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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
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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.
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Common Mistakes
Mistake #1:
Employers do not handle reported injuries correctly.
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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.
Important—when to file a 1st Report
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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
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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.
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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.
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Common Mistakes
Mistake #3:
Employers are not taking full advantage of recent reforms passed by the legislature.
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Drug Free Workplace ProgramT.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.
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Drug Free Workplace ProgramT.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 ProgramT.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 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
The Benefit Review Program
• Anderson
• Bedford
• Benton
• Bledsoe
• Blount
• Bradley
• Campbell
• Cannon
• Carroll•
• Carter• Cheatham
• Chester
• Claiborne• Clay
• Cocke
• Coffee
• Crockett
• Cumberland
• Davidson•
• Decatur
• De Kalb
• Dickson• Dyer
• Fayette
• Fentress
• Franklin
• Gibson
• Giles
• Grainger• Greene
• Grundy
• Hamblen
• Hamilton
• Hancock
• Hardeman • Hardin
• Hawkins
• Haywood• Henderson
• Henry
• Hickman
• Houston
• Humphreys
• Jackson
• Jefferson
• Johnson
• Knox
• Lake
• Lauderdale
• Lawrence
• Lewis
• Lincoln• Fayetteville
• Loudon
• McMinn
• McNairy
• Madison
• Marion
• Marshall
• Maury • Meigs• Monroe
• Montgomery
• Moore
• Morgan
• Obion • Overton
• Perry
• Pickett
• Polk
• Putnam
• Rhea
• Roane
• Robertson
• Rutherford
• Scott
• Sequatchie
• Sevier
• Shelby
• Smith
• Stewart• Sullivan
• Sumner
• Tipton
• Trousdale
• Unicoi
• Union
• Van Buren• Warren
• Washington
• Wayne
• Weakley
• White• Williamson
• Wilson
• Revised: 07/13/2011
• Memphis
• 170 N. Main Street, 11th Fl
• Memphis, TN 38103-1820
• Telephone: 901-543-6077
• Fax: 901-543-6039
• Nashville--Metro Center
• 2222 Rosa L. Parks Blvd.
• Nashville, TN 37228
• Telephone: 615-741-1383
• Fax: 615-253-2480
• Cookeville
• 444-A Neal Street• Cookeville, TN
38501-4027• Telephone: 931-
520-4290• Fax: 931-
520-4316
• Knoxville
• 1525University Avenue
• Knoxville, TN 37921-6741
• Telephone: 865-594-5177
• Fax: 865-594-5172
• Kingsport
• 1908 Bowater Drive• Kingsport, TN
37660-4136• Telephone: 423-224-
2057• Fax: 423-
224-2056
• Chattanooga
• 540 McCallie Ave, Ste W600
• Chattanooga, TN 37402
• Telephone: 423-634-6422
• Fax: 423-634-3115
• Murfreesboro
• 845 Esther Lane• Murfreesboro, TN
37219• Telephone: 615-
848-6743• Fax: 615-
217-9378
• Jackson
• 225 Dr. MLK Drive, 1st Fl
• Jackson, TN 38301-6985
• Telephone: 731-423-5646
• Fax: 731-265-7022
Division of Workers’ Compensation Offices1-800-332-2667
Website: www.state.tn.us/labor-wfd/wcomp• Macon
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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.
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 non-compliance.
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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.
2010/11 Legislation
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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
2011 Legislation
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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/
Exemption Registry
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Common Mistakes
Mistake #5:
Employers or their insurance carriers are not handling a claim timely.
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Penalty ProgramThe 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
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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• Under $1.50• $1.50 - $1.99• $2.00 - $2.49• $2.50 - $2.99• $3.00 - $3.49
1. Concerns About Costs
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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
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 63427
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 InjuryCurrently, there is a “could be” standard when it is supported by lay testimonyNew 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 15-mile 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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Employeeso More assistance to understand
the processo Emphasis on resolving disputes
in mediationo Faster access to “court” o Improved medical treatment
• Fewer delayso Quicker return to pre-injury jobso Faster delivery of benefits
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Employerso 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?
