KUFM Commentaries 2011

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2011 Commentaries



September 27, 2011
Gun Safety - Get Your Remington 700 Repaired

For me, these crisp autumn mornings mean the big game hunting season is near. Right now hunters are out sighting in their rifles. The general rifle season for elk, deer, and antelope opens next month. Hunting is a family tradition in Montana, a higher percentage of our population hunts than in any other state, and it is common to see hunting parties of two or three generations in the woods and on the prairies throughout Montana. Unfortunately, a Montana family may lose a loved one to a hunting accident. While any loss of life is tragic, we are doing better - down from twenty plus hunting fatalities each year in the 1960's to around one or two per year.

It’s good to remind ourselves, and our hunting companions, to be extra careful with guns. Those of us who do own and use firearms, whether for hunting or sport shooting, need to make sure that we emphasize safe gun handling practices, for ourselves and those we are shooting with. We need to reinforce the safe handling of guns, remembering to treat each and every weapon as if it were loaded. We have come to place too much trust in the mechanical safeties on our guns, but that trust is misplaced.

Eleven years ago, here in Montana, nine year Gus Barber lost his life when a hunting rifle that was being unloaded fired unexpectedly. Most of us who heard the news reports at the time were saddened to hear the reports, and it was especially so for parents confronted with the unimaginable pain of losing a child. For those of us who hunt, especially with our kids, it was a sober reminder of the inherent dangers of firearms and the need to reinforce safe gun handling practices.

I’ve talked before about defective products that injure and kill unsuspecting Americans, like the revelations about defective Firestone tires. Our lives, or those of our families or friends can be quickly and severely altered by a defective product.

Unfortunately, the tragedy of the loss of nine year old Gus Barber’s life was caused, in part, by a defective product. While a Remington Model 700 rifle was being unloaded, the rifle’s safety was released, and the gun fired. The gun firing was an unexpected event for Gus’s family. A Remington Model 700 rifle accidently discharging, however, was not unexpected, by Remington.

Over the years thousands of Remington Model 700 rifles have discharged unexpectedly, including many here in Montana. Faced with owner complaints and lawsuits, Remington, making a cost benefit analysis, chose not to recall the rifles. Remington chose instead to issue a statement to Remington rifle owners about proper gun handling. The statement did not alert Remington owners that there was a potential design problem with their rifles that required added attention to safety.

Remington knew it’s Model 700 rifles had problems. They even launched an internal program to develop a safer rifle. And they did develop a safer rifle, but chose not to market it.

We know all this about Remington Model 700 rifles because the victims of the tragedies that have resulted from Remington’s design defect have come to trial lawyers for help. Trial lawyers, and the victims’ concerned family members, like Gus's dad, Rich Barber, have uncovered the internal documents showing Remington’s knowledge of this problem, and of their knowledge of safer alternatives.

One of the legal aspects of the Remington story has received little attention over the years – secrecy agreements in previous litigation prevented much information about the dangers of the rifles from being made public. One of the benefits of being a trial lawyer is that you get to help people. Unfortunately, people usually only seek the assistance of a trial lawyer when they or a member of their family have been severely injured or killed. I have had the good fortune to work with, and become friends with Rich Barber. With Rich’s hard work we have been able to pass legislation in Montana to ban these secrecy agreements. Rich’s purpose was clear and concise - he didn't want another family to face the tragedy his had, simply because knowledge of a dangerous product was hidden from public view by a secrecy agreement. A similar law is needed on the federal level.

While there has been no mandatory recall, Remington is offering to modify the defective mechanism for its models 700, 721, 722, 600, 660, XP-100 and 40-X. You can check the Safety Modification Program at remington.com under the safety tab or call 800-243-9700 for the details of the program. There are still millions of defective rifles out there, and thousands here in Montana, please make sure one of them isn’t your’s or one of your hunting buddy’s.

Gus Barber’s death prompted me years ago to make this yearly plea. I do it because every year I hear from a listener who has had a defective Remington repaired.

Safe gun handling practices are not enough, these rifles are defective - enough is enough, check your guns, tell your family and friends, and just get these Remington rifles fixed. Please don’t wait until another Montana family’s fall hunting tradition turns into yet another preventable tragedy - please do it this season.

This is Al Smith for the Montana Trial Lawyers Association.

CNBC prepared an hour long story on defective Remington rifles Remington Under Fire, it can be accessed at http://www.cnbc.com/id/39554936/

The link to Remingtons's Safety Modification program is:

http://remington.com/pages/news-and-resources/safety-center/safety-modification-program.aspx

From this page:

The unloading process for most bolt-action firearms with a bolt-lock mechanism cannot begin unless the manual safety is placed in the "F" or "Off or Fire" position. If you participate in the program your firearm will be modified to eliminate the bolt-lock feature and you will be able to unload your firearm while the safety is kept in the "S" or " On Safe" position. The operation of your firearm will not otherwise be affected.

