STATE OF WEST VIRGINIA

Update of the

PRELIMINARY PERFORMANCE REVIEW OF THE

Workers' Compensation Office of Judges

Office of Judges Has Reduced the Number of
Pre-June 1995 Protests in Its Inventory
Office of Judges Continues to Improve Its Efficiency
in Making Final Decisions
Office of Judges Has Eliminated All Cases That
Have Awaited a Final Decision for Over 180 Days
Backlog of Permanent Total Disability Cases Decided by
Workers' Compensation Division Appears to Have
Peaked and Is Beginning to Decline
Office of Judges Has Reduced Its Use of
Contract Attorneys

BACKGROUND

    The West Virginia Legislature created the Office of Judges (OOJ) as an independent organization headed by a Chief Administrative Law Judge. The Governor, with the advice and consent of the Senate, appoints the Chief Administrative Law Judge (ALJ). The ALJ is a will and pleasure official. According to provisions 23-5-9, the Chief ALJ has the statutory power to hear and determine all disputed claims in accordance with the provisions of this article, establish a procedure for hearing disputed claims, take oaths, examine witnesses, issue subpoenas, establish the amount of witness fees, keep such records and make such reports as are necessary for disputed claims, and exercise such additional powers, including the delegation of such powers to administrative law judges or hearing examiners as may be necessary for the proper conduct of an organization for administrative review of disputed claims, as stated in 23-5-8 of the West Virginia Code.

    Prior to creation of the OOJ, the Commissioner of Worker's Compensation and their legal division were responsible for the dispute resolution process within the agency. However, the Worker's Compensation appeals process was criticized for three obvious reasons: a lack of due process, a lack of substance within legal decisions, and a lack of expediency. To remedy this blatant deficiency of the Worker's Compensation Division, the OOJ was created by a special session of the West Virginia Legislature in June 1990. Under West Virginia Code 25-5-1, the OOJ was granted jurisdiction over all new protest requests. The OOJ's administrative appellate power commenced on July 1, 1991. All cases, which were in the litigation process were transferred to the jurisdiction of the OOJ on January 1, 1991.

    By creating the OOJ, the West Virginia Legislature addressed the structural weaknesses within the Worker's Compensation dispute resolution process. First, the lack of due process was remedied by establishing the OOJ as an independent organization, which is headed by the Chief Administrative Law Judge (ALJ) who is appointed by the Governor and confirmed by the Senate. The Chief ALJ can only be removed by a vote of two thirds of the members of the compensation programs performance council and shall not be removed except for official misconduct, incompetence, neglect of duty, gross immorality or malfeasance and then only after he or she has been presented in writing with the reasons for their removal and is given an opportunity to respond and to present evidence (WVC 25-5-8). Second, the lack of substance with prior Worker's Compensation administrative law decisions was remedied by requiring that all OOJ decisions contain findings of fact and conclusions of law. Lastly, the West Virginia Legislature attempted to remedy the lack of expediency in processing cases by requiring that the OOJ manage and control the litigation process.

   On March 16, 1993, the West Virginia Supreme Court of Appeals, citing section 2.50 of the American Bar Association's Standards Relating to Court Delay Reduction ("the court, not the lawyers or litigants, should control the pace of litigation.") stated, "under the current procedure, the time frame order is entered automatically, and, unless there is an objection, nothing more is done with the claim until the time frame expires (Lyons v. Richardson, 189 W.Va. 157, 54). As a result of the West Virginia Supreme Court's ruling, the OOJ instituted Time Standards to comply with the Court's holding and expedite the dispute resolution process. Time Standards are shown in Table 1.

Table 1

Office of Judges Time Standards

Protest Type

Time Standards

1) Compensability - Protests concerning whether an injury or disease occurred in the course of and as the result of employment. 6 Months (180 Days)
2) Rehabilitation - Protests concerning whether an individual is entitled to receive physical or vocational rehabilitation benefits as a result of a compensable injury. 10 Months (300 Days)
3) Medical Treatment - Protest concerning whether an individual should receive a particular kind of medical treatment or medical equipment ain regard to a compensable injury. 4 Months for claimants (120 Days)

6 Months for employers (180 Days)

4) Temporary Total Disability Benefits - Protest concerning whether an individual, as a result of a compensable injury, is temporarily unable to perform the job that he or she had at the time the injury occurs or at a later time if necessary.

