our-goal-is-to-reduce-unnecessary-pain-and-suffering-and-reduce-costs

WCB Legislative Review

Submission to:

The Workers Compensation - Committee of Review, 2006
By: Roadbuilders and Heavy Construction Association of Saskatchewan

Date:  June 30, 2006

Introduction

The Roadbuilders and Heavy Construction Association of Saskatchewan (RBHCA) were established in 1956.  We have a long and active history of working to make the heavy construction industry safer while they built infrastructure in Saskatchewan.  Our work ensures that Saskatchewan has the infrastructure to keep this great province going.

At the outset, our members support and expect:

  1. policy and legislation that is sound and balanced, and reasonably practical for employers in the current global competitive marketplace
  2. transparency of all government and government agency policy and operations, in this instance the Workers Compensation Board of Saskatchewan
  3. positive relations between management, employees and their chosen representatives

Principles of Workers Compensation

The two fundamental and paramount issues of the Workers Compensation system are:

  1. Adherence to Workers Compensation principles
  2. Financial accountability and transparency

Adherence to Workers Compensation principles means the Workers Compensation system compensates that which arises out of a workplace accident and does not exceed the original intent and the Meredith principles upon which the Workers Compensation system was based.

Financial accountability to employers which fund the system is critical to achieve confidence that the system they are funding is fiscally prudent and responsible with their assessment dollars; and that the Workers Compensation Board is transparent in their reporting of it.

The Workers Compensation Board is a valued institution and has generally served employers and workers well for decades.  It is critical for the ongoing success and trust that all parties must have in the Workers Compensation system that it not to be biased toward one party or another.  RBHCA holds the strong view the Workers’ Compensation system must not and cannot be politicized and it must operate at arms length of Government.

Governing principles regarding Workers Compensation Act Review

The Committee of Review is charged with an important responsibility i.e. reviewing and reporting on all matters concerning the Workers Compensation Act, the regulations and the administration of the Act and the regulations.

RBHCA submits and respectfully requests that the Committee of Review turn its attention to conduct a thorough review of the current environment in place at the Saskatchewan Workers’ Compensation Board.  It is important to determine whether the Saskatchewan Workers Compensation Board is meeting the principles of providing benefits as the result of a workplace accident or whether the Act and the administration of it has extended beyond Workers’ Compensation’s original intent and the Meredith principles.

It is the submission of the RBHCA that three governing principles should be adopted by the Committee of Review in considering any change to the legislation.  They are:

  1. Whether the proposed change is fair, reasonable and consistent with the Act and Regulations.
  2. Whether it satisfies a demonstrated need.
  3. Whether the change can be provided at a reasonable cost.

We suggest that no change be considered which has not been subjected to a thorough and accurate cost analysis to be made public.  We further suggest that the Committee adopt the principle that change(s) to the system overall be cost neutral.  In other words, wherever a cost increase is recommended, it must be balanced by a corresponding cost saving.

Accountability

It must be kept in mind the Workers Compensation system is entirely funded by employers.  Unless the Committee of Review wishes to change this fundamental aspect of the system and extend the funding burden to other stakeholders, it must ensure that the Workers Compensation system is accountable to employers, as well as other stakeholders.

This means conducting independent, periodic and public audits and evaluations of the Workers Compensation system and ensuring that the system is providing value for the funding that it receives.  Further, costing reviews should be conducted at regular intervals in order to ensure that cost estimates which have been publicly given are proved accurate over time.

By way of background, in 2003 the WCB issued a Discussion Paper on Funding, as the Workers’ Compensation Board identified a $116.7 million shortfall in various WCB funds.  Despite the fact that investment earnings had been declining, the Saskatchewan legislature passed legislation adding $36.7 million to the unfunded state of the WCB.  The decision to put the WCB in an even deeper unfunded financial situation was not responsible and consequently, has been laid on Saskatchewan employers.  A request was made to the WCB to request the Provincial Government inject cash into the legislated increase they made.  We continue to request the Provincial Government to inject cash into the Workers Compensation Board for that decision.  (There is precedent next door in Manitoba for this to occur.  In 1988, the Manitoba Provincial Government advanced $16,386,000 out of the Consolidated Fund to the Manitoba Workers Compensation Board to cover off mounting losses.  The losses occurred due to policies and practices of the WCB.)