If you have a bolt-action rifle with a bolt-lock mechanism, and you do not wish to have the lock removed, you must be sure to follow this IMPORTANT SAFETY NOTICE: Be sure the rifle is pointing in a safe direction anytime you move the manual safety to the "F" or "Off or Fire" position. As soon as you have lifted the bolt, immediately put the manual safety back in the "S" or "On Safe" position and then continue the unloading process.


November 22, 2011

Corporate Speech - Equality or Special Privileges?

Last year the Montana district court in Helena ruled that Montana’s law that prohibits corporate money in independent expenditure campaigns to oppose or support candidates is unconstitutional. The lead party challenging the law was Western Tradition Partners, a non-profit corporation that runs independent expenditure campaigns attacking candidates.

Following the U.S. Supreme Court’s 2010 Citizens United opinion, the court found Montana had no compelling state interest in restricting political speech by corporations. The decision did note that Montana’s law was enacted by citizen initiative in 1912, in response to blatant electoral thuggery by the copper companies, but found that interest in preventing electoral corruption too distant in time to be relevant today. The Court ultimately agreed that Citizens United is unequivocal: “the government may not prohibit independent and indirect corporate expenditures on political speech.”

The Western Tradition decision left corporations free to spend all the money they want to directly, or through front groups like Western Tradition, to independently oppose or support candidates. Attorney General Steve Bullock appealed the decision to the Montana Supreme Court in an effort to uphold the law enacted by the people of Montana. Oral arguments were heard by the Court in late September.

How did we get to the point where corporations are treated like actual citizens of our country and state? How is it that an artificial entity that can exist forever, and that owes its very existence to laws enacted by our governments, be afforded the same rights as the rest of us flesh and blood citizens? Well, actually corporations have a right that real people don’t - they get to spend pre-tax money on independent expenditures, while the rest of us have to pay our taxes first and spend from what’s left.

Corporations and their messages have become so pervasive that we hardly even question their place in our country anymore.  It wasn't always so.  In the early days of our country, we sparingly granted corporations a limited business role. Granted limited powers, corporations continually sought more from state legislatures.  Mindful of the corporate tyranny they had cast aside in the Revolution, most opposed any further expansion of corporate power.  Thomas Jefferson said, "I hope we shall crush in its birth the aristocracy of our moneyed corporations which dare already to challenge our government in a trial of strength, and bid defiance to the laws of our country."

The most severe blow to citizen control of corporations was the 1886 Supreme Court case of Santa Clara County v. Southern Pacific Railroad.  A case about local taxation powers became the precedent by which corporations became "persons" under the U.S. Constitution, entitled to all the rights of any other person, even though the Constitution never mentions corporations.  The 14th Amendment, enacted to protect the rights of freed slaves, has since been used to strike down hundreds of local, state and federal laws enacted to protect people from corporate harm - and, is the reason that the holding in Citizens United is applicable to Montana’s anti-corruption law struck down in Western Tradition.
It is appropriate that Western Tradition is the corporation that challenged Montana’s anti-corruption law. It has been active in Montana legislative races, flaunting Montana’s campaign laws for years. The case before the Montana Supreme Court is one of three lawsuits that these characters have filed challenging Montana's election laws.

Last year, Montana’s Commissioner of Political Practices ruled that Western Tradition violated Montana campaign financial reporting and disclosure laws in the 2008 election. Among its findings, the Commissioner found that Western Tradition doesn’t report the source of its money, doesn’t fully report it’s expenditures, solicits corporate money while assuring potential donors that their identities will not be revealed, and likely has solicited money from foreign corporations. The Commissioner’s 43 page findings and decision (Graybill v. Western Tradition) can be found online at politicalpractices.mt.gov.

The authority of the Commissioner to require disclosure of campaign expenditures in the Graybill case is currently being challenged in federal court. Also being challenged in another lawsuit are our limits on the amounts that can be contributed to candidates.

Western Tradition gives us a preview of what we can expect in the future. It is unlikely we will see an independent expenditure solely by a legitimate company, rather we will see front corporations who gather corporate money, refuse to identify where the money comes from, flaunts campaign laws, and floods mail boxes with sleazy attack pieces.

The Citizens United and Western Tradition decisions grant corporations ever more influence in our political process, assuring that corporate domination will continue for the foreseeable future. Sorry Mr. Jefferson, we tried to heed your warning, but corporate personhood has trumped our efforts so far.

Article XIII, Section 1 of our Montana Constitution provides for our power to charter corporations, and mandates the Montana legislature to "provide protection and education for the people against harmful and unfair practices by" corporations. Thanks to the efforts of Attorney General Bullock, the fight continues to protect Montana's right to manage the influence of money in elections and require disclosure of donations and expenditures in elections. Hopefully, the Montana Supreme Court gives some guidance on how the legislature can fulfill its mandate despite the strictures imposed by the Citizens United decision.

This is Al Smith for the Montana Trial Lawyers

 




August 2, 2011
What, Work Comp Rates Higher Than Promised?

