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Construction and Equipment Spotlight
April 24, 1997

Unresolved claims can be a nightmare

BY LUCY BODILLY
Special to the Journal

The effects of an unresolved worker's compensation claim are enough to give even Steven King goosebumps.

Construction company owners with unresolved claims pay higher industrial insurance premiums to the state, they can end up owing lawyers and doctors thousands of dollars and their sullied safety record can cost them future jobs.

Over the past five years, local contractors have made a concerted effort to avoid accidents that cause long-term disabilities by both improving jobsite safety and shepherding claims through the maze at the state Department of Labor and Industries.

Many companies cut their worker's comp costs by instituting return-to-work programs which give injured workers light-duty jobs until they are fully recovered. The construction industry worked with the state to institute a retroactive insurance program that gives refunds on worker's comp premiums to contractors with good safety records.

Even though contractors are working harder to settle claims, the nature of the construction industry works against them. Most construction workers are employed on a temporary basis, which makes injured workers hard to track. Strict drug-testing policies require workers under the influence to be fired, which eliminates drug and alcohol abusers from the payroll, but at the same time makes it impossible for them to participate in a return-to-work program and get off workers' comp.

The state Department of Labor and Industries is testing a pilot project which shows promise for better management of workers who suffer long-term disabilities. Parts of the new system will be in place statewide by 2000.

Construction is also hit harder than other industries because there is no income averaging. Workers compensation benefits are equal to the average yearly salary, even if the employer only hired the person for two weeks per year.

Despite advances in jobsite safety, even the most scrupulous contractor can be haunted by a claim from hell, a claim so strange or so complicated that it takes months to work its way through the system. Some are downright fraudulent, but others are just too complicated to be settled easily.

In Washington, Labor and Industries estimates, about 15 percent of claims are fraudulent. Other claims become a problem because claims managers in Tumwater are overburdened, often handling as many as 400 claims at one time. Claims managers can be reluctant to close cases because state law mandates that the injured worker automatically be given the benefit of the doubt and every effort made to protect workers rights.

Careful review and investigation of every case is impossible. And, many company owners simply don't have the time to pay proper attention to claims at the start, the best time to avoid problems.

Whatever the reason, the office personnel handling an unresolved claim almost always ends up on a daily diet of antacids and headache relievers. Though almost any contractor has an unresolved claim story, not many are willing to talk on record. Some believe that Labor and Industries employees are vindictive and would retaliate if they went public with criticism. Others don't want publicity because it may affect their ability to secure jobs.

But some are willing to be more vocal.

One company now battling what it feels is a fraudulent claim is DBM Contractors of Federal Way. The injury occurred last November when some workers were carrying long tendons across a jobsite. The backhoe operator did not see all the workers helping with the job, and accidentally hit one, knocking him to the ground.

The fallen man said his arm was injured, and DBM personnel took him immediately to Harborview hospital for evaluation. He was treated for abrasions on the arm and he returned to work the same day. DBM ordered the worker to take a drug test, according to company policy, which he refused to do and, as a result, his employment was terminated.

Three weeks after the injury, the man reported he had also injured his head in the fall. After visiting a different team of doctors, he was diagnosed with head trauma so severe that it was causing psychological problems which made it impossible for the injured man to return to any type of work.

A company investigation and questioning of witnesses showed that no head injury had occurred at the site.

"But the state is arguing that our former employee failed to complain of a head injury at the initial physical exam because he received a head trauma and was confused," said Mike Murphy, company president.

Sue Wolf, who manages workers claims at DBM says she believes the story, at least in part.

"I believe that he did hurt his head, and that he is suffering from the symptoms he claims he is," Wolf said. "But I don't believe that it happened at our jobsite."

Wolf, worked the case through the Labor and Industries bureaucracy following all the advice of claims management. The injured worker was encouraged to return to work. The claim was first given to a novice claims manager, but Wolf worked the claim to the top level, asking managers with more experience to review the facts.

Workers who claim that injuries which took place elsewhere happened on the job are not that unusual. Polls show that about 10 percent of the American public believes that it is all right to receive worker's comp for accidents that did not happen on the jobsite, according to the National Insurance Crime Bureau.

`I believe he did hurt his head and that he is suffering from the symptoms he claims he is. But I don't believe it happened at our job site.'

Sue Wolfe
Worker Claims Manager, DBM Contractors

So far, the claim has cost the company almost $300,000 including payments to the injured worker, payments to a retro program and about 200 hours of company time spent arguing with Labor and Industries officials. It is currently before the board of appeals, and now, six months after the accident, the company is waiting for a hearing date.

Whether the unresolved claims are fair or not, many contractors can tell similar stories.

Sometimes there is no escape from a claim from hell. Another reputable contractor, who spoke off the record, fought with Labor and Industries for almost a year over a worker's claim that stemmed from back injuries he received while working for two different construction companies.

The second company he worked for proved that its rehabilitation efforts had returned the employee to his pre-accident physical condition. After intervention from the Secretary of State and legislators, Labor and Industries accepted the argument and remanded the claim back to the first construction company where the employee was originally injured. In the meantime, the first company had filed for bankruptcy. Now the employee has appealed, and the second company is paying for the claim again.

Such claims are the reason for a pilot project Labor and Industries started in 1995 to see if it could better manage workers with long-term disabilities. So far, the study taking place in Everett and Yakima is a success. Results tallied after eight months in operation show that claims involving 120 days of disability were down 10 percent, employer protest of claims dropped 50 percent and there has been a 40 percent reduction in claims with one year of time-loss payments.

The main component of the experimental system is that companies in the same industry are assigned specific case managers. That allows case managers to become more familiar with injuries specific to various industries and to become acquainted with personnel and practices at individual companies.

The pilot project uses a team approach. A nurse and rehabilitation worker can both be called in to work with doctors and the injured worker in rehab or training programs, and to help the worker return to the job as quickly as possible. Caseloads for individual claims managers are much smaller in the pilot study, in part because claims are closed faster. Having claims managers located in each county makes meetings and communication much easier.

"As far as we are concerned this is the way to go," said Craig Norleen, whose employer, Construction Associates, is part of the pilot program. Participation helped him gain access to services and he was able to help an injured worker much more quickly than with the traditional system.

Even with the pilot project's early success, no part of it is expected to be implemented for several years, said Donnis Hurd, unit supervisor in Everett. A complete study of injuries and their outcome is needed before changes can be made, but parts of the pilot project will be in place statewide by 2000.

Another effort to improve the system is Substitute House Bill 1292, which is expected to pass both the House and the Senate during this legislative session. It would give members of retrospective rating programs more authority to settle claims and set up treatment programs.

Another contractor, who spoke off the record, came up with a different solution to the way workers comp claims are settled. Rather than file a claim, "I'd rather they (the injured worker) sue me. At least that way I get to tell my side of the story."

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