Article cited to keep up with GM bankruptcy and its affect on workers compensation claims. JEFF SWANEY FREE CONSULTATION 314-481-7778
(June 1, 2009 – Madison, WI) Self insurance directors had a jolting start to their work week as headlines of General Motors bankruptcy petition filled the news yesterday. The so called “first day motion” to the court included a petition to continue wages and benefits to GM’s workforce. As part of this motion, General Motors’ management took the position that payment for all workers’ compensation benefits, whether for future or past claims, was in the best interest of preserving the commitment of its labor force. Thus, the petition calls for the payment of all workers’ compensation benefits for any of its past or present employees, administrative expenses, and any workers compensation insurance premiums due, with exceptions for certain states, as noted below.

The petition before the court includes workers’ compensation liabilities for active plants and operations, as well as incurred claims for ongoing workers’ compensation benefits in many jurisdictions where operations have ceased. According to the petition, the magnitude of past claims is enormous:

As of the Commencement Date approximately 12,500 workers’ compensation claims were pending against the Debtors. The Debtors estimate that the aggregate amount payable on account of incurred but not yet paid claims and IBNR claims arising prior to the Commencement Date is approximately $1.47 billion. Of course, not all of this amount is immediately due, but rather would be payable throughout the succeeding months and even years. The Debtors estimate that cash payments for the next 12 months related to prepetition workers’ compensation claims will be approximately $240 million.

The formal request to honor these past payments is stated as follows:

A GM official commented that Alabama, Georgia, New Jersey, and Oklahoma were omitted because they have no current GM operations. However, Greg Krohm, Executive Director of the IAIABC notes, “Even if collateral or surety coverage is sufficient to pay all future claims, there is likely going to be at least a few weeks delay in initiating payments in these four states. Moreover, the adequacy of security at ultimate payout is not guaranteed.”

How quickly the court will respond to the petition is unclear. If the Bankruptcy Court of the Southern District of New York rules that evidentiary filings and hearings are called for, turning claims over to sureties or third party administrators will inevitably result in some interruptions in benefit payments. The company rationale to the court for priority preference for these claims is:

“If unopposed, this first day petition is likely to be granted. However, if creditors object the matter may be reopened,” according to Robert Aurbach, Principle, Uncommon Approach.

Chrysler sale   An interesting article regarding Chrysler’s workers compensation concrens. JEFF SWANEY FREE CONSULTATION 314-481-7778

This is an interesting case which states that Social Security Judges cannot act as doctors in denying a social security claim.
FREE CONSULTATION 314-481-7778

Social Security: Denial Of Benefits – Mental Disability – Medical Noncompliance

Pate-Fires v. Astrue (MLW No. 59069/Case No. 07-3561 – 22 pages) (U.S. Court of Appeals, Eighth Circuit, Bye, J.)

Where an administrative law judge denied the application for disability benefits and supplemental security income of a claimant with mental impairments based on his determination that she could perform her past relevant work as a retail store stocker, the medical evidence proved that the claimant suffered from a severe mental impairment and could not engage in gainful employment, and the ALJ’s contrary conclusion was not supported by substantial evidence because the claimant’s treating doctor found her to be disabled and the ALJ improperly disregarded the doctor’s opinion based on his own conclusion that the claimant’s drug use and refusal to take her medicine precluded a finding of disability.
Judgment is reversed and remanded.

‘Playing doctor’

“The ALJ’s conclusion Pate-Fires’s medical noncompliance was not justifiable and precludes a finding of disability is not supported by substantial evidence. Further, the ALJ’s determination Pate-Fires’s medical noncompliance is attributable solely to free will is tantamount to the ALJ ‘playing doctor,’ a practice forbidden by law.”

Improper basis

Dissenting opinion by Shepherd, J.: “I respectfully dissent from the majority’s conclusion that remand for an immediate award of benefits is the appropriate remedy in this case. At step four of the sequential evaluation process, the ALJ decided that Pate-Fires retained the residual functional capacity to perform her past relevant work ‘The majority finds that the ALJ reached this step-four conclusion in error. Specifically, the ALJ relied on an improper basis to reject Dr. Erby’s opinion, and substantial evidence did not support the ALJ’s conclusion that Pate-Fires’s medical noncompliance precluded a finding of disability’ To the extent the majority’s decision to reverse the judgment of the district court is based on these errors in the ALJ’s step-four analysis, I concur.”

Judgment is reversed and remanded.
y claim.

