John H. Geaney – July 12, 2012

The Judge of Compensation and Appellate Division found that the employee was entitled to no benefits based on his violation of the New Jersey Fraud Act

In Johnnie Jackson v. Township of Montclair, A-2212-11T2 (App. Div. July 5, 2012), the claimant injured his knee while moving large boxes of books at the Montclair Public Library on August 4, 2008.  He immediately stopped working and went to Mountainside Hospital where a brace was put on the right knee.  He was seen by a number of physicians thereafter.  An MRI of the right knee done on August 28, 2008 showed a tear of the posterior horn of the medial meniscus.  Petitioner underwent arthroscopic surgery on September 18, 2008 to repair the meniscal tear.

When the claimant saw Dr. Hatfield shortly after his accident, there was no indication whether he had any prior knee injuries.  When he saw Dr. Mendes, the doctor wrote that he “denied any history of knee injuries or pain in the past.”  When he saw Dr. Colizza, the doctor noted that he “denied any problems with respect to his right knee prior to his work injury.”

Contrary to his assertions to these doctors, the claimant had been involved in an automobile accident on April 13, 2007 and treated with a surgeon, Dr. Vizzone, who ordered an MRI and diagnosed a “tear of the posterior horn of the medial meniscus” and “a partial tear of the anterior cruciate ligament.”  Petitioner was told he would need knee surgery but he did not undergo the surgery.  He did, however, bring a law suit, and he signed answers to interrogatories on December 15, 2008 stating that the injuries he suffered in the car accident “are considered to be permanent” and “continue to limit his activities” and “cause great pain on a daily basis.”  He said in these answers that he suffered pain and discomfort while working, bending, lifting, sitting, and sleeping.

The Township of Montclair referred petitioner to Dr. Carl Mercurio for an IME.  Dr. Mercurio stated that petitioner’s knee problem was causally related to the work injury in August 2008 but that he was aware of a prior car accident and would like to see those records. After he received the records of the car accident, Dr. Mercurio concluded that the work injury only caused a sprain and strain and that the tear of the medial meniscus had already been there before the work injury.  He amended his initial report and opined that petitioner’s 7.5% disability of the leg was all due to the car accident, not the work injury.

Trial ensued in this case.  When the claimant testified he said that prior to the work injury in 2008 his knee had been “feeling great.”  He was confronted with answers to interrogatories in the civil law suit and said that some of his answers had been wrong and he signed them without knowing what they were. He also said he did not recall being told that he had a tear in his knee after the car accident.  He later admitted that Dr. Vizzone had in fact told him he needed surgery for his knee from the car accident. He said he had no idea why Dr. Hatfield, Dr. Mendes and Dr. Colizza had no knowledge of the prior car accident and knee injury.

The petitioner’s expert, Dr. Tiger, was also shown the prior car accident records and admitted that Dr. Colizza had not been given an accurate history of petitioner’s prior knee injury.  He said that without an accurate history, the treating doctors would have been confused on causation.

The Township filed a motion to dismiss the petitioner’s claim for violating N.J.S.A. 34:15-57.4, the New Jersey Fraud Act.  The Honorable Nilda Hernandez, Judge of Compensation, dismissed the case, finding that petitioner made material omissions which constituted “fraudulent conduct.”  She also ordered that petitioner repay temporary disability benefits in the amount of $17,497.71 as well as costs of surgery in the amount of $892.33.  He was permitted to keep $3,262.86 for temporary disability compensation for a sprain of the knee.

Petitioner appealed and argued that the Judge of Compensation erred in not finding that petitioner sustained a permanent injury at work.  He also argued that the Judge relied on impermissible hearsay evidence.  The Appellate Division rejected all these arguments and affirmed the dismissal of the case.  The Court noted that there was ample evidence to support the Judge of Compensation’s finding that petitioner was not trustworthy.  In particular, the Appellate Division noted that petitioner explicitly denied suffering any knee injury prior to the work accident.

