The Second Injury Fund in Missouri continues to teeter on the edge of complete insolvency.  Note this excellent article on the subject from Jason Hancock of the St. Louis Post-Dispatch.

Missouri injury fund refusing to pay, heading for insolvency

BY JASON HANCOCK • jhancock@post-dispatch.com > 573-635-6178 | Posted: Monday, June 6, 2011 12:21 am | (58) Comments

JEFFERSON CITY • Diabetes is something Mark Brumfield has been dealing with since he was 6. And even though it has caused numerous medical problems throughout his life, the Affton resident, 56, has always been able to work.

He was a custodian at St. Catherine Laboure Parish for years, continuing to work even after blisters on his feet got infected and resulted in toe amputations in 2005 and 2007. That all changed in June 2008 after he slipped and broke his hip while preparing to wax the floor of the school.

“I’ve done that job for years with no problem, but that stuff is so slippery, all it takes is one bad step,” Brumfield said.

He was ruled permanently totally disabled and eventually began receiving about $800 a month in disability payments. After three years, he also was awarded a little more than $300 a week out of the state’s Second Injury Fund, which covers certain workplace injuries that aggravate pre-existing disabilities.

But instead of receiving his first check from the state, he got a letter from the attorney general’s office saying Missouri couldn’t afford to make his payments.

“His case has been tried, there was no appeal, and this was a final decision,” said Phil Hess, Brumfield’s lawyer and president-elect of the Missouri Association of Trial Attorneys. “Yet he’s not being paid.”

Brumfield is among 55 workers who were left permanently disabled after a workplace injury and who are owed money out of the Second Injury Fund — but who are not getting paid.

To keep the fund from becoming insolvent, Attorney General Chris Koster decided in March to withhold paying any new permanent total disability awards. And with 28,000 pending claims against the fund, the number of people owed state money is expected to grow.

Despite warnings from Koster that the fund could go broke by year’s end, lawmakers last month adjourned for the year without passing legislation addressing the problem. Koster said this will likely result in some hard choices in coming months.

“All options involve some party not being paid what’s owed them,” Koster said.

That could mean more permanently disabled workers not getting paid, layoffs in the attorney general’s office or a combination of both, observers say.

“As the fiscal crunch gets deeper and deeper, they’ll start shifting back the people they can’t pay to include individuals who have already started getting checks,” Hess said. “Those folks are at risk of losing their payments, and those folks are terrified.”

FUNDING LAGS

The Second Injury Fund was established after World War II to encourage businesses to hire veterans who returned from the war with some disability but who could still work.

It has been a hot topic in political circles since former Attorney General Bill Webster and a group of St. Louis attorneys were caught up in a federal investigation over misuse of the fund in the early 1990s.

The fund’s solvency has been in question since 2005, when lawmakers placed a cap on its revenue source. Businesses pay a 3 percent surcharge on their workers’ compensation insurance to fund the payouts to injured workers.

That 2005 law was intended, in part, to lower workers’ compensation rates for businesses, and it has been successful in that regard. But because of the 3 percent cap, the funding for the Second Injury Fund hasn’t kept pace with claims made against it.

The fund began the 2006 fiscal year with a nearly $40 million balance. By May 2011, Koster said, the fund had about $7 million — and that’s only because of the $3.5 million being withheld from new permanently disabled workers since March.

“If we paid those and the other payments we need to make, the fund would be under water. Since September 2009, we’ve been paring back where we can just to keep the lights on,” Koster said, referring to his decision in 2009 to stop settling Second Injury Fund cases, sending all claims to litigation.

By year’s end, if all liabilities against the fund are paid, it will be $20 million in the red, Koster said. Also, there are about 28,000 pending claims against the Second Injury Fund, with about 700 new claims filed each month.

Legislation aimed at solving the funding problem won support from groups ranging from the Missouri Association of Trial Attorneys to the Missouri Chamber of Commerce and Industry. It would have eliminated the fund and shifted all claims to the Workers’ Compensation System. The cap on the 3 percent surcharge would have been temporarily lifted and allowed to float as needed each year to cover existing claims. That surcharge would have eventually shrunk to zero.

Disagreements in the business community doomed the plan. The Associated Industries of Missouri decried it as “the largest tax and government-imposed cost increase on Missouri employers in Missouri history.”