Injury Prevention/Return to Work

The areas with the greatest potential to achieve cost savings are injury prevention and return to work.  Accordingly, these two subjects must be the focus of intense efforts.  Strategic investment in meaningful programs with specific measurements, outcomes and targets are important and current ‘programs’ must be evaluated to determine their effectiveness, relevance and overall cost value.

We endorse current efforts in the return to work process and trust all parties support the importance of early return to work after injury.  We have identified expedited treatment as an area where a potential consensus exists among all stakeholders and where there is presently room for improvement.

Specific recommendations

For your consideration, we offer the following specific recommendations:

(1)  Definition of Accident

RBHCA recommends the Act include a section that references, not only the definition of “accident”, but necessitates that a workplace accident must occur before a claim will qualify.

Currently, the Saskatchewan Workers Compensation Act does not contain any reference to the word “accident” as a starting reference point – “injury” is the reference point.  Notwithstanding that, the liberal definition of what constitutes a workplace accident/injury has gone beyond the original intent of compensating for workplace injuries and takes in a host of other social issues that are not caused by a workplace accident.  The costs of these decisions are borne by employers.  We hear many anecdotes from our members about the kinds of claims the WCB accepts and it appears acceptance of some claims extends beyond the original intent of Workers Compensation.  Employers understand the legal and moral obligation to provide a safe workplace, however holding employers responsible for some of the kinds of situations the WCB pays benefits on goes beyond reasonableness, fairness and the intent of the Act.

(2) Waiting Period


RBHCA recommends the introduction of a waiting period for injured workers prior to receiving benefits, as is the case in other public insurance programs and recommend a 3 day waiting period.

Exemptions to the waiting period may be considered if:

  • The injury results in hospitalization; and/or,
  • The time loss lasts longer than 20 working days and there is clinical objective medical evidence to support a causal relationship between the injury and the workplace accident; the board may retroactively pay the claimant for the waiting period in these situations.

Waiting periods in workers compensation system programs are similar to deductibles, a common feature of most insurance programs.  The primary motivation for introducing a waiting period is to improve employee accident reporting and give employers a tool to ensure that accidents are reported. A second benefit would be to achieve cost savings by discouraging frivolous claims.

A waiting period means that an injured worker would be required to wait a specified number of days after a workplace injury before income replacement benefits are paid.  It is similar to a waiting period in other public insurance programs such as federal Employment Insurance.  Waiting periods for WCB benefits exist in New Brunswick, Nova Scotia and Prince Edward Island.

For example, the Nova Scotia Act has a waiting period of 2 working days and the New Brunswick Act has a waiting period of 3 working days.  Waiting periods in these two provinces do not affect the worker’s right to medical aid from the date of injury, however compensation benefits do not commence until 2 and 3 days respectively.

(3) Level of benefits

RBHCA recommends the Act be amended to bring the level of benefits in line with some other provincial jurisdictions.

Some provinces level of benefits are not paid at 90% of net as they are in Saskatchewan.  For example, Nova Scotia pays 75% net for the first 26 weeks, then 85% of net afterward; Newfoundland pays at 80% of net.

(4) Average earning

Included under this issue is the level of benefits paid to seasonal workers i.e. seasonal layoff and normally the worker would apply for and receive EI benefits, however if there is a Workers Compensation claim, the WCB continues to pay at 90% of net which is not a true reflection of the worker’s normal level of yearly earnings.  A recent example regarding level of benefits was citied at the WCB’s March, 2006 Comp Institute where an employer asked what level of benefits would be paid to a laid off Weyerhaeuser worker earning $50,000 and hired by their company at $20,000/annum.  The person becomes injured at the lower paying job and the WCB announced that both earnings (to the legislated maximum) would be used in setting the worker’s disability benefits, despite the fact the worker was not injured at Weyerhaeuser.  Section 70 was cited as the WCB’s authority to pay at the combined high level of earnings, despite the fact the Act states that the loss of earnings is based “as a result of the injury” and not the economic consequence of a company going out of business.  There are serious concerns the WCB is exceeding the intent of the legislation by compensating for matters that are not remotely connected to a workplace accident.

(5)  Pre-existing conditions

RBHCA recommends the Act be amended to take into consideration the non-work pre-existing conditions and compensate that which arises out of a workplace accident.