6 Months (180 Days)

5) Dependent Benefits (104 Weeks) - Protest concerning whether as individual is a dependent of a person receiving permanent total disability and whether that person is entitled to receive the 104 weeks of benefits provided by law.

4 Months (120 Days)

6) Dependent Benefits (Fatal) - Protest concerning whether a compensable injury or disease was a material contributing factor to the death of a deceased claimant.

18 Months (540 Days)

7) Permanent Partial Disability - Protest concerning whether claimants have any permanent partial (not total) disability as a result of a compensable injury.

15 Months (450 Days)

8) Occupational Pneumoconiosis Non-Medical - Protest concerning whether an individual has been exposed to the hazards of occupational pneumoconiosis for the requisite time period provided by law whether any impairment is presumed to have been caused by such exposure, and whether any award should be allocated among different employers.

9 Months (270 Days)

9) Permanent Total Disability Threshold- Protest concerning whether an individual has 50% whole body medical impairment resulting from compensable injuries so as to qualify that claimant for consideration for permanent total disability.

8 Months (240 Days)

10) Permanent total Disability Entitlement - Protest concerning whether a claimant is permanently and totally disabled in accordance with law.

15 Months (450 Days)

11) Permanent Total Disability Onset/Changeability - Protest concerning the date permanent total disability commenced once it has been determined that an individual is permanently and totally disabled.

4 Months (120 Days)

12) Permanent Total Disability Second Injury - Protest concerning whether a permanent disability award should be paid from the second injury fund.

4 Months (120 Days)

13) TTD Reopening - Protest concerning whether the claim of an individual who has suffered a compensable injury should be reopened.

5 Months (150 Days)

Issue Area 1: The Office of Judges Has Reduced the Number of Pre-June 1995 Protests in Its Backlog.

    The original performance evaluation conducted by the Legislative Auditor on the Office of Judges uncovered an estimated 6,000 to 8,000 protests that were in its backlog prior to June 1, 1995. The significance of the June 1, 1995 date is that it is the date that the OOJ 's new computer system went online. At that time, the computer system did not have a programmed report that identified active cases filed prior to June 1, 1995. Since then, the OOJ completed a project that accurately identified the number of pre June 1, 1995 protests backlogged in its inventory. As of October 31, 1998 there were 3,595 pre June 1, 1995 protests backlogged in the OOJ inventory. As of November 12, 1999 there were 1,751 pre June 1, 1995 protests backlogged in the OOJ inventory (see Table 2).

TABLE 2

PRE-JUNE 1, 1995 PROTESTS

PROTEST TYPE

NUMBER OF PROTESTS (1998)

NUMBER OF PROTESTS (1999)

Compensability 53

5

Rehabilitation 1

1

Medical Treatment/Equipment 75

20

Temporary Total Disability 23

5

Dependent Benefits 104 161

21

Dependent Benefits Fatal 60

121

Permanent Partial Disability 2852

56

Occupational Pneumoconiosis (Non-Medical) 123

349

Occupational Pneumoconiosis (PPD) NA

977

Permanent Total Disability Threshold 2

0

Permanent Total Disability Entitlement 127

55

Permanent Total Disability Onset Date 5

3

Permanent Total Disability 2nd Injury 20

3

Reopening 55

18

System Resolution Only NA

117

Miscellaneous 38

0

TOTAL 3595

1751

Recommendation 1:

The Office of Judges should complete all pre-June 1, 1995 protests through their appeals process in accordance with time standards as established in regulations.

Issue Area 2: The Office of Judges Continues to Improve Its Efficiency in Making Final Decisions.

