Doug Smith
FOX 13 Investigative Reporter
Mar 1, 2010

TAMPA – We’ve all seen video of people caught on tape playing up their injuries and claiming benefits: people walking with a walker, and later walking just fine, or using or a cane where now you see it, now you don’t.

But there’s nothing funny or phony about the video of Sam McGinnis, a clerk behind the counter at a drug store in Tampa, Florida on November 29, 2008. A camera inside the store shows a holdup.

In the course of the robbery, a man wearing a white clown mask shot Sam McGinnis in the leg after ordering him to open up the cash register.

“I asked please don’t hurt me,” McGinnis remembered, “Please don’t hurt anybody else.

When McGinnis couldn’t get the money out of the second register fast enough, the robber took aim a second time.

“The last words I ever heard from this gentleman were, “‘F*** you.’ and he shot me in the chest.”

The man in the mask was never caught. He got away with just $88, but McGinnis paid a much higher price. The bullet, which ripped though his chest and pierced several organs, is still lodged in his back.

The damage has left him in constant pain. Even the simplest tasks are a challenge, and he says the workers’ compensation system is compounding his agony.

“The system itself it just beats you down,” Sam McGinnis told investigative reporter Doug Smith.

McGinnis hasn’t been able to get surgery that his doctors say could ease his pain because so far workers’ compensation won’t approve it. McGinnis says he had very good private insurance, but because he was hurt at work, he can’t use it.

He says workers’ comp treats him like almost like a criminal, instead of a crime victim.

“(Workers’) comp is a ‘mother may I’ system,” said Attorney Tim Jesaitis, who is an adjunct professor at Stetson University College of Law and also handles workers’ comp cases for insurance companies. “Mother may I go to the chiropractor? Mother says no. What do I do?”

Jesaitis says Florida lawmakers reformed the workers’ compensation system after so many people abused it, but those changes make it difficult for someone with catastrophic injuries.

One of the rules says an injured worker can change doctors just once. That’s to prevent doctor shopping. But Sam McGinnis will need a lifetime of care.

“I think the one time change is a good example of where a limitation applied to a catastrophic case might be unreasonable,” said Jesaitis.

Sam McGinnis’s father, Gene McGinnis, is out to change the law. He wants a two tier system: one for the average worker hurt on the job and another for people who are catastrophically injured, like his son.

He’s started an internet campaign and contacted lawmakers to gather support for Sam’s Law. Gene McGinnis has a web site and has also posted a video of the shooting online.

“Wouldn’t it be nice to find ten years from now that somebody comes up to him and says, “‘you’re Sam,’” Gene McGinnis imagines. “‘If it wasn’t for you I wouldn’t have the life that I have because I was so severely injured and I was able to get the help that I needed.’”

But Sam McGinnis hopes a change in the law comes soon enough for him.

“I’m hoping,” he says, “that’s all I’ve got — hope and faith.”

By Ted Mann
theday.com
March 1, 2010

Margaret Hansen is sitting, attentive and still, in the hearing of the Labor Committee, as a crush of reporters, cameras and curious lawmakers lean in to hear the horrifying story of the police officer and the deadly chimpanzee.

And, when the officer’s testimony is finished, and the swarm of bodies has followed him and his fellow officers out into the hallway for a press conference, Hansen is still in her seat alone, waiting.

She waits with a handbag stuffed with Workers’ Compensation denials and written testimony and the sort of photographs that no newspaper will publish, ready to ask the legislators to recognize the trauma of her memory for what she says it is: a wound.

It has been nearly 12 years since Hansen’s friend and co-worker, Donna Millette-Fridge, was murdered near the intersection of Golden and Green streets in downtown New London, slashed and stabbed again and again by a deranged client of First Step Inc., the facility where Millette-Fridge was a social worker. The client, Adrian Isom, was shot to death moments later by a New London police officer, after brandishing what turned out to be a starter pistol, as passersby on the rainy morning sidewalk cowered in terror.

Minutes later, the phone rang in the offices of First Step in Groton, where Hansen and others who had spent the preceding hours hunting for the missing Isom were just arriving for work.

Hansen had warned for months, in memos and phone calls to state officials, she says, that staffing shortages and agency policies were putting aid workers at risk. And she had been disturbed enough by Isom’s behavior under her care in Groton to convince her superiors to have him transferred to an in-patient program in New London. But Isom slipped away from the intake center where he was sent, according to lawsuits and press reports from the time, leading Hansen and others to make frantic efforts to locate him.

They never did, and the next Hansen heard of him, early on the morning of Sept. 22, 1998, was the phone call to her office in Groton. Donna Millette-Fridge, the caller told her, was lying in the middle of Golden Street.

“I was never told that he had made any threats to her or I would have called her at home and said, ‘He’s missing, don’t come in,’” Hansen said in an interview last week. “But I had no knowledge. So, you know, I have a lot of guilt about that.”

The shock has never really healed, says Hansen, who lives in New London. She suffers from anxiety and depression, has been diagnosed with post-traumatic stress disorder, and says she spent $40,000 on psychiatric care in one year alone as she coped with her guilt and the memory of that day.

“When it happened to me, you could actually feel the split,” she said. “It was a very cold crack that went down my body, and they said that’s when your psyche splits into two.”

The feeling numbed her to the painful moments after the murder, she said, but the numbness has remained long after it was a solace.

“I had grandkids and it was like, ‘Oh, well, I got a car,’” she said. “You no longer have feelings. You don’t establish joy. My mother passed away and I buried her, and it just felt like something I had to do.”

Other coworkers, she says, are similarly disturbed by Millette-Fridge’s murder, including one who Hansen says vacillates between “homicidal and suicidal” impulses.

But despite the upheaval it has caused in her life, Hansen has been unable to collect Workers’ Compensation for the post-traumatic stress from which she suffers. With the exception of a post-traumatic stress provision added specifically for police officers several years ago, state law requires workers to have been physically injured in order to collect workers’ compensation.

“The law reads that what we refer to as a pure mental-mental claim is not compensable under Workers’ Comp law,” said John Mastopietro, a Workers’ Compensation commissioner. “There has got to be some degree of physicality associated with the mental claim, the psychiatric claim.”

That statutory language has prevailed since an overhaul of the Workers’ Comp law in 1993, said Mastopietro, when legislators believed workers were taking advantage of loopholes in the law to seek benefits for stress or other minor ailments that didn’t truly prevent them from performing their jobs.

