Overview of Tennessee
Workers’ Compensation—2014
Avoid some of the most common mistakes,
cut your workers’ comp costs
and prepare for the upcoming Reforms.
Jeff Francis, Assistant Administrator
b.jeff.francis@tn.gov
1
During this presentation, I am going to
introduce you to the
Five Most Common Mistakes
that drive-up your workers’ comp costs
and the
Pending Reforms.
2
Common Mistakes
Mistake #1:
Employers do not handle reported
injuries correctly.
3
Important—when to file a 1st Report
Form C-20 (Tennessee Employer’s First
Report of Injury or Illness) should be filed in
all cases where the injury or illness results
in:
• receipt of medical treatment outside of the
employer’s premises,
• absence from work,
• death.
4
Worker’s Compensation Claims
T.C.A. 50-6-201
• Claims have two classifications:
– Medical Only
• 1 to 7 days off work with physician statement
– Lost Time & Medical
• If 8 days or more off work with physician
statement indemnity benefits are due to the
claimant
– July 1, 2012 through June 30, 2013
• 59,713 Medical-Only Claims
• 39,809 Lost Time Claims
5
Common Mistakes
Mistake #2:
Employers are not providing injured
employees with a panel of
physicians.
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Provide a Panel
C-42—Choice of Physician Form
Employers lose control of claims
when they don’t take reported
injuries seriously.
Several types of panels.
7
2009 Legislation
SB1574/HB1472 provides specific
procedures for obtaining medical
information from authorized treating
medical providers—medical waiver.
(Deals with Overstreet case)
• there is no covenant of confidentiality or
prohibition against communications with
authorized treating medical providers if
guidelines/procedures (waiver) are
followed.
8
Common Mistakes
Mistake #3:
Employers are not taking full
advantage of recent reforms passed
by the legislature.
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Drug Free Workplace Program
T.C.A 50-9-101 et. Seq.
Created as part of the Workers’ Compensation
Reform Act of 1996, the DFWP has three basic
objectives:
– To promote drug-free workplaces in Tennessee,
– To discourage the abuse of alcohol and drugs in
the workplace, and
– To penalize employees who choose to engage in
alcohol and drug abuse.
10
Drug Free Workplace Program
T.C.A 50-9-101 et. Seq.
While participation is voluntary, this program
offers the employer several significant benefits,
among them:
– A shift in the burden of proof in workers’
compensation claims involving a positive alcohol
or drug test,
– Discounted workers’ compensation insurance
premiums (by 5%), and
– Denial of unemployment benefits to an employee
terminated because of a positive alcohol or drug
test.
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The Benefit Review Program
T.C.A. 50-6-236-239
The goals of the Benefit Review Program are:
• To resolve disputes which occur in the
context of a workers’ compensation claim,
• To minimize adversarial relationships
between parties, and to
• To decrease litigation and reduce the overall
costs of workers’ compensation claims for all
parties.
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The Benefit Review Program
The Benefit Review Program offers service in
four main areas:
– Toll-free number: 1-800-332-2667
– Requests for Assistance: for temporary
disability and medical benefits
– Benefit Review Conferences: for settlement
mediation
– Settlement Approvals: finalization of
settlements
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Division of Workers’ Compensation Offices
1-800-332-2667
Website:
www.state.tn.us/labor-wfd/wcomp
•Stewart
•Lake•Obion
•Weakley
•Dyer
•Gibson •
•
•Henry
•Montgomery •Robertson
•Macon
•Clay •Pickett
•Sumner
•Fentress •Scott
•Trousdale
•Jackson •Overton
•Cheatham
• Davidson
•Dickson
•
•Houston
•Williamson •Rutherford
•Hickman
•Henderson
•Decatur•Perry
•Haywood •Madison
•Lewis
•Tipton
•Chester
•Shelby
•
•Fayette•Hardeman
•McNairy
•Giles
•Lawrence
•Moore
•Loudon •Blount
•Sullivan
•Johnson
•Washington
•Carter
•Unicoi
•Sevier
•Rhea
•Bledsoe •Meigs
•Bedford •Coffee
•Marshall
•Hardin •Wayne
•Union •Grainger
•Hamblen•Greene
•Morgan
•Putnam
•Anderson
•Knox
•Jefferson
•De Kalb •White •Cumberland
•Cocke
•Roane
•Cannon
•Warren•Van Buren
•Maury
•Claiborne •Hancock
•Hawkins
•Wilson •Smith
Carroll •Benton
•Humphreys
•Lauderdale•Crockett
•Campbell
•Sequatchie
•Grundy
•Lincoln
•Franklin
•Marion
•Fayetteville
•McMinn •Monroe
•Bradley
•Hamilton
•Polk
•Memphis
•Nashville--Metro Center
•Cookeville
•Knoxville
•170 N. Main Street, 11th Fl
•Memphis, TN 38103-1820
•Telephone: 901-543-6077
•Fax:
901-543-6039
•2222 Rosa L. Parks Blvd.