23-5-9 of the West Virginia Code required that the OOJ make a decision within thirty days after a final hearing that either affirms, reverses or modifies an action of the Workers' Compensation Division. In the original performance audit, the OOJ compliance rate for rendering final decisions within the mandated thirty day period fluctuated between 10% and 30%. By January 1999, the OOJ compliance rate rose to between 30% and 50%. Although a change in the law during the 1999 regular Legislative Session dropped the thirty day requirement, by May 1999, the compliance rate rose even higher to over 70% (see Figure 1). However, the compliance rate fell drastically in July, August and September 1999. This occurred because of circumstances beyond the OOJ's control. According to the OOJ:

The overall results for this reporting period would have been substantially better had the Office of Judges not experienced operational difficulties in July and August 1999, that were beyond our control and which adversely impacted every aspect of our performance. In July 1999, BEP management information system personnel installed over 100 new PC's as a part of the Bureau's electronic document management system (EDMS) which is scheduled to be implemented January 10, 2000. A host of technology issues involving our application software, operating software, and printers ensued over the next two months. Because of these technology issues, our office was unable to perform certain key functions for more than 50% of the time during July and August. These functions included typing and making final decisions and acknowledgment of protests. Dictation of final decisions continues by all adjudicators, but our inability to type and mail decisions caused a reduction in our final decision percentage in July and August.

The Legislative Auditor is satisfied that the drop in compliance during July, August and September is a temporary setback and is not indicative of any failure on behalf of the OOJ. A sign that the OOJ is getting back on track can be seen by the return to normal levels in the number of decisions issued monthly in September 1999 (see Figure 2).

Issue Area 3: The Office of Judges Has Eliminated Its Backlog of Cases Ready for Final Decision for Over 180 Days.

    In the original performance review, the OOJ had 3,254 protests which had a final hearing but were not yet decided. 1,900 exceeded the 30 day time period, which is no longer required by by state statute, for final decisions. In the January 1999 update, the OOJ reduced the number of protest awaiting final decisions. As of October 1998, the OOJ had 2,072 protests awaiting final decisions. As of November 1999, the OOJ had 3,421 protests awaiting final decisions. Approximately a third of the protests are within the 30 day window another third are within 31-60 days. The major improvement in this area is that there are no longer any cases waiting over 180 days for a final decision.

Table 3

PRE-JUNE 1, 1995 CASES STILL IN THE OOJ'S SYSTEM, 11/23/99

  NUMBER OF DAYS SINCE FINAL HEARING  

PROTEST TYPE

0-30 31-60 61-90 91-180 181-360 361 + TOTALS
Compensability 142 137 39 1 0 0 319
Rehabilitation Services 29 30 48 13 0 0 120
Medical Treatment/Equipment 146 300 99 25 0 0 570
Temporary Total Disability 210 91 62 8 0 0 371
Dependent Benefits 10 2 2 1 0 0 15
Dependent Benefits Fatal 20 17 4 0 0 0 41
OP Non-Med 92 104 50 5 0 0 251
PTD Threshold 0 2 1 0 0 0 3
PTD 83 64 68 8 0 0 223
PTD Onset 11 9 6 2 0 0 28
PTD Second Injury 0 2 1 0 0 0 3
OP Board 218 226 84 24 0 0 552
Reopening 41 37 29 3 0 0 110
PPD / Injury 246 290 247 32 0 0 815
TOTAL 1248 1311 740 122 0 0 3421
1998 TOTALS 1116 345 370 209 28 4 2072
1997 TOTALS 1336 791 492 384 147 104 3254

Issue Area 4: The Backlog of Permanent Total Disability Cases Decided by the Workers' Compensation Division Appears to Have Peaked and Is Beginning to Decline.

    The 1997 performance review identified a potential crises looming on the horizon for OOJ. A backlog of approximately 4,000 Permanent Total Disability (PTD) cases had built up in the Worker's Compensation Division. The West Virginia Supreme Court of Appeals recalled Judge James Holiday and situated him in the Circuit Court of Kanawha County to conduct all proceedings pertaining to Worker's Compensation on behalf of the Supreme Court of Appeals. On October 9, 1997, Judge Holiday signed an order requiring the Worker's Compensation Division to render decisions on approximately 1,500 backlogged "Old Law" PTD cases by February 15, 1998 and approximately 2,500 Ferral "Old Law" cases by June 15, 1998. The OOJ estimated that two thirds of the cases will be appealed to them.

