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November 29, 2014

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Legislature:

Hopes lowered for workers’ comp overhaul

Labor-friendly legislature aside, business will press recessionary concerns

Beyond the Sun

To hear the leader of the Nevada AFL-CIO tell it, the workers’ compensation system in Nevada is a crime, cheating employees out of treatment for legitimate injuries and all but encouraging employers to fire injured workers.

Danny Thompson says the system has been tinkered with session after legislative session, with lawmakers gradually tilting the balance of power toward business. With the Legislature in Democratic hands, a tilt back toward labor seems likely.

Sen. Maggie Carlton, chairwoman of the Commerce and Labor Committee, said Democrats in the upper chamber will offer a robust agenda on both workplace safety and compensation after a worker is injured.

“Once a worker gets hurt we need to figure how the system is working for them,” she said. “It’s time to sit down and get the players at the table and figure out if it’s working, — the whole system.”

Labor says changes, such as making it easier for workers to claim secondary injuries and making it more difficult for employers to fire injured workers without consequences, are necessary in an economic environment where workers are vulnerable.

Here’s how Thompson describes the system as it stands: “It’s not so much the compensation end of things, but the process. To get to the compensation you have to climb Mount Everest, and then they pour gas on it and light it on fire.”

While supporting some changes, business counters that the system is largely successful in helping injured workers, and says major changes could come with enormous costs that are unrealistic in a recession.

Bob Ostrovsky, who lobbies for the gaming industry and, as a former gaming company human resources executive is considered an expert on the issue, said employers are facing a terrible environment to take on more costs.

“What can we do that’s reasonable in this environment?” he said. “Employers are under a lot of pressure because of the economy.”

He said labor commonly uses anecdotal evidence to advocate for broad changes that would cost business, but he counters that, in general, “I think the system works well.”

Notably, the Gibbons administration has joined the cry for change.

The Business and Industry Department, with the backing of the Nevada AFL-CIO, introduced a bill that would ensure medical care for workers who are fired after an injury, a practice that labor leaders say is on the rise.

A department representative, testifying before the Assembly Labor and Commerce Committee this month, said the department had received “several thousand calls” from workers who had been terminated after filing a workers’ compensation claim. In some cases, employers had denied all compensation, including medical treatment, claiming employee misconduct.

Current law, Thompson said, provides an incentive for businesses to fire workers for injuries. The proposal would guarantee workers medical care regardless of any subsequent misconduct. “A legitimate on-the-job injury is a legitimate injury,” said John Jeffrey, who lobbies for Laborers Local 872 in Las Vegas. “Right now it’s too easy for businesses to abuse the system.”

Ostrovsky said industry is willing to compromise on legislation in that area but notes that a Supreme Court ruling makes it illegal to fire someone for filing a claim.

But workers compensation attorneys say they will almost never agree to take a case from a worker alleging he’s been fired because of injury, citing the difficulty of proving it in court. A legislative proposal would make it easier for workers to bring such cases by creating an administrative process to resolve them, with fines attached, which should make it more difficult for employers to fire injured workers, attorneys say.

Another area labor seeks to change is the claim acceptance process. Under current law, insurers routinely deny workers’ claims for secondary injuries, Thompson said. For example, a worker who files a claim for a broken leg and signs the insurer’s acceptance letter consequently forfeits his rights to claim any further injuries that may result from the initial accident.

“This is the latest way to screw people,” Thompson said. “I have seen case after case after case where a hearing officer ruled in favor of that argument.”

The proposed changes would make it easier for workers to reopen claims. Workers would need to prove only that the initial injury was a “substantial contributing cause” of the secondary injury, not the “primary cause.”

Ostrovsky said industry is open to “tweaking” this process but not wholesale change.

He pointed to cases wherein a worker has a knee injury and 20 years later is diagnosed with arthritis. Should workers’ compensation pay for arthritis care? These are medical questions that should be resolved by doctors, he said.

Most conspicuous in its absence thus far is legislation that would restore “bad faith” lawsuits against insurance companies or self-insured employers that knowingly violate the law. Such suits were outlawed during the course of workers comp privatization efforts in the 1990s. And soon thereafter, third-party administrators began telling Nevada insurers to deny all claims outright, Thompson said. About half of injured workers will appeal — and only half of that group will win, he said.

Prompted by workers or attorneys who seek sanctions, the state’s Industrial Relations Division occasionally levies fines against companies that violated the rules. But worker advocates say even the threat of a lawsuit that seeks serious damages would force problematic companies to meet deadlines in reviewing claims and sending checks.

Ostrovsky said industry would push back hard against legislation allowing these lawsuits, which he called a wish of the trial lawyer lobby.

“The state of workers’ compensation in Nevada is a crime,” Thompson said. “It’s a crime against its citizens and it’s driven by greed and it is not what it was intended to be and it needs to be fixed. We constantly have to fight off these attacks and fight for these changes that just make sense.”

The list of pent-up demands from injured-worker advocates to address what they say are serious weaknesses introduced into the system when it was privatized 10 years ago is long. It includes allowing injured workers to pick their own physicians and allowing workers to sue a contractor on a construction site other than their own employer for safety deficiencies that cause injuries or fatalities.

And yet, even with both legislative chambers under Democratic control, organized labor and its allies have tempered their expectations.

Ray Badger, a Reno workers’ compensation attorney who helped draft AB 178, a labor and trial attorney-supported bill introduced in the Assembly last week, acknowledged it’s a tough environment: “You’d have to be deaf to not understand that anything that’s going to charge a significant cost to management is going to be opposed because of the economic times.”

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