State legislators have tried in recent years to amend the law to permit those who have experienced genuine post-traumatic stress from incidents like the Millette-Fridge murder to seek compensation.

“I don’t think people really cared” in 1993, said Sen. Edith Prague, D-Columbia, whom Hansen praised as “tireless” in her efforts to amend the law.

“It was the theory that Workers’ Comp is being abused, and you have to watch out for those employees who try to beat the system,” Prague said. “Some (of that sentiment) was deserving, but much of it was not. Those ‘93 reforms were brutal, totally brutal, and it’s taken us some time to restore some of those benefits that have been cut.”

Prague, as co-chairwoman of the Labor Committee, has put forward bills in the last two years to address Hansen’s case, but each effort has been defeated by opponents like the Connecticut Business and Industry Association, who warn that such a move would lead to a renewed flood of claims on the compensation system.

“Every time we get a bill in, CBIA runs around telling legislators that it’s going to cost businesses more for their Workers’ Comp if we put in any kind of stress-related help for people like Margaret Hansen,” Prague said, adding that she felt “people in unique, horrible circumstances should be able to get some sort of help.”

The concern, said Rep. Kevin Ryan, D-Montville, Prague’s co-chair, is “what kind of financial impact it’s going to have.”

“How many other claims are out there is, I guess, what people are worried about,” he said.

On Thursday, police officer Frank Chiafari testified in Hartford about the horror of facing down and shooting to death a rampaging chimpanzee that had ripped off the hands and face of a woman in Stamford last February. The officer’s foot bounced nervously on the carpet as he spoke. Behind him, to the left, Margaret Hansen listened carefully.

She empathizes with Chiafari, Hansen said, but is frustrated too at the sudden willingness of lawmakers of both parties to broaden the post-traumatic stress language for police officers – to include incidents stemming from confrontations with animals, not just people. What about her?

Hansen, 51, wore a pink sweater and bluish eyeglasses. Around her neck were a small silver crucifix and a pendant with the image of her grandson, Jacoby. (His mother, Hansen’s daughter, is a social worker too, and is currently preparing for surgery after being attacked by a client, Hansen says.)

When Rep. Ernest Hewett, D-New London, briefly left the Labor Committee hearing, Hansen followed him into the hallway, and handed him the stack of photographs she obtained from the state police Major Crimes unit as part of a long-settled suit she brought against First Step and its former director, Joseph MacGregor, after Millette-Fridge’s killing.

As Hansen stared expectantly at him, Hewett flipped through the photographs. The representative’s eyes filled with tears. He briefly rested the back of his head against the hallway wall, and exhaled sharply, his lips pursed.

For Hewett, who was the head of the City Council’s public safety subcommittee when Millette-Fridge was murdered, and for a reporter standing beside him, the images were gasp-inducing. The slain woman and her killer lie with their lower legs entangled in the gutter. Millette-Fridge’s abdomen, throat and chin are ripped open; her killer, Isom, has a dark spreading blotch across the chest of his T-shirt, where the police officer’s bullet ripped through.

A photograph taken from above the street, perhaps from one of the windows in the former First Step offices, is an eerie tableau of lifelessness. A close-up shows a bottle of malt liquor standing on the street, another the inside of a brown paper bag, which holds a few fortune cookies, still in their wrappers, and what looks like a tarot card, adorned with a skeleton.

Hansen said she had never before brought the photographs with her in her appeals to the legislature, out of concern for the privacy of Millette-Fridge’s family. But she is frustrated by the legislature’s refusal to recognize the damage she feels, and galvanized by the attack on her daughter.

“I haven’t shown people the pictures because of the privacy of the family,” she said. “But when you’ve got to see something like that, and you know that that’s your friend, that’s somebody who you had lunch with every day. That that’s somebody’s mother, that’s somebody’s daughter, somebody’s child, somebody’s wife. They deserve to be taken care of, they deserve to be remembered, and most of all they deserve not to die in vain, to make sure that it doesn’t happen again.

“I never felt that I was any better than the population that I served,” Hansen said. “I just don’t feel that I’m any less. My tax dollars go to pay for your care, so why shouldn’t my tax dollars go to pay for mine?”

By Ted Mann
theday.com
February 26, 2010

Hartford – If the violent assailant that Officer Frank Chiafari shot last year had been different, the insurance coverage for the treatment the Stamford policeman later needed wouldn’t have been in doubt.

Chiafari had responded to a scene of almost unimaginable gore, a woman bleeding without face or hands and near death, her attacker desperately trying to attack Chiafari himself before the officer was able to draw his gun and shoot.

But the attacker was Travis, a chimpanzee who turned on his owner and a friend at his home in Stamford last year.

And so when Chiafari’s superiors put in a claim on his behalf for Workers’ Compensation for the post-traumatic stress that still affects him, it was rejected in just five days, faster than his union could ever remember a denial coming down.

The state law that covers police officers for Workers’ Comp claims after they are involved in shootings doesn’t apply, the city said, when the attacker is an animal.

For Chiafari, for whom the city later agreed to pick up some medical expenses, the scarring memories of that day remain.

“I came this close to getting ripped apart myself, and I can’t get that out of my head – seeing his face coming at me with bloody teeth,” the veteran officer told members of the legislature’s Labor and Public Employees Committee on Thursday.

Chiafari was testifying in favor of a bill that would amend the current law to permit police officers who are compelled to shoot attacking animals in the line of duty to submit Workers’ Compensation claims for post-traumatic stress disorder.

The legislation, first proposed by Sen. Andrew McDonald, D-Stamford, would allow post-traumatic stress claims in incidents like the chimp attack, provided an officer used deadly force while “reasonably believing that he or she was in imminent danger of serious physical injury or death from such an animal.”

Chiafari was one of the first officers to arrive at a home in North Stamford on Feb. 16, 2009, where the 200-pound chimp had already severely injured Charla Nash, a friend of the animal’s owner who had reportedly come over to help calm the aggravated animal.

Just five days later, his claim was denied in writing, Chiafari said, even though he has continued to suffer from anxiety and terrible visions. The officer described walking through a shopping mall, picturing women “without faces,” just as Nash had been when he arrived at the scene of the chimpanzee’s attack.

“The next day when I wake up, I’m like broken,” he said. “I just – I crashed. I get a letter five days later essentially telling me they’re washing their hands of it. ‘You’ve suffered nothing. Goodbye, Frank.’ For a city that claims that it cares about its officers, what a farce,” he said.

