We will first present a study of sixty-six of the seventy-two cases referred to above. Six are omitted because compensation payments are not yet completed. Analysis of Cases Which Created Medical Costs of $200 or More. payments were not yet completed. $32,022.23 477.90 Total compensation paid in these cases, excluding six cases where Average for these 66 cases. Total medicals paid in these 72 cases. 18,823.94 265.00 These cases included two where employers paid respectively $890 and $1,189.65, and one where the injured and insurer paid $1,100. They therefore include a ratio of over 4 per cent of extremely large bills, and the average given for the 72 cases, $265, is probably higher rather than lower than the average which will be obtained with a larger number of cases. The medical provisions of the Ohio act are more liberal than those of Minnesota. Two hundred dollars is available for medical care in every case where needed, and there is no time limit on medical care as there is. in Minnesota. (Section 1465-89, General Code of Chio) Bulletin 21 of the Ohio Industrial Commission, entitled, “Industrial Accidents in Ohio, January 1, 1914, to June 30, 1915," shows the following facts on pages 52 and 53: MEDICAL COST OF INDUSTRIAL ACCIDENTS. (1) 377 fatal accidents created medical costs of. 13 permanent total created medical costs of. 1,789 permanent partial created medical costs of. $17,368.92 2,004.50 84,103.55 31,373 temporary (over seven days' disability) created medical costs of 454,948.83 132,531.49 52,359 temporary (under seven days' disability) created medical costs of 85,906 accidents. Total, $690,957.29 This gives an average medical cost per case of $8.05 and an average medical cost in non-fatal cases of $7.86. The compensation and medical costs paid in these cases was $4,401,986.16. The medical cost, therefore, amounted to 15.7 per cent of the total compensation. The compensation and medical in the non-fatal cases was $3,015,911.55, and 22.4 per cent of this was medical cost. In California, where the medical provision is more liberal than in any state but Connecticut, the medical costs in 62,211 cases in 1914 amounted to $730,178.56, or an average of $11.74 per case. (U. S. Department of Labor, Monthly Review, Vol. II, No. 5, page 53). These "medical expenses" include also the burial expenses paid in a considerable number of death cases. In Maryland, where they have a $150 money limit on medical care but no time limit, the medical costs in 20,227 cases amounted to $91,164.18, or an average of $4.50 per case, while the average for 3,185 cases in which the disability lasted more than two weeks was $11.71. (Report of Maryland Commission, 1915, page 65.) In Illinois, with a $200 money limit and a 56-day time limit, the medical costs in 7,187 compensation cases of over six days' disability was $103,716, or an average of $14.43. (U. S. Monthly Review, Vol. II, No. 4, page 55.) The apparently greater cost per case in Illinois as compared with Ohio and California is probably accounted for by the fact that the figures in Illinois were compiled from a much smaller and therefore less representative group of cases. The experience throughout the country has therefore been quite consistent. A medical clause which requires the employer to furnish medical care for 90 days or which requires him to furnish medical care costing $200, will cause an average medical cost per case not far from $10. In Minnesota medical costs amounting to $129,715.77 were reported in the nine months ending June 30, 1914; $207,025.78 in the statistical year ending June 30, 1915, and $255,542.80 in the year ending June 30, 1916. This total of $592,284.35 represents the medical cost of approximately 37,000 accidents, most of which caused a disability of at least one week. This is an average cost of $12 per accident. But if all accidents which disable for one day or more had been reported, the average would have fallen to at least as low as Ohio. The Court Order for the Additional One Hundred Dollars. Realizing that the legislature may not see fit to enact the recommendation just discussed, we make another important recommendation for amendment of section 18. This second recommendation will be rendered unnecessary if the previous recommendation is written into the law, as we hope that it will. We recommend that that portion of section 18, first paragraph, which reads, "provided, however, that the total liability under this section shall not exceed the sum of one hundred ($100) dollars in value; except that the court, may upon necessity being shown therefor at any time within one hundred (100) days after the date of the injury, require the employer to furnish such additional medical, surgical and hospital treatment and supplies during said period of ninety (90) days, as may be reasonable, which together with any such sums or relief theretofore furnished, shall not exceed in all two hundred dollars ($200) in value," be amended either by striking out all reference to $100 and making that portion of the paragraph read: "provided, however, that the total liability under this section shall not exceed the sum of two hundred dollars ($200) in value"; or be amended to read about as follows: "Provided, however, that the total liability under this section shall not exceed the sum of one hundred dollars ($100) in value, except that the court may, upon necessity being shown therefor at any time after the date of the injury, require the employer to furnish such addition medical, surgical and hospital treatment and supplies during said period of ninety days, as may be reasonable, which together with any such sums or relief theretofore furnished, shall not exceed in all two hundred ($200) dollars in value. If the employer, not less than thirty nor more than seventy days after the date of the injury, shall notify the injured and his physician in writing that the said employer refuses to pay more than $100 for the medical care of the said injured, without a court order requiring the employer to pay in excess of $100, then the said employe or his physician in his behalf, must file their petition to secure said order from the court within one hundred (100) days after the date of injury." The said notice shall be substantially in the following