Roberto Ceniceros

Roberto Ceniceros is senior editor at Risk & Insurance® and chair of the National Workers' Compensation and Disability Conference® & Expo. He can be reached at [email protected] Read more of his columns and features.

Legal Developments

Marijuana: The Great Pain Management Hope?

Some doctors are turning to marijuana when opioids fail to ease patient pain. And courts say the treatment is reasonable under workers' comp.
By: | July 6, 2015 • 4 min read
med marijuana4

Doctors supported workers’ comp claimants’ medical marijuana use when powerful opioid narcotics combined with other medications failed to relieve their chronic pain conditions, three recent New Mexico Court of Appeals rulings show.

Legal arguments in all three cases focused on whether insurers and employers must reimburse claimants for their medical marijuana consumption. In each case, the court ruled against insurers and employers, saying they must pay.

But the underlying facts in the three cases revealed that doctors supported their patients’ marijuana use when polypharmaceutical regimens — including several addictive opioid pain medications combined with numerous other drugs — failed to diminish chronic pain stemming from back injuries.

“The doctors, I don’t think, believe the opioids are a long-term solution [and the pharmaceutical pain medications may create their] own set of problems over time,” said Peter D. White, a Santa Fe, N.M., attorney who represented claimants in two of the cases. “I think they are hopeful medical cannabis will reduce the reliance, if not eliminate, the reliance on prescription pain medications.”

It is reasonable and not surprising that doctors treating patients suffering from intractable pain would try medical marijuana as an alternative to combinations of opioids and other prescription drugs, added Kevin T. Glennon, vice president of Clinical Education and Quality Assurance Programs at One Call Care Management.

“Physicians are always looking for alternatives,” to narcotics for patients with intractable pain because increased doses of narcotics become ineffective as patients build up a tolerance, while also increasing the risk of addiction, Glennon said.

Meanwhile, a June report published in the Journal of the American Medical Assn., based on a review of medical literature detailing existing clinical trials, found that “use of marijuana for chronic pain, neuropathic pain, and spasticity due to multiple sclerosis is supported by high-quality evidence.”

Several of the trials reviewed found that marijuana “may be efficacious” for pain, the report states. But the research does not support marijuana’s effectiveness for other illnesses, the review of past studies also found.

Court records in the three New Mexico cases do not reveal whether the doctors who authorized medical marijuana for the three workers’ comp claimants suffering from chronic pain based their decisions on such medical research.

“I think [doctors] are hopeful medical cannabis will reduce the reliance, if not eliminate, the reliance on prescription pain medications.”  —Peter D. White, attorney, Santa Fe, N.M.

But the records do show the doctors authorizing their patients’ marijuana use under New Mexico’s medical marijuana law called the Compassionate Use Act.

The latest of the New Mexico decisions, handed down on June 26, involved a chronic-pain patient consuming numerous prescription medications that commonly concern workers’ comp observers because of the drugs’ association with addiction and overdose deaths, while often failing to eliminate chronic pain long term.

Oxycontin, oxycodone, Soma, Norflex, gabapentin, Lyrica, Percocet, fentanyl, and Zantac are among drugs prescribed for the claimant, court records in the case of Sandra Lewis v. American General Media and Gallagher Bassett reveal.

In addition to those drugs, Lewis consumed medical marijuana and believed it was the most effective of the medications. One of three doctors who approved her marijuana use stated that other medications had failed to treat her chronic pain, and that the “benefits of medical marijuana outweigh the risk of hyper doses of narcotic medications.”

A court-appointed psychologist also supported her marijuana use for pain control, declaring it reasonable and appropriate. The court appointed the psychologist after the employer in the case requested an independent medical exam.

The appeals court eventually ruled that “marijuana constitutes reasonable and necessary medical care.”

Similarly, the January 13, 2015 appeals court opinion in the case of Miguel Maez v. Riley Industrial and Chartis shows that medications prescribed to claimant Maez for chronic back pain included Soma, Ultram, Sprix, Percocet, Lortab (oxycodone), and hydrocodone.