Supporters of the bill are not trying to permit officers to make Workers’ Compensation claims for more routine interactions with animals, like shooting a rabid or mortally injured animal, said Sgt. Josephy Kennedy, the president of the Stamford Police Association.

“We’re not trying to open the floodgates,” said Kennedy. “That’s not the intention here.”

Kennedy told legislators he had brought along pictures of the crime scene, which he offered to show privately to those who wanted a deeper understanding of Chiafari’s ordeal. At least one lawmaker, Rep. Ernest Hewett, D-New London, said he was interested in seeing the images.

Lawmakers were universally sympathetic during the committee hearing, which was packed with TV cameras and onlookers.

“It took a lot of guts to come up here today,” said Sen. Edith Prague, D-Columbia, the co-chairwoman of the committee.

Prague, her co-chairman, Rep. Kevin Ryan, D-Montville, and other lawmakers expressed shock that Chiafari had been so quickly denied compensation via a letter that arrived five days after the incident.

“It’s totally incomprehensible,” Prague said, “that you would get such a letter.”

BUT THESE SCHEMES WERE HATCHED BY FOLKS WHO HAD TO BE JOKING, SAYS NEW YORK ALLIANCE AGAINST INSURANCE FRAUD!

NYAAIF’s Picks for New York’s Most Foolish Fraudsters in 2009:

ALBANY, N.Y., Feb. 25 /PRNewswire-USNewswire/ — Insurance fraud is an enticing enterprise for criminals throughout New York State, but you’ve got to wonder just what some of the state’s fraudsters were thinking when they cooked up the scams that led to their eventual arrests, according to the New York Alliance Against Insurance Fraud (NYAAIF).

“To paraphrase playwright Oscar Wilde, these defendants could resist everything except temptation,” said Ellen Melchionni, NYAAIF’s president. “And they should deservedly pay the price.”

NYAAIF reviewed reports from the New York State Insurance Department (NYSID) frauds bureau and various published accounts and deemed the following individuals New York’s Most Foolish Fraudsters for 2009:

Most Brazen

• DOCTOR’S NOTE CAME FROM THE PATIENT: A 43-year-old Utica man must have heard there was money to be made following an auto accident under New York’s no-fault system. Alas, this Utica resident’s decision to accept $2,620 in allegedly fraudulent lost wage benefits resulted in his February 2009 arrest. “He [the defendant] is also accused of changing the date on the doctor’s prescription that allowed him to be out of work so he could continue to receive the [lost wage] benefits for an additional month,” NYSID reported.
• FORMER PAINTER’S STRIP CLUB GIG BARED: A 57-year-old Herkimer County man was charged in December 2009 with wrongfully receiving nearly $47,000 in workers’ compensation benefits while also working as a disc jockey for a Utica strip club over the past five years. The case dated back to an accident 23 years ago. “[The defendant]was injured in 1986 while working as a painter for a Central New York cheese company, and he has previously denied in three separate written statements to the State Insurance Fund (SIF) that he had returned to work,” a Utica, NY news article on the case quoted officials as saying.
• BASEMENT MAY HAVE FLOODED BUT CLAIM WAS ALL WET: No one appears to have disputed the fact that the basement of a 53-year-old man in Apalachin, NY [Tioga County] flooded after his home’s washing machine hose broke. His November 2009 arrest arose out of the $5,300 insurance claim he allegedly filed fraudulently, listing four pieces of property which were supposedly damaged because of this incident. Three of the four items identified on the claim were neither damaged by the flood nor owned by the defendant, investigators determined. The fourth, a couch, was not in the basement at the time the washing machine’s hose broke, according to NYSID.
• TAKES TWO TO DISMANTLE A PICKUP TRUCK: A 27-year-old Town of Tonawanda auto mechanic wanted a quick way to rid himself of the monthly loan payments on his 2004 Chevrolet Silverado pickup truck, and selling the vehicle was one option he seemingly didn’t pursue. Instead, this individual allegedly asked a 32-year-old Town of Tonawanda auto mechanic to dismantle the pickup truck, and sell its parts. Since the vehicle had somehow ‘disappeared,’ the 27-year-old then filed a $32,500 fraudulent insurance claim.
• DAMAGE VEHICLE, PURCHASE INSURANCE: The sequence of events is reversed for most New Yorkers but the 31-year-old Oneonta man arrested in January 2009 on charges of insurance fraud and falsifying business records had his recent past catch up with him pretty quickly. The defendant was alleged to have purchased auto insurance coverage for a rented 2004 Chevrolet Malibu on Sept. 19, 2008, and then filed a claim totaling $1,280 with that same insurer three days later, “reporting that he struck a deer when driving from the insurance agency,” NYSID says. Neighbors told investigators that damage to the Oneonta man’s rented vehicle was readily apparent well before the Sept. 19, 2008 “accident.”

Laziest

• ‘STOLEN CAR’ TURNS UP IN STORAGE FACILITY: A 33-year-old San Francisco, CA man who used to reside in Orange County, NY was charged with fraudulently collecting $19,000 after reporting his 2002 Acura Integra stolen in July 2004. The alleged crime would have remained undetected except that the 33-year-old man failed to pay rental charges to the Orange County storage facility owner where the Acura Integra was housed, NYSID reported. Upon gaining access to the storage unit and seeing the vehicle, the facility’s owner contacted the Town of Woodbury’s police department, which traced the Acura Integra back to the defendant.
• SUPPOSED DISABLED WOMAN HAD REASON TO BE A HAPPY CAMPER: A 56-year-old Ulster County woman suffered injuries which left her ‘totally disabled’ and forced her to leave her teaching position in the Kingston, NY school district in 2005, according to the NYSID. However, this same individual was arrested in October 2009 “for accepting $73,000 in workers’ compensation benefits while she worked at a youth sports camp.” The benefits she allegedly received under false pretenses were paid through Ulster County, whose self-insured workers’ compensation plan covers Kingston School District employees.