When the  Missouri Legislature passed “Work Comp” reform in 2005 the goal was to payback insurance companies and business groups for their support. The winner always gets the spoils, but this time fairness and common sense had to take a far back seat to expediency. Older workers were punished -for aging!!  Section 190, subsection 3 states that ”Any award of compensation shall be reduced by an amount proportional to the permanent partial disability determined to be a preexisting disease or condition or attributed to the natural process of aging sufficient to cause or prolong the disability or need of treatment. Reduced by “the natural process of aging!” Believe it or not,the intent of the legislature was to punish workers for the natural aging process.

When do we punish people for aging? From the age of 35? What about 20? Why doesn’t a worker get a bonus for healing faster, if he is young? Every middle aged worker is going to have some arthritis, or may have diabetes or some frailness as time goes on. Now the older worker is to be penalized if his “natural aging” prolongs his disability or treatment. So if you don’t bounce back at 50 the way you did when you were 25 because your body has become more frail, then the insurance company should be able to make you pay for your own treatment and at the same time cut off your lost time benefits. Where’s the outrage from groups life AARP and other advocates for older citizens? Too bad we can’t reduce the pay of Missouri legislators as they get older! Nevermind, they always stand up for themselves when it comes to their own pay raises and retirement benefits, but there is no common sense when it comes to injured workers.

The Fair Debt Collection Practices Act was passed by Congress in 1977 to protect consumers from the abusive and unscrupulous tactics employed by debt collectors and collection agencies in their efforts to collect debts. Its primary purpose was to protect those consumers who had experienced difficulty and fallen behind on their debts from these abusive practices and to make sure that those consumers were treated with respect, dignity and honesty by these agencies. This well-written column by Michelle Singletary of the Washington Post provides an excellent insight on how the process should work. Unfortunately, for most consumers, the behavior suggested by Ms. Singletary is usually lacking when it comes to debt collectors and collection agencies.

Feel free to contact Bob Healey for more information and a free consultation at (314) 481-7778 or at his email address rhealey@swaneylawfirm.com

Collect debt, the right way

By Michelle Singletary

Washington Post Writers Group

Sunday, May 10, 2009

WASHINGTON — Whenever people ask me what they should do about their debts, I encourage them to call their creditors and do what they can to make good on their promise to pay. Morally, that’s the right thing to do.

I also believe debt collectors have a moral obligation to treat debtors honorably and with respect. Just because someone is a debtor doesn’t mean he or she is a deadbeat. However, there is enough evidence that far too many debtors are treated abusively by debt collectors.

To address this problem, the Federal Trade Commission is recommending essential changes to how companies collect past-due obligations. Since 2007, the FTC has been evaluating whether there is a need to change the debt collection system, including updating the Fair Debt Collection Practices Act, which was enacted to protect consumers from abusive, unfair and deceptive practices by debt collectors.

In its annual report to Congress about the fair debt collection law, the FTC said that it had received more than 78,000 complaints last year from consumers about debt collectors. The agency received, by far, more complaints about debt collectors than any other industry. After evaluating these complaints, the FTC put together a report released this year outlining proposed changes to address primarily two areas.

First, the agency wants to change the law to improve the information that debt collectors use to hunt down debtors. Second, the FTC wants the law updated to reflect the way creditors contact consumers.

To improve the information creditors use to collect debts, the agency is recommending the following:

1. Require that when debt collectors contact consumers, they disclose the name of the original creditor and a breakdown of the debt owed, including the original principal, total interest and total fees.

I can’t believe this isn’t part of the law already. Turns out debt collectors often have inadequate information because the right to collect a debt can be sold and then resold. “This increases the likelihood that collectors will reach the incorrect consumer, try to collect the wrong amount, or both,” the FTC said in its report, “Collecting Consumer Debts: The Challenges of Change.”

Under current law, if a consumer disputes a debt, the collector is required to verify what is owed before pursuing further collection efforts. However, “many collectors currently do little more to verify debts than confirm that their information accurately reflects what they received from the creditor,” the FTC says.

1. Require collectors to conduct “reasonable” investigations when consumers dispute debt information.

I certainly hope if this change is adopted, the FTC specifies what “reasonable” actually entails. Does it mean one call to the original creditor? Or does it mean digging for documents to prove what a debtor owes? Without clarity, this rule change would have little meaning.

1. Require debt collectors to inform consumers that if they send a timely written dispute or request for verification of their debt, the collector must suspend collection efforts until it has provided the verification in writing. Collectors would also be required to tell consumers that if they request in writing the debt collector cease contacting them, the collector must comply.

Tech changes

In the area of technology, the FTC has recommended the Fair Debt Collection Practices Act be changed in the following ways:

1. Debt collectors should be allowed to use all communication technologies, including mobile telephones and text messages, to contact consumers.