•Nashville, TN 37228
•Telephone: 615-741-1383
•Fax:
615-253-2480
•444-A Neal Street
•Cookeville, TN 38501-4027
•Telephone: 931-520-4290
•Fax:
931-520-4316
•1525University Avenue
•Knoxville, TN 37921-6741
•Telephone: 865-594-5177
•Fax:
865-594-5172
•Jackson
•Murfreesboro
•Chattanooga
•Kingsport
•225 Dr. MLK Drive, 1st Fl
•Jackson, TN 38301-6985
•Telephone: 731-423-5646
•Fax:
731-265-7022
•845 Esther Lane
•Murfreesboro, TN 37219
•Telephone: 615-848-6743
•Fax:
615-217-9378
•540 McCallie Ave, Ste W600
•Chattanooga, TN 37402
•Telephone: 423-634-6422
•Fax:
423-634-3115
•1908 Bowater Drive
•Kingsport, TN 37660-4136
•Telephone: 423-224-2057
•Fax:
423-224-2056
Revised: 07/13/2011
Common Mistakes
Mistake #4:
Employers do not have the proper
workers’ compensation coverage as
required by law.
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Uninsured Employers Fund
The UEF strives to have covered employers comply
with the Workers' Compensation Act. The Program
has offices in Jackson, Nashville, Memphis,
Knoxville & Kingsport, Tennessee.
Important Points:
• In most industries, employers with five or more
employees, including part-time employees, must
carry workers’ compensation insurance.
• Family members are included in the count if they
meet the definition of employee.
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Compliance Program
Uninsured Employers Fund Stats
• In fiscal year ending June 30, 2013 the program
collected $995,592 in monetary penalties.
• We also conducted 1,308 onsite inspections.
• Also, 324 employers were penalized for noncompliance.
2010/11 Legislation
Employee Misclassification Education and
Enforcement Fund (EMEEF) was created.
Effective March 1, 2011, new legislation requires
everyone in the construction industry must:
– be covered by workers’ comp, or
– be specifically exempted.
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2011 Legislation
Who may request an exemption?
– Up to 5 officers of a corporation
– Members of LLCs that own at least 20% of the
business (maximum of 5)
– Partners that own at least 20% (maximum of 5)
– Up to 5 owners of certain family owned
businesses
– Sole proprietors
19
Exemption Registry
My disclaimer:
– Other restrictions apply (licenses, etc.)
– Requests for exemptions are sent to the
Secretary of State’s office, not the Dept. of
Labor, and cost $200.00 for two years
For more info about the exemption registry:
http://tnbear.tn.gov/wc/
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Common Mistakes
Mistake #5:
Employers or their insurance carriers
are not handling a claim timely.
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Penalty Program
The Penalty Program enforces several penalties,
including:
1) a 25% penalty for failure to pay or untimely
payment of temporary disability benefits; A 25%
penalty assessed by the department is made
payable to the injured employee;
2) a $10,000+ penalty for failure to comply with a
Specialist’s order;
3) a penalty for failure to timely file Claims forms.
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Public Chapter 289
An Act To Improve The
Workers’ Compensation System
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Why Reform?
• Concerns about costs in TN
– Higher than border states
– Detriment to bringing new jobs to TN
• Some current employers want to opt out
• Concerns about court system
– Inconsistency—“Race to the courthouse”
– Claims in the court system take too long
• Concerns that process is too
complex and too lengthy
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1. Concerns About Costs
•
•
•
•
•
Under
$1.50 $2.00 $2.50 $3.00 -
$1.50
$1.99
$2.49
$2.99
$3.49
2. Concerns about courts:
Tennessee’ s system is different from other
states:
– One of only two states that is a court-based
system
– The only state with a hybrid system that
includes mandatory mediation
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3. Concerns About the Complicated
and Lengthy Process
Date Injured Worker Reaches
Maximum Medical Improvement
Number of Days from Maximum
Medical Improvement to Trial
8/18/2008
1487
10/23/2008
1147
3/18/2009
793
3/31/2009
667
4/28/2009
643
8/10/2010
530
9/30/2009
471
8/9/2010
232
1/3/2011
382
2/25/2011
634
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Implementation
• Reforms are effective for injuries or
diseases that occur on or after July 1,
2014
• Rules will be formulated for various
sections of the reform bill
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Major changes in the reform
• Definition of Injury
• Change in Construction of Law
• Move from Chancery/Circuit Courts to
Workers’ Compensation Court in DWC
• Change in Medical Provider Panels
• Change in Physician Communications
• Change in PPD benefit calculations
Definition of Injury
Currently, there is a “could be” standard
when it is supported by lay testimony
New Law: Injury is compensable if it arose
“primarily in the course and scope of work”
when all other possible causes are
considered
• Primarily had applied to gradual injuries
since 6/6/11.
