Workers’ Compensation

By Luis Julia

In this newsletter I will be posting a significant part of an article written by Terri Carter on October 1, 2011, for the American Bar Journal. I think it correctly demonstrates the current state of the Texas Workers’ Compensation system and the necessity for legal representation.

“Once a stand-alone agency, the Division of Workers’ Compensation was run by a three-member board appointed by the governor: one from labor, one employer and a lawyer as chairman. Later it was recast with six part-time commissioners with a similar labor/employee split and a full-time executive director, to whom more of the power gravitated.

But in 2005 workers’ compensation was brought into the Texas Department of Insurance — a regulatory agency long considered by critics as being too cozy with the insurance industry — where it is run by a single commissioner appointed by the governor.

But several decades of tweaking — through legislation, policy and business practices mostly meant to target scams by physicians and medical services providers — have gone beyond simple reform. Critics of the system say it has become so hostile, so skewed toward delay and denial that lawyers, physicians and even legitimate claimants have been driven away.

In the 1980s, Texas legislators decided that too many lawyers were involved in workers’ compensation claims, and that something had to be done to stop skyrocketing costs for businesses and insurers. They enacted a severely restricted fee structure that made it nearly impossible for claimants-side lawyers to make a living wage. And it worked. Where previously hundreds of Texas lawyers had significant workers’ compensation practices, there now are about 30.

Says Rick Levy, a name partner in Austin’s Deats Durst Owen & Levy and a legal director for the Texas AFL-CIO, “so for a long time it’s been insurance companies and their lawyers going up against injured workers usually without lawyers. The unfairness of that is not difficult to discern.”

Lump sum settlements were outlawed by the 1991 changes. If an insurer balks on a claim, everything must be hashed out in administrative proceedings. Medical and compensatory claims are bifurcated: whether or not the worker was actually injured on the job must be fought out, determining if the claimant will get 70 percent of his salary while recuperating. Also fought over is the necessity of medical treatment, as well as the extent to which any preexisting conditions might partially offset covered treatments.

Texas is the only state where participation in a workers’ compensation system is not mandatory for employers above a certain size. (New Jersey technically has the option, but it is so strict as to be preclusive.) Most Texas employers carry workers’ compensation insurance, but 32 percent of them are so-called nonsubscribers and employ an estimated 17 percent of the workforce — 1.7 million people. Many of those have private plans, but some go completely bare.

The climb through the system can be steep. Even if an injured worker overcomes denials through three administrative levels within the division, the insurance carrier can appeal for judicial review in state court. If the claimant wins there, for the first time in the process the carriers must pay any lawyer’s fees and costs. Up to this point, a lawyer would have been paid only 25 percent taken from the claimant’s income benefits, with even that severely capped.

Still, an injured worker’s chance of getting a lawyer for state court is so slight, the Office of Injured Employee Counsel has asked the legislature in its past three sessions to fund appointed lawyers.

At Bailey & Galyen we have successfully represented Texas Workers’ Compensation claimants through every step of the administrative and legal process. For legal representation for your work-related injury and for a free initial consultation, please call Bailey & Galyen (855) 747-4878.

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