For the third time in 14 years, the Florida Legislature is taking up the issue of workers’ compensation attorneys’ fees. The question of attorneys’ fees for lawyers representing injured workers is a very touchy subject. The political diatribe against these fees in workers’ compensation claims typically laments “greedy lawyers” who work the system and how the fees increase cost to the system, but is that true? Lobbyists for Associated Industries of Florida, the Chamber of Commerce and others are always hammering away at the Florida Workers’ Compensation System, decrying its exorbitant costs and blaming attorneys fees as the cause. Jeremy Wallace of the Tampa Bay Times does a great job of debunking this is his recent column (click here to read it), as well as showing how difficult it has been and could be again for injured workers to find a lawyer to represent them.
Disclaimer: I am a lawyer representing injured workers, otherwise known as a “Claimant’s Attorney.” I have a vested interest in this issue (although not nearly as big an interest as my clients do). As a Claimant’s Attorney, I understand this issue all too well, but how is the general public supposed to understand it?
First, it’s important to understand that the Florida Workers’ Compensation Law is the only area of the law where it is a crime for a lawyer to get paid a fee without a Judge’s approval. Second, this applies only to injured workers’ lawyers, not insurance company lawyers. Third, out of the total amount of money spent in the Florida Workers’ Compensation System, the money paid by insurance companies to Claimant Attorneys, in the words of a defense attorney I know, amounts to a gnat on the arse of a big fat cow (the cow being the system). In other words, they are unbelievably insignificant.
Yet, the National Council on Compensation Insurance (NCCI), who evaluates and recommends the rates for workers’ compensation insurance in the State of Florida, recommended a 19.6% rate increase, allegedly due to recent decisions by the Florida Supreme Court — one of which now allows Claimant’s Attorneys to be paid a reasonable hourly rate when they prevail on an issue. While the Florida Office of Insurance Regulation (OIR) rejected their recommendation, they did approve a 14.5% rate hike in workers’ compensation premiums. If attorneys’ fees are such a small percentage of the amount spent in the system, why the need for such a huge rate hike? The answer: because we Claimant Attorneys will make them pay our clients the benefits they should have been paid in the first place. And that is the rub: we hold the insurance companies accountable by seeking an order from the Judge of Compensation Claims for them to provide benefits. It’s not our fees that cost money, it’s the benefits we get for our clients.
How the workers’ compensation system could affect you:
If you are an employee in the State of Florida, you are most likely subject to the Florida Workers’ Compensation System. In a nutshell, if you are injured on the job, your employer’s workers’ compensation insurance company will tell you where to go to the doctor. You are not allowed to see your own doctor. They get to choose. If you are out of work, they are supposed to pay you disability benefits. If you have a pre-existing condition, they will only pay to the extent your work accident is more than 50% the need of your treatment or disability.
Sounds simple enough, yes? I mean if the insurance company gets to pick your doctor, why would they ever deny any treatment or disability that their hand-picked doctor recommends? If you only knew. It happens everyday. That’s why I have a job.
Consider this: you hurt your knee on the job. The workers’ compensation carrier sends you to a walk-in clinic who orders an MRI of your injured knee. The carrier never authorizes it. If you can’t hire an attorney to help you get that $800 MRI, you may never know what’s wrong with your knee. Then the carrier offers you $7,000 to settle. You take it, because there are no lawyers to help you get your MRI, and you then go get it through your health insurance only to find that you need surgery and will miss 4-6 weeks of work. The workers’ compensation carrier just saved $10,000 or more and dumped you on your health carrier. You are now spending that $7,000 to cover copays and the wages you are losing from missing work. With a Claimant’s Attorney in your corner, you get the MRI, your surgery and your wages.
With Claimant Attorneys now able help them get their benefits, injured workers are actually getting more benefits (like the MRI of your knee). And this is bad, how?
Think about this for a moment. What is costing workers’ compensation carriers more money isn’t really the attorney’s fees they are now paying, it’s the benefits that the attorneys secure for their clients. Benefits that a Judge of Compensation Claims is now ordering them to pay (because they were able to hire a lawyer to fight for those benefits). Benefits that were wrongfully denied and without an attorney, they would never see.
The commentary of State Representative Danny Burgess, the leader of House’s workers’ compensation reform legislation, is telling:
“What we’re trying to do is reduce attorney involvement in the system.”
