One of the singular promises made by President Obama whenelected in 2008 was that “change” was destined to permeate thelandscape of America. Certainly those within the discrete world ofworkers' compensation have witnessed volumes of that “change”blossoming at many points throughout the practice. Several of themost salient varieties that have emerged within the past severalyears include healthcare reform, alternate dispute resolution, andimmigration legislation.

The watchword of the 2012 election cycle has been “Obamacare.”Of course, this references the push at the national level toaddress the high cost of healthcare in America and the resultantdrain on the U.S. economy. Washington's official response—andarguably its most comprehensive effort—has been the passage of thePatient Protection and Affordable Care Act (PPACA) in December2009. At more than 2,500 pages and 500,000 words in length, the actis weighty in both actuality and intention, and it is regarded bymany as the most dramatic maneuver to address healthcare in theU.S. since the adoption of Medicare and Medicaid in the 1960s.

One could say PPACA has drawn praise and criticism in equalmeasure. Its complexity has created confusion, frustration, falseexpectations, and conflicts about the extent of implied coverageand impact. The legislation has already faced numerous legalchallenges, including filings principally regarding the “individualmandate,” which requires individuals to either purchase healthinsurance or else pay a fine to the U. S. Treasury, along with the“employer mandate,” under which employers with more than 50employees will pay a fine if any full-time employee qualifies forfederal healthcare subsidies). The U.S. Supreme Court has scheduledoral arguments for an unprecedented two days—March 26 and 27,2012—meaning that a decision will likely be announced prior to theNovember elections.

Real Implications of National HealthcareReform

At this point, one would be justified in wondering what all ofthis has to do with workers' compensation. Luckily that issue hasbeen addressed, at least to some extent, by prior authors.

Suffice it to say, all parties can agree that no one truly knowsthe full impact this far-reaching legislation may have on workers'compensation systems in the future. One immediate and direct resultof the PPACA was found in the Black Lung Benefit EntitlementProvisions, which will make it easier to file claims for and toobtain benefits; will increase the benefits payable for suchclaims; and will increase future insurance premium costs for thoseaffected industries. In addition, changes in Medicare reimbursementlevels are expected to result in cost impacts for those states thatuse Medicare as a basis for reimbursements in their respectivestate fee schedules for medical providers.

Other potential effects: there may be less utilization ofworkers' compensation medical treatment for pre-existingconditions, if individual healthcare is indeed available to more people; promotion ofwellness initiatives may reduce the incidence and duration ofworkers' compensation claims; provisions making generic drugs moreavailable sooner in the process may result in loweredpharmaceutical expenses in workers' compensation claims; and newtaxes are expected to be levied on drug manufacturers, medicaldevice manufacturers, and health insurance companies—for whichthere can be an expected trickle down to consumers. The act'sfraud-and-abuse prevention provisions are far-reaching and touchnearly every aspect of the provision of healthcareservices—enforcement and penalty provisions in the act may raisecompliance across the board. One perhaps unanticipated result ofthe increased availability of medical care to previously uninsuredindividuals may be a concomitant reduction in access to healthcareby those already “in the system,” including but not limited toworkers' compensation beneficiaries. Another potential result maybe reduced services in state workers' compensation systems becauseof the financial requirements imposed by the addition of as many as20 million Medicaid-eligible individuals.

Disclaimers and Decrees

As virtually all authors who have considered PPACA and itspotential effects on workers' compensation readily admit, all ofthe concerns and analyses expressed at this time are speculative,hypothetical, and premature. No one holds a crystal ball toaccurately predict whether the act in its present form will surviveeven this year's election cycle, much less how it will all pan outin the future as different parts of the legislation come intoeffect. It clearly behooves us all to be aware of thepossibilities, however, and to take note of these changes as theyevolve.

Vermont, for one, has led the way in universal healthcare reformwith its “Green Mountain Care” legislation, which was approved onMay 26, 2011. The avowed purpose of that legislation certainlysounds laudable, as it is to “contain costs and to provide, as apublic good, comprehensive, affordable, high-quality, publiclyfinanced health care coverage for all Vermont residents…” Thelarger question, however, becomes whether those goals are bothachievable and mutually exclusive. Creation of the “single payer”governmental entity providing for all healthcare expenditures iswell on its way, and although the act as originally passedspecifically excluded “workers' compensation or similar insurance”from the definition of “health benefit plan” subject to the act'sinvolvement, integration of Vermont's workers' compensation systeminto that “single payer'” paradigm is likewise on track—althoughthe Commissioner of the State's Department of Labor apparently didnot meet the January 15, 2012, deadline to report on “aligning theworkers' compensation system with Green Mountain Care.”

