Alabama Workers' Compensation Reform Bill Not Likely to Pass
On April 2, 2015, Alabama Republican State Senators Del Marsh and Cam Ward submitted Senate Bill 330, which proposes drastic reforms to The Alabama Workers' Compensation Act. If the legislature passes SB-330 and Governor Bentley signs it into law, it would be the biggest change to the Act since the 1992 Amendments.�_The major proposed changes are outlined below. MY TWO CENTS: The last time we saw this many proposed changes to the Alabama Workers' Compensation Act was on December 9, 2011, when State Senator Arthur Orr (R-Decatur) pre-filed a bill (SB77) for the 2012 legislative session. That bill never made it out of the Senate Business and Labor Committee. I would not expect this bill to make it out of committee either. There are simply too many controversial suggested revisions lumped together into one bill for there to be any chance of success. In order for such broad sweeping change to take place, it will be necessary to form a committee where all interested parties are represented and then hammer out a bill that is mutually acceptable before it is filed. That is the process that allowed the 1992 amendments to become law.�_ If SB-330 becomes law, �_ 25-5-11.1 of the Act would be amended to make it illegal for an employer to terminate an employee where the "substantial motivating factor" for the termination is that the employee instituted or maintained a workers' compensation claim. Under the current law, the employee must prove that filing a workers' compensation claim is the sole reason for the termination. MY TWO CENTS: Alabama is an employment at will state. This means you can fire someone for a good reason, a bad reason, or no reason at all. We currently have an exception to that rule in �_ 25-5-11.1 when the employee can prove that he or she was terminated solely for filing a workers' compensation claim or filing a written notice of a safety rule. This means that if the employer had another valid reason for terminating the employee, then it is not considered to be a wrongful termination. If the employee can demonstrate that the other reason is a mere pretext, then it does not qualify as another valid reason and it would still be considered wrongful termination. To allow the new standard proposed above would have the effect of forcing employers to retain bad employees. It would also likely encourage more misconduct on the part of injured employees because of their new termination proof status.�_�_�_ �_ 25-5-56 would be amended to provide a presumption that any settlement would be in the best interest of the employee, so long as the employee is represented by a licensed Alabama attorney. Additionally, any proposed settlement rejected by the Court would be reassigned to another judge and any statements or arguments made by the parties, witnesses or judge at the settlement hearing where the settlement was not approved would not be admissible in subsequent proceedings. Additionally, �_25-5-56 would provide that advanced payments or payments of medical benefits of any kind shall not be considered an admission against interest or admission of liability. MY TWO CENTS: This is a good idea and would likely have unanimous support. The judge reassignment and confidentiality aspect of the bill was actually addressed by a committee appointed by then presiding judge of Jefferson County, Scott Vowell over 10 years ago. Both employee and employer interests agreed that it was a good idea and Judge Vowell adopted it as a local rule. The advanced payments aspect of the bill is already addressed by the Alabama Rules of Evidence. Evidence of such payments is already not admissible. �_ 25-5-57 would be substantially amended by increasing the number of weeks for permanent partial disability (PPD) benefits from 300 to 400 weeks. Additionally, permanent total disability (PTD) benefits would be cut off either after 500 weeks or after the employee attains 75 years of age _�_ whichever is longer. �_25-5-68 would be amended to completely remove the $220.00 per week statutory PPD cap, replacing it with a cap equal to 80% of the state's average weekly wage or 100% of the employee's pre-injury average weekly wage _�_ whichever is less. To put that in perspective, an employee earning $1,000 per week who suffers a back injury resulting in a 50% permanent partial disability would be entitled to as much as $150,000. Under the current law, the employee would be limited to a maximum of $66,000. MY TWO CENTS: The $220 cap is low and probably needs to be bumped up at least to some degree. However, there needs to be a conversation between employee and employer interests on how best to effectuate such change. Simply introducing a bill proposing such drastic change does nothing more than make such change impossible during this legislative session. The proposed caps on PTD are a good start on how to negotiate such change but there needs to be more discussion.�_ �_ 25-5-77 would be amended to provide that if an employee is dissatisfied with the initial treating physician selected by the employer and further treatment is required, the employee may select a new physician from a panel of six physicians selected by the employer (currently it is four). Additionally, �_ 25-5-77 would be amended to provide that if five years pass during which time an injured employee receives no medical treatment by his or her authorized treating physician for the injury, there would be a rebuttable presumption that any subsequent medical treatment would be unrelated to the injury. Additionally, after seven years without such treatment, there would be a conclusive presumption that the employee would not be entitled to any further medical treatment _�_ with previously implanted medical or prosthetic devices being the sole exception. There would also be new provisions providing for pain management treatment and requirements that an injured worker receiving controlled substances sign a formal written agreement with the pain management physician. Under the proposed law, if the employee violates the agreement, her or she may lose his or her right to further pain management treatment. Another new provision would allow employers to select the pharmacy where injured workers' get there prescriptions filled. MY TWO CENTS: It is hard enough to populate a panel of four in some of the more rural areas of Alabama. Requiring a panel of six could become impossible in some situations. Especially when you have an employee that gets kicked out of pain management or dismissed from the care of a treating physician for bad or inappropriate behavior. The five and seven year cut off periods sound nice but the reality is that we will see requests to return to the doctor every 4 years even when treatment is not needed. The pain management cut off aspect of the bill sounds nice except that it says may rather than shall. This means that it has absolutely no meat to it and renders the employer powerless to cut benefits when the employee is getting kicked out of pain management.