The case is an important reminder that the New Jersey Fraud Act can be invoked when a claimant is not forthcoming about prior relevant medical history.  Material omissions or misstatements by either party in a workers’ compensation proceeding may be actionable under the Fraud Act.

This is a big win for employers in New Jersey. It goes back to the same basic principal: employers who stay on top of their workers compensation claims will ultimately keep their workers compensation costs down. So make sure that all information is investigated when an employee gets injured. It's your job as the employer to be on top of things. Don't leave it up to the insurance companies or anyone else. Take a proactive approach. Those that do will see workers compensation premium reductions and if you want to recover workers compensation overcharges, we can help you with our workers compensation recovery program.

By IFAwebnews  – July, 11, 2012          

Lump-sum payments in workers’ comp cases don’t halt return to work

Lump-sum settlements paid in workers’ compensation cases appear to encourage people to return to work, according to a new study.

The Workers Compensation Research Institute’s (WCRI) study, based on the analysis of 2,138 workers in Michigan who were injured in 2004, found that 78% of those injured workers receiving lump-sum settlements did not change their work status. The study tracked them through 2008.

“This is an important study because we need to find out whether settlements discourage return to work for injured workers who want to return to work or assist them in closing this chapter of their life and moving on with their career,” says Bogdan Savych, author and public policy analyst at WCRI.  “My hope is this research will help policymakers and other stakeholders understand how workers respond to receiving a lump-sum settlement.”

Many of those who were employed at the time of the lump sum stayed employed and those who were not employed remained unemployed, researchers found.

Of those injured workers that did change their employment status, 30% who were employed at the time of the lump-sump settlement left work and 19% of those who were not employed at the time of the lump sum attained employment.

On average, more injured workers returned to work after receiving a lump-sum settlement than exited. Average employment in the sample increased from 25% to 32% among workers one year after a settlement.  The exception is older workers who experienced a decline in employment after a settlement, according to the WCRI.

Employers should work hard to get employees back to work immediately after an injury or as soon as possible.  The solution is being on top of RTW.  If the owners of the company have given 100% devotion to the companies return-to-work program then settlements will be reduced significantly.  When I read this study it says “follow the money.”  Just like there are those that abuse workers comp because they get tax free cash staying home, there are those abusers who would like quick, nice settlements to buy a new car. 

Note that employers that have a large number of settlement claims are very likely to see their experience mods rise with NCCI’s new experience rating split point change.  Reduce workers comp premiums with workers compensation recovery.

Business Insurance – July 10, 2012

Commercial property/casualty insurance prices are expected to show a 3% increase at midyear compared with the same time last year, according to Barclays Capital Inc.'s midyear 2012 Commercial P&C Insurance Buyers' Survey.

According to Barclays, its survey of 75 risk managers from U.S. and Canadian companies—39% in the Fortune 1000—showed an expected 4% price increase in property insurance at midyear and a 2% increase in casualty prices, the first casualty insurance price increase shown in the survey since early 2004.

Of the risk managers surveyed, 23% characterized the property/casualty market as hard, up from 7% six months ago. None characterized the market as soft, down from 13% six months ago.

The survey showed risk managers expect policy terms to remain stable, with 90% expecting no change from last year's terms. About 35% of those surveyed characterized the renewal process as more difficult than a year ago, with 64% saying the renewal process was similar in difficulty to last year.

Switching brokers

The survey showed the percentage of respondents that reported switching their business among insurance brokers rose to 8% in the current survey vs. 3% six months ago. Most risk managers surveyed expect broker fees to be flat this year, with 82% expecting them to be unchanged, 12% expecting to pay a higher fee and 5% expecting to negotiate a lower fee.

Barclays noted that its survey respondents are mostly large, national accounts likely to compensate their brokers on a fee basis, as opposed to small and middle-market insurance buyers whose broker compensation is more likely to be commission-based.

Barclays said that while fees are likely to remain stable, insurance broker commissions could increase with property/casualty premiums.