Mike Dennison reported Sunday that workers' compensation premiums haven't gone down like promised by Republican legislators and insurers in this past session. He reported that the promised 20% savings were not being seen by Montana's employers. One of the excuses from insurers for why rates weren't going down as much as promised, was the unknown of what trial lawyers would do.

I found that excuse somewhat amusing, since our organization and our members testified many times in public that the Republican bill, HB 334, had serious constitutional flaws that would be challenged in court. We testified about amendments that could be made to alleviate those constitutional concerns, and still save money, but our suggestions were dismissed.

What I do not find surprising about Dennison's report, is that legislation that reduced workers' benefits was not even providing the big benefit employers were promised. Virtually every bill involving workers’ compensation reform since the mid-eighties has resulted in restricting access to health care for injured workers, reducing benefits, or both. All those “reforms” promised to “fix” workers' compensation while lowering premiums for employers.

While insurers haven't given employers the big savings they were promised, you can be sure insurers will take full advantage of the parts of HB 334 that reduce benefits and access to medical care for injured workers. Montana’s benefits provided to injured workers, already among the lowest in the country, are even lower now.

Workers’ compensation is always a hot issue at the Montana Legislature, fueled by Montana’s ranking as the most expensive state for workers’ compensation premiums. The Labor-Management Advisory Council (LMAC), established by Governor Schweitzer in 2006, also took this problem very seriously. LMAC is composed of five employer representatives and five labor representatives who analyze the cost drivers of the workers’ compensation system.

After four years of study, including input from experts and allowing all interested parties including doctors, lawyers, chamber of commerce, injured workers, and insurance companies to contribute, consensus was reached before the 2011 legislature on many of the pressing issues – lowering costs for employers and providing for limited increases in benefits for injured workers.

Not satisfied with this thoughtful, reasoned approach to workers’ compensation reform, the Republican legislative leadership unveiled their workers’ compensation reform bill, HB 334. Unlike the LMAC proposal, it was drafted without input and consensus from all interested parties – the only input was from insurers, the health care industry, and employers. They promised to immediately reduce the costs of worker’s compensation premiums by more than 20%.

So, what is so bad about HB 334, besides not lowering premiums as much as promised? Let me give you a couple of examples. HB 334 completely eliminates benefits for some workers that were previously getting benefits for permanent physical impairments caused by workplace injuries. Impairment benefits were eliminated for some 50% of workers previously receiving those benefits. This represented a whopping 2% of the savings in HB 334, but is devastating to those injured workers and a violation of the quid pro quo guaranteed by our constitution and the Workers’ Compensation Act. There will be workers denied these benefits, and they will challenge the law in court, just like we testified to in the legislature.

HB 334 purports to take away personal choice of physician. This would increase an insurance company's ability to deny medical treatment by allowing the insurer to pick the treating physician. Nobody wants to be limited to the “company doctor.” When an insurer denies an injured worker the right to choose their own treating doctor, you can be sure there will be a challenge to the law in court, just like we testified.

Workplace Safety? Most importantly, HB 334 fails to address the main cost driver of the system – our high rate of on-the-job injuries. As we continually reminded the legislature, the sad fact is that Montana workers are more likely to be injured or killed on the job than workers in most other states, regardless of the type of work. Reducing our injury rate to the national average would save $145 million – $10 million more than HB 334’s draconian cuts to workers saves. Yet, there was no significant legislation to reign in those employers that have unsafe work places and no legislation to shield safe employers who see their rates go up because the safety records of their unsafe competitors are factored into the rates of all employers in similar industries.

The sponsor of HB 334, Representative Scott Reichner, described workers’ compensation as a benefit “that we get to decide as legislators.” However, HB 334 failed to acknowledge the corresponding constitutional obligation employers owe to employees injured on the job, and the special protection from more expensive civil suits employers receive in return. HB 334 hasn't fulfilled the promise of immediate premium reductions of more than 20%. It's no surprise, as we warned, that workers denied their constitutional rights will be forced to give up – or go to court, where we will proudly represent them.


This is Al Smith for the Montana Trial Lawyers Association.
 


July 5, 2011
Oil, “Hot Coffee” and Independence

 

With so many things happening in Montana and across the country affecting the civil justice system, I had a hard time picking a topic for tonight. There was the Exxon oil spill in the Yellowstone River, our annual celebration of our declaration of independence, a Business Insurance article about lawsuits and jobs, and the recent release of the documentary on the civil justice system - “Hot Coffee.” So, I decided to tie them all together.

We often forget that many of our grievances were with King George carrying out the bidding of the few corporations that dominated colonial America, like the East India Company. It was corporate tea that was thrown in Boston Harbor. In 1776 we declared our independence not only from British rule, but also from the corporations of England that dominated and controlled us, and extracted wealth from us.

One of the rights insisted upon in order to assure passage of our constitution was the right to trial by jury in civil matters – the Seventh Amendment. It is the means by which we hold our government accountable. It also ensures that all men and women are equal under the rule of law and entitled to a redress for wrongs done by others, including corporations. As John Adams once said about jury trials, "We have not envisioned a better fortification from being ridden like horses, fleeced like sheep, worked like cattle and fed like hounds."

