California's workers' comp system experienced a spike in cumulative trauma claims starting in 2010 and the rate of new CT claims remains near all-time highs. Carriers, claims adjusters and defense attorneys all agree that these are difficult to defend and end up driving up the overall cost of the claim and by extension an employer's X-Mod.
"CT claims are becoming a major problem for the industry," says Stu Baron, a defense attorney in Southern California who has made the CT claim problem something of a personal mission. "I call this the wearing out disease because really that's what it is...and my position is unless there are extraordinary circumstances then you have been compensated for not only the rental of your services, but also the rental of the package that the services come in."
CT claims now account for nearly one out of every 10 indemnity claims in the California workers' comp system, according to the latest data from the Workers' Compensation Insurance Rating Bureau. That 9.4% rate for 2011 is down only slightly from a high of 9.6% in 2010 and up significantly from the 6.5% rate in 2006. The economic downturn is suspected of driving most of the increase, but observers say it doesn't explain all of the increase or the persistently high rate of filings today.
Baron says that many of the cases he sees involving CT claims appear to be attempts to transition into some sort of disability retirement.
He tells the story of a 27 year heavy equipment mechanic who retired as soon as he met his shop's "rule of 85" criteria to retire with full benefits. The next day he filed a workers' comp claim for cumulative trauma injuries.
"The claim was he was in such pain that he couldn't continue to work," says Baron. "Isn't it convenient that he waited until the day after he retired to file this claim."
Baron says the mechanic had a history of medical issues and had openly wondered if he could make it to retirement. "The incurred cost on this thing is well over $400,000 as he collected temporary disability for 2 years before the carrier finally said wait a minute – you've retired," says Baron, noting that on top of the TD payments the claimant was receiving his regular pension.
He says he's in a fight now with the carrier to recoup at least some of these payments as the claim is on a policy with a $500,000 deductible so the employer has funded the whole thing to this point.
It is yet another instance of carriers not paying attention to the meat.