Most Heartless

• SON COULDN’T BRING HIMSELF TO REPORT MOM’S DEATH: There was a reason the 34-year-old Rochester man didn’t want to share this sad news with the State Insurance Fund (SIF). His mother, who died in April 2007, was collecting workers’ compensation benefits through SIF, and investigators allege that the son fraudulently collected and cashed checks made payable to his late mother between April 2007 and August 2008. The man was consequently arrested on grand larceny charges.
• MOM’S WORKERS’ COMPENSATION CHECKS LIVE ON: A 31-year-old West Seneca, NY woman saw no reason she couldn’t endorse and cash four checks totaling $1,600 that were mailed to her mother, according to NYSID. The problem with this line of thinking: her mother died in February 2009, and all of those workers’ compensation checks in question arrived after that date and were intended for her late mother, NYSID reported, soon after the daughter’s arrest.
• POWER OF ATTORNEY FALLS INTO WRONG HANDS: A 53-year-old Niverville, NY [Columbia County] woman was arrested in June 2009 for cashing $5,599 in disability checks mailed to her sister who died more than two years ago, the NYSID reported. The defendant was able to get away with the scheme, which involved not reporting her late sister’s death to the disability insurer, for a while because the 53-year-old woman was her sister’s caregiver and had power of attorney.

NYAAIF is a cooperative effort by insurance companies in New York to educate consumers about the costs of insurance fraud, the many forms fraud can take and what you can do to help fight back. Visit www.fraudny.org for more information on NYAAIF and what you can do to help fight insurance fraud. Individuals can also call 1-888-FRAUD NY to anonymously report suspected cases of fraud.

By Patrick Malone
The Pueblo Chieftain
February 24, 2010

Feb. 24–DENVER — A witness from a House committee hearing last week on a bill aimed at limiting surveillance on workers’ compensation claimants said he was spied on again over the weekend.

The insurance company that he suspects was conducting the surveillance denied it has watched him in years.

Jim Elson, 55, of Pueblo, testified last year during an interim committee hearing on the practices of Pinnacol Assurance, the state’s quasi-governmental workers’ compensation assurer of last resort — that holds about 65 percent of the market share.

Elson again testified last week before the House Judicial Committee as it reviewed HB1012, sponsored by Rep. Sal Pace, D-Pueblo, that seeks to limit surveillance on workers’ compensation claimants to instances when probable cause to suspect fraud exists.

After Elson testified, the House Judiciary Committee passed the bill on a 6-4 vote after amending it to remove a provision granting claimants expedited hearings. Elson told The Pueblo Chieftain that he is familiar with surveillance practices by the insurer, because he was subjected to it while his claim was pending. He said he’s frustrated and frightened by the spying that has taken place since his claim was settled, in particular that it took place soon after each of his two appearances airing grievances against Pinnacol before legislative committees.

After 18 years of employment in several positions with the state, Elson, a registered nurse employed at the Colorado Mental Health Institute at Pueblo, filed a workers’ compensation claim in February 2006 after suffering two injuries on the job during an eight-day span.

He worked in the maximum-security forensic division of the hospital treating patients who’d been disruptive in the prison system or who had been deemed incompetent to face trial for criminal charges.

“These were some bad boys,” Elson said, “guys that’ll hurt you in a minute.”

And Elson said they did hurt him. Among his injuries were back trauma that required surgery, reconstruction of his right arm and extensive damage to his left arm. Elson also suffers from post-traumatic stress disorder and major depression resulting from his work, he said.

“I’m on more medications now than any of my patients were.”

On Saturday, Elson said his son noticed someone watching their house from the end of his driveway in the upscale Regency Ridge neighborhood. It wasn’t an unfamiliar sight, as surveillance had been conducted on the place while Elson’s claim was pending.

That was proven by a videotape obtained by his attorney, which showed 30 minutes of everyday activities ranging from moving around in his garage to trips to the store.

Pinnacol had amassed the footage through a private investigator who followed Elson for nine weeks.

Suzi Stolte, a Pinnacol spokeswoman, acknowledged the company had conducted surveillance on Elson, but not lately.

“We’ve checked our records, and we have not conducted surveillance on Mr. Elson since mid-2007,” she said. “It would be highly unusual for us to conduct surveillance on a case that was settled.”

Elson said his case was settled in May 2007, in part out of frustration over what he says was overzealous surveillance and denial of medical procedures he needed by Pinnacol added to his mental disruptions.

“I felt so intimidated, so threatened, that I just wanted it over, so I settled,” Elson said. “My pay’s been cut by $2,800 a month. My family struggles. But to me it was worth it to have Pinnacol out of my life.”

Elson admits he can’t prove it, but suspects Pinnacol is back in his life following two rounds of testimony before the Legislature.

He confronted a man in a sport utility vehicle parked just outside his driveway on Saturday. After they traded heated remarks, Elson said the man admitted he was conducting surveillance, but wouldn’t say for whom or whether Elson was the subject of the spying.

Soon afterward, the SUV left, and was replaced by a car occupied by someone other than the first driver, Elson said.

He reported a similar occurrence last year after his testimony before the interim committee.

Elson said he’s unlikely to testify before the Legislature again after his latest experience.

Stolte said Pinnacol does not conduct surveillance on anyone based on testimony in the Legislature.

“We initiate surveillance to find out or confirm facts in a case, nothing else,” she said.

Only when certain “red flags” are raised is surveillance initiated, she said. Among those are inconsistent reports about an accident, medical findings that dispute injury claims, claimants who are reported to be unusually active for the injuries they claim, claimants missing medical appointments and injured workers’ failure to answer repeated phone calls from Pinnacol.

Pace said his bill would assure that surveillance activities by Pinnacol and other insurers was confined to cases where there is a legitimate question about fraud.

“A reasonable basis for their suspicions is all I’m asking (insurers) to have before they initiate surveillance on injured workers,” Pace said. “It’s the lowest standard possible. If they have an ounce of suspicion, they can spy on anybody. This bill wouldn’t change that.”

Stolte said Pinnacol opposes the bill because “it can add costs to the system and hinder our ability to do any investigation, and those investigations often require a quick response.”

Pace’s bill is scheduled to be heard by the House Appropriations Committee on Friday. Elson said he is unlikely to be there.

“I’ve put this in Sal Pace’s hands,” Elson said. “I want to see what he’ll do with it. I hope the Legislature doesn’t turn a blind eye to me the way Pinnacol did.”

By Roberto Ceniceros
Business Insurance
Feb. 22, 2010

FRANKFORT, Ky. – Wal-Mart Stores Inc. must provide Workers’ Compensation benefits to an employee who also received a $900,000 civil award from two third parties, the Kentucky Court of Appeals has ruled.