But when those failed to manage his pain, his doctor authorized medical marijuana as a trial, to see if it would help Maez.

In the third case, a May 19, 2014, appeals court opinion in Gregory Vialpando v. Ben’s Automotive Services and Redwood Fire & Casualty describes a workers’ comp claimant treated with “multiple narcotic pain relievers and multiple anti-depressant medications” for severe chronic pain.

His doctor also recommended marijuana services and provided the certification necessary under the Compassionate Use Act.

Employers in all three cases posed various arguments as to why they should not be responsible for funding the claimants’ marijuana use. But they found the court unsympathetic.

Many doctors remain skeptical about medical marijuana’s efficacy, said Victor A. Titus, a Farmington, N.M., attorney who represented claimant Miguel Maez. Therefore, the three cases may not represent a trend of doctors recommending marijuana as an alternative to prescription pharmaceuticals, he said.

“I know there are a lot of doctors who still don’t believe in medical marijuana,” he said.

But White has spoken with many injured workers who are certified to use medical marijuana in New Mexico, yet have not asked their insurer to pay for it.

They report, anecdotally, that the drug has effectively addressed their pain, White said.

Other cases could benefit from knowing whether medical marijuana helped the claimants in the three New Mexico situations eliminate their narcotic use, Glennon said.

“If they were willing to share that information that would substantiate that medical marijuana is beneficial,” Glennon said. “However, I have a feeling the reason that information is not readily available is they are still doing both.”

Roberto Ceniceros is senior editor at Risk & Insurance® and chair of the National Workers' Compensation and Disability Conference® & Expo. He can be reached at [email protected] Read more of his columns and features.
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Legal Developments

Growing Pains in the Sharing Economy

Experts expect not much will change regardless of the outcome of the Uber employment-classification appeal.
By: | July 1, 2015 • 5 min read
uber

A recent finding that an Uber driver is an employee rather than an independent contractor has focused attention on the future of the sharing economy.

Whatever that future, observers don’t expect that the sharing economy, with its business models that rely on smartphone apps like Uber’s, will have a significant impact on workers’ compensation insurance.

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They are, however, watching to see how state labor commissions, courts and legislatures nationwide will address the employment status of people providing a range of services through technology platforms such as those offered by ride-sharing companies like Uber and its rival Lyft.

“We are very interested,” said Peter Burton, senior division executive for state relations at NCCI Holdings Inc., a workers’ comp ratings and research organization.

“We actively are watching work comp commission decisions as well as legislative decisions.”

But NCCI’s interest in how states will eventually rule on whether workers in the sharing economy will be legally designated as contractors or employees is mostly technical. NCCI wants to stay abreast of matters, for instance, should it need to develop new rates.

So far, there have been few definitive legal determinations on the classification of on-demand workers, and whether app companies linking them to customers must purchase workers’ comp insurance. Consensus may also be elusive.

“It’s going to have to be adjudicated state by state and you are probably going to have all sorts of different opinions,” Burton said.

“Right now it’s still uncharted ground.”

The issue of whether the sharing economy’s on-demand workers should be classified as employees and legally entitled to a range of benefits and expense reimbursements has surfaced before.

“It’s going to have to be adjudicated state by state and you are probably going to have all sorts of different opinions. Right now it’s still uncharted ground.” — Peter Burton, senior division executive for state relations,
NCCI Holdings Inc.

But the topic recently gained increased attention when news stories reported that rapidly-growing Uber — valued at $40 billion — is appealing a California Labor Commission finding that a former chauffeur was an employee rather than an independent contractor as the company classifies its drivers.

The Labor Commission said that Uber could not exist without the work performed by the former driver. It essentially found that Uber exercised enough control over how the driver conducted her work to make her an employee. The ruling requires Uber to reimburse the former driver $4,152 in expenses and interest.

