One of the singular promises made by President Obama when elected in 2008 was that “change” was destined to permeate the landscape of America. Certainly those within the discrete world of workers' compensation have witnessed volumes of that “change” blossoming at many points throughout the practice. Several of the most salient varieties that have emerged within the past several years include healthcare reform, alternate dispute resolution, and immigration legislation.

The watchword of the 2012 election cycle has been “Obamacare.” Of course, this references the push at the national level to address the high cost of healthcare in America and the resultant drain on the U.S. economy. Washington's official response—and arguably its most comprehensive effort—has been the passage of the Patient Protection and Affordable Care Act (PPACA) in December 2009. At more than 2,500 pages and 500,000 words in length, the act is weighty in both actuality and intention, and it is regarded by many as the most dramatic maneuver to address healthcare in the U.S. since the adoption of Medicare and Medicaid in the 1960s.

One could say PPACA has drawn praise and criticism in equal measure. Its complexity has created confusion, frustration, false expectations, and conflicts about the extent of implied coverage and impact. The legislation has already faced numerous legal challenges, including filings principally regarding the “individual mandate,” which requires individuals to either purchase health insurance or else pay a fine to the U. S. Treasury, along with the “employer mandate,” under which employers with more than 50 employees will pay a fine if any full-time employee qualifies for federal healthcare subsidies). The U.S. Supreme Court has scheduled oral arguments for an unprecedented two days—March 26 and 27, 2012—meaning that a decision will likely be announced prior to the November elections.

Real Implications of National Healthcare Reform

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

Suffice it to say, all parties can agree that no one truly knows the full impact this far-reaching legislation may have on workers' compensation systems in the future. One immediate and direct result of the PPACA was found in the Black Lung Benefit Entitlement Provisions, which will make it easier to file claims for and to obtain benefits; will increase the benefits payable for such claims; and will increase future insurance premium costs for those affected industries. In addition, changes in Medicare reimbursement levels are expected to result in cost impacts for those states that use Medicare as a basis for reimbursements in their respective state fee schedules for medical providers.

Other potential effects: there may be less utilization of workers' compensation medical treatment for pre-existing conditions, if individual healthcare is indeed available to more people; promotion of wellness initiatives may reduce the incidence and duration of workers' compensation claims; provisions making generic drugs more available sooner in the process may result in lowered pharmaceutical expenses in workers' compensation claims; and new taxes are expected to be levied on drug manufacturers, medical device manufacturers, and health insurance companies—for which there can be an expected trickle down to consumers. The act's fraud-and-abuse prevention provisions are far-reaching and touch nearly every aspect of the provision of healthcare services—enforcement and penalty provisions in the act may raise compliance across the board. One perhaps unanticipated result of the increased availability of medical care to previously uninsured individuals may be a concomitant reduction in access to healthcare by those already “in the system,” including but not limited to workers' compensation beneficiaries. Another potential result may be reduced services in state workers' compensation systems because of the financial requirements imposed by the addition of as many as 20 million Medicaid-eligible individuals.

Disclaimers and Decrees

As virtually all authors who have considered PPACA and its potential effects on workers' compensation readily admit, all of the concerns and analyses expressed at this time are speculative, hypothetical, and premature. No one holds a crystal ball to accurately predict whether the act in its present form will survive even this year's election cycle, much less how it will all pan out in the future as different parts of the legislation come into effect. It clearly behooves us all to be aware of the possibilities, however, and to take note of these changes as they evolve.

Vermont, for one, has led the way in universal healthcare reform with its “Green Mountain Care” legislation, which was approved on May 26, 2011. The avowed purpose of that legislation certainly sounds laudable, as it is to “contain costs and to provide, as a public good, comprehensive, affordable, high-quality, publicly financed health care coverage for all Vermont residents…” The larger question, however, becomes whether those goals are both achievable and mutually exclusive. Creation of the “single payer” governmental entity providing for all healthcare expenditures is well on its way, and although the act as originally passed specifically excluded “workers' compensation or similar insurance” from the definition of “health benefit plan” subject to the act's involvement, integration of Vermont's workers' compensation system into that “single payer'” paradigm is likewise on track—although the Commissioner of the State's Department of Labor apparently did not meet the January 15, 2012, deadline to report on “aligning the workers' compensation system with Green Mountain Care.”

Dispute Resolution

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

Of course mediation allows the parties to participate in how their case will be resolved, rather than turning over the entire decision-making process to another. A mediation session provides adequate time to narrow issues, focus the parties on the strengths and weaknesses of their particular claims, and develop options for resolution. One of mediation's most crucial contributions is bringing about the psychological framework to allow a claim to be resolved, rather than drawing more lines in the sand of sometimes intractable litigation. Significant savings in terms of time as well as expense can be appreciated through the mediation (rather than litigation) process.

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

Similarly, North Carolina's Industrial Commission has since the adoption of automatic referral procedures in 1996-97 sent an Order for Mediated Settlement Conference to all parties with the acknowledgement of the claim's filing. Montana similarly has a Mediation Unit within its Workers' Compensation Claims Assistance Bureau, which provides a mandatory alternate method to resolve disputed claims prior to involving the Workers' Compensation Court.

Georgia, on the other hand, has a dedicated “Alternate Dispute Resolution Unit” under the state's workers' compensation board, charged with resolving certain types of disputes without the necessity of a formal hearing. Such issues include requests for change of physician, disputes about payment of medical bills, what constitutes “suitable employment” in compensable claims, disputes regarding attorneys' fees, average weekly wage disputes, and determining the amount of permanent partial disability benefits payable.

California may, in fact, be the most aggressive jurisdiction of all when it comes to the use of alternate dispute resolution mechanisms. In the Golden State, the workers' compensation system has become so overloaded that labor and management have been authorized to and have agreed to use a far-reaching and encompassing process to bypass the adjudicative system. As designed, the new ADR initiative will be achieved by using provisions of California Labor Code section 3201.7 and other relevant laws to establish a Labor-Management Trust; employer safety groups injury and accident prevention; an exclusive list of medical providers, evaluators, vocational rehabilitation and retraining programs; and an exclusive list of other providers, including ambulance, radiology, hospitals, inpatient and outpatient facilities, and other vendors that are needed to effectively implement the program.

The Immigration Laws

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

The impact of these laws on workers' compensation systems will be significant, and go to such fundamental issues as whether there can even be an employer/employee relationship between an undocumented worker and his putative employer, and whether an undocumented worker can contract with an attorney for legal representation in his claim or even enter into a compromise settlement of his claim. The arguments for and against such laws essentially boil down to whether one believes that strengthening immigration laws to exclude illegal workers from entitlement to benefits would incentivize employers to hire illegal immigrant workers, if doing so would avoid the risk of workers' compensation liability.

An exemplar case for this line of reasoning was the South Carolina 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 mean unscrupulous employers could hire undocumented workers without the burden of insuring them, a consequence that would encourage rather than discourage the hiring of illegal workers.”(Id. at 484).

Various challenges to these newly adopted state immigration laws are presently winding their way through the court system. No one at this point can necessarily predict the ultimate outcome. It is clear, however, that the present administration in Washington has made 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 seen the last of these changes to our practice environment. Only those practitioners able and willing to adapt to change are destined to succeed and prosper in its wake.

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Obamacare and Emerging Workers&rsquo; Compensation Trends

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