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Dec
2013
27

Ruthless Insurers Taking Advantage of Suffering Laborers, Depleted Labor Dept Judgement System

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An incredible piece from Jim Morris at the Center for Public Integrity details the burdens placed on suffering laborers as they try to navigate a treacherous legal environment with fewer and fewer judges handling rising caseloads.  In the past, the system to rule on grievances set up by the Longshore and Harbor Workers’ Compensation Act has been efficient, but an uptick in worker voice has created a backlog of cases and put huge financial burdens on sick workers.  With limited time as the main inhibition, workers now must accept any deal they can get in hopes of recovery. From Morris’ piece:

Nationwide, the number of Labor Department judges has fallen to 35, plus one part-timer, from 41 earlier this year and 53 a decade ago. Yet new cases filed with the department’s Office of Administrative Law Judges have risen by 68 percent in the past five years, with a 134-percent increase in pending cases.

As a result, the most desperate claimants — the very ill, those in financial straits — may feel compelled to accept meager settlements, lawyers say. In some instances, they say, employers or their insurers are moving to re-litigate cases with the aim of saving money.

“The claimant has to take what he or she can get,” said Joshua Gillelan, a retired Labor Department lawyer who runs the Longshore Claimants’ National Law Center in Washington. “They can’t hold out for another year or two or three; they’re going to starve.”

Insurance providers are taking advantage of the pile-up by becoming more aggressive in attempting to deny the role of occupational hazards in the sicknesses of claimants.  Some insurers are going as far as attempting to bring previously settled cases back into the system, hoping to lower the amounts a judge has previously ruled they are responsible to pay.

Such is the case with Robert Durbin, a former fiberglass technician in San Diego.  Twenty-one years ago he won his Longshore claim after a judge found a “causal relationship” between Durbin’s chemical exposures and his hypersomnia.  He was awarded permanent total disability.  Unable to ever return to work, Durbin relocated to rural Kentucky where he receives semimonthly payments o $1,180 ($28,320/year).  This year, his former employer’s insurer, AIG, brought the case back into the system.  

In August, a lawyer for AIG filed a petition for modification with the Labor Department, saying a “mistake in fact” had been made by the judge 21 years earlier and seeking to reopen the case. A toxicologist hired by the insurer reviewed Durbin’s medical records and concluded his drowsiness was due to “obstructive sleep apnea, unrelated to employment,” the lawyer wrote. “The prior orders should be modified to deny claimant all compensation and medical services.”

The Durbins were shaken by the filing. Robert, 58, takes two drugs — Desoxyn, a powerful stimulant, and Hydergine, a memory aid — that collectively cost $3,400 a month. AIG has stopped paying for his prescriptions and medical treatment, he said.

“They’re trying to break us,” said Susan, who is on Social Security disability for a back injury. “I can afford to pay for Bob’s prescriptions for the next six or seven months and then I’m broke.”
Robert had a cancerous kidney removed two years ago, suffers from congestive heart failure and was recently diagnosed with prostate cancer. He believes the insurance giant is trying to pressure him into accepting a skimpier settlement.

“I’m costing them too much, basically,” he said. He finds this ironic, given that AIG received a $182 billion government bailout at the height of the financial crisis five years ago. (AIG eventually repaid all the funds, plus interest).

“They got the help they needed and gave all their executives these million-dollar bonuses, when they’re shorting me,” Robert said. “If they’re doing it to me, they must be doing it to other people, too.”

The situation is a perfect example of how business interests can manipulate the political system in order to weaken checks and balances.  In knee-capping the Labor Department’s ability to fulfill its intended function, insurers can now use the depleted system to force disabled workers into crummy settlements an walkbacks.

This must-read and more information about the Longshore and Harbor Workers Compensation Act are available via publicintegrity.org.

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