Richard Moore, director of regulatory affairs for the Missouri Chamber, said calling the change a tax increase is misleading. While the plan would have resulted in higher workers’ compensation costs for businesses, it was still far less expensive than doing nothing.

That’s because of a pending federal lawsuit filed by three disabled workers who fear they are at “imminent risk” of being deprived benefits if the fund becomes insolvent. A fourth plaintiff, who like Brumfield has been awarded payments from the Second Injury Fund but is not getting paid, recently joined the lawsuit.

“By enforcing the cap on the surcharge, which everyone agrees is inadequate, the state is depriving people of their property,” said John Boyd, a Kansas City attorney representing plaintiffs in the federal lawsuit.

The judge in the case could rule the surcharge cap unconstitutional, allowing the state to raise the rate employers pay to a level that is sufficient to cover all liabilities.

Another option, Moore said, would be for the judge to order the state to cover the liabilities regardless of the surcharge, putting taxpayers on the hook for millions.

“I anticipate other people are going to file suit as well,” Moore said. “And ultimately, a judge could decide how the state ends up fixing the problem.”

In addition to the pending lawsuit, Moore fears the attorney general’s office, in an effort to keep making payments, will be forced to lay off employees who defend the fund.

Moore points out that 60 percent of claims against the Second Injury Fund are dismissed and result in no payments. If the attorney general’s office has no one left to handle the cases, people filing claims could “get everything they asked for,” he said.

‘TWO-YEAR BILL’

Koster reiterated that there has been no final decision on how to keep the fund in the black.

Gov. Jay Nixon could call the Legislature back into session this summer to focus on the Second Injury Fund. But Nixon appeared to rule out the idea at a press conference last month when he called proposed fixes a “two-year bill,” meaning one year to educate lawmakers on the problem so that legislation can be passed the next year.

For Mark Brumfield, the situation could be worse. He tried to return to work but found he wasn’t physically able. And poor eyesight, another condition caused by his diabetes, keeps him from moving to a desk job. He currently shares a duplex with his sister, splitting expenses with her and trying to “live cheaply.” He’s in a much better situation than a lot of folks, he said, but he worries about the future.

“Right now, I’m not under financial distress,” he said. “But I want to make sure I can provide for myself down the road.”

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As an attorney handling Car Accident Injury cases, “Work Comp” cases and Social Security Disability claims, I find it challenging to balance the demands which are made on my time.  First, it is important to accomplish results.  As an attorney, you may be a nice guy, but you were hired to accomplish the best possible result for your clients.  This requires meticulous attention to detail.  Every day pages and pages of medical records run across my desk for review.  In addition, time needs to be made to think through a game plan for determining how each case needs to be approached.  You must be more prepared than your opponent, and not paying attention to detail can cause heartache to an attorney, or perhaps, even worse, a heart attack!  Also, a lot of time must be spent when legal research needs to be done.  Secondly, time has to be spent reading and keeping up with developments in your field because the law is constantly changing and being reinterpreted by the courts.  When you meet with someone, they aren’t interested in what the state of the law was six months ago, they want to know how good their case is now.   Thirdly, it takes time to manage your own personnel,  to make sure that you are complying with all of the requirements of running a law office, and to evaluate the directions and trends in your field.  After all, you must manage people, pay their salaries and benefits, pay your taxes and make sure that you are in compliance with numerous requirements of running a law office.  Fourthly, you must allow time for evaluating new cases and meeting with new people.  Unfortunately, what is often missing is giving personal attention to clients.  There is no easy way to put the “personal“ back in personal injury claims.  It requires a consistent effort to take time out of every busy day in order to report back to the people who are placing their trust in you.  Any true personal injury attorney will only get this done working long days, including weekends.  In short, the only way to put the personal in personal injury  is through dedication and hard work.  Come to think of it, this is no great secret and it is the common ingredient in all successful businesses.  So the question is “Is your attorney too busy to call you back?” Submitted by Jeff Swaney FREE CONSULTATION 314-481-7778