While the Act permits payment of benefits for non-compensable pre-existing conditions, the Board sometimes extends payment of benefits long after a worker has returned to their pre-accident state and continues to assess the costs of this to the employer.  Many have referred to this as the WCB behaving like and becoming a broad social welfare net.  In addition, the WCB does not make it universally known in the employer community they can apply for cost relief, which can impact a firm’s rate.

(6) a)  Medical Monitoring

We recommend that the Act be amended to recognize the importance of medical monitoring with the following or similar provision.

“Medical aid furnished or provided under any of the preceding subsections of this section shall at all times be subject to the supervision and control of the board; and the board may contract with doctors, nurses, hospitals, and other institutions, for any ical aid required, and agree on a scale of fees or remuneration for any such medical  aid.”

Costs have escalated since the Workers Compensation Committee of Review reported to the Minister in 1992 that “Although the Board pays the cost of medical care for injured workers, the Board has no right to intervene in the treatment plan.  Decisions regarding treatment are to be made by the worker’s physician in consultation with the worker.”

This has proven a costly mistake and has had a negative affect in terms of claims management,

fraud, entitlement culture, adjudication, etc.   While it is recognized that medical costs have increased, a doubling of medical costs since the legislation was repealed in 1994 is unacceptable.  In affect, removing controls from the insuring agency i.e. WCB was not a prudent or responsible action to take.  Despite the repeal of Section 107 in 1994, there is still ample legislation in the WCB Act that provides the Board broad jurisdiction to manage the affairs of the Workers Compensation system, including medical treatment – however, the Board says it cannot.  The WCB says their hands are tied, due to the legislators removing responsibility/accountability to manage disability, which is unacceptable.  There is no private sector insurance company that abrogates their fiduciary duty to monitor, supervise and control medical treatment on behalf of their customers.  To give the benefit of the doubt to the past Legislative Review Committee position and recommendation – they may have been well intentioned, however it has been a costly position to take and then adopt.  It’s time to correct the problem of 1994.

Currently and according to the WCB, workers can book physiotherapy directly without referrals.  This practice should be stopped.

b)  Expedited treatment for injured workers

We recommend that the Act be amended to permit the Workers Compensation Board to contract, purchase or arrange for expedited medical treatment and/or diagnostic testing for injured workers.

There is a generally accepted belief held by all stakeholders that an early recovery from injury and an early return to work is critically important to the injured workers and his/her family.  Studies demonstrate that the longer a worker is out of the workforce, the less likely it is that he/she will successfully return to work.  However, in many cases, the disability period is often prolonged due to delays in accessing necessary diagnostic tests or timely medical treatment.  These delays often add months or years to the recovery process.  It would be our sincere desire that organized labour fully support this recommendation as it has the potential to reduce the amount of time an injured worker must suffer while awaiting diagnostic testing or referral to a specialist.

The clear intent of this recommendation is to ensure injured workers receive expedited service and not to subsidize the provincial healthcare system.

c)  Independent Medical Examinations

RBHCA recommends that the Act be amended to allow the employers of Saskatchewan the right to have an injured worker examined by a physician selected by the Employer

This recommendation is consistent with legislation already in place in other jurisdictions; for example Alberta, Ontario and Nova Scotia.  We believe that the primary need for such assessments would be those situations where the disability period is both prolonged and inconsistent with the perceived severity of injury.  Such an amendment would, in our opinion, provide both a ‘fresh’ assessment of the clinical findings as well as allay or validate the concerns of the employer.

(7) Rehabilitation

RBHCA recommends the Act be amended to include mandatory time limits for rehabilitation.

There is often no exit off the rehab clover leaf – WCB rehab, like other insurance rehab, should have limits.  The 1992 Legislative Committee of Review made a unanimous decision recommending limits (e.g. two years) to rehab training/education and the legislators unfortunately dismissed it – this should be revisited with limits on the number of times the WCB will train and retrain an individual.

(8) Overpayments to workers

The WCB currently has discretion to collect overpayments.  RBHCA recommends that an amendment to the Act be made to make it mandatory for the WCB to collect overpayments made by it.

The Act gives the WCB the authority to collect overpayments – the major complaint is that the WCB does not.   Monetarily, we do not know if this is a major cost item, but in terms of good governance, it is important to collect overpayments made to any individual or organization.