The moneyed interests of corporate power have been chafing at the reigns of the the civil justice system and the right to trial by jury since our country's inception. The latest variation is in this weeks’ Business Insurance magazine, a trade publication for the insurance industry. The U.S. Chamber of Commerce have announced their recycled PR messaging trying to link the relatively infrequent litigation by consumers against corporations, and job loss. Another justification in their campaign to strip everyday Americans of their right to jury trials - so-called "tort reform."

When hearing such claims, I like to check what actual businesses really think, as opposed to corporate lobbyists and PR spokespeople. If you check out the most recent “Small Business Problems & Priorities” survey issued by the National Federation of Independent Businesses (NFIB), you get a different perspective. Going down the list of 75 issues that are important to NFIB’s members, you finally get to #65: “Cost and Frequency of Lawsuits/Threatened Lawsuits.” That’s right, this issue ranked 65 out of a possible 75 issues that small business owners actually care about, just below "Solid and Hazardous Waste Disposal."

In a way it is surprising that lawsuits rank so low amongst actual business people – surprising in that with over 35 years of corporate propaganda about the evils of lawsuits, the civil justice system and jury trials, you'd think the ranking would be much higher. Evidently, sometimes facts and reality can overcome propaganda.

A recent documentary film, “Hot Coffee,” examines this decades old campaign of anti-civil justice, anti-jury trial, and anti-corporate accountability propaganda called “tort reform.” In the nearly 20 years since it occurred, there has been a lot written about the McDonald's coffee case. You know it: 79-year-old grandmother Stella Liebeck spilled her cup of McDonald's coffee, burned herself, sued and received a lot of money. The truth, however, is that very few Americans know the real story of Stella Liebeck; how and why the case generated so much news coverage; and how corporate special interests seized the case to advance a political agenda of “tort reform.”

“Hot Coffee” examines the facts of Stella's case and three other stories demonstrating the effects of the corporate assault on the civil justice system. It premiered on HBO June 27th and is currently being replayed on HBO. The film had its debut at the Sundance Film Festival and just won the top Jury Prize for Best Documentary at the Seattle Film Festival. Victor Schwartz, one of the most prolific mouth pieces of the corporate “tort reform” movement is featured, though other leading “tort reform” advocates declined interviews. Many viewers and reviewers have noted how little they really understood about the McDonald's case and its impact on people who seek justice through our civil justice system in a trial by jury.

You can check the KUFM archives or our webite at monttla.com for my past comments on Stella's case, or better yet catch “Hot Coffee” this month on HBO.

So, what does all of this have to do with the recent Exxon oil spill into the Yellowstone River? Well, Exxon has been one of the largest contributors to the corporate “tort reform” campaign. Exxon has supported putting caps on damages – both actual damages suffered and punitive damages for egregious conduct. After Exxon's disaster in Alaska, Congress enacted caps on actual damages oil companies would have to pay, and the Supreme Court drastically reduced the punitive damages Exxon had to pay.

Now I'm sure Exxon will say they will take full responsibility for the Yellowstone spill, and I hope they do. But, Prince William Sound has still not recovered, and Alaskans affected have still not been fully compensated for the harm Exxon's spill caused. If Exxon fails to be fully responsible, Montanans, with thanks to Governor Schweitzer's vetoes, still have the ability to use our civil justice system the way our founders envisioned - juries in our communities determining responsibility, and the full amount of damages.

This is Al Smith for the Montana Trial Lawyers Association.


 



 


June 7, 2011
Litigation For Future Generations

Last month a direct petition was filed in the Montana Supreme Court on behalf of young Montanans, ranging in ages from 6 to 22, asking the Court to recognize the ancient doctrine that governments hold nature in public trust for its citizens. News reports today of a few legislators seeking to intervene in the legal action prompted me to go back and review the petition. The Barhaugh Petition, the State's response and all other filings, including the motion to intervene, are available for the public to read – they can be found under the Docket tab on the Supreme Court's website. Click here for Exhibits to the Petition.

Reading the news reports you would think the petition sought an order to halt all uses of fossil fuels. The petition, however, does not ask the Court to order any such specific remedy. Rather, the petition asks the Court to recognize the government’s duty to protect the atmosphere in the same way water is protected, under the public trust doctrine and Montana’s Constitutional guarantee of a clean and healthful environment. And, the petition asks the Court to declare that the State of Montana has the affirmative duty to protect and preserve the atmospheric trust, including the State establishing and enforcing limitations on the levels of greenhouse gas (GHG) emissions as necessary to mitigate human caused climate change.

The petitioners argue that the Supreme Court has original jurisdiction because: (1) the petition raises constitutional issues of major statewide importance; (2) the case involves purely legal questions of statutory and constitutional construction; and (3) urgency or emergency factors make the normal litigation and appeal process inadequate.