Dispute Resolution

Mediation is a time-honored method of resolving disputedclaims—and workers' compensation is no stranger to its use.However, the frequency with which it has been exercised, and thedegree to which adjudicative bodies have deferred decision-makingand instead required parties to submit to alternate disputeresolution methodologies, has exploded in recent years.

Of course mediation allows the parties to participate in howtheir case will be resolved, rather than turning over the entiredecision-making process to another. A mediation session providesadequate time to narrow issues, focus the parties on the strengthsand weaknesses of their particular claims, and develop options forresolution. One of mediation's most crucial contributions isbringing about the psychological framework to allow a claim to beresolved, rather than drawing more lines in the sand of sometimesintractable litigation. Significant savings in terms of time aswell as expense can be appreciated through the mediation (ratherthan litigation) process.

Michigan provides an example of the new momentum that mediationhas gained throughout the nation as particularly applicable inworkers' compensation matters. Recently enacted legislation in thatstate—in December 2011, to be specific—requires that all claimsfiled with the agency administering such claims “shall be set formediation or hearing, as applicable,” and further that “if theagency or the Michigan administrative hearing system determinesthat a case may be resolved by mediation, the case may be mediatedby the parties (and) if the matter is not resolved by themediation, the case shall be set for hearing.”

Similarly, North Carolina's Industrial Commission has since theadoption of automatic referral procedures in 1996-97 sent an Orderfor Mediated Settlement Conference to all parties with theacknowledgement of the claim's filing. Montana similarly has aMediation Unit within its Workers' Compensation Claims AssistanceBureau, which provides a mandatory alternate method to resolvedisputed claims prior to involving the Workers' CompensationCourt.

Georgia, on the other hand, has a dedicated “Alternate DisputeResolution Unit” under the state's workers' compensation board,charged with resolving certain types of disputes without thenecessity of a formal hearing. Such issues include requests forchange of physician, disputes about payment of medical bills, whatconstitutes “suitable employment” in compensable claims, disputesregarding attorneys' fees, average weekly wage disputes, anddetermining the amount of permanent partial disability benefitspayable.

California may, in fact, be the most aggressive jurisdiction ofall when it comes to the use of alternate dispute resolutionmechanisms. In the Golden State, the workers' compensation systemhas become so overloaded that labor and management have beenauthorized to and have agreed to use a far-reaching andencompassing process to bypass the adjudicative system. Asdesigned, the new ADR initiative will be achieved by usingprovisions of California Labor Code section 3201.7 and otherrelevant laws to establish a Labor-Management Trust; employersafety groups injury and accident prevention; an exclusive list ofmedical providers, evaluators, vocational rehabilitation andretraining programs; and an exclusive list of other providers,including ambulance, radiology, hospitals, inpatient and outpatientfacilities, and other vendors that are needed to effectivelyimplement the program.

The Immigration Laws

Alabama joined South Carolina and Arizona on September 1, 2011,by adopting new immigration laws some media outlets have describedas “the most hateful piece of immigration legislation evercrafted,” prompting attacks by both religious groups and the U.S.Department of Justice.

The impact of these laws on workers' compensation systems willbe significant, and go to such fundamental issues as whether therecan even be an employer/employee relationship between anundocumented worker and his putative employer, and whether anundocumented worker can contract with an attorney for legalrepresentation in his claim or even enter into a compromisesettlement of his claim. The arguments for and against such lawsessentially boil down to whether one believes that strengtheningimmigration laws to exclude illegal workers from entitlement tobenefits would incentivize employers to hire illegal immigrantworkers, if doing so would avoid the risk of workers' compensationliability.

An exemplar case for this line of reasoning was the SouthCarolina Supreme Court's decision in the case of Curiel v.Environmental Management Services, 655 S.E.2d 482 (2007),which held an illegal immigrant worker was entitled to workers'compensation benefits, because to hold otherwise “would meanunscrupulous employers could hire undocumented workers without theburden of insuring them, a consequence that would encourage ratherthan discourage the hiring of illegal workers.”(Id. at 484).

Various challenges to these newly adopted state immigration lawsare presently winding their way through the court system. No one atthis point can necessarily predict the ultimate outcome. It isclear, however, that the present administration in Washington hasmade this issue a priority in this election year.

It is obvious that the world (as we knew it) no longer exists.But is the new reality a better place, or merely a different one?Only time will tell, but one thing is for certain: We have not seenthe last of these changes to our practice environment. Only thosepractitioners able and willing to adapt to change are destined tosucceed and prosper in its wake.