Uber argued that it is merely a technology company that allows drivers and passengers to conduct transportation business. It filed its appeal of the Commission’s ruling to a San Francisco County trial court on June 16.

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The California Labor Commission’s decision applies to a single plaintiff. But the case’s eventual outcome, and other ongoing cases including class-action lawsuits with similar allegations against a range of sharing-economy app companies, could substantially impact Uber’s profitability and business model.

However regulators and courts in California and other states decide the employment-classification issue, the overall impact on workers’ comp insurer operating results will not be significant, said Robert P. Hartwig, president of the Insurance Information Institute.

If courts and regulators find that sharing economy companies are employers, then workers’ comp insurers would gain only modest opportunity to write new coverage for workers not currently covered by comp policies, he added.

“It would bring the payrolls associated with tens of thousands of workers into the workers comp exposure base,” Hartwig said. “The vast majority of which is not there right now. That would represent a modest opportunity for some insurers who are inclined to write these.”

Any premium volume growth would be limited because the number of people participating in the sharing economy is “very small,” Hartwig explained. About 7 percent of the U.S. population aged 18 and older has engaged in providing sharing-economy services.

Their participation typically is limited, rather than full time, and mostly conducted to supplement other income, Hartwig added. For instance, about 16 percent of people over the age of 65 have participated in the sharing economy, doing so to earn additional income.

Any new revenue workers’ comp insurers might gain from a group of newly insured workers could be offset by losses, Burton said. Insurers already understand how to rate taxi and limousine companies, but time would tell whether losses for ride-sharing companies differ.

Hartwig also wouldn’t expect significant impact on insurers should labor departments and courts take the opposite position, finding that people providing sharing-economy services are not employees.

Evidence does not exist that workers leave traditional jobs, where they are counted as part of employer payrolls and employers’ workers’ comp insurance exposure base, to exclusively participate in on-demand economy work, he said.

“There would be some very small amount of leakage from the overall payroll base to the extent that some occupations can migrate on net to this online platform, but that leakage is very, very small,” Hartwig said.

While there have been scant definitive rulings nationwide on whether shared economy participants are employees or independent contractors, “in most cases we have seen states leaning toward the side of independent contractor status,” Burton said.

That is consistent with Uber’s position.

In a June 19 press release announcing that it will appeal the California Labor Commission ruling, the San Francisco-based company said six states have found that Uber drivers perform services as independent contractors.

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Uber also said that the recent California Labor Commission ruling is contrary to a previous finding by the same body. In 2012 the Commission ruled that a driver performed services as an independent contractor and not as an employee, Uber said.

“It’s important to remember that the number one reason drivers choose to use Uber is because they have complete flexibility and control,” the release states.

“The majority of them can and do choose to earn their living from multiple sources, including other ride sharing companies.”

Roberto Ceniceros is senior editor at Risk & Insurance® and chair of the National Workers' Compensation and Disability Conference® & Expo. He can be reached at [email protected] Read more of his columns and features.
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Legacy Exposures

Asbestos Claims Dwindle, but Slowly

Asbestos liability claims have stubbornly lingered, which has been vexing for companies that didn't even realize they had inherited the exposure.
By: | July 1, 2015 • 4 min read
Topics: Claims | Workers' Comp
Asbestos Sign

Claims demanding compensation for illnesses caused by working around asbestos still haunt employers who struggle to determine whether insurance coverage exists for exposures alleged to have occurred decades ago.

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The claims no longer surface in the mass quantities like they did a couple decades ago when workers from industries such as construction, oil and gas, boiler and automotive parts manufacturing filed claims alleging mesothelioma and asbestosis.

But neither have asbestos claims entirely disappeared as former workers or their survivors continue filing claims either in civil courts, through workers’ comp systems, or in bankruptcy proceedings. Advertisements by attorneys seeking plaintiffs suffering from asbestos-related lung disease remain common on television and on the internet.