The petition relies on undisputed acknowledgements by the State to demonstrate that recognition of the public trust in Montana is not a great legal leap. As an example, the Montana Department of Environmental Quality, the DEQ, has expressly admitted climate change poses a statewide imminent and growing threat to the lives and livelihood of the citizens of Montana.

Because Montana has Constitutional and statutory protections of the environment, and the State has acknowledged the problem, the petitioners argue it meets the requirement that the petition only present legal issues. Petitioners argue that the existence of legal duties – whether the atmosphere is subject to the public trust, and the State’s affirmative duty to protect the trust resource – are questions of law.

The petitioners further argue that the State’s acknowledgment of the problem, demonstrates that there is insufficient time to use ordinary litigation to address the problem. The two to three years which it would take before the case could reach the Montana Supreme Court through appeal would be a time period in which the problem will likely become irreversible. The Montana DEQ has already determined that, “[t]he stakes associated with projected changes in climate are high,” and “[i]t is imperative that we all begin to do what we can to address this crucial issue for our own sake and the sake of the generations of Montanans to come.”

The petitioners argue that the emergency which led to the Petition was created by the legislature. They point out that in 2005 Governor Schweitzer appointed the Climate Change Action Committee to prepare a Climate Change Action Plan to address the “profound consequences that global warming could have on the economy, environment, and quality of life in Montana.” The Action Plan concluded that Montana has a rate nearly double the national average of GHG emissions per capita, and recommended a number of measures for Montana to reduce its emissions of GHGs to 1990 levels by the year 2020.

Despite these recommendations, petitioners argue, the Legislature prevented the State from acting to regulate GHG emissions, despite a legal obligation to do so. In 2009, after the EPA determined that GHGs are a pollutant that must be regulated under the federal Clean Air Act, the Board of Environmental Review (BER) initiated required rule-making proceedings for GHG emissions under the Montana Clean Air Act. However, a legislative committee, the Environmental Quality Council (EQC), forced BER to terminate the GHG rulemaking.

Contrary to the impression left by news reports, the Petition does not seek to exclude the public or their representatives from political participation. Should the Petition be successful, any member of the public will be entitled to present facts and arguments to the DEQ and BER regarding any specific actions to protect the atmosphere as part of the State's public trust responsibilities. In a curious twist, the vast majority of legislators who seek to intervene voted for a bill, SB 305, this past session sponsored by Senator Jackson, also one of the prospective intervenors. SB 305 provides specifically for the State to "increase utilization of Montana's vast coal reserves in an environmentally sound manner that includes the mitigation of greenhouse gas and other emissions." A couple of months ago they vote for mitigating GHG emissions, and now they seek to oppose an order to have the State, through the DEQ and BER, take steps to mitigate GHG emissions, hmm?

The motion to intervene, and the news reports of it, misses the point of the Petition. The question it presents is purely legal.  The Petition asks, does the State hold the quality of the air we breathe in trust for future generations of Montanans, just as it does the quality of our water and all our essential natural resources? If the answer is yes, the Petition asks that the Court order the State to determine in an open, public process how to preserve and protect that trust, including, how to mitigate GHG emissions - a requirement the prospective intervenors have already voted for in passing SB 305.

This is Al Smith for the Montana Trial Lawyers.

 


 

May 10, 2011

VETO Acceptance of Medical Malpractice

The 2011 legislative session is finally over, and I think it's fair to say that virtually everybody is, at the least, relieved. I know I am. And, I am also relieved, and thankful, that Governor Schweitzer has been unafraid to make use of his VETO – by pen and branding iron.

Often there are similar issues that Congress and state legislatures are dealing with – one of those issues that is before Congress and was before the Montana legislature is medical malpractice. The discussion usually is NOT about how to decrease the types and numbers of preventable medical errors, rather it is usually about how to decrease the rights of those patients harmed by medical malpractice.

A committee of the U.S. House of Representatives took testimony on H.R. 5 last month, and tomorrow the committee is scheduled for the mark up of the bill – committee discussion, proposed amendments and possibly vote on the bill. One of the components of this bill is so-called defensive medicine.

Defensive medicine is one of those pieces of medical malpractice propaganda being touted as a significant factor in health care costs. Supposedly doctors order unnecessary tests and medical procedures as a means to avoid lawsuits. And of course, the only cure for defensive medicine is to limit or deny the rights of persons who have been harmed by medical negligence.

There just aren’t any facts to back up the claim that true defensive medicine is a significant factor in health care costs. The Congressional Budget Office called the evidence of defensive medicine “not conclusive,” and summarized, “On the basis of existing studies and its own research, CBO believes that savings from reducing defensive medicine would be very small.” Researchers at Dartmouth College echoed these conclusions, saying, “The fact that we see very little evidence of widespread physician exodus or dramatic increases in the use of defensive medicine in response to increases in state malpractice premiums places the more dire predictions of malpractice alarmists in doubt.”