The Friday decision in Wal-Mart Stores Inc. vs. Donald Greg Wells stems from carbon monoxide exposure injuries Mr. Wells suffered in 2005 while working in a freezer at a Wal-Mart distribution center.

Mr. Wells argued that carbon monoxide resulted from generators and welding machinery that two contractors used while renovating the nonventilated freezer, court records state.

He simultaneously pursued a Workers’ Comp claim against his employer and a civil action against the contractors. After receiving a $900,000 award in the civil action, Wal-Mart argued that Mr. Wells should be allowed to recover either from the Workers’ Comp claim or the civil action, not both.

An administrative law judge, backed by the Kentucky Workers’ Compensation Board, disagreed. The judge awarded Mr. Wells nearly $441,000 in income and medical bills.

The state appellate court ruled that Wal-Mart’s argument was without merit and the law judge’s ruling complied with statutory and case law. The appellate court also agreed with the judge that Wal-Mart was entitled to a $126,811 subrogation credit because Kentucky law allows the legal expense an employee incurs in a civil action to e deducted from an insurer’s or employer’s payment of benefits, meaning Wal-Mart owes Mr. Wells about $317,000.

By Peralte C. Paul
Atlanta Journal-Constitution
February 21, 2010

Standing over her son, Shirley Whitey stroked his hair. She told him she loved him and kissed his forehead. Sitting in a specially designed chair in his parents’ living room, Kenny Whitey couldn’t respond, other than to flash his bright blue eyes.

Kenny Whitey’s life radically changed on June 20, 2006, at Leon Jones Feed & Grain in Cumming. He believes a malfunctioning lid on a tanker truck smashed his face. He was thrown more than 12 feet from the rig and landed on his head. The accident left the 49-year-old, 6-foot-2 outdoorsman trapped in a body he no longer controls.

He can move his head and has greater control of his right side than his left. Whitey is confined to his crescent moon-shaped chair, which his mother, wife or nurse must rotate down and back up every 30 minutes for blood circulation. Communication is mainly limited to his right hand: Thumb up for yes, down for no.

The accident also has altered the lives of his parents, his wife, son and stepson. The family faces medical bills of $45,000 per month.

The safety net for those medical bills – Workers’ Compensation – ripped apart in November when Whitey’s employer’s insurer, Atlanta-based Southeastern U.S. Insurance (SEUS), was declared insolvent and taken over by state insurance regulators.

SEUS’ failure placed Kenny Whitey and 87 other Georgians with workplace injuries in insurance limbo. None are covered by the state’s insurance insolvency pool. Funded by insurers, the pool is designed to cover claims if an insurance firm fails. The pool had $136.9 million at the end of 2008, the most recent audit, and $77 million is earmarked for workers’ comp insurance.

Because of the way SEUS was originally organized, the company was not initially required to pay into the insolvency pool. As a result, employers of the 88 affected workers are legally responsible for their medical bills.

Eight of those 88 workers, including Whitey, the most severely injured, are categorized as catastrophically injured and will need medical care for life.

Their employers said paying those medical claims will bankrupt them.

Help Wanted
Victims’ families, their attorneys and employers have lobbied state legislators and the Georgia Department of Insurance to change the law so those workers, particularly the eight who are the worst injured, are covered by the insolvency fund. Their fates could rest on a judge’s ruling in a pending lawsuit by one company in Fulton County against the state insurance department and insolvency pool.

“We’re not trying to demand big settlements,” said Pat Whitey, Kenny’s wife. “We just want my husband taken care of. I’m expecting a miracle and I know he’s going to get better. But I know he’s not going to get better unless he gets the medical care that he needs.”

Kenny Whitey’s case is so severe the family received coverage exceptions from federal Medicare and Medicaid, which are now paying for some of his medical needs. Taxpayer dollars normally are withheld from workplace medical claims in favor of workers’ compensation.

Still, Pat Whitey recently held off buying some of her husband’s eight medications at a local drugstore because she couldn’t cover them all at once. The failure of SEUS put an end to the one luxury for the family: a specialized van to take Kenny Whitey to his son’s baseball games, the movies and church. He has access to a van now, but only for doctor visits.

“We’re doing the best we can,” she said. “I’m grateful for the Medicaid and Medicare. Without it we would have been ruined financially.”

Former machine operator Kenny Crowell, who lost a leg after a 2005 workplace accident, said he’s already there.

Crowell, 45, who lives in the northeast Georgia town of Lula, needs a new prosthetic leg that costs $70,000. He receives $260 per week from his employer as a lost wages benefit, a big drop from the $400 to $500 a week he netted when healthy. SEUS’ failure ended a lot of medications and doctor visits for his hip and back pain. He owes $10,000 in back rent, but his landlord hasn’t evicted his family of six.

“I was going to settle with SEUS and then they went bankrupt with no warning, and life’s been miserable since then,” he said. “Now I have no doctor, no medication, nothing. I’m starting from the bottom again.”

Meanwhile, 778 injured Georgians whose employers had Workers’ Comp coverage through SEUS are covered by the insolvency pool. Their injuries occurred after SEUS became a traditional insurer.

Yet their coverage isn’t guaranteed. Only workers whose employers have less than $25 million in assets are covered by the insolvency fund. How many of them are included in the pool could be determined by pending court action in DeKalb County. “I’ve been a licensed attorney since 1978 and I would have bet these kind of scenarios were not even possible,” said Marvin Price, representing the Whitey family.

Weak Safety Net?
Insurance failures in Georgia are rare. The state Department of Insurance is investigating SEUS and its owner and chief executive, M. Clark Fain III.

SEUS’ demise raises questions regarding Georgia oversight of workers’ comp operators.

John W. Oxendine, state insurance commissioner since 1994 and a gubernatorial candidate, did not respond to several requests for comment.

Employers are aware they’re on the hook for their employees’ workers’ comp claims but said the cost of those claims will force them into bankruptcy if they have to pay.

“We had to try to come up with a Plan B for his sake and ours,” said Chad Jones, Leon Jones Feed & Grain president and Kenny Whitey’s employer. “We’re a trucking company that faces pretty high risk and we’d be crazy to go with any possibility of not being covered.”

The company pays $200,000 to $300,000 a year in workers’ comp premiums for its 100 employees. Adding another $45,000 per month to cover Whitey would put the firm out of business, Jones said.

“I didn’t think it was even possible for this to occur,” Jones said. “We’re not that big of a company to be able to take on that kind of cost.”

