LaborDay-08-(1-14):NWLP
8/12/08
10:03 AM
Page 2
...Comp fee changes worry labor officials
(From Page 1)
governor-appointed representatives
from labor and five from management
who advise WCD on issues involving
workers’ compensation.
“We have a no-fault insurance pro-
gram that, for the most part, has been
working pretty well,” Shiprack said. “I
don’t see how this benefits anyone but
insurance companies and national
PPOs.”
Shiprack has contacted Gov. Ted
Kulongoski to protest the emergency
rule.
“One of the top three complaints I
hear from injured workers is that doc-
tors won’t take them if they are in the
workers’ comp system,” said Ernie
Delmazzo, co-founder of Injured
Workers Alliance, a support group for
people who have been hurt on the job.
The problem is amplified east of
the Cascade Mountains. “Sometimes
injured workers have to drive to Port-
land for treatment,” Delmazzo said.
“It is absolutely a sweeping change
to the system,” said State Rep. Brad
Witt (D-Clatskanie).
Witt and Shiprack were outraged
that the emergency order came with
little or no input from the two main
b h
m k
players in the system — labor and
management.
“This entire system is based on a
compromise agreement between labor
and management to get an injured
worker’s injury addressed as soon as
possible and to get that person back to
work as soon as possible,” said Witt, a
union rep with United Food and Com-
mercial Workers Local 555 and a for-
mer MLAC member.
“This ruling is not in anyone’s in-
terest — not the state’s, not the em-
ployer’s, and certainly not the injured
worker’s,” he said.
Witt is drafting legislation that
would rescind the emergency order
and return the system to the prior re-
imbursement rate schedule. “(Medical
provider) reimbursements should be
regulated by the reimbursement fee
schedule,” he said.
Lon Holston, a union rep for Labor-
ers Municipal Employees Local 483
and another MLAC member, said he
wasn’t made aware of the need for an
emergency ruling until about a week
before it was issued. He believes the
order came too quickly and without
enough discussion.
“Somewhere in corporate America
Bennett Hartman
Morris & Kaplan, llp
Attorneys at Law
Oregon’s Full Service Union Law Firm
Representing Workers Since 1960
The Attorneys and Staff of
Bennett Hartman Morris & Kaplan
join you in celebrating victories for
working families and the many
accomplishments of the
Labor movement in 2008
Have a HAPPY & SAFE
LABOR DAY!!
We Work Hard for Hard-Working People!
111 SW Fifth Avenue, Suite 1650
Portland, Oregon 97204
(503) 227-4600
www.bennetthartman.com
Our Legal Staff are Proud Members of UFCW Local 555
PAGE 2
they came up with this plan and ran
with it,” he said.
Union officials argue that the PPO
structure is designed for private-sector
health care and that it doesn’t belong
in the workers’ comp system.
“We ask a lot more of our doctors
who handle workers’ comp cases than
we do those in general medicine,”
Shiprack explained. “To combine the
two — I believe a mistake has been
made.”
WCD Administrator Shilts told the
NW Labor Press that medical
providers should have the freedom to
enter into a PPO contract if they so
choose. He said providers have partici-
pated in networks with discounted
rates for years — for workers’ com-
pensation as well as other types of
health insurance.
“The discounted fees have helped
keep medical costs under control in
workers’ compensation and through-
out the health care industry,” he said.
Shilts told the Labor Press the
emergency order simply “clarifies”
how providers are paid. “We wanted to
respond quickly to the uncertainties
about PPO contracts.”
Those uncertainties surfaced after
Godwin, the attorney representing
physical therapists, began disputing
the amounts some insurance compa-
nies were reimbursing physical thera-
pists for treating injured workers.
Fee dispute resolution requests start
at WCD, but can go all the way to the
Oregon Supreme Court.
Godwin said the explanation of
benefits that routinely accompanies
each insurance payment check would
include a note “to the effect that a dis-
count was being applied to the billing
pursuant to a contract owned or ac-
cessed by a named PPO.”
In some instances, the discount was
more than half the medical bill.
Godwin prevailed on most of her
appeals. In turn, WCD ordered the in-
surers to pay the difference between
the PPO discount and the state-man-
dated fee schedule.