What he really means is that they don’t want a system where injured workers have legal representation adequate enough to force insurance carriers to pay all of the benefits to which an injured worker is entitled.
Before the Supreme Court’s decision in the Castellanos case last year, a workers compensation insurance company could spend an unlimited amount of money defending a case, where you, the Claimant, were restricted in what you could pay a lawyer to get your benefits. If you can only pay your lawyer $500, but the insurance company can pay theirs $20,000, do you think you are going to have a fair fight? That is what Representative Burgess wants back. A system where the playing field is uneven and Claimant Attorneys are once again fighting for benefits with both hands tied behind our backs. The House bill seeks to limit hourly fees at $150 per hour. That may sound like a lot, but keep in mind that we pay our staff and our overhead out of that (and for many of us $150 per hour doesn’t cover that cost), and we only get paid if we win. Other areas of the law, that are far less complex, see hourly rates of $400 to $600 per hour or more, and the lawyers get paid regardless of the outcome. When you consider this proposed amount, in light of the stated goal of reducing attorney involvement, you know that it is not intended to be reasonable; it’s intended to get rid of Claimant Attorneys, a goal that the insurance industry has always had. The Senate bill has proposed a cap on the hourly rate at $250 per hour. While the constitutionality of this is questionable as well, at least it is more in the realm of reasonableness.
Regardless, as the issue of workers’ compensation attorney’s fees unfolds in Tallahassee, yet again, it would appear that the legislature is going to take some action to once again attempt to limit the attorney’s fees payable to an injured worker’s lawyer. While you watch your rights continue to get whittled away by a government that is supposed to represent you, remember this (preferably when you enter the voting booth):
Attorneys’ Fees are a completely insignificant amount in the context of the entire workers’ compensation system.
Attorneys’ Fees are only paid when the carrier loses, which means they have wrongly denied care.
The carrier gets to select the doctor. So when it comes to denying medical care, the vast majority of the time they are denying treatment that has been recommended by a doctor that they selected.
If carriers just authorized the recommended care and paid the benefits they were supposed to pay, there would be no need for attorneys. Yet, the legislature would rather enact legislation that limits your ability to fight than legislation that forces carriers to simply pay the benefits.
In closing, one final point: if we didn’t win so often, Claimant Attorneys wouldn’t be doing this. Which of course means that carriers wrongly deny benefits on a very routine basis. Do you want a system where denial of benefits is the norm and you have no one to fight for you, or do you want to be able to have an attorney in your corner, just like the insurance company does? That is what is at stake this legislative session, and it has absolutely nothing to do with the actual cost of the attorneys’ fees on the system. Nope, it’s the cost of the benefits they don’t want to pay the injured workers.
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The writer is correct but his analysis is incomplete. For example, only 6% of injured workers ever hire an attorney and while calling total fees miniscule, the fact is that fees amount to less than 1/2 of 1% of the total premium dollar collected. The insurance agent who 'sells' WC coverage get about 11%. Since WC coverage is mandatory, it's not really a hard sell.
Next, insurance company profits are guaranteed. In calculating profits the OIR doesn't look at ancillary companies, set up by the carriers, with whom they have self dealing. For insstance, the law mandates every medical bill be reviewed for 'overutilization'. Sometimes the review costs more than the whole bill itself. In the first year after overutilization review was made mandatory, insurance companies were prohibited from having an ownership interest in the overutilization review companies. One year later the law was amended. Now the insurance companies set up UR companies to whom they refer their business. UR companies can charge the carriers whatever they like. The expense is passed along to employers as a cost of doing business. In fact the profit form UR companies going to the carriers is not considered when rates are made. I guess this should be callled 'skimming'. Or worse.Legislators are aware of these practices but are paid to ignore them in the form of campaign contributions. In the end, the injured worker pays the price of this corrupt scheme.
Scott R. Marshall
Thanks for your comment Mark. You bring up some very good points and are spot in your analysis. A "complete" analysis of the issues you address will require more than a single blog, and I did not want to lose readers with too many details; although, I very much appreciate you adding the exact and absurdly low percentages involved. I do intend on addressing the absurdity of the NCCI rate making process in the future. The purpose of this partticular blog is to succinctly address the issue of attorney's fees so that the public at large will understand and be able to relate to the fact that it's not really about attorney's fees. Thanks again! I always appreciate input!
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