By Rory McCann
I had the pleasure of updating you the last week of April. Since then, legislative responses to the Covid-19 crisis continue afoot. A few jurisdictions, including many of the most populated ones, are still mulling over options. Many appear content to proceed with temporary solutions via executive order or will rely on their existing statutes to adjudicate.
RESPONSES FROM AROUND THE 50 STATES
California governor Gavin Newsom issued an executive order addressing workers’ compensation and Covid-19 on May 6, 2020. The order notes authority under Government Code Sections 8567, 8571 & 8627 and provides a rebuttable presumption in favor of “any Covid-19 related illness of an employee.” The employee would demonstrate a physical site work history within 14 days of diagnosis, or if the employee worked and received a diagnosis on or after March 19, 2020. Employees who work at home are logically excluded. The test must be confirmed within 30 days of diagnosis. Employers will be allowed to present controverting evidence to rebut the presumption. However, they must do so within 30 days after the claim was filed. Temporary disability is reserved if the employee has access to paid sick leave.1
The state of Georgia has made news for its speed in easing its Covid-related directives before other states. To address this, John King, Insurance and Safety Fire Commissioner, issued a “Winding Down” bulletin on April 28, 2020. The directive for property and casualty insurers were to refrain from canceling policies expires on May 19, 2020; to cancel health policies on May 31, 2020; and suspension of all court filings and late fees expiring on May 31, 2020.2 Further, the clarified that suspension of UR requirements would end May 25, 2020. The state also returned to elective procedures.
As noted during the last update, the business community in Illinois successfully challenged the Commission’s rebuttable presumption rule. This led to withdrawal of the rule. Following, the Commission issued new memoranda on April 27, 2020. Chairman Brennan announced formation of a committee to study possible Commission responses to the Covid-19 crisis. In addition, the Commission announced procedural guidelines, noting that only emergency motions would be set for hearing (in June) and only upon agreement of both parties to proceed. Further, hearing locations were streamlined to the Chicago, Rockford, Peoria, Springfield and Collinsville locations3.
In Massachusetts, a senate bill pends providing a rebuttable presumption for any state employees required to report to work outside of their home after March 11, 2020. It remains in committee.4 Its neighbor, New Hampshire, clarified its workers’ compensation policy on April 24, 2020. Governor Christopher Sununu’s executive order covers “first responders” under the previous definition of “emergency response/public safety workers.” Eligibility hinges on a positive test and report to their DHHS. The order remains for the duration of the emergency.
New Jersey Governor Phil Murphy vetoed a controversial bill on May 4, 2020. The legislature had passed a bill allocating an additional $20 million from the state’s general fund to establish a “Temporary Lost Wage Unemployment Program” which would make $10 million available to compensate workers for lost wages, and another 10 million for employers who are ordered under quarantine by a licensed healthcare practitioner as a result of “coronavirus disease 2019.” In the statement supporting his veto, Governor Murphy remarked, “ In order to ensure that New Jerseyans have access to critical assistance during this time of crisis and recovery, we must take immediate action to secure our budgetary and cash flow position. As my Administration continues to fight for direct assistance from our federal government, additional actions will be needed across all levels of government.”5
New Mexico Governor Stephanie Grisham issued a 4 page executive order ultimately providing a rebuttable presumption in favor of state executive agencies and “eligible volunteers” which is defined as “any volunteer or contractor temporarily assisting the State during the Covid-19 public health emergency…” She noted this would cover, but not be limited to: EMTs, medical personnel, administrative and custodial staff at care centers and law enforcement officers.6
New York remains unclear with respect to its ultimate Covid-19 standards. A number of presumption bills are in consideration and an amendment to clarify that Covid-19 would be covered under their occupational disease act.
