Over the weekend, in the biggest cyberattack yet, a ransomware worm locked up more than 200,000 computers in more than 150 countries. Dubbed WannaCry, the ransomware encrypted data on the infected computers demanding payments of $300 to $600 to restore access. The tools behind the attacks reportedly belonged to the U.S. National Security Agency, which had the information stolen and leaked in April.
WHO WAS AFFECTED?
The massive ransomware disrupted operations at car factories, hospitals, shops, and schools. Britain's National Health Service (NHS) suffered one of the day's largest and most severe hacks when 48 NHS organizations were hit, forcing the NHS to suspend operations. The ransomware blocked access to patient records, x-rays and test results. (No patient data was compromised.) However, hospitals across Britain shut down wards and closed emergency rooms.
Ransomware surged from the 22nd most common type of malware in 2014 to the fifth most common this year. Of all the healthcare malware attacks in 2016, 72% were ransomware. The financial services sector is the only industry that's targeted more than health care.
Early estimates of the WannaCry attack put the potential costs from the hack at $4 billion, which includes lost productivity and the cost of conducting forensic investigations and restoration of data. In 2016, ransomware caused losses of $1.5 billion. It's predicted that cyber insurance premiums could triple in 2020 to $10 billion. Wake up call - received.
Another Constitutional Ruling
A circuit court ruled the Alabama Workers' Compensation Act (the Act) unconstitutional. Circuit Judge Pat Ballard found two provisions unconstitutional: the $220 cap on weekly permanent partial disability (PPD) and the 15% cap on attorney fees. The PPD cap has been in place since 1987 when the Act was written but has not been addressed since. The court ruled that the judicial branch has control over attorney fees rather than the legislature.
THROW OUT THE BATH WATER
Due to the non-severability statute, if provisions are ruled unconstitutional, it renders the entire Act unconstitutional. The order puts a 120-day stay into effect to allow the legislature time to correct the provisions in the Act. Side note - Alabama is still the only state without an administrative court system in place to oversee workers' compensation disputes. To work out differences, employers and injured workers need to file a civil suit through the district court.
Making Our Way Around The Country
Montana Gov. Steve Bullock vetoed a bill that would have stripped workers' compensation benefits for failure to disclose medical conditions. S.B.116 would have eliminated all wage-loss and medical benefits if the employee knowingly or willfully failed to disclose a medical condition pertinent to a job in any pre-employment questionnaires. The previous week, Gov. Bullock vetoed S.B. 184, which would have allowed carriers to deny liability for already accepted claims if those claims were accepted because of fraud or mutual mistake of material fact.
Workers' compensation legislation was pulled back by the sponsor, IL Sen. Christine Radogno, as lawmakers continue to address points in the bill. As part of a "grand bargain" package of bills, it would place restrictions on workers' compensation injury payouts. A recent amendment to the bill (S.B. 12) was added by Sen. Kwame Raoul, which calls for a Medicare-based fee schedule to lower medical costs. The Senate's legislative session adjourns May 31st.
DC HONOR FLIGHT
Although it's not quite Memorial Day yet, I had the pleasure of being at Reagan National Airport in Washington, DC when an honor flight was de-boarding. It was amazing to see folks lined up in the hallways applauding while 200 veterans were escorted through the airport. Thank you Honor Flight Network for honoring them.
About The Way
The Way is Gallagher Bassett's weekly governmental briefing on state and federal affairs that affect our industry. We thank you for starting your Wednesday morning with us. Please be sure to follow #GBTheWay for additional news and updates as we make our way throughout the country on the issues affecting our industry. For more information, please connect with GB on LinkedIn, follow us on Twitter, or contact the authors, Greg McKenna or Cari Miller, directly.