“Protecting the Fund”: How a legitimate obligation of the Bureau of Workers’ Compensation is often used as an excuse for unfair treatment of injured workers while at other times is ignored to the systems detriment.
No one denies that the Bureau of Workers’ Compensation has a legal obligation to protect the fund that supports the Ohio Bureau Workers’ Compensation system. That being said, how the obligation to protect the fund should be interpreted is unquestionably a matter of disagreement. In my opinion, protecting the fund should be defined as follows: The Bureau of Workers’ Compensation has an obligation to make sure that the fund contains an adequate amount of money to compensate legitimate workers’ compensation claim; this obligation, of course, would require the BWC to make sure that claims and costs that are not legitimate are not paid for. I do not believe this should be a contentious definition. The Bureau of Workers’ Compensation can make sure that legitimate claims are covered and claims that are not legitimate are not covered. Unfortunately, with every passing year, it appears that the BWC defines its obligation different than I define it. Instead of the innocuous definition I have offered, the BWC often conducts its business as if its obligation to “protect the fund” is actually an obligation to limit expenses at all costs; i.e. the legitimacy of claims is secondary to whether there is any chance of avoiding responsibility of paying for those claims. Sometimes this tactic saves the BWC money, and sometimes it does not (most often through costs arising from delaying approval of treatment which is ultimately approved). In all truth, the BWC’s tactics probably do save the system more money than it would pay if it approached the system as per my definition. But the BWC should not merit credit for this result. Paying out as little money as possible is not the BWC’s mission; making sure the fund is viable is the BWC’s mission and this is a message that the BWC seems to have forgotten.
Examples of the Bureau’s strategy are rife in the system. From setting up a system where even the most straight forward medical procedures can take months to approve to the proclivity of BWC attorneys to show up at hearings to argue against the interests of injured workers far more often than they show up to support injured workers (even when the legal issues are clear), the BWC shows an inclination to put the interests of the fund ahead of the interests of achieving the proper results. It’s unfortunate that this is the case, because the BWC could unquestionably preserve the fund and create a fair system. It is possible that it would cost slightly more to run that system, but it is not exactly like the Bureau is running at a deficit. As we all know, the BWC has been returning money to Ohio employers at unprecedented rates. While these refunds may be prudent for politicians who want to tout the money they returned to employers, returning money to employers is not the BWC’s mission; its mission is to run a fair workers compensation system. Making sure that inappropriate costs are not sustained within the system is obviously a part of that role. But that role should not include trying to deny appropriate work-related costs. The BWC has the power to set premiums, and if feels like it somehow cannot pay for appropriate work-related costs through what it has, its fiduciary duty allows it to adjust premiums. While such a move – unnecessary as it would seem given the aforementioned budget surpluses – would be unpopular among many employers, it is a much more fair exercise of the BWC’s duty to protect the fund than its current efforts to prevent payments in legitimate claims.
It should be noted that the Bureau’s mindset on protecting the fund my fighting spending does not uniformly accomplish the Bureau’s goal. In fact, two common scenarios come to mind where the BWC likely costs itself a great deal of money trying to limit expenditures. The first, as noted before, is giving such broad latitude to MCOs to deny treatment that even the most obvious forms of treatment are often denied when first requested. The result of this format is, that by the time treatment is ultimately approved, additional money has often been spent on lost time compensation. Moreover, future costs are often impacted because delays in treatment routinely create suboptimal results that require more expenditure on treatment later. To the BWCs credit, they are experimenting with some measures to hopefully speed up treatment approvals. Unfortunately, from what I have been told about these changes, they focus on return to work measures only, and ignore the elephant in the room when it comes to the mishandling of treatment, MCO’s deny first and ask questions later approach to treatment approvals. The second obvious place where a warped vision of protect the fund hurts the system is in settlements, most notably in regard to high-value settlements. The BWC’s approach to high-value settlements has little to do with the Bureau’s exposure and focuses instead on instilling fear into its employees of spending “too much “ money to settle a claim. This is because settlement personnel seem to be only judged on the settlements they reach rather than the settlements they do not reach. Because of this, BWC employees fear to offer fair value on high dollar claims. They know they might face repercussions if the claim settles at a value someone later deems “too high” but won’t face any consequences if the claim later goes on to costs the system a boatload of money. The result is a system that can best be described as focused on “fleecing the desperate;” i.e. the highest value claims are hard to settle, and only ones that do involve claimants that are so desperate that they are willing to let the Bureau take advantage of them. Fleecing injured workers, of course, is a practice the BWC should not be engaged in – it is clearly not the function of what is supposed to be an even-handed governmental administration. However, anyone who has dealt with the BWC’s settlement policies in high-value claims is acutely aware that its current policy can clearly be described as “if you can’t fleece the injured worker” do not settle the claim. The end result is most often that high dollar claims do not get settled, even when it would be in everyone’s best interest to do so. The end result is that the BWC holds on to its most expensive claims when it could close many of those claims, and save itself money, by simply settling at fair value. Many of us have heard higher-ups at the BWC complain of having a glut of “long tail” claims, but the existence of so many of these claims is the BWC’s own fault. By trying to squeeze injured workers so hard on a settlement, they are failing to get high-value claims settled, and in the end, they are eating costs on claims they could have gotten out from under.
While some of the BWC’s more execrable policies are likely costing the system money, whether or not money is spent or saved really should not be the point when it comes to the BWC’s duty to protect the fund. The duty to protect the fund should be defined simply – it means that the Bureau of Workers’ Compensation should make sure that it collects enough money to cover treatment and compensation related to the states legitimate workers’ compensation claims. Unfortunately, this is not how the BWC has been defining its responsibility for many years. The BWC has instead chosen to define protecting the fund as fighting to avoid spending money. The result is that the system has turned into an adversarial competition between the Bureau and its customers (the injured workers) where legislatively no adversarial relationship was intended. The fix to this problem is simple. The BWC should focus on fair results rather than on what money it spends. As noted before, the system is set up in a way that allows the Bureau to collect what it needs to by setting premiums accordingly. This is what protecting the fund really means – it means the BWC should do what is right, not just what saves money. It would be nice to see the BWC’s actions reflect its true mission on this accord.