Audit of the Department of Industrial Accidents Overview of Audited Entity

This section describes the makeup and responsibilities of the Department of Industrial Accidents

Overview

The Department of Industrial Accidents (DIA), within the Executive Office of Labor and Workforce Development (EOLWD), administers and oversees the Commonwealth’s workers’ compensation system in accordance with Chapter 152 of the Massachusetts General Laws, known as the Workers’ Compensation Act. DIA acts as the court system—the place where disputes regarding benefits are resolved—for workers’ compensation cases. It is also responsible for making sure employers in Massachusetts have workers’ compensation insurance. DIA is organized into 11 functional areas: the Office of Claims Administration, Office of Investigations, Office of Legal Counsel, Office of Insurance, Office of Self-Insurance, Office of Education and Vocational Rehabilitation, Office of Health Policy, Office of Safety, Office of Conciliation, Impartial Scheduling Unit, and Division of Dispute Resolution. DIA’s main office is at the Lafayette City Center, 2 Avenue de Lafayette, in Boston. It has four regional offices, in Fall River, Lawrence, Springfield, and Worcester.

DIA’s appropriation was $19.6 million for fiscal year 2018 and $20 million for fiscal year 2019. DIA repays the Massachusetts General Fund quarterly for its full appropriation plus fringe and indirect costs. DIA’s main sources of revenue include assessments levied on the premiums of each workers’ compensation policy, fines on assessments not paid within 30 days of their due dates, fines related to stop work orders³ and late first reports of injury,⁴ and insurer penalties⁵ and referral filing fees⁶ for cases that have not been resolved by conciliation. These revenue sources fund DIA’s operating expenses, expenditures for claims, and other statutorily required payments. Assessments represent 90% of DIA’s funding. In fiscal year 2019, DIA collected $69 million in assessments.

DIA administers the Workers’ Compensation Trust Fund and the Workers’ Compensation Special Fund. The trust fund has a private component (the private trust fund) and a public component (the public trust fund). Assessments levied against private employers are deposited in the Workers’ Compensation Special Fund (see Appendix C) and the private trust fund (see Appendix A) in proportion to each fund’s share of the total amount budgeted for each fiscal year. The special fund reimburses the Massachusetts General Fund for DIA administrative costs (e.g., payroll, fringe benefits, rent, and indirect costs). The private trust fund makes payments to uninsured injured workers and to workers whose insurers will not pay for their vocational rehabilitation services. It also reimburses insurers for costs of employee latent-injury (injury that is not immediately apparent) and second-injury (injury related to a prior injury claim that results in permanent and total disability) claims and certain cost-of-living adjustments. Assessments levied against self-insurers and public employers are deposited in the public trust fund (see Appendix B), which is used for entitlement programs’ cost-of-living adjustments.

During the audit period, DIA had 191 employees, including 54 who were paid through the Workers’ Compensation Trust Fund as of December 31, 2018. In fiscal year 2019, DIA’s main office received 24,570 visitors and 17,781 calls. The regional offices (Fall River, Lawrence, Springfield, and Worcester) received a total of 40,613 visitors and 19,972 calls.

Workers’ Compensation Advisory Council

Chapter 572 of the Acts and Resolves of 1985 created the Workers’ Compensation Advisory Council (WCAC). The council has 16 members, who are appointed by the Governor to serve five-year terms. Ten of them are voting members, 5 of whom represent employees and 5 of whom represent employers. The nonvoting members include one representative from each of the following groups: workers’ compensation attorneys, the insurance industry, medical providers, and vocational rehabilitation providers. The Secretary of Labor and Workforce Development and the Secretary of Housing and Economic Development are ex officio (nonvoting) members.

WCAC is responsible for monitoring and annually reporting on all aspects of the workers’ compensation system, as well as making recommendations and giving testimony about the system. The annual report is filed with the Secretary of Labor and Workforce Development and the clerks of the state House of Representatives and Senate. It includes an evaluation of DIA operations and recommendations for improving the Massachusetts workers’ compensation system. WCAC is also required to review DIA’s annual operating budget; upon the affirmative vote of at least seven members, WCAC may submit recommendations for the budget to the Secretary of Labor and Workforce Development. WCAC may also offer testimony regarding insurance rate filings and workers’ compensation legislation.

DIA is required to report to WCAC referral filing fees, attorney fees,⁷ continuances,⁸ and insurer penalties.

Workers’ Compensation Claim Process

If an employee experiences a work-related injury or illness, the employer must report this event to the appropriate insurance company. The insurer must decide to contest or begin paying benefits within 14 days after receiving the claim. If an insurer denies, reduces, or stops payment of benefits, the employee can file a claim with DIA’s Office of Claims Administration.

