The comp management decision Featured

6:02am EDT August 31, 2004
After more than 30 years of relative quiet on the workers' compensation front in Ohio, widespread change may be on the horizon.

In May, in response to complaints that representatives of third-party administrators (TPAs) were exceeding the scope of a 1970 agreement, the Board of Commissioners on the Unauthorized Practice of Law of the Ohio Supreme Court issued a finding that the majority of the activities undertaken by these representatives constitute the unauthorized practice of law.

Since 1970, nonattorney hearing representatives have been authorized to represent the interests of employers at administrative hearings throughout Ohio. Under the 1970 agreement between the Unauthorized Practice of Law Committee of the Ohio State Bar Association and TPAs, a TPA representative was permitted to attend any hearing before the Industrial Commission and advise the hearing officer(s), without comment, of documents or parts of documents within the file.

TPA representatives were not permitted to examine or cross-examine witnesses; interpret statutory provisions, administrative rulings or case law; make or give legal interpretations; or comment on the nature of the evidence presented, the credibility of witnesses, the weight of the evidence or the legal significance of the documentation on file.

The issuance of the board's report in May caused widespread confusion. Many of the hearings where a TPA or union representative was present on behalf of an interested party were put on continuance. On May 21, the Ohio Industrial Commission issued a statement that essentially proposed a "business as usual" approach until the Supreme Court ruled on the board of commissioners' findings and recommendations.

In a further effort to return to the status quo, on June 2, the Industrial Commission adopted a new resolution (R04-1-01) recognizing the 1970 agreement and setting forth the guidelines for participation by TPA and union representatives at administrative hearings.

R04-1-01 expanded upon the 1970 agreement by adding provisions which prohibit TPA and union representatives from providing legal advice to injured workers or employers; giving legal opinions or citing case law to injured workers or employers; and providing stand-alone representation at a hearing for a fee.

The future of workers' compensation practices in Ohio now rests squarely in the hands of the Ohio Supreme Court. Until the final ruling is issued, we may only speculate as to the outcome and the ultimate impact that the decision will have. However, it appears that, regardless of the decision, there will be significant changes to the workers' compensation system.

The most drastic change would come if the Supreme Court adopts the board's recommendations wholesale. In that case, TPA and union representatives would be effectively barred from actively participating in administrative hearings. That alternative could be catastrophic to thousands of jobs, the very existence of small businesses, and, potentially, the entire workers' compensation system.

On the opposite end of the spectrum, the court could disregard the board's recommendations but would, in all likelihood, call for stricter interpretation and enforcement of the 1970 Agreement and R04-1-01. Regardless of the court's decision, we must prepare for what appears to be a new era in Ohio workers' compensation.

With respect to preparing now for future possibilities or inevitabilities, all businesses should establish a back-up plan and relationship with legal counsel that could be expanded to include global representation in the event that the Supreme Court adopts the board's recommendations. Start by checking with your present legal representatives to see if they have the personnel, capacity and expertise to handle all workers' compensation hearings. Also, find out if they have a good support staff that could handle some matters to maintain a lower cost base.

Finally, find out whether they would consider alternative billing procedures such as flat rates to reduce legal fees. MARY EILEEN PURCELL is an attorney in the Cleveland office of Vorys, Sater, Seymour and Pease LLP, where she practices in the labor and employment group with an emphasis in workers' compensation. Reach her at (216) 479-6104 or www.vssp.com.