That’s not lost on the Whiteys and other workers without coverage for their injuries. They don’t want employers forced into bankruptcy. Yet the workers and their families don’t want to be forgotten, either.

“It’s been tough to see him suffer like he did,” Shirley Whitey said in her kitchen, measuring and mixing a pink-colored medicine to give her son. “He can’t tell us when he’s hungry; he can’t tell us when he’s thirsty. The only thing that matters to me is him getting taken care of and him getting the care he needs.”

Forced to repay medical bills ‘because I didn’t die.’

By Mike Gorrell
The Salt Lake Tribune
February 20, 2010

Federal mine inspector Frank Markosek risked his life in the summer of 2007 trying to rescue six trapped miners in the Crandall Canyon coal mine.

For his efforts, he has endured 2 1/2 years of physical and mental anguish from injuries suffered when a mine wall blew in on the rescuers — killing three, wounding six — and from the bureaucratic nightmare that followed.

The experience has left the third-generation miner asking, “Why am I being punished because I didn’t die?”

As a federal employee, Markosek’s months of medical treatment and rehabilitation for numerous broken bones and a traumatic brain injury were covered by the federal workers’ compensation program. But after a time, the U.S. Labor Department agency that administers the program urged him to join other disaster victims in a wrongful death and injury lawsuit against the mine’s owners, primarily Murray Energy Corp., and their insurance carriers.

When the case was settled out of court last year, the Labor Department required him to repay the workers’ comp program for what it had laid out for his medical care and lost wages, minus “reasonable attorney fees and court costs.” The reason? The Federal Employees’ Compensation Act, supported by long-established case law, mandates that beneficiaries of litigation against a third party must reimburse the federal government before getting their share of the lawsuit’s proceeds.

Markosek, 59, cannot disclose how much money that is, citing a confidentiality clause in the settlement agreement (whose value also has not been revealed). But the reimbursement easily exceeded six figures — a sizable portion of his share of the settlement.

“Congressmen probably go to dinner on that much [money],” he said sarcastically. “But to me, that’s a bunch of living.”

Markosek was not entirely alone in his financial exposure. Lola Jensen had to repay medical expenses incurred by her late husband, Gary, also a Mine Safety and Health Administration (MSHA) inspector, in the few hours he lived after being injured in the blast. Because he died that night, her debt was much smaller.

All of the others who died or were injured were employees of Murray Energy’s subsidiaries. But in consultation with its insurance carriers, the company was able to cover the workers’ comp repayments it owed to the state.

That flexibility was not available in dealing with the federal employees.

No separate deals.
Markosek could have recouped some of his workers’ comp obligation by claiming a larger share of the settlement offer made by the mine owners. But the way the agreement worked, the companies made an all-encompassing offer that the victims as a group had to accept or reject. Once accepted, they had to figure out among themselves how to divide the lump sum.

“For Frank to try and negotiate a separate deal, or a deal that got him more money to cover the repayment could have scuttled the whole deal,” said Spencer Siebers, one of Markosek’s attorneys.

“Frank was not willing to do that. There were folks in the case who needed that case to settle, and Frank was certainly not willing to hold them up or try to better his circumstances at their expense,” Siebers added. “He went into that mine to fight for those guys at great personal expense, and he kept fighting for them at real cost to himself throughout the negotiations.”

Instead, Markosek and his attorneys tried to get the federal compensation program to waive the repayment. But as Markosek’s lead attorney, Fred Silvester, noted in a letter seeking assistance from U.S. Sen. Bob Bennett’s staff, the Labor Department agency responded that it could not compromise or forgive the bill “irrespective of the circumstances of the accident or the strength or weakness of the case.”

A department spokesman later told The Salt Lake Tribune that the workers’ comp program “obtains millions of dollars in reimbursements … every year, and the repayment has never been waived.”

The only solution was to turn to Bennett and Sen. Orrin Hatch for help. Markosek did that through his sharp-tongued wife, Trudy. But to the couple’s disgust, Utah’s senators have provided little more than “lip service,” Markosek said. “They say, ‘Oh, that ain’t right. We’ll look into it.’ But that’s as far as it goes.”

Bennett spokeswoman Tara DiJulio said her boss appreciates the “heroic and selfless” actions of Markosek and the other rescuers. Although Bennett continues to seek a solution, she said, “it would take an act of Congress and the president to overturn this law, which would dramatically alter workers’ compensation requirements for all federal employees and could result in some unintended circumstances.”

For privacy reasons, Hatch does not discuss cases brought to him by constituents, said spokesman Mark Eddington. But “if a Utahn approached him with a case similar to this one, he would do all he can … to help. Unfortunately, sometimes cases such as these come down to what the law says, and if the law specifically prescribes the repayment of the money, then there is little that can be done.

“The MSHA employees who risked everything in the 2007 Crandall Canyon mine disaster are true heroes, and they deserve the respect and the thanks of a grateful nation,” Eddington added. “Sen. Hatch truly hopes something can be worked out to help them.”

Poppycock, fired back Trudy Markosek. “They don’t give a s— about it.”

Reliving the tragedy.
The Markoseks’ nightmare began Aug. 16, 2007, at 6:38 p.m.

The laborious effort to rescue six miners missing deep underground after a massive collapse of the mine’s walls was in its 10th day. Markosek had been assigned to Crandall Canyon for the first time the afternoon before, teaming with fellow MSHA inspectors Jensen and Scott Johnson to monitor Murray Energy crews clawing through debris-filled tunnels toward the last known working area of the missing six.

He felt the operation was under control, largely by the noises the Emery County mountain was making as crews tunneled through it, setting up steel reinforced chain-link fence structures to keep the walls in place.

“We were hearing bumps and bounces, some pretty decent bangs,” Markosek said. “It felt to me like the mountain was relieving and not building up [pressure]. You get nervous when it’s quiet.”

So he was caught off guard when the tunnel’s right wall exploded without warning, pummeling rescuers with chunks of coal and steel beams. Markosek recalls only that he was talking to Jensen, and that the doomed crew’s shift would have ended as soon as it finished setting up support materials along the left wall. A replacement crew already was in the mine, driving to the working face.

“Five more minutes, and everybody would’ve been back out of the way,” he lamented recently in his Price home. “Five or 10 more minutes and nobody would have been hurt.”