(9) 3rd Party Cost Recovery (Subrogation of Costs)

RBHCA recommends amending the Act to include a section directing the WCB to follow through on third party cost recovery where an employer’s worker is not responsible for a workplace accident e.g. motor vehicle accident.

There are varying interpretations of this issue in Saskatchewan.  The WCB says it cannot recover costs in a third party action, although the WCB has indicated it can collect monies through subrogation of costs.  To ensure uniformity, clarity and direction, the Act should include a section that addresses this issue and mandates the WCB to assess and recover costs in a third party action.  For example, if a worker who is at work and driving a one ton truck is driving to his destination and is involved in an MVA at no fault of his and does qualify for WCB benefits because he was injured at work, the current Act does not explicitly give direction on 3rd Party cost recovery to the WCB on this matter.  Some jurisdictions have reciprocal agreements with other organizations for such cost recovery and the credit is applied to the employer’s account and is not held liable for the costs of the claim.

(10) WCB Appeal Structure and Process

RBHCA recommends amendments to the Act that clearly outline procedure and parameters for appeal:

§ The rules of procedure for the proper functioning of the Board should be approved by the Lieutenant Governor in Council.

§ There should be limits on the numbers of appeals one can make on the same issue

§ Decisions and any dissenting opinions should be made public as is the case in many Canadian Workers Compensation jurisdictions

§ The final level of appeal i.e. Board of Directors, should be bound by its own policies,  procedures and adherence to the Act

There are a number of issues and perceived biases within the appeal process e.g. limits on appeals, employer access to information, public decisions - most other provinces publish Appeal Commission decisions.

Board decisions with employee, employer names and claim and firm numbers can be deleted in the public decisions.  Written dissents, if the Saskatchewan WCB has any, should be published and it should be mandatory that all three Board members sit on all appeals.

The Appeals Committee which is the second level of appeal in Saskatchewan is bound to follow WCB legislation, policies and procedures.  The Board of Directors, on the other hand, indicate they base decisions on legislation, and are not bound by the policies they set and approve.  The perception that is held is that accountability is missing from the appeal process.  If the Board is not bound by policies, the question that must be addressed is: Are decisions on final level of appeal made in compliance of the Workers Compensation Act?  The Board’s overturn rate is relatively high at the final level of appeal.  We recommend an analysis of the appeals structure and decisions be made.

(11) Access to Information

RBHCA recommends complete access to file information at both levels of appeal.

Employers should have access to complete claim file information when considering or pursuing an appeal.  Too much discretion is left to the WCB to decide what information it will release.  Additionally, employers oftentimes do not have enough claim file information in the return to work/claims management process.  Often an employer only becomes aware of relevant information in the appeal process that would have materially changed the way the claim was handled or the duration of it.  In addition, the WCB must be more diligent in advising employers about their rights in the appeal process.  Sometimes, the employer only becomes aware of an appeal when the Board overturns a decision and employers see the costs of those decisions on their firm statements.  That is not acceptable.

(12) Defunct firms

RBHCA recommends that at the final level of appeal the Board of Directors be given the authority to designate a deemed employer, for the purposes of an appeal, where the employer in the appeal is defunct (no longer in business or no longer covered by the Act).

This recommendation is based on Section 248 of the B.C. Workers Compensation Act.  It allows a group of employers (some of whom must be from the defunct employer’s subclass) to be identified as a deemed employer, and to have the same rights to participate in an appeal as the original employer.

The argument for this recommendation is that employers who continue to pay Workers Compensation assessment premiums and employ workers in the province, will be charged with the costs and outcomes of Board decisions for an employer which has gone out of business.

In the absence of this added provision, it is unclear whether the Board can designate economically affected employers as a “party of direct interest’.  Adding this provision allows for fully informed decisions to be made by the Board.  It is also consistent with the equitable balance of advocacy encouraged inside both the WCB and in the appeals process.

(13) Audit Process

RBHCA recommends that an independent audit be conducted, at minimum, every five years commencing 2006 on the WCB.  The focus of the audit should be value for money expended.  The results of the audit should be subject to public disclosure.

The Workers Compensation Board is an employer funded agency where transparency and accountability is essential.  An audit process of this nature will provide the necessary “score card’ to determine the level of financial, fiducial and functional conformity.

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