Meaning of “primarily”
An injury arises primarily out of the
employment if the employee can show
that it “contributed more than fifty
percent (50%) in causing the injury,
considering all causes.”
Medical Proof
Treating physician must state that work
primarily caused the injury to a
“reasonable degree of medical certainty.”
– Reasonable degree of medical certainty means,
“ in the opinion of the physician, it is more
likely than not considering all causes, as
opposed to speculation or possibility.” T.C.A.
50-6-102(12)(D)
– Treating physician’s opinion is presumed to be
correct
Different construction of law
Will replace current construction that
the law must be liberally construed in
favor of the employee.
New: Statute must be construed fairly,
impartially and in accordance with
basic principles of statutory
construction.
WORKERS’ COMPENSATION COURT
– Judicial function moved from courts to the
Division of Workers’ Compensation
– Judges appointed by Administrator
– Licensed attorneys at least 30 years old
– Must have at least 5 years appropriate
experience
– Will serve a 6 year term; maximum of 3 terms
– There will be one Chief Judge
– Selection process
New Board of WC Appeals
• Will render and decisions on appeals of
decisions by WC judge.
– Wholly separate from the Court of Workers’
Compensation.
• 3 Appeal Judges
– Appointed by Governor
– 6 year term, limit of 2 terms
– Licensed attorneys with 7 years experience
• Parties will still have right of appeal to the
Supreme Court.
New Medical Provider panel process
• PC 289 simplifies the process by requiring
only one panel.
– Three or more independent physicians,
specialists, chiropractors, or practice groups (or
any combination thereof)
• Initial Treating physician may refer injured
worker to a specialist
– Employer has 3 business days after notification of
referral is received to offer a panel or referral
stands.
New Provider panel process
• Providers must be willing to treat the injured
worker.
• Maintains the “community” rule, but allows a
100-mile radius if not available in the
community.
– EE still gets travel reimbursement if outside 15mile radius
• NEW—Division can enforce a penalty for
improper panels
Physician communications
• New: Employer is allowed to
communicate with treating physician
(orally or in writing), only about the
treatment for the workers’ compensation
injury.
New Medical Treatment Guidelines—
To be adopted by 2016
• Guidelines for the diagnosis and treatment
commonly occurring workers’ compensation
injuries
• Intended to reduce disputes, improve quality
and timeliness of medical treatment
• In consultation with medical advisory
committee
NEW PERMANENT PARTIAL
DISABILITY BENEFITS
Date of Injury
If worker does not
return to work for any
ER at 100% wage after
initial disability period
Date Injured Worker Reaches
Maximum Medical
Improvement
PPD benefit after initial benefit
• If EE does not return to work or does, but makes less
than the pre-injury wage, the EE is eligible for
additional benefits.
• The additional benefit is determined by multiplying
the initial benefit by all that apply:
–
–
–
–
Factor of 1.35 because of loss of job or pay
Factor of 1.45 if no HS diploma or GED
Factor of 1.2 if employee > 40 years of age
Factor of 1.3 if unemployment in county where
employed > 2 points above state average for year prior
to initial period of compensation
Expected Results of Reform
A workers’ compensation system
that is:
• fair,
• efficient, and
• provides better outcomes for
employees and employers.
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Employees
o More assistance to understand the process
o Emphasis on resolving disputes in
mediation
o Faster access to “court”
o Improved medical treatment
• Fewer delays
o Quicker return to pre-injury jobs
o Faster delivery of benefits
43
Employers
o Fairer, more predictable environment
• Quicker, simpler resolution of claims
• Improved relations with injured workers
• Lower administrative costs
o Quicker return of employees to their jobs
• Less disruption in operations
o More conducive to expanding operations
or coming to Tennessee
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When an Employee is injured, the
Employee should:
• Immediately notify his/her employer and complete
a “First Report of Injury”.
• If medical care is required, choose a physician
from a panel of physicians that is provided by the
employer. Sign the form to acknowledge.
• Sign a medical waiver.
• Follow the advice of the physician.
• Stay in contact with the employer and insurance
adjuster.
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When an Employee is injured, the
Employer should:
• Have the employee complete a “First Report of
Injury” and file it with their insurance carrier
• Provide the injured employee an appropriate panel
of physicians
• Have the injured employee sign a medical waiver
• Give the injured employee the name & phone
number of the insurance carrier/adjuster
• Provide a wage statement to the adjuster
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When an Employee is injured, the
Insurance Adjuster should:
• Contact the employer and the injured employee
within 2 business days.
• Investigate the claim.
• Accept or deny the claim within 15 days of its
knowledge of the claim.
• For accepted claims, issue compensation if
appropriate, and file all appropriate forms with the
Workers’ Compensation Division.
• For denied claims, file all appropriate forms with the
Workers’ Compensation Division.
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Questions?
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