Markosek does not remember being pulled from debris that piled up 4 feet deep in the tunnel, riding out of the mine in the back of a pickup or taking an ambulance ride from Huntington Canyon to Castleview Hospital in Price. “Somebody upstairs was watching out for me because I missed all the gory stuff,” he said. “I guess he decided I didn’t need to know that.”

He came to briefly at the hospital, where Trudy and daughter Tammy were waiting after news spread of the accident. Trudy was not prepared for what she saw. “His eye was popped out [of its socket] and all his face below it was crushed in,” she said. “I was in shock. I never felt that Frank would get hurt in a mine, ever, because he was so good at his job.”

But he was hurt, badly enough to be airlifted to Utah Valley Regional Medical Center in Provo, where he spent almost two weeks receiving intensive treatment.

“My ankle was broke, my leg was broke, my knee was tore up, my tailbone was broke, I think three bones in my back, two bones in my neck, my elbow, three ribs. I think there was some pelvic injuries, too, and lots of cuts and bruises,” Markosek recounted. “And my head injury. I have a plate in my head now. And I had some brain damage.”

A chapter that needs closing.
After his release from the hospital, he endured months of physical rehabilitation, “basically I about had to learn how to walk all over again.” For four months, Trudy drove him to and from Murray, where he spent weekdays in a motel so therapists from Rehab Without Walls could help him learn how to deal with his traumatic brain injury.

The injury “changed my attitude,” he said. “Before, I was a mellow person. Nothing upset me. But after that, I went just the opposite. Things would really set me off quick.”

Over time, Markosek made progress. He learned to control his temper. He slept more. He could take walks. Eventually, he could play the piano and drive short distances. But he couldn’t continue restoring vintage automobiles because of dizzy spells brought on by the brain injury. And the sight of little pieces of coal embedded in his cheek, creating a Zorro-like scar, bothered him so badly every time he looked in the mirror that he had to have surgery to remove it.

Along the way, he and Trudy missed the note from the federal Office of Workers’ Compensation Program, informing them of the need to repay the federal government if a third-party settlement were reached.

Lola Jensen didn’t. She got her letter in the mail within days of her husband’s death.

“It was very disturbing. It said that with our workers’ compensation policy, if a third party was to be found liable, then we had to sue or we would risk losing our workers’ comp funds. And it laid out a formula for what they would expect back.”

By the time the Markoseks learned from their attorneys about the reimbursement requirement, most medical expenses had been incurred.

“I would have probably done some things differently, on some of the doctors they made me go see,” he said. “It doesn’t bother me so much that I have to pay the medical [expenses] back, but it bothers me I have to pay back the wages that I would have been earning.”

Would have. Markosek is retired, on long-term disability. His retirement party was held last September at the Carbon Country Club. MSHA’s top coal official, Kevin Stricklin, attended. For his service to the agency, Markosek received a safety lamp.

That’s a meaningful but small reward for putting your life on the line, said Price Mayor Joe Piccolo, a fervent supporter of Markosek’s cause.

“We’ve made some progress to help all of those most affected in the Crandall Canyon accident. This is the final chapter that needs to be closed,” Piccolo said. “It needs to be done fairly and equitably.”

By Tim Hoover
The Denver Post
February 17, 2010

The managers of Pinnacol Assurance have offered the state $200 million in exchange for greater autonomy in its workers’ compensation insurance business.

The proposal comes as lawmakers are trying to craft a budget for the fiscal year that begins in July, a budget that already faces at least a $1.3 billion shortfall. The proceeds from “separating” the quasi-governmental workers’ compensation insurance fund from the state could be used to help offset cuts to a variety of programs.

Pinnacol earlier this month agreed to pay the costs of hiring Morgan Stanley to represent the state in a potential transaction, with that firm to receive not less than $2 million, or 1 percent of the transaction price, whichever is greater.

Any transaction to privatize Pinnacol, whose assets have been close to $2 billion in recent years, would need legislative approval.

Sen. Pat Steadman, D-Denver, has been designated as the negotiator for Senate Democrats on the deal, and Steadman said he spoke with Pinnacol president and chief executive Ken Ross last week.

Steadman confirmed that the proposal from Pinnacol calls for paying the state $75 million in the 2010-11 budget year and $75 million the year after that. Pinnacol also would pay the state $50 million over 30 years.

In exchange, Pinnacol would remain the state’s workers’ compensation insurer of last resort and keep its tax-exempt status only for such “residual market” employers. Pinnacol now does not pay state premium taxes on the insurance it sells.

Pinnacol’s proposal also would require that the governor appoint only a majority, rather than all, of its board members, and it would allow existing Pinnacol employees who are members of the Colorado Public Employees’ Retirement Association to remain in the PERA pension system.

Pinnacol also has expressed concern about a number of bills in the legislature that would place stricter regulations on it. Steadman and others with knowledge of the proposal said they understood Pinnacol was wanting the bills to go away in exchange for doing the deal.

How that could occur is unclear. It’s against the law for legislators to promise something in exchange for a vote.

In a statement Monday, Pinnacol confirmed the amount it offered but did not provide many details.

“As currently envisioned, the proposed arrangement would establish Pinnacol as a domestic mutual insurance company owned by its policyholders and committed to covering the residual market and to providing competitive and stable workers’ compensation coverage in Colorado,” the statement said. “In addition, the proposed arrangement would not impair Pinnacol’s future ability to consider reducing rates and issuing dividends nor interrupt Pinnacol’s operations and services.”

Senate President Brandon Shaffer, D-Longmont, spoke about the offer to Senate Democrats on Monday. Shaffer said he did not want to comment on the offer until he saw it in writing, but he did say the timing of the proposal seemed peculiar.

Part of Morgan Stanley’s job is to determine the market value of Pinnacol to help the state decide what a fair offer is, Shaffer said. That hasn’t happened yet.

By offering the state $200 million, “it seems like they (Pinnacol) have already determined what the value is,” Shaffer said.

He also noted that a wide- ranging state audit of Pinnacol is still underway and won’t be finished until summer.

Several other Senate Democrats who learned of the offer said it was too low.

“I thought it was laughable,” said Sen. Lois Tochtrop, D-Thornton, adding that she was concerned about the potential effects on workers and employers by taking the insurance fund out from under state oversight.

Sen. Moe Keller, D-Wheat Ridge, called the offer “outrageous” and said Pinnacol was trying to enjoy the benefits of a private company while still retaining the advantages of a political subdivision of the state.

“They have to decide whether they want to be a private company and compete in the free market or remain under under state oversight,” Keller said. “They can’t have it both ways.”