Very few injuries that we commonly see can change a claimant’s life as dramatically as a “herniated disc”. Many similar terms are used almost interchangeably like “ruptured disc” , “disc protrusion” and “herniated nucleous pulposis”.Doctors often describe disc as being like a”jelly donut” between the vertebrae.When the disc material inside of the disc leaks out and touches on the”sciatic nerve”, severe pain often travels down the injured worker’s leg. Sometimes other structures are affected, like the “spinal cord” or the “spinal canal” .Disc injuries are most common found in the low back and neck and rarely occur in the mid-back. We see alot of lumbar “laminectomies”in workers who do alot of heavy lifting. A laminectomy or a micro -discectomy will often produce good results and in many instances injured workers will be able to return to rigorous  work. If surgery is unsucessful,  a lumbar or cervical “fusion” may be needed. This often occurs with a condition called “spondylolithesis” which involves a slippage o   a vertebrae. In order to diagnose a disc problem an “MRI” is usually needed. If a condition is diagnosed as a “disc bulge” doctors wil normally try treating the condition with physical therapy or steroid injections.If the MRI is negative, doctors may determine that they are dealing with a strained or sprained back or neck. Where surgery is contemplated, doctors will normally do a test called a “myelogram’ with a “cat scan” in order to get the best possible look at the problem. In those cases where multiple surgeries have been performed and a “fusion’ is the ultimate outcome, some injured workers may become “permantly totally disabled” which means that they are unable to work or compete in the “open labor market”. Everyone is different and it is difficult to generalize. I once had a client who had five surgeries, including a disc fusion,who had a body like Charles Atlas and was running 5 miles a day! In any event, if you are confronted with a serious back or neck injury, it is important to ask your attorney about the reputation of the doctor who is treating you.  submitted by Jeff Swaney FREE CONSULTATION 314-481-7778

Over the years, I have handled numerous Missouri and Illinois “work comp” injury cases. It often surprises injured workers to find that they can pursue their case in both states.  Sometimes we will have an injured worker who is employed in St. Louis, but who is injured, for example, in Belleville, Alton, or Granite City, Illinois. Under these circumstances, the worker can pursue their case in both Illinois and Missouri. As an attorney, I will usually file a claim in both states and eventually determine which state is most favorable.  In Illinois Workers’ Compensation cases, a worker can choose their treating doctor, which is certainly an advantage.  There are also more favorable circumstances where an emloyee can’t return to their former employment and needs vocational rehabilitation.  In addition, there are higher maximum rates for temporary total disability, permanent partial disability and permanent total disability benefits.  However, for employees who are not as highly paid, the permanent partial disability rates are based on 60%, rather than 66 2/3%, as is the case in Missouri.   Missouri Workers’ Compensation also has a special benefit called the “Missouri Second Injury Fund” which often provides extra compensation for a wide variety of pre-existing conditions.” Illinois Comp” tends to favor highly compensated workers who are seriously injured.  “Missouri comp” tends to favor less highly compensated workers and workers with significant pre-existing disabilities.  If you qualify for benefits in both states, it may be helpful to hire an attorney who is licensed in both states. There are a multitude of other factors which may come into play, such as attorney’s fees which are 20% in Illinois versus 25% in Missouri.  Also the venue, or place where your case comes up for hearing, will influence your attorney’s strategy.  My advice- ask your attorney if he practices in both states! Submitted by Jeff Swaney FREE CONSULTATION 314-481-7778

Whenever an employee is injured, a report of injury is to be filed with the State of Missouri.  If an employee chooses, he may file a claim for compensation with the Workers’ Compensation division.  His case will then be assigned to one of the state offices and eventually proceedings will be scheduled in front of a judge.

As part of the claim for compensation, an employee can request to be compensated by the State of Missouri for pre existing injuries and disabilities.  The basic concept is that an injured employee may be affected by other injuries and disabilities which pre existed the work injury.  For example, I recall representing an employee many years ago who had a rotator cuff tear injury to his right shoulder.  Under normal circumstances, this would be a significant injury, but the employee had been afflicted with Polio, as a child and had little or no use of his left arm.  He had managed to work in a factory setting performing all of his work with one arm.  As  you can imagine, the injury to his right shoulder had created complications because his only “good” arm was now injured.  He relied on his right arm for everything and now he was suffering from an injury which limited what he could do.

I filed a Second Injury Fund claim on behalf of the injured worker and we were eventually able to enter into an additional settlement above and beyond what the insurance company paid.  If you are injured on the job, any pre existing disabilities should be considered regardless of their cause.  An experienced attorney can then analyze all of your medical records in order to determine your eligibility for additional benefits. Jeff Swaney FREE CONSULTATION 314-481-7778

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