Upon receipt of a claim for workers’ compensation benefits or a complaint from an insurer to stop or modify benefits, DIA schedules a conciliation, which is the first step of the five-step adjudicatory process (conciliation, conference, appeal, impartial medical exam, and hearing) for dispute resolution. The formality and requirements for the parties increase with each step. At any step of this process, a claim may be withdrawn, voluntarily adjusted, or settled for a lump sum.

A conciliation is an informal meeting of the claimant, the claimant’s attorney, the insurer’s attorney, and a conciliator from DIA’s Division of Dispute Resolution. Successful conciliations result in payment or in withdrawal or adjustment of the claim. If no resolution is reached at the conciliation, the matter is referred to a DIA administrative judge for a conference to be scheduled within 28 days. This administrative judge retains jurisdiction over the case throughout the process, unless otherwise directed by a senior judge.

A conference is an adjudicatory event involving the claimant, the claimant’s attorney, the insurer’s representatives, and an administrative judge. If the matter is not resolved at the conference, the administrative judge issues a conference order with a determination of the claim within 7 days of the conference. If the claimant, or the insurer, or both are not satisfied with the conference order, they can file appeals within 14 days. According to Section 11A(2) of Chapter 152 of the General Laws,

When any claim or complaint involving a dispute over medical issues is the subject of an appeal of a conference order pursuant to section ten A [of Chapter 152 of the General Laws], the parties shall agree upon an impartial medical examiner from the roster to examine the employee and submit such choice to the administrative judge assigned to the case . . . or said administrative judge shall appoint such examiner from the roster.

The case moves to the presiding administrative judge’s hearing queue after the impartial medical exam is completed.

A hearing is a formal proceeding in which Massachusetts rules of evidence apply, witnesses are called, and a stenographer produces a verbatim transcript of the hearing proceedings. Before the hearing, the parties may file motions seeking to submit additional medical evidence because of the medical complexity of the case or inadequacy of the impartial medical exam report. The parties may also choose to depose the impartial medical examiner. A hearing decision is issued within 28 days after the hearing ends.

A hearing decision can be appealed to the DIA Reviewing Board within 30 days after it is issued. A DIA Reviewing Board panel, which consists of three administrative judges, then examines the hearing transcripts and legal briefs and asks for oral arguments when necessary. The panel can summarily affirm the hearing decision, send it back to the administrative judge for further findings of fact, or reverse it. According to Section 11C of Chapter 152 of the General Laws, a hearing decision can only be reversed “if [the board] determines that [the] administrative judge’s decision is beyond the scope of his authority, arbitrary or capricious, or contrary to law.” Appeals of the DIA Reviewing Board’s decisions are heard by the Massachusetts Court of Appeals.

During the audit period, only 25 claims went through the entire adjudicatory process. There were, on average, 308 days from filing of the claim to hearing decision.

Case Management System / Document Management System

DIA uses an automated case management system (CMS) and a document management system (DMS) to maintain cases and schedule appointments for conciliations, conferences, hearings, and appeals. When an initial first report of injury is submitted to DIA, by either the employer or the employee, the CMS issues a board number for the case.

The processing timeline for cases waiting to be scheduled for conferences begins on the referral date from conciliation. Scheduling from the conference queue in CMS depends on the availability of the claimant, the claimant’s attorney, the employer’s attorney (if applicable), the insurer’s attorney, and a judge. The system does not schedule any conference for sooner than 24 days from the current date. The queue runs on a first-in, first-out basis.

At the hearing level, cases awaiting impartial medical exams are tracked in the judges’ hearing queues. The CMS automatically schedules cases for hearings when they have been inactive for 100 days and have had impartial medical exams scheduled but not yet completed. It also automatically schedules cases for hearings when they have been inactive for 200 days, an appeal fee has been paid, and no impartial medical exam has been scheduled. Cases that have been inactive for 400 days are removed from the hearing queues, and notices that the cases have expired are sent to the parties.

Each case is also assigned a default priority status by the CMS that may be updated by the Impartial Scheduling Unit for conferences and hearings. The priority status is signified by a number from 0 through 9; however, the Impartial Scheduling Unit currently only uses priority statuses 7 and 8. Priority status 7 is used to schedule a conference because of hardship, and priority status 8 is used when a case has not moved forward in the process (usually because of scheduling delays). Cases can be processed individually or grouped. An individual case is a single case with one case identification number (ID) and one board number. A grouped case has multiple board numbers and case IDs. Parties involved with a case may file a motion for the administrative judge to group additional cases with theirs. The grouping function uses one time slot in the schedule for associated cases. To identify associated cases, the CMS uses a field called a group meeting leader number, which joins multiple cases. Cases are generally grouped at judges’ discretion.