form and shall be invalid if it omits the sentence referring to the department of labor: NOTICE. "You are hereby notified that.... injured... .employer of... The first of these two forms of amendment appears to this department to be preferable to the second. We believe that the second form would remedy the evils which we are about to point out, but the first form would unquestionably remedy them. The first form would also simplify the operations of the act, while the second would not. The choice between the two is, however, a matter of legislative discretion and it is our purpose simply to show the need of an amendment and indicate a type of amendment that will fill the need. Reasons for Amendment. The reason for this suggested amendment can be stated in one sentence. The provision in section 18, which requires a court order for the second $100 of medical care, and which makes that order ineffective unless obtained within one hundred days after the date of injury, provides a technical defense by which certain insurance companies have repeatedly avoided the payment of medical bills in excess of $100 when they themselves admitted that there was no question about the injured's need for more than $100 worth of care and no question but what the doctor bills were reasonable. It also causes employes who have to sue for their compensation to lose the second $100 of medical care. The faulty operation of this portion of the section can best be described by typical cases. Case No. 1. A Minneapolis physician rendered treatment in a particularly difficult case and presented a bill for $153. The physician affirms that the local representative of insurer assured him previous to the expiration of the 100 day limit that the bill would be paid in full. After the time limit expired they tendered the doctor a check for $100 in full settlement of his claim, but when he refused this they called his attention to the fact that he could not obtain more than $100 for his services without a court order, which of course it was too late to get. Case No. 2. In another Minneapolis case the injured was taken to St. Mary's hospital. Previous to the expiration of the hundred days Sister Leo of the hospital called the matter to the attention of the Minneapolis deputy of the labor department, who then took the case up with the local representative of the insurer. He assured the labor department that they would pay the bill in full without a court order. After the expiration of the hundred days the home office flatly refused to pay more than $100 in the case. Payment was finally made by the insurer when the labor department made it clear to their home office that steps would be taken to revoke their license to do business in the state. Case No. 3. The employe suffered a compound comminuted fracture of the leg, followed by necrosis of the bone. The story of his medical treatment and the attitude of the insurer is told in a letter written to the insurer by this department, December 30, 1915, when the case was brought to our attention. The names used in the illustrations are all fictitious except the name of the hospital and of Minneapolis. December 30, 1915. "Dear Sirs: A Mr. John Andrus was injured in the employ of William Smith at "X" City, Minn., of whom you are the insurers. This injury occurred on January 20th. From January 20th to March 23d the injured was in the care of Dr. L of "X." At the end of five weeks Dr. M. of Minneapolis was called to "X" to examine Mr. Andrus, and Dr. M. recommended that an X-ray be made and that plates should be put on the broken leg and showed Dr. L. how the operation should be performed. This was about the first of March. Dr. L. had an X-ray taken on March 16th, about two weeks after Dr. M.'s examination and another X-ray on March 23d. On March 25th the injured left the care of Dr. L. and came to Minneapolis to the Northwestern hospital, where he employed Dr. S., who operated on his leg on April 1st. He was then in the Northwestern hospital until the latter part of August. The injured man has now returned to "X." but has a permanently impaired leg. "You are probably familiar with all of these facts. "Your company has paid medical bills amounting to $100. Your agent at St. Paul states that he never saw the injured man until after March 25th, when he came to Minneapolis, and that he never made any offer of compensation previous to the time when the injured came to Minneapolis. "In a letter of June 21st to the employer he refers to the fact that he had made the man an offer, and the indications of this letter are that this offer had been made not very long previously. "The ninety days during which an injured man could obtain an order from the court for the additional $100 medical care appear to have elapsed before your agent ever talked with the injured. The bills rendered by the "X" hospital to your company were made up at the hospital on March 27th. Dr. L's bill was made up on March 29th. It is not likely, therefore, that these bills were in your hands before April 1st. Therefore, 70 of the 90 days had elapsed before you secured the bills for the medical care at "X.” These bills totaled over $300. On April 6th your agent wrote Dr. L., stating that the bills were in excess of the amount allowed by the compensation law and that the hospital and the doctor would, therefore, have to agree on a basis of the amount available. This letter does not specifically state that you would not pay more than $100. but the doctor seems to have received such an understanding from some source, for on April 12th he wrote and said that he had agreed with the hospital to divide the $100 equally between them. Eightytwo days had elapsed by this time. "Sometime after April 12th you paid Dr. L. $50 and the hospital $50, but neither your company nor anybody else informed the injured man of these proceedings that were going on relative to his medical care, and there is no indication that up to ths time you had taken any steps to come to an adjustment with the injured. "The inevitable conclusion that we reach from a survey of the facts in this case is that the injured in the case never had a chance to protect his rights in the matter. The total medical expenses in the case amount to more than $1,100, and the injured still