In almost all cases, the insurers ap-
pealed.
Shortly after that, Shilts said he was
contacted by insurer Liberty North-
west informing him that Coventry
Health Care was threatening to leave
the Oregon market unless there was a
resolution to all the fee disputes.
Coventry is a Fortune 500 company
based in Bethesda, Md.
“They asked how we decided the
disputes. We told them that rules are
rules. We obey our own rules,” Shilts
told the NW Labor Press.
Following their conversation, Shilts
said his department took a closer look
at the statute. In light of the agency’s
own rules, WCD determined that state
law allowed for the PPO discounts.
“The statute says the fee schedule is
the ceiling; that a medical provider
can’t be paid above that,” Shilts said,
emphasizing that Oregon’s medical fee
schedule overall is the highest in the
country.
Upon further review, the agency
also realized there was no time limit
on how far back a provider could chal-
lenge a reimbursement. “It could be 4-
5-6 years or longer,” Shilts said. “Go-
ing back that long, and ordering a
resolution of the lower of the fee
schedule or the providers normal rate
(over the PPO discount) ... well, that
could add up to a lot of money.”
Godwin said she had 163 fee dis-
putes pending and more to be filed
when the emergency order was handed
down. “It was in the hundreds of thou-
sands, if not millions of dollars,” she
said.
That much potential cost added to
the workers’ comp system likely
would impact insurance premiums,
Shilts said. “In my experience, if rates
are pushed up, the typical response is
that benefits (to injured workers) are
reduced or taken away.”
The emergency order was made
retroactive, effectively wiping out all
of the disputed fees that had not been
resolved by a final order.
Godwin has filed a legal challenge
with the Oregon Court of Appeals and
is advising her clients not to accept
new injured workers if the insurer is
applying a PPO discount.
Shilts pointed out that the tempo-
rary rule puts several protections in
place for providers with PPO con-
tracts. For instance, if a provider’s fee
is covered by multiple PPO contracts,
only one contract discount will apply.
Additionally, the department must be
given a copy of any PPO contract that
is the basis for a fee reduction to deter-
mine whether it actually covers work-
•Oregon has about 1.72 million workers cov-
ered under the state workers’ comp system.
This does not include employees working for
self-insured employers, the federal govern-
ment, maritime, police and fire departments,
and others.
•Approximately 45 percent of workers in the
comp system are covered by SAIF Corp., a
quasi-public insurer. SAIF contracts with state-
certified managed care organizations.
•Nearly 104,000 workers’ comp claims were
filed in 2006 (the most recent complete data
available). Of those, 89,700 were accepted as
compensable under Oregon’ s workers’
comp system.
•Of those accepted claims, 23,000 were
recorded as “disabling.” A disabling claim is
an injury that results in time-loss from work,
permanent disability, or death. A non-dis-
abling claim is one that does not result in
time-loss or permanent disability, but requires
only medical treatment.
•In 2006, workers’ compensation medical
payments accounted for $313,742,500, or
54.5 percent of total workers’ compensation
claim costs, an increase of 9.1 percent from
2005.
•In 1990, massive reforms were made to
Oregon’ s workers’ comp system, primarily
because insurance premiums were some of
the most expensive in the nation. Between
1990 and 2006, however, the pure premium
employers pay for workers’ compensation
coverage has dropped 57.4 percent, repre-
senting an estimated $11.5 billion in savings
to employers.
ers’ compensation.
Before an emergency rule can be
made permanent, it must go through a
public rulemaking process. WCD is
putting together an advisory commit-
tee of all interested parties to discuss
the matter. Meetings are set for Friday,
Aug. 22, from 9 a.m. to noon, and
Wednesday, Aug. 27, from 5:30 p.m.
to 8 p.m., both at the WCD office at
350 Winter St. NE, Salem. The meet-
ings are open to the public.
Shilts would like to have a perma-
nent rule to present to MLAC when it
meets Sept. 11.
Labor Metal Trades Council
Day of Portland & Vicinity
Greetings
from
NORTHWEST LABOR PRESS
4545 NE 102nd Ave., Portland, Oregon
503-256-0462
AUGUST 15, 2008