�_�_�_ �_ 25-5-88 would be amended to provide that the Courts must enter judgment within ninety (90) days of any workers' compensation trial. Additionally, the bill would increase the maximum amount of attorney's fees an injured worker's attorney can charge, from 15% to 25%. It would also provide that a court can award up to 25% of the reasonable value of medical services, if the legal services provided for the injured worker are for the procurement of medical treatment previously denied. MY TWO CENTS: I have never understood why attorneys are limited to 15% on the award of indemnity benefits. I think that raising it is probably a good idea. However allowing a fee representing 25% of the reasonable value of denied medical services is a bad idea. If an employer exercised its right to deny a back injury claim and the judge subsequently ordered that it was compensable, the fee on the medical alone could end up being higher that the contingency fee on the indemnity award. Such an award would be more in the nature of a penalty and have the effect of scaring employers into paying for treatment that may not be owed. �_ 25-5-110 would provide compensation for psychological conditions which result from the hazards of the employment in excess of those ordinarily incident to employment in general, even if the psychological condition was not precipitated by a physical injury to the body. MY TWO CENTS: Alabama is a physical-mental state. This means you have to have a physical injury before you can successfully claim any type of psych condition. You do not have to have a significant physical injury but you have to have been physically injured at least to some degree. To allow employees to claim psych without the physical injury requirement would open the flood gates of psych claims. �_ 25-5-293 would be amended to require that utilization reviews be conducted by a board certified physician of the same specialty, licensed in Alabama. MY TWO CENTS: This would not be a terrible idea if it also included a presumption that such an opinion by a UR doctor would be considered to carry the same weight as the authorized treating physician. As it stands now, Alabama judges almost always side with the treating physician so it is unclear what this part of the bill is trying to accomplish. Changes to �_ 25-5-311 would amend the composition of the Workers' Compensation Medical Services Board. Instead of five licensed Alabama physicians, the Board would be comprised of two claims professionals chosen by the Alabama Workers' Compensation Organization (AWCO), two employer representatives chosen by the Alabama Counsel of Association of Workers' Compensation Self-Insureds' Fund, two physicians and two provider practice managers chosen by the Medical Association of the State of Alabama, four hospital representatives chosen by the Alabama Hospital Association, a physical therapist chosen by the Physical Therapist Association of Alabama, two "employee representatives", chosen by the Alabama Association for Justice (the trial lawyers), and one judge chosen by the Alabama State Bar. Medical providers, other than hospitals, would be reimbursed at a rate equal to an amount 7.5 % greater than the rate customarily paid by the largest health care service plan in the state. Hospitals would be entitled to a maximum reimbursement rate of 1.2 times the Medicare National Base Rate multiplied by the Diagnosis-Related Group Weight Value as published by Medicare. Brand name drugs would be reimbursed at a rate equal to the average wholesale price, plus $5.00. Generic drugs would be reimbursed at 30% less than the wholesale price, plus $5.00. Additionally, injured workers not be allowed to have the medication prescriptions filled in any facility or business establishment in which the prescribing physician has a financial interest. MY TWO CENTS: This probably gives us a good road map on how to form a committee that can actually effectuate change that is mutually acceptable to all. Without all interested parties at the table negotiating a true compromise, nothing is likely to ever be accomplished. For an example of how it was done in 1992, I suggest that you read the first four paragraphs of Tuscaloosa attorney Steve Ford's article New Alabama Workers' Compensation Act published inThe Alabama Lawyer in September of 1992. If you would like a copy, please shoot me an e-mail and I would be more than happy to send you one.�_�_ ----------------------------------------------------- ABOUT THE AUTHORS The summary of SB-330 was written by Charley Drummond and the My Two Centsportion was written by Mike Fish. Both are attorneys at Fish Nelson & Holden, LLC, a law firm located in Birmingham, Alabama dedicated to representing employers, self-insured employers, and insurance carriers in workers' compensation cases and related liability matters. The firm is a member of The National Workers' Compensation Defense Network (NWCDN), which is a national network of reputable law firms organized to provide employers and insurers access to quality representation in workers' compensation and related employer liability fields. If you have questions about this article or Alabama workers' compensation issues in general, please feel free to contact the authors at email@example.com, firstname.lastname@example.org, or (205) 332-3430.