The agency said the law should be carefully crafted to avoid collectors using certain forms of communication in a way that causes consumers to incur charges, or otherwise subjects consumers to unfair, deceptive or abusive acts and practices. “Consumers should not have to pay to be contacted by a debt collector,” the FTC says. The solution: The law would generally prohibit debt collectors from contacting consumers via cell phones unless they have obtained express prior consent for such contacts.

I see all kinds of problems with this change on contact rules, especially at the time when consumers apply for credit. So to be sure the permission is granted with the consumer’s full knowledge, creditors should not be allowed to put this information into the fine print of debt agreements. It should be done in a separate agreement dealing with the contact information only.

Michelle Singletary is a financial columnist for The Washington Post. Write her at Michelle Singletary, Buyer’s Edge, The Atlanta Journal-Constitution, 72 Marietta St. N.W., Atlanta, GA 30303 or e-mail buyersedge@ajc.com and put “comment for Michelle” in the subject line.

This is an interesting article on facet syndrome  which can be associated with whiplash injuries.

New law breaks promises made when workers’ comp began                     

Wednesday, March 23, 2005                                                 

Michael Maguire                                                            

By the time you read this, the governor will probably have signed the workers’ compensation bill. His signature will mark the betrayal of working people in Missouri who were made a promise nearly 80 years ago that they would be treated fairly if they agreed to accept workers’ compensation.

Keep in mind this is not a needed change. The statistics from our Division of Workers’ Compensation show that insurance companies are making record returns on their premiums, which means they are not having to pay out much.

It is also not an attempt to be friendly to employers, as the Missouri Chamber of Commerce and Industry argues, although any time the chamber speaks up when you are talking about people’s rights––look out. If that were the case, this change could have been handled like it has since I started practicing law in Missouri in 1986: by getting the two sides together and coming up with a solution. For the last three years, those representing employees have tried to get insurance companies and employers to work on their complaints. They refused to do anything meaningful, biding their time until they had control of the legislature and the governor.

A little history is worth remembering. When the workers’ comp system was set up––in exchange for having a required mechanism that would provide medical care if you were hurt doing your job, provide some money if you could not work and provide payments if you had some disability as a result of your injuries––workers gave up certain rights:

1. They lost their right to sue their employers in regular court.

2. They lost the right to pick the doctor who would treat them––as the employer (read that to mean insurance company) gets to pick.

3. Artificial caps were placed on the amounts a worker could receive for weekly benefits and for permanency benefits.

4. Employees could not be awarded any damages for just pain and suffering, although someone who loses a hand or a leg or suffers any kind of work injury will readily tell you it hurts like hell.

Part of the promise made so many years ago was a presumption in favor of the employee, meaning that if all things were equal, meaning it was a tie on the proof, that the decision should go to the worker. Employers knew that and signed off on that when they set up this system. Now because of
this manufactured business-unfriendly crisis, that presumption is gone. The burden of proof for a worker has been changed from the work being a substantial factor of the injury to the prevailing factor.

Administrative law judges have faithfully followed the promise and interpreted the law, and because businesses don’t like what that means, they are putting politics into the process. Those judges will now be reviewed every two years, and if they don’t come up to standards, which will be determined by––guess who––pro-employer types, then they are out of a job.

Never mind that employers have two bites of the apple if they don’t like a decision of the judge. They get to appeal to the Labor and Industrial Relations Commission. And if that does not work, they can appeal to the Court of Appeals. I consider this provision alone character assassination of the fine men and women who routinely handle thousands of cases as judges and legal advisors with great intelligence and diligence.

Part of what this cadre has done is to change lawyers’ fees. Yes, I am an lawyer. And, yes, I handle cases of employees. I admit I will be looking at cases more closely, because the new law says if the company makes an offer and it is rejected, then my fee can only be a percentage of the amount I recover above that offer. If I take a case and it takes little or no work, I have no problem with that theory. However, if the usual case occurs and the employer makes the case go on for months, requiring extra work and I have to try the case, then it is not fair to me or to the employee to limit that award.

I believe, and always have, that the law is supposed to be fair––not too much for one side or the other. I know the employers and their cronies in the legislature have not given back to employees their rights they gave up when they created workers’ comp. The promise has been broken, and the
owners get all the benefits. The workers get the shaft.

Don’t be surprised after all these changes go into effect that nothing happens to the premiums paid by employees. I have said all along that the cyclical nature of insurance companies investing premiums in the stock market has more to do with higher premiums than any $6-an-hour line worker filing a claim for carpal tunnel syndrome.

If you think this is wrong and unfair to the working man and woman, let the governor and our local senator and representatives and the lieutenant governor know, because they all supported this promise breaking.

Michael H. Maguire of Cape Girardeau is a lawyer.

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