David DePaolo, the author of the well-known “DePaolo’s Work Comp World” blog, shared some thoughts about what’s going on in workers’ comp with WCInsights. He speaks at trade shows and educational seminars, and will be featured at the upcoming NWCDC as part of a blogger’s roundtable session. He wants his blog to serve as an education resource and sees himself as a neutral reporter of the industry.
As a long time workers’ comp lawyer in California, DePaolo knows a bit about the rules and regulations affecting the industry. He sees a growing trend of “micro-management” or over-regulation that is being instituted by special interests all over the industry. He notices legislation and rules that are affected by administrators who are pressured by special interests like employers or insurance companies. Fittingly, his recent post discussed the FBI’s discovery of a California politician who may have halted legislation to decrease the costs of spinal procedures in exchange for financial compensation from interested medical providers.
He also thinks that a lot of legislation is enacted that only serves to complicate the industry and make things more difficult than they need to be, citing the AB1309 Professional Sports Exemption Law.
“It obfuscates the basic purpose of what workers’ comp does,” said DePaolo.
DePaolo says that fraud stories can be overstated and sometimes it’s simply a lack of education on the part of the person who allegedly committed the fraud. According to DePaolo, what really hurts the system is not the guy who collected benefits when he was faking it. He says that large insurance companies commit large-scale fraud all the time, using AIG, who shifted their reserves offshore to pay taxes, as an example.
“They’re using mechanisms to avoid paying their obligations to various state funds, which comes out as higher premiums for employers,” he said.
Though the system has some flaws and we hear horror stories of where it goes wrong, he understands that for most people it is a good system.
“For 95% of the population workers’ comp works and we tend to focus on the 5% that it doesn’t, because that’s where the money goes.”