North Carolina is also unsettled. A pending house bill here, although referencing the coronavirus, would appear to be drafted with the intent of addressing future disease outbreaks. The bill describes the presumption for “pandemic infection.” It is defined as “an outbreak of an emerging disease prevalent in the United States or the whole world.”7
The state of Texas has not been as expansive as others in its legislative response. Governor Abbott announced coverage for telemedicine in subsequent executive orders in late April.8 Without a presumption in favor of frontline workers, advocates from the plaintiff side in Texas have come in for criticism and raised the specter of crippling wrongful death litigation. As Professor Duff argues, if an employer doesn’t provide an employee with personal protective equipment, enforce social distancing measures or comply with CDC guidelines, in lieu of simply alleging negligence, he would argue, “the employer had the purpose of injuring or killing the employee, or knew to a substantial certainty that injury or death would result from its conduct.”9
One suit to watch pends in Texas state court (Parra vs. Quality Sausage)10 and alleges negligence and wrongful death. Another meatpacking wrongful death suit pends in Pennsylvania (Benjamin v. JBS). This case is more notable for the allegations of fraudulent misrepresentation leveled at JBS. The decedent, Enock Benjamin, was chief steward of a chapter of the United Food and Commercial Workers Union11. By April 27th the CDC reported that nearly 5,000 workers had contracted the disease from 115 meat packing plants in 19 responding states.12
Overlaying the litigation in these matters are rising food prices and looming potential shortages raised by many agribusinesses and restaurants. Chairman John Tyson posted a full-page ad in the Washington Post, New York Times and Arkansas Democrat-Gazette addressing plant closures and warned that “the food supply chain is breaking.”13 President Trump signed an executive order declaring meat production “essential infrastructure” on April 28th. Lobbyist Tony Corbo responded by accusing the Big Ag companies of “putting profits over public health.” Others have downplayed concerns raised by Tyson by noting the amount of meat in cold storage given restaurant closures.14
Projections continue to be revised by those studying the economic impact from the Covid disruptions. The National Council on Compensation Insurance has estimated that if only 10% of health care workers contract covid-19 and all claims are deemed compensable, loss costs could double or triple in some states. They frame the worst scenario estimating 50% of workers acquire the infection and 60% of claims are deemed compensable. Costs would result in $81.5 billion in increased costs, or 2.5 times the current costs, at least in the 39 jurisdictions the NCCI tracks claims data. If eligibility is limited to first responders and healthcare workers and only 5% become infected, the projected costs would be $2 billion dollars15.
A 180-page study from the Workers Compensation Research Institute (WCRI) was published this week. Their purview wasn’t Covid-19 specific, but their conclusions are relevant in projecting outcomes and understanding medical cost trends. The study focused on assessing the costs of professional services for injured workers across states and the impact of fee schedules. As practitioners across the country already know, the cost of a service varies per state. For example, in 2018, Florida’s pricing was 27% below the 36 state median from the study. Meanwhile, Wisconsin was 164% above median price. So therefore, payors in Wisconsin would pay three times the costs for the same service in Florida.
Of note, the states with no fee schedules (Indiana, Iowa, Missouri, New Hampshire, New Jersey & Wisconsin) paid an overall level of price of 39 to 171% higher than the median of fee schedule states. The study also noted that, excluding Illinois, Nevada and Oregon, states with fee schedules for professional services paid 22-25% lower rates. In couching that with growth rate comparisons, Illinois had a negative 15% trend from 2008 to 2018 and Wisconsin saw a positive 44% trend during the same period in medical costs.
In recent years, North Carolina (2015) and Virginia (2018) have adopted fee schedules with varying results. Following 2018 and a full year of statutory effect, Virginia saw a 14% decrease in the cost of professional services. Meanwhile, North Carolina increased 17% from 2014 through 2016. Cost drivers in the Tar Heel state included pricing for office visits, physical medicine and emergency visits seeing growth rates of 30 to 46%16
Thank you for reading. I hope all are managing well during this difficult time. ASA Law Group and I will continue to keep updating you with relevant information to keep you informed and able to best adjust. Feel free to contact me at email@example.com or 630-394-9753 with any additional questions, responses or your own updates!
- Rory McCann
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