Sen. Shawn Mitchell, R-Broomfield, said the offer was the result of “extortion” on the part of the state, which he said keeps threatening to meddle in Pinnacol’s operations and take its money. Lawmakers last year considered but abandoned a plan to tap $500 million from Pinnacol’s assets.

But Mitchell added, “It may be extortion, but sometimes when the thugs are after you, all you can do is dodge.”

Trey Rogers, chief legal counsel for Gov. Bill Ritter and the Democratic governor’s lead negotiator with Pinnacol, confirmed the $200 million figure was a “rough outline” of what Pinnacol has offered.

Rogers said the governor’s office had not taken a position yet on the offer.

“We have just recently retained Morgan Stanley to help us assess any offer we get from Pinnacol,” he said. “It’s very new, and we don’t just have a reaction yet.”

Pinnacol’s Proposal
The workers’ compensation insurer would pay $75 million in the 2010-11 budget year, $75 million the year after that, and $50 million over 30 years.

In exchange, Pinnacol would gain greater autonomy on its business practices, including how it sets its rates and who is on the board. But the company would remain the state’s workers’ compensation insurer of last resort.

By John Sepulvado & Emily Green
Georgia Public Broadcasting
February 17, 2010

ATLANTA – Southeastern U.S. Insurance, or SEUS, once boasted it was the third largest workers compensation insurer in Georgia. But last year, state regulators noticed some accounting discrepancies, and soon after, a Fulton county judge shut the company down. Now, state officials are conducting a criminal investigation into SEUS. GPB examined the red flags regulators should have noticed but didn’t and the role prominent Georgians played in the company. We also look at the struggle of a family once dependent on workers comp benefits from SEUS.

Kenny Whitey was hurt on the job four years ago. His son, Chance, and wife, Pat, spend a lot of time caring for him. SEUS began as a captive insurance company, and it began selling policies to a very niche market—PEO’s. Those are leased labor companies—essentially temp services. To cover the liabilities, SEUS purchased reinsurance from a now failed Bermuda based company. Then, in 2006, SEUS became a larger stock company–and started selling insurance to any company or municipality that wanted to buy it. Former Georgia Insurance Commissioner Tim Ryles says the expansion of the company, along with the low rates, should have raised red flags for regulators. Ryles says another red flag is that SEUS started doing business in Bermuda.

“Offshore companies are notorious for this kind of stuff. A regulator ought to step in right away and take some action to make sure that Bermuda company is solvent, that it is regulated by at least some entity, domestic or foreign,” says Ryles.

Yet another red flag for Ryles is that SEUS CEO Clark Fain was involved with First Oglethorpe, another workers comp company at the center of controversy in the 1990s. Fain handled marketing, according to newspaper reports. When Ryles was Insurance Commissioner, he investigated First Oglethorpe for a questionable loan deal. Current Insurance Commissioner John Oxendine says his office monitored SEUS properly, and only noticed irregularities at SEUS after learning of a land and loan deal between SEUS and CEO Clark Fain, totaling more than $10 million dollars.

“Whenever you have a transaction at such a large portion of the assets that’s going to raise a big question. We then found out that this land deal was actually perfected without our consent. It was required to be approved by the department, they went ahead and did it without our approval. We instantly raised our concerns. We later forced the company to reverse the land deal. That started bringing up questions about the appropriateness of some of their other business transactions,” says Oxendine.

Meanwhile, SEUS had assembled an advisory board stacked with powerful and politically well connected Georgians to offer insight to the company. Former State House Majority leader Larry Walker, Former Democratic Speaker Terry Coleman, and Former University of Georgia Head Coach Ray Goff served on the board, as well as Congressman Lynn Westmoreland. Like every other advisory board member contacted by GPB, he says he can’t recall much of what was discussed at those meetings. Furthermore, Westmoreland says he never advised the company.

“No, I didn’t give any recommendations. No. You know, you’re basically, you’re there, people run their business model by you… I mean you’re a business person. You’ve been in business. It’s just exactly that. They call it an advisory board, but I’ve never advised anybody,” says Westmoreland.

Westmoreland says he was paid $1,500 dollars per meeting. Other advisory board members took trips to Europe, and went on hunting retreats, all paid for by SEUS. Commissioner Oxendine, meanwhile, received $2,500 dollars in campaign contributions from Clark Fain. Oxendine says Fain’s political influence did not influence regulation, and notes his office opened up a criminal investigation. Fain, in statements, says he has not committed fraud and has done nothing wrong. When finished, the criminal investigation may be able to explain how a small but powerful insurance company that insured government workers went from jetting politicians around the globe to liquidation, unable to pay for its claims.

SEUS’ liquidation has also meant incredible hardships for families who were dependent on workers comp. benefits from SEUS. Kenny Whitey is one such person.

Kenny used to work as a truck driver. He got hurt on the job, falling off a tractor trailer, and as a result, he has a traumatic brain injury and is paralyzed. He can only move his thumb. SUES told Kenny’s lawyer his medical care cost about $45,000 dollars a month. And at first SEUS paid for it all. But then the company was liquidated, the payments stopped, and now Shirley and her husband Herbert, Kenny’s dad, are providing 24 hour care during their retirement.

“It’s just… this is rough. It would be on anybody I guess. As much help as we always had, and then coming down to not having anything. But what little we get now help, but not like it used to be,” says Herbert Whitey, Kenny’ dad.

Kenny is now on Medicaid, which covers eight hours of nursing care. At night, Kenny’s mom, Shirley sleeps with a baby monitor so she can hear her son at night. She rotates Kenny in his hospital bed every four hours so he doesn’t get bedsores.

“Especially it’s hard when I wake up and can’t go back to sleep, you know, but I know he’d do the same for me. I don’t worry about myself, just so long as he’s took care of. That’s all that matters,” says Shirley.

Kenny’s wife—Pat Whitey—pays for a physical therapist to come to the house once a week. Most of her time is spent at her job reviewing loans at a financial institution, and in her off time, she and her brother-in-law handles the legal mess to get Kenny care. She spends every day before and after work at her in-laws house.

Pat and Kenny have a ten-year old son named Chance. He’s an incredibly soft spoken kid, with white hair framing his face. He helps change his father, he spends a lot of time watching TV with him, and Chance says, he’s waiting for the day his father will get better.

“Just waiting… waiting till he gets better,” says Chance.