has a badly crippled leg. "We consider it a clear case where the injured should have received $200 medical care. The provision in the law providing for the court order for the second $100 was put in with the intention of enabling the employer or insurer to protect themselves against exorbitant medical bills. It was not put there for the purpose of enabling them to avoid their proper liabilities in cases such as the one in question. We are "We would be very glad to hear from you further on this case. enclosing you a copy of the affidavit taken in the case." On March 15, 1916, the department again wrote the insurer in this case as follows: "Dear Sirs: Referring to our letter of December 30, 1915, in the matter of John Andrus vs. William Smith, we wish to call your attention to the fact that we have as yet had no reply from your company." At the time that this report went to press in the fall of 1916 we were still awaiting a reply to our letter of December 30, 1915. John Andrus received $100 on his medical expenses. Case No. 4. The injured suffered a crushing injury to three fingers, which resulted in lockjaw and in a serious permanent disability of the fingers. The medical bills amounted to $357.38. The insurer would pay only $100, and on March 27, 1916, the matter was brought to the attention of the labor department. The 100 day period had elapsed but the department at once wrote the insurer as follows: "Dear Sirs: We are advised that you have refused to pay more than $100 medical bills in the case of Paul K. vs. John E. N. "We understand that the injured received medical care shortly after injury, but lockjaw set in, and that the total medical bills in the case were $357.38. It would seem clearly as if this is one of those cases where the legislature intended that the insurer should pay $200 on the medical bills. "Will you kindly advise us of your intentions in the matter?" The insurer replied that they would refer the matter to their attorneys, who of course pointed out that the company was not legally liable for more than $100, since the 100 day period had passed without a court order being issued. The department then again wrote the insurer as follows: "Referring to your favor of the 23d in the matter of K. vs. John E. N., beg to advise you that the opinion which you enclosed from your attorneys does not add anything to our information in this case. We were fully aware of the fact when we wrote you under date of March 30th that you were able to avoid the payment of the second $100 by resorting to legal technicalities. "It is our understanding of section 18, however, that it was the intention of the legislature that the employer or insurer should pay $200 whenever that amount was necessary for the relief of the injury during the first 90 days after injury, and the clause requiring the court order was put in simply to put a check on the rapacity of certain physicians who might seek to run up a $200 bill in a case which should not cost more than $100. "Are we to understand that your favor of the 23d constitutes a definite and final refusal to pay more than $100 in this case? Kindly advise us at an early date." This letter was likewise of no avail, the insurer standing on his legal rights to avoid paying for the care because of the technicalities of section 18. Case No. 5. The medical expenses in the fifth case amounted to $176.95. The department of labor inquired of the insurer within 90 days of the date of injury whether or not they would pay the entire medical expense in the case. The local agents referred the matter to their home office, and finally said that they would not. The department then filed complaint for the injured between the nintieth and the one hundredth day after the injury. The insurer set up as a defense that the application for and allowance of the additional medical service must be made before the service is rendered and maintained that an order could not be issued for payment for medical service already received. The case was contested for the injured by the labor department and the order of court issued. We wish to cite some excerpts from the correspondence in this case to make clear the department's conception of the legislature's purpose in section 18, and the way that purpose is sometimes defeated by the technicalities of the "court order" portion of the section. "My third point was that your company has repeatedly resorted to technical defenses. This has been the experience of every one of our effices in this state in dealing with your company. The third paragraph of your letter to Mr. Houk is as conclusive proof on this point as we deem necessary. "You say: 'We understand that under section 18 of the act should the employe discover, either by advice of his physician or otherwise, that within the ninety-day period allotted under section 18, etc., he will require an amount in excess of the maximum of $100, that such employe shall thereupon apply to the court, etc.' You take the position that if you can prevent the employe from discovering that the bills are going to be in excess of $100, as is very frequently possible, or if you can prevent him from discovering that there is a limit of $100 unless he applies for the additional $100, that by thus outwitting the employe you will be relieved of medical bills in excess of $100. The whole question under this interpretation of the law whether the employe will secure $100 or $200 will be resolved, not by the equities of the case but by the relative shrewdness and knowledge of the employe and your representatives. "The largest and most reputable insurance companies doing business in this state never raise a question of paying more than $100 and up to the limit of $200 in any case where medical care in excess of $100 is actually received by the employe. For instance, we have never had to file a complaint, and so far as I know there has never been a complaint filed for the additional $100 against a considerable number of the insurance companies that I might go on and mention, and who are doing very nearly 90 per cent of the compensation business transacted in Minnesota. They pay without question up to $200 for medical care, and in many cases they have paid much in excess of $200. Your company is the only company in |