The Government Accountability Office (GAO) has issued similar statements questioning the occurrence of defensive medicine, saying, the overall prevalence and costs of defensive medicine have not been reliably measured, and “study results cannot be generalized to estimate the extent and cost of defensive medicine practices across the health care system.” The GAO reported that even “officials from AMA [American Medical Association] and several medical, hospital, and nursing home associations told us that defensive medicine exists to some degree, but that it is difficult to measure.”

To the extent that defensive medicine does exist, research has found that the motivation behind it is not liability but rather a desire to simply help a patient or, in some cases, boost physician income. One government agency found that when doctors ordered tests they almost always did so because of medical indications, and only one half of one percent of all cases involved doctors who ordered tests due solely to medical negligence concerns.

Doctors may actually practice defensively because it generates more income, according to the GAO. They identified revenue-enhancing motives as one of the real reasons behind the utilization of extra diagnostic tests and procedures. In Florida, health authorities determined diagnostic-imaging centers and clinical labs were ordering additional tests because the majority were physician-owned and the tests provided a lucrative stream of income. Federal law now prohibits the referral of Medicare patients to certain physician-owned facilities, many of which charge double the amount in lab fees.

So, if defensive medicine is actually so prevalent, you have to ask, isn’t it fraud to order medical procedures that are not medically necessary? The law is so clear about this, that when this issue came up not once but twice at Congressional hearings this year, the doctors who first testified to performing unnecessary tests essentially wound up denying it when Members of Congress asked if they billed Medicare for them.   The exchange between Troy M. Tippetts, MD and Rep. Jan Schakowsky (D - IL) was particularly enlightening.

Evidently, the health care industry has learned how to get around Medicare rules designed to stop unnecessary care. In comments to a blog post on Huffington Post posting on this issue, physician commentators actually admitted to not only routinely ordering unnecessary tests, but also that they knew precisely how to “outsmart” Medicare auditors so they wouldn’t get caught!

So, is medical malpractice really a significant health care cost concern? Looking at the numbers, all malpractice costs - malpractice insurance premiums, damages paid, legal fees, etc - amount to less than 2% of our total health care costs. That’s right, the health care industry could receive total immunity from all lawsuits and it would lower health care costs by a whopping 2% – but, only if all lawsuits are eliminated.

The medical malpractice propaganda seems to be working, real issues like how insurance industry overhead and profits decrease the amount of money available for actual health care by hundreds of billions of dollars, or how hundreds of thousands of patients are being harmed each year by preventable medical errors, are not discussed.

Today, Governor Schweitzer vetoed HB 405, Montana's answer to defensive medicine - by giving immunity to physicians if they documented their reasoning and could find one doctor anywhere in the country to agree with them. Should H.R. 5 make it out of Congress, it deserves the same fate – maybe the Governor will loan his VETO irons to the President.

 





March 15, 2011
Insurers Tightening Your Belt, And Picking Your Pocket

Subrogation, made whole doctrine, first-party medical payments coverage, third party liability, limitations, exclusions, or reductions of coverage – I hope you haven't tuned me out yet. All those terms are part of a bill being heard tomorrow in the Business committee of the Montana Senate. And, as mind numbing as all those terms might be, how those terms are put to work in House Bill 555 is extremely important to all Montanans that have health insurance.

HB 555 is being pushed by the health care industry as a cost savings measure. The only savings though are for the health insurance companies – HB 555 allows them to collect premiums for health insurance, and then relieves these insurers of having to pay for covered medical benefits. In tough economic times we all tighten our belts. HB 555 allows health insurers to avoid this by giving them the authority to instead tighten the belts of the people they collected premiums from.

The impetus for HB 555 is a Chicken Little cry that people who are injured in accidents are getting double payments for their medical bills. I say Chicken Little because the fiscal note for the bill, says it has no fiscal impact to the state health plan because the state plan “is currently not responsible for the duplication of payments.”

We agree, under current Montana law, if you are injured by the driver of another car and have medical bills, these bills will be paid by one of three sources: your automobile medical payments coverage; workers’ compensation; or health insurance. If one of these three sources pays your medical bills, none of the others pays because that would be a “duplicate payment.” Claims for double payment of medical payment coverage is expressly prohibited by Newbury v. State Farm, a 2008 Montana Supreme Court case.

Under current law you will also receive compensation for your lost wages and other damages from the at fault driver’s insurance company. Then, if the other driver’s policy limits are high enough and you are fully compensated for all of your damages (that's the made whole doctrine), you will have to reimburse the health insurance company for some or all of the money it paid for your medical bills (that's subrogation).

HB 555 tries to change current law so that health insurers can deny or limit payment and not be subject to laws regarding subrogation, or to any legal doctrines requiring that the insured must be fully compensated or made whole”. HB 555 does this by providing that health insurers can attribute the money from third-party liability policies (the general liability policy of the person that hits you) to medical bills, and the health insurer can thereby refuse to pay those medical bills. When all the insurance intended to pay your lost wages and other damages has all gone to pay medical bills, only then would the health insurance company have to start paying. In a serious accident, this will leave you and your family without any financial resources because all your money will go to the benefit of the health insurance company.