Conferences, hearings, and impartial medical exams can be rescheduled for multiple reasons, including, but not limited to, parties not being available, additional time being required for settlement discussion, or additional documents being required. As a result, cases may be delayed and their timelines extended. Additional reasons for extensions include things like appeals, problems with parties obtaining required records, a lack of physicians to perform impartial medical exams, or a lack of attorneys to handle cases. Also, judges can request that cases be continued. Each week, the Impartial Scheduling Unit manager/supervisor manually enters all judges’ schedules in the CMS, which generates updated reports on the judges’ case assignments and distributes the reports electronically.

Opioid Alternative Treatment Pathway Program

The Opioid Alternative Treatment Pathway Program (OATP) was started as a pilot program in 2017, in response to the national opioid crisis, and was made a permanent program in 2019. The program aims to reduce the time required to resolve clinical disputes and improve the care of injured workers who have chronic pain conditions. OATP is a voluntary program available in DIA cases where injured workers have settled workers’ compensation claims, but are still prescribed opioids, and insurers seek to discontinue payment for opioid treatment. The insurers incur the cost of the program, including any alternative medical treatments for the injured workers.

A senior judge oversees OATP and has an informal committee (made up of insurers; medical personnel; employees of EOLWD, DIA, and/or the Executive Office of Health and Human Services; and attorneys representing injured employees) to help administer the program.

All DIA judges are aware of OATP and inform all parties of the program during the adjudication process when an insurer or injured worker wants to reduce the worker’s use of opioids. Either party may ask to participate in OATP, but both parties have to agree and submit a medical mediation form to an administrative judge for approval. OATP provides an opportunity for injured workers to learn how to manage their pain through evidence-based pain management strategies other than opioids. With the assistance of DIA-approved care coordinators, teams of highly trained medical providers, therapists, and other health professionals collaborate to help the worker achieve pain management goals via specific interventions. DIA currently has 28 care coordinators, from seven medical consulting companies, available to assist with the program.

During the audit period, there were a total of 57 requests to join OATP: 45 by insurers and 12 by injured workers. Nine of these resulted in agreements, signed by injured workers and insurers, to participate in the program. Eight of these workers successfully⁹ completed the program, and one withdrew from it.

Flextime and Parking Benefits for Employees

DIA allows employees to participate in an alternative work hours program if they file an Alternative Work Hours Request Form and a Request for Change or Reduction in Scheduled Work Hours Form. These forms are approved by the employee’s direct supervisor, department manager, and director and then filed with EOLWD’s Human Resources Department.

DIA has property lease agreements for its offices in Boston, Lawrence, Fall River, and Worcester. (The Springfield office is in a building owned by the Commonwealth.) For Worcester, there is no employee parking in the property lease agreement. For Lawrence and Fall River, there are reserved spaces for the administrators. For Boston, there are 3 reserved and 12 unreserved spaces in the Government Center Garage. DIA distributes the parking spaces at the Government Center Garage by seniority to the administrative judges, deputy director, and director. At the end of the year, DIA includes the parking benefits on these employees’ Internal Revenue Service (IRS) Form W-2s in accordance with IRS and Massachusetts Department of Revenue requirements for qualified parking.¹⁰

3.     According to Section 8.02 of Title 452 of the Code of Massachusetts Regulations, a stop work order, issued by DIA, is “a citation issued to an employer that has failed to provide evidence of workers’ compensation insurance coverage.”

4.     A first report of injury must be filed by an employer within seven days, not including Sundays and legal holidays, after the injured worker’s fifth day of full or partial disability.

5.     Insurers pay penalties for not paying or responding to claims within a set timeframe.

6.     Insurers pay these fees when cases are referred from conciliation to conference.

7.     The insurer pays the attorney fees to the employee’s attorney when the company contests and loses a case.

8.     A continuance is a postponement of a pending action in response to a motion by a party involved with the claim.

9.     DIA personnel told us in interviews that injured workers who have decreased or stopped their opioid dosages have successfully completed the program.

10.     Qualified parking allowances are outlined in Subchapter A(1)(1.132-9) of Chapter I of Title 26 of the US Code and Massachusetts Department of Revenue Technical Information Release 18-12.

Date published:	March 23, 2021