Paul D. Braun, managing director, casualty risk consulting, Aon Global Risk Consulting

Paul D. Braun, managing director, casualty risk consulting, Aon Global Risk Consulting

“We thought the issue of asbestos would have gone away 10 years ago, but there are just more and more,” said Paul D. Braun, managing director, casualty risk consulting at Aon Global Risk Consulting.

From about the 1930s through the 1960s, workers labored in textile mills and power plants where asbestos products were either manufactured or used in building construction products, said Jeffrey A. Kadis, a workers’ comp expert specializing in defending occupational disease and chemical exposure claims at Hedrick Gardner Kincheloe & Garofalo LLP in in Charlotte, North Carolina.

That created opportunities for claimant attorneys to generate mass numbers of claims with their volume peaking during the 1990s and early 2000s because of a decades-long latency period for asbestos exposure illnesses, Kadis said.

“We thought the issue of asbestos would have gone away 10 years ago, but there are just more and more,” —Paul Braun, managing director, casualty risk consulting, Aon Global Risk Consulting

While the number of claims peaked back then, his firm still sees one every two weeks or so, Kadis said.

“The volume has definitely decreased, but they have not gone away altogether by any means,” he added.

A lawsuit three former workers filed against BNSF Railway on June 3 in Portland, Oregon, provides an example of case characteristics observers say are common among recently filed claims.

The three say in their Federal Employers Liability Act (FELA) claim that they suffer from lung disease due to asbestos exposure that occurred while working for railroads beginning in the late 1950s and 1960s. Their employment continued until 2003 and 2004, said Paul S. Bovarnick, of counsel at Rose, Senders & Bovarnick in Portland.

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FELA is a tort statute providing an exclusive remedy for railroad workers injured on the job.

“We have filed not only this case, but over the last two years about six or eight other [similar] cases,” Bovarnick said. “We file a new set of cases every 4 to 6 months.”

Successive railroad mergers or acquisitions occurred throughout the three workers’ employment and BNSF eventually became their final employer, Bovarnick said. Now the workers allege BNSF was negligent in failing to provide a safe workplace.

The case is similar to many other recent asbestos claims filed nationwide in that the claimants allege lung disease, sources said. Many of the recent claims allege exposure in the 1970s.

Additionally, it’s common for recent claims to allege exposures that occurred at companies that no longer exist, but whose assets and liabilities were passed along through successive mergers and acquisitions.

In some cases the existing employers did not know that they had acquired companies, or parts of companies, that had asbestos exposures, Braun said. The current company may not even possess employment records from companies they acquired after successive mergers dating back to the decades plaintiffs allege they were employed.

The factors make it difficult for companies to establish if any insurance policies in force at the time of the workers’ employment provide coverage, Braun said.

Workers’ comp policies commonly contain sunset clauses stating that for coverage to apply, claims must be filed within 36 months or so of an injured worker’s employment. General liability policies began excluding coverage for asbestos in the 1980s and also exclude coverage for employees, Braun said.

“That is the dilemma the clients are looking at right now,” he said.

Other coverages, such as old umbrella policies, if they can be recovered, may provide some insurance, Braun added.

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As time marches on, however, observers say the claims are less of an issue in many current mergers and acquisitions, including the purchase of manufacturing operations.

Because asbestos has not been used in product manufacturing or factory construction in decades, the risk continues to dwindle while experts conducting due diligence for today’s acquisitions understand the risk better than in past years, said Henry Jennings, global practice leader for Lockton’s private equity and corporate acquisitions practice.

“My experience lately is that we are seeing much less of it than we did years ago,” Jennings said. “If we do see it, it is more than likely that the legal people at the firm being sold have their arms around it from the standpoint of whether insurance is involved.”

Roberto Ceniceros is senior editor at Risk & Insurance® and chair of the National Workers' Compensation and Disability Conference® & Expo. He can be reached at [email protected] Read more of his columns and features.
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