For example, you get in an accident and suffer $15,000 lost wages and $40,000 in medical costs, and negligent third party has the required minimum of $25,000 liability coverage, a not unusual circumstance.  Under HB 555, your health insurer is entitled to determine that “we are not responsible to pay the the first $25,000 medical costs.”  If the health insurer pays only $15,000 and the negligent party pays $25,000 of the medical costs, this leaves you with zero $$ for lost wages and other damages. And, by prohibiting application of subrogation and the made whole doctrine, HB 555 leaves you with no further recourse.

By including “third-party liability coverage” and precluding application of sugrogation statutes or the made whole doctrine, HB 555 grants insurers the right to attribute any or all of the monies from a general liability policy to medical costs, refuse to pay legitimate medical claims, and force their insureds to potentially take money out of their own pockets, even if the insured is far from made whole. Montana law for decades has been that insurers could not take money from injured persons unless and until the injured person has been made whole for their injuries. The basic position of the Supreme Court has been “that when the amount recovered by a claimant is less than the claimant's total loss, with a result that either the claimant or the insurer must to some extent go unpaid, then it is equitable that the loss be born by the insurer which had been paid an insurance premium for the assumption of its liability.”

HB 555 attempts to do what both the Montana Insurance Commissioner and the Montana Supreme Court have denied – give insurers the right to take third-party liability coverage money that rightfully belongs to the insured before the insured has been made whole for the damages they have suffered. HB 555 is bad public policy that places insurers above the individuals they are supposed to be serving – it doesn't just allow health insurers to tighten your belt, it gives them authority to pick your pocket. Keep insurers out of your pockets, please contact your state senator and urge him or her to vote no on HB 555.

This is Al Smith for the Montana Trial Lawyers Association.


February 15, 2011

Work Comp Demise

I've spoken many times about Montana's workers' compensation system, and the system is rightfully getting a lot of attention in the legislature. In August Montana received a top ranking in the nation – number one in the number of our citizens who died on the job. In 2009 fifty Montanans were killed at work - a 25 percent increase over the previous year. For years the sad fact has been that Montana workers are more likely to be injured or killed on the job than workers in most other states, regardless of the type of work - our loggers, our miners, our office staff, our sales force, all categories of Montana workers are injured more frequently.

Given this dubious record of injuries and death, it was also no surprise that recent rankings put Montana in another number one spot - for the highest workers’ compensation premiums. It's no surprise that higher premiums would follow higher injury rates. The number one cost driver in Montana’s workers’ compensation system is our number one ranking in injuries and deaths.

With our number one ranking in premiums, it is also no surprise that the legislature would be trying to bring down work comp costs. Some bills are reasonable attempts to tweak parts of the system. Some attempt to go after other significant cost drivers - like getting workers back to work sooner. But, most try to bring down costs by the all too familiar method of reducing benefits to injured workers - either by direct cuts or by making it more difficult for workers to get the medical and compensation benefits they are entitled to.

Now cuts of benefits to workers might make some sense if Montana was number one in another category - benefits to workers. But, there is no such distinction for Montana, we are at the back of the pack when it comes to benefits.

The major Republican bill, HB 334 carried by Representative Scott Reichner, is the main legislation dealing with workers' compensation. It is being touted for the money it saves employers. But, like past changes of work comp, it reduces costs by reducing benefits to workers, and, like past changes, the bill has no guarantee that the cost savings generated by cutting worker benefits will actually be passed on to employers.

One way HB 334 reduces costs has to do with treating physicians. Currently, an injured worker gets to choose his treating physician. HB 334 takes that right away, and grants the insurer authority to designate who the treating physician will be. It further provides that the insurer’s doctor would be paid 10% more than a doctor initially chosen by an injured worker. Deny and delay care – is that the insurers' recipe for converting their ability to designate an injured worker’s doctor to reduced costs? Now if you can logically reconcile Republican abhorrence of the federal government supposedly choosing their doctor for them, with this Republican plan to actually have an insurance company choose a worker's doctor, please let me know, because I can't.

Another part of HB 334 sets what is called a “hard cutoff” of medical benefits for injured workers. It would provide that a worker receives medical benefits for a maximum of 5 years from the date of their injury – period. Doesn't matter if the insurer jumped you through hoops for a year before they finally started paying for your medical benefits. Doesn't matter if you still require medical attention to treat your injury. The only exception is that you might be able to get additional treatment after 5 years, but only for a surgery, and only for 2 more years. After that, too bad, better try a bake sale, a spaghetti dinner or change jars on store counters.

Over the past couple of years the Governor’s Labor Management Advisory Council has thoughtfully and deliberatively looked at various workers’ compensation issues. The Advisory Council’s careful and deliberative work is reflected in one bill, SB 243 carried by Senator Ryan Zinke. It makes several changes that employers and insurers want to reduce costs, including ways to get injured workers back on the job sooner. Unfortunately, SB 243 has already been tabled.

