.g. there are different time limits for asbestos claims). This type of detail works against simplification and brevity, and is better addressed elsewhere (such as in the injured worker pamphlet where it’s already required). LC §3550(d) mandates that the written posting information be prescribed by the administrative director after consultation with CHSWC. As with the written information for injured workers, this seems to eliminate the right of insurers, employers and others to develop posting notices that meet the standards set forth by DWC. Similarly, instead of the current provision that the posting notice "may" be made available by the administrative director, proposed language mandates that the posting information "shall" be made available by the AD. Providing only a single source for this information, and requiring changes or updates only after consulting CHSWC adds an unnecessary layer of bureaucracy and impedes the ability to keep the information current and readily available. It also will require CHSWC to commit ongoing resources to monitor changes in the system that affect basic procedures, rights or obligations, and to update the material. LC §3551 revisions would impose the same requirements on production and distribution of basic "new hire" information (i.e. replacing a pamphlet with "information" prescribed by the AD after consulting CHSWC. Again, new language would make the AD the source of the information, with any update or revision subject to consultation with CHSWC as well as DWC review. NOTE: The proposal also recommends considering expansion of $7,000 civil penalties against employers for failure to post workers’ comp information, suggesting LC §6431 be amended to include failure to provide the claim form and other injured worker information, and to give Cal-OSHA authority to cite violations during worksite inspections. It is ironic that while the proposal would reduce sources for employers to obtain posting notices and mandatory information, it would increase penalties and enforcement against employers who fail to have it available. LC §3552 would delete the clause that an employer provide a "personal physician" form upon employee request, instead requiring employers to give every new hire a form to name their personal physician. Aside from mandating more paper and wresting medical control for the first 30 days away from the employer, automatically providing a form raises practical concerns. If a form merely asks for a personal physician, workers may not realize they are predesignating a treater for any work injury. Also, treatment delays could occur if workers don’t check to see if their physician handles workers’ comp cases, if they switch physicians but don’t update the form, or if they suffer a work injury requiring treatment outside the scope of their physician’s practice. LC §4061 (b) would be deleted, eliminating the language in TD/PD letters that notifies the worker that hiring an attorney is voluntary and may not result in a larger award, and advising the worker that attorney fees will be deducted from the disability benefits. Instead, each letter the worker would receive would contain the much less detailed 138.4 (c) statement, which tells them that they have the right to hire an attorney and provides phone numbers for attorney referral services, with no information on the potential costs, liabilities and impact on the injured worker. This would repeat the information required in the injured worker guide and the fact sheets.LC §5401(a) (b) expands the current requirement so the notice of potential eligibility for benefits, currently on the back of the claim form in English and Spanish, would be replaced by additional "written information regarding potential eligibility for benefits" prescribed by the administrative director in consultation with CHSWC. With the exception of "practical information on how to contact legal referral services" proposed required elements in the "written information" [5401(b)(A)(B)(C)(D)(E)(F)(G)(H)(I)] are already in the injured worker pamphlet mandated by Labor Code §§138.4(a) and 139.6(a)(2), with the form and content noted in CCR §9882. In addition to requiring the new "written information," the proposed revision would require a new claim form (DWC-1) simply to add "practical information on how to contact legal referral services" – an element not on the current claim form. Notably, while adding the attorney referral requirements, the proposed revision of 5401(a) deletes existing notice information describing "procedures and assistance available to the employee on his or her own behalf." LC §5401(c) would require the written information and the claim form be made available to employers and insurers by the AD, but it is unclear whether it would be produced by the state printing office or a contractor and sold by DWC, prepared and distributed as camera-ready art, or whether copy would merely be posted on the web or mailed to employers and claims operations. LC §5401(d) would require employers to provide the insurer and the injured worker a statement verifying that the required written information and the claim form was provided to the claimant or their agent. Employers already are required to provide the claims administrator and worker with signed copies of the claim form, which includes the basic explanation of benefits and informs the worker that they should have received the injured worker pamphlet. Requiring additional verification for claimants and insurers simply creates more paper in the system. SummaryThe draft proposal attempts to respond to perceived information needs of workers based on the LOHP focus group interviews as laid out in the Navigating the System report. The proposal would require employers and claims administrators to provide LOHP/CHSWC fact sheets (or derivations thereof) as the basic information for injured workers, alter (not eliminate) benefit notice letters, and expand notice requirements in a system already choked by paper. For claims administrators, the result would be more penalties for paperwork violations and less time to focus on the actual delivery of benefits to injured workers. The Institute has noted several times over the past three years that the LOHP materials were not designed to meet statutory notice requirements, and merely respond to opinions and comments of LOHP focus group participants — an extremely small, unrepresentative sample of the injured worker population in California. The Navigating the System report itself admits that its findings provide no measure of the prevalence of the themes, issues and concerns expressed, and that LOHP cannot confirm whether the findings accurately reflect information services provided to the 57 focus group participants – let alone all employees in the state. Thus, it’s unfair to contend that the findings are representative of the information needs of all workers, and they should not form the basis of statutory proposals. The basic information for workers is already specified by statute and regulation, and a system is in place to provide it to them using pamphlets, posting notices and claim forms. The proposal to overhaul that system by mandating more written materials would be extremely expensive, time consuming, repetitive, create major headaches for DWC and claims administrators, and leave injured workers inundated by a baffling blizzard of paper, all of which would direct them on how to see an attorney. California’s workers and workers’ compensation community would be far better served if the effort to improve employee information would focus on reducing the number and simplifying the content of benefit notice letters, upgrading DWC Information and Assistance services and fostering communication between claims administrators and injured workers to reduce litigation.