May 2008

A consultant who determined that 14 percent of North Dakota workers’ compensation claims might have been inappropriately denied recommended Monday that claims handlers be given more discretion to decide cases involving “gray areas.”

The recommendation came as a legislative panel meeting in Fargo weighed the merits of building more discretion into a complex system for determining benefits that can comprise a lifeline for disabled workers.

“It’s a judgment call in some cases,” Anthony Walker, an executive for consultant Marsh USA, told legislative committee members in testimony given by telephone.

He noted that his firm came to a different conclusion involving legal interpretations in a dozen claims that had been denied by Workforce Safety and Insurance, the North Dakota workers’ compensation agency. In two other cases, claims files lacked documentation to determine whether denials were appropriate.

Many claims deemed inappropriately denied concerned work-caused aggravation of pre-existing injuries.

“We felt those claims could have been accepted based on our opinion,” Walker said.

Several states have laws that give claims handlers more discretion in deciding claims involving pre-existing conditions, within certain parameters, he added.

“Are we screwing it down too right so there’s no flexibility,” asked Rep. Elwood Thorpe, D-Minot, who said he believed there should be room for discretion in a system that deals with the “human element.”

Walker responded, “I think there might be some validity to that.” In all, the consultants’ review found 14 of 84 denied claims were inappropriately rejected.

The denials were from a sample of 475 claims over a recent three-year period, when the agency handled about 63,000 claims.

The discussion about how much discretion claims handlers should have came as injured workers testified about their experiences with what they portrayed as a bureaucracy that could be indifferent or even adversarial when dealing with their disability benefits. A common theme involved workers’ criticism of the agency’s reliance on so-called independent medical examiners who recommended denying their benefits based on incomplete medical information and cursory examinations that contradicted the advice of their treating physicians.

Workers also complained that they were required to follow inappropriate rehabilitation or training programs, sometimes on the advice of a physician.

The penalty for noncompliance: loss of benefits.

So far, more than 50 injured workers have contacted the North Dakota Legislature’s interim Industry, Business and Labor Committee, which is exploring workers’ compensation reforms.

John Bjornson, a lawyer for the North Dakota Legislative Council, said claims involving pre-existing conditions were by far the leading cause of complaints, comprising perhaps 40 percent of grievances.

Other complaints included poor communications, complaints about mishandled claims, independent medical examiners and inability to hire lawyers, and doctors who refuse to take workers’ comp cases rounding out the list, Bjornson said.

“The lawyers don’t get anywhere, the doctors don’t get anywhere,” said Denise Locnikar of Fargo, one of the injured workers who testified Monday. “They don’t listen to my doctors.”

Darren Knutsvig, a disabled electrician from Buxton, said his benefits stopped when he refused to go to school, after his doctor told him he must take frequent breaks because of back and leg pain. He has been forced to get assistance from other services.

“You’re just putting more stress on the social services of the state,” Knutsvig told legislators.

Sen. Terry Wanzek, R-Jamestown, said the inappropriately denied claims probably involve just 1 percent of all claims. He said the challenge is to better focus on the complex cases, and wondered how other states handle those cases.

Gordy Smith, a state auditor who is overseeing a performance review of workers’ compensation, said a 1-percent inappropriate denial rate could translate into more than 200 improper denials a year, sometimes with catastrophic results, based on workers’ testimony.

The CIWS has pointed out how, in Canada, the same things are happening - the culture of denial, the misuse of so-called "independent" medical examiners, the adversarial bureaucracy, the inappropriate rehabilitation or training programs and the downloading onto other social programs.