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The following article by K. Dawn Atkin was published in the Fall 2006 Utah Trial Journal. Unfortunately, nothing has changed since then.
--------- An insidious attack on Utah’s injured workers is currently underway. This is not a surprise attack like the 2005 legislative changes, or a public relations attack like the advertizing campaigns of the Workers Compensation Fund. This attack remains completely hidden from public view. This is an attack of inaction. The insurance companies have learned they can win by simply doing nothing. The workers compensation system has no remedy for bad faith by insurance carriers. In Savage v. Educators Insurance (908 P.2d 862, 1995) the Supreme Court found there is no privity of contract between the workers compensation carrier and the injured worker. Therefore, unless legislatively enacted, there is no duty to treat the injured worker in good faith. Although the provisions have changed slightly over the years, the court in Savage cites protections for the employee which now read, B. The payment for compensation shall be considered overdue if not paid within 21 days of a valid claim or within the 45 days of investigation unless denied. C. Failure to make payment or to deny a claim within the 45 day time period without good cause shall result in a referral of the insurance company to the Insurance Department for appropriate disciplinary action and may be cause for revocation of the self-insurance certification for a self insured employer. Utah Administrative Code Rule 612-1-7 and An employer, employee, or other person is guilty of a misdemeanor if that employer, employee or other person violates this chapter or Chapter 3, Utah Occupational Disease Act. Utah Code Ann. §34A-2-803 However, there is no report of these provisions ever being enforced by the Insurance Commission or Labor Commission. Injured workers who contact the Insurance Commission to report a violation are routinely referred to the Labor Commission and told to file a workers compensation claim. Where there is no penalty for failure to pay, and the insurance company can save through delay, there is no incentive for the carriers to properly evaluate and approve benefits in a timely fashion. Accordingly, requests for benefits are simply being ignored. Under workers compensation law, pre-authorization of medical care is required before the doctors can proceed with treatment beyond emergency care. Under rule R612-2-6(B)(1) Utilization Review requires the insurance carrier to notify the doctor of acceptance or denial of the request for pre-authorization within five days. However, as in all workers compensation rules and statutes, there is no penalty if the adjuster ignores this rule. If the adjuster chooses to do nothing, the injured worker can only file a legal action with the Labor Commission to request a court order for benefits. This lack of enforcement has caused problems for people like Amy C. Her case required two different legal actions with the Labor Commission in order to establish the responsibility of the insurance carrier for her industrial injuries, including her low back problems. Although the Labor Commission has found that her current back problems are industrial, the adjuster has not approved her medications or doctors visits. When Amy called the adjuster for an explanation of the delay, the adjuster said that she did not know if Amy had stubbed her toe or had a heart attack, but she could not look into it right then because there were other claims that took precedence over Amy’s case. Therefore, the claim has not been denied, which would trigger certain reporting requirements, but it has not been approved either. Amy is left without medical care, again. The “do nothing” attitude has even spread to the insurance companies’ response to orders of the Labor Commission. Kenny Atkin, who practices solely in workers compensation for injured workers, has noticed a change in payment of the orders by insurance companies. “I never had to request an abstract on an order until this past year. In 2006 I had to request them in three different cases to get the ordered benefits paid.” When an injured workers’ only remedy is to request an order from the Labor Commission and even that order can be ignored, there is a problem with the system. Part of this problem is systemic to the workers compensation system. A court order rarely signals the conclusion of an injured worker’s claim. Where a permanent injury exists, the court will likely award medical expenses with the provision, “The employer/carrier shall pay all medical expenses which are reasonable and related to the industrial injury.” Although this award of medical coverage follows the wording of the law, it allows an unscrupulous adjuster to avoid payment of the very next medical expense by claiming that treatment is no longer related to the industrial injury. This too, has become a common occurrence. Eblen D. injured her back at work. After three years in court, including an appeal to the Court of Appeals, she thought she had finally secured medical coverage for her injury. The order from the court included a finding that the back injury was industrial. The Judge wrote, “All doctors indicate the IDET procedure is not proven... Petitioner wants to try it and recognizes that it might not work, in which case a lumbar fusion would be the next step. I will therefore allow that attempt.” (Finding of Fact, Conclusions of Law and Order Case No. 2002503.) However, only five months after the completion of the extensive appeals in the case, and with no new injuries or changes in medical condition, the injured worker received notice from the adjuster that any future medical care would be denied as non-industrial and should be sent to her private health insurance. There was no choice but to file a second case with the Labor Commission to request another order for ongoing medical coverage. Although the Labor Commission provides fair and accurate adjudication of claims, an injured worker’s health and financial life is destroyed by any delay. Insurance companies have realized that most injured workers will settle for pennies on the dollar when faced with no income or no health care for even a short period of time. An injured worker can expect to wait a year and a half for benefits after requesting that the Labor Commission intervene in a case involving medical issues. The delay has been aggravated by the dramatic increase in cases at the Labor Commission. Additional ALJs have been hired to handle the increased caseload. However, the problem continues to grow due to medical panels which are taking longer to issue decisions and appeals to the Commission which now take over a year for decision. We cannot expect an injured worker to survive without income or health care for over a year and then ask them to repeat the process when the adjuster still neglects to approve appropriate benefits. The failure to pay benefits results in medical and living expenses passed off to private health care, disability insurance, government assistance programs, churches and other support networks. Government and charitable organizations should not be asked to pay for the liabilities of the employers and workers compensation insurance carriers. The workers compensation system is designed to protect injured workers by providing immediate benefits in exchange for the elimination of the injured worker’s right to sue his employer. But the entire system breaks down when insurance companies are allowed to ignore the law. In 1995 the Supreme Court in Savage decided that the external safeguards in place were enough to protect injured workers from bad faith by insurance carriers. However, a decade of experience has shown that the majority opinion was wrong. In hindsight we can see that Justice Durham was correct in her dissent. She wrote, "In conclusion, in the absence of an obligation to deal in good faith, workers’ compensation insurers may create obstacles to payment and may indeed have economic incentives to do so. This kind of delaying tactic runs counter to the goals of the workers compensation system and creates substantial hardships for injured employees." (Id. at 870.) If this attack of inactivity by insurance carriers continues, it will be left to the UTLA, Utah Citizens Alliance and others who support injured workers’ rights to fight back with real legislative action. __________________ K. Dawn Atkin
Attorney with Atkin & Associates