For the past two decades, the legislature has always heeded employers’ concerns with escalating insurance premiums by decreasing benefits, and it has rarely responded to injured workers’ concerns with ever decreasing benefit levels. Yet, all those cuts in benefits never seem to lower employers’ insurance premiums enough.

Even with our high injury rate, there is no legislation to directly attack our number one cost driver – our number one ranking in frequency of on the job injuries and deaths. There is no proposed legislation to reign in those employers that have unsafe work places. No legislation to shield safe employers who see their rates go up because the safety records of their unsafe competitors are factored into the rates of all employers in similar industries. The lone ‘safety’ proposal is for $1 million for Work Safe MT for promotional efforts, but it requires the expenditure of state money, an iffy proposition.

Let's hope the legislature will take a close look and balance the draconian cuts of HB 334 with the thought out and reasoned reforms proposed by the Advisory Council. Simply taking more away from injured workers, again, threatens the legal viability of the entire exclusive remedy system – what are now $30,000 work comp claims, may instead become $200,000 negligence actions.

This is Al Smith for the Montana Trial Lawyers Association.

January 18, 2011
Work Comp Fixes

In August Montana received a top ranking in the nation. Unfortunately, the ranking is not something any of us can be proud of - we are number one in the number of our citizens who died on the job. In 2009 fifty Montanans were killed at work - a 25 percent increase over the previous year. And, it is also unfortunate that this ranking really comes as no surprise. For years the sad fact has been that Montana workers are more likely to be injured or killed on the job than workers in most other states, regardless of the type of work - our loggers, our miners, our office staff, our sales force, all categories of Montana workers are injured more frequently.

Given this dubious record of injuries and death, it was also no surprise that recent rankings put Montana in another number one spot - for the highest workers’ compensation premiums. It is no surprise that higher premiums would follow higher injury rates. It is indisputable that the number one cost driver in Montana’s workers’ compensation system is our number one ranking in injuries and deaths.

With our number one ranking in premiums, it is also no surprise that the legislature would be trying to bring down work comp costs. There are currently a large number of bills introduced, or in the drafting stage, regarding workers’ compensation. Some are reasonable attempts to tweak parts of the system. Some attempt to go after other significant cost drivers - like getting workers back to work sooner. But, most try to bring down costs by the all too familiar method of reducing benefits to injured workers - either by direct cuts or by making it more difficult for workers to get the medical and compensation benefits they are entitled to.

Now cuts of benefits to workers might make some sense if Montana was number one in another category - benefits to workers. But, there is no such distinction for Montana, we are at the back of the pack when it comes to benefits.

One intriguing idea for saving money has to do with treating physicians. Currently, an injured worker gets to choose his treating physician. One draft bill proposes to take that right away, and grants the insurer authority to designate who the treating physician will be. It further provides that the insurer’s doctor would be paid 10% more than a doctor initially chosen by an injured worker. I think it’s safe to say that insurers figure that their ability to designate an injured worker’s doctor, even if paid 10% higher, will still mean less cost overall.

Over the past couple of years the Governor’s Labor Management Advisory Council has been tasked with looking at various workers’ compensation issues. The Advisory Council’s work is reflected in one bill. It makes several changes that employers and insurers want to reduce costs, including ways to get injured workers back on the job sooner. The main benefit for workers in the package is a slight increase in the number of weeks they can receive permanent partial disability benefits, and an increase in the cap on their weekly benefit as a percentage of the state’s average weekly wage. The Council has eliminated their prior proposal to change the manner of calculating permanent partial disability benefits, finally acknowledging the fact that the theoretical change reduced benefits for virtually all injured workers.

For the past two decades, the legislature has always heeded employers’ concerns with escalating insurance premiums by decreasing benefits, and it has rarely responded to injured workers’ concerns with ever decreasing benefit levels. Yet, all those cuts in benefits never seem to lower employers’ insurance premiums enough.

Montana’s workers’ compensation system offers a strange paradox - we have some of the highest insurance rates in the country, and our benefits are among the lowest. The primary reasons for Montana’s high workers’ compensation costs are our high rate of on the job injuries, high medical costs and injured Montanans are out of work longer than injured workers in most states. As I said previously - the chief culprit is the sad fact that Montana workers are more likely to be injured or killed on the job than workers in most other states, regardless of the type of work.

There has been one surprise with workers’ compensation this session - the lack of any legislation to directly attack our number one cost driver, our number one ranking in frequency of on the job injuries and deaths. There is no proposed legislation to reign in those employers that have unsafe work places. No legislation to shield safe employers who see their rates go up because the safety records of their unsafe competitors are factored into the rates of all employers in similar industries. The lone ‘safety’ proposal is for $1 million for Work Safe MT for promotional efforts.

Hopefully, the legislature will take a close look at the balanced reforms proposed by the Advisory Council and directly address unsafe workplaces. It is simply unacceptable to just take more away from injured workers, again, without first addressing unsafe workplaces.

This is Al Smith for the Montana Trial Lawyers Association.