    PTD protests are the most complex received by the OOJ. They are only assigned to its staff of administrative law judges. Neither paralegal writing teams, nor contract attorneys are permitted to handle these types of protests because of their complexity. The OOJ received 684 PTD protests between November 1998 to September 1999.

TABLE 4

NUMBER OF PTD PROTESTS RECEIVED BY THE OOJ,

JANUARY 1996 TO SEPTEMBER 1999



TIME PERIOD
TOTAL NUMBER OF PTD PROTESTS AVERAGE NUMBER

OF PTD'S RECEIVED PER MONTH

1/96 - 12/96

112

9

1/97 - 10/97

310

31

11/97 - 10/98

1393

116

11/98 - 9/99

684

68

    According to the OOJ, actual completion dates for these cases may vary substantially from the projections based on extensions requested by the parties involved.

    The OOJ has complied with the two recommendations pertaining to this area from the January 1999 update. The first recommendation pertained to the OOJ submitting a plan to the Compensation Programs Performance Council which they have done and are currently implementing. The second recommendation required the Compensation Programs Performance Council to monitor the progress of the OOJ in compliance with time standards. As a result of this recommendation, the OOJ provides the Compensation Programs Performance Council with the following reports each month:

1. Time standards compliance;

2. Hearing schedule compliance;

3. Motion resolution compliance;

4. Final decision compliance;

5. Acknowledgment goal;

6. Affirmations/reversals;

7. Protests Acknowledged; and

8. Decisions Issued;

Recommendation 2:

The Compensation Programs Performance Council should continue to monitor the progress of the Office of Judges as it works to improve compliance with time standards.

Issue Area 5: The Office of Judges Has Reduced Its Use of Contract Attorneys.

    The OOJ has reduced its expenditures on contract attorneys since 1997 (see Table 5). In 1997 the monthly average paid for contract attorneys was $135,633. In 1999 it was reduced by 75% to $37,191. Since the January 1999 update, the OOJ reduced expenditures on contract attorneys by 61%. The OOJ claims that they would no longer have to use contract attorneys if it weren't for the large number of Permanent Total Disability cases caused by the mandamus actions in regard to the Workers' Compensation Division. The OOJ estimates that it will take 6 to 10 months to complete these cases.

Table 5

Expenditures for Contract Attorneys

CALENDAR YEAR

TOTAL EXPENDITURE

MONTHLY AVERAGE

1995

$1,862,807 $155,234
1996 1,453,800 121,150
1997 1,627,600 135,633
1998 1,058,924 88,244
1999* 409,100 37,191
TOTAL 6,412,231 106,871

*Includes months 1/99 to 11/99.

Conclusion

    The performance of the Worker's Compensation Office of Judges shows significant improvement during the Performance Evaluation and Research Division's evaluation and monitoring. They reduced the number of pre-June 1, 1995 cases in their inventory from 3,595 in 1998 to 1,751 in 1999.Their compliance to the 30 day requirement has improved from around 20% in 1997 to around 70% in 1999, not taking into account the temporary setback from the switching to a new computer system. The OOJ has completed all cases that have awaited a final decision for over 180 days when in 1997 7% of their cases went without a decision for over 180 days. However, they still need to decide as many cases as possible in an expeditious manner. The OOJ has also reduced their expenditures on contract attorneys by 61% from 1998 and by 75% from 1997 and plans to cease using them when the current PTD caseload resulting from mandamus actions on the Workers' Compensation Division have been reduced.

Recommendation 3:

   The Legislative Auditor recommends that the Office of Judges should continue in its efforts to reduce and eliminate the use of contract attorneys and appear before the Joint Committee on Government Operations during the 2000 Interim to give an oral presentation and provide a written status report on this issue.