Workers Compensation Premiums are on the rise and the fastest and easiest way to reduce workers compensation costs is with workers compensation premium recovery.

Important Notice to Employers

July 9, 2012

The national recession has led to record levels of unemployed workers receiving unemployment insurance benefits. As a result, New York State has borrowed over $4 billion from the federal Unemployment Insurance (UI) Trust Fund since 2009. New York must pay approximately $102 million in interest on these loans to the federal government by September 30, 2012. In order to pay the interest on these federal loans, New York State is required by law to assess a temporary charge on employers, called an Interest Assessment Surcharge (IAS).

The Federal interest rate on these loans is lower this year than it was when the IAS was assessed last year. This reduced New York's IAS rate for 2012 to 0.15 percent. Each employer's surcharge amount is determined by multiplying the total taxable wages in the most recently completed payroll year (October 1, 2010 to September 30, 2011) by the IAS rate of .015 percent. The maximum amount that most employers will be assessed is $12.75 per employee. The IAS is due 30 days after the date of your bill.

As the bad economy continues to take a toll on employers, workers compensation premium recovery offers employers the opportunity to have a workers compensation audit performed that can generate workers comp refunds. These refunds could be used to offset additional surcharges like the Interest Assessment Surcharge.

Best solution for NCCI new experience rating split point change announced by Simon Feuer, President of Apex Services.

Jul 09, 2012 – Apex Services is a leading provider of workers compensation premium recovery for Property Casualty Workers Comp brokers and employers nationwide and is pleased to announce our special program for the new experience rating split point change.

With NCCI’s announcement, the split point value will change so that over a three-year period the current value for frequency claims of $5,000 will increase to $10,000 for the first year, beginning in 2013. In 2014, this will increase to $13,500, and from 2015, the split point value will be $15,000 plus inflation adjustments. This ultimately means that more claims will fall into the primary loss category. According to NCCI, these changes are being implemented as the average cost of a claim tripled since the last split point update occurred two decades ago. NCCI basically sums up this new split point value by stating that "good mods will get better and worse mods will get worse." If you want to learn more about the experience rating split point change, visit http://www.apexservices.com/experience-rating-split-point….

With this change, employers with poor claims experience are facing major experience mod increases. To cover higher Workers Compensation costs, the employer might need to increase its bid or pricing on certain projects, causing the business to lose those accounts altogether. Also, many large companies refrain from hiring businesses with workers compensation experience mods greater than 1.00 if they’re doing some time of bidding work. Furthermore, there is a great risk that the insurance carrier will not renew the insured’s account, resulting in higher costs by forcing the employer to move into the assigned risk plan at a higher rate with an ARAP surcharge and possible loss of scheduled credits.

Based on the current workers comp market and continued rate changes needed to offset rising costs, in addition to the upcoming NCCI mod split changes, immediate results are needed to get immediate changes. The only immediate solution to reduce experience mods effective 2013, 2014, and 2015 is to change losses that have already occurred. For example, the 2013 experience mod utilizes losses from 2011, 2010, and 2009. In order to knock down an employer’s 2013 experience mod and most of the 2014 and 2015 mods, Workers Compensation premium recovery is needed. Safety and loss control protocols only affect forward solutions, but do have an impact on previous years. Workers Compensation premium recovery offers solutions going backwards and forwards.

What always works well is when brokers and employers utilize insurance recovery services that have no out-of-pocket expenses and work on a no-recovery no-fee basis. It’s a win-win for everyone. Safety and loss control programs are great but they can be costly, and they require a lot of time and patience and someone to manage the programs daily to make sure that they’re actually effective and stay effective. With the service we provide, which is contingency-based, you have nothing to lose, and you get quick, quantifiable results.

For more information about solutions to the NCCI experience rating split point change, please visit http://www.apexservices.com/experience-rating-split-point…. For more information about Apex, please visit http://www.apexservices.com or call Simon at (888) 380-APEX (2739).