Author Archives: Gregory Grinberg

132a Claim Rejected on Recon

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The Workers’ Compensation Appeals Board recently issued an opinion on a 132a claim in the case of Miller v. County of Alameda (39 CWCR 208).

Miller was a licensed clinical social worker and would drive to see her patients, until she was hurt in a car accident while on one of these trips.  The injury was accepted by the defendant, and Miller eventually returned to work.  The defendant expressed doubts about her ability to continue driving as often as she had before, and told her she needed to find another job.  Miller found an applicant’s attorney instead and filed a claim for 132a.

Labor Code § 132a, prohibiting employer discrimination against employees for filing a workers’ compensation claim (or being a witness in a workers’ compensation case) is covered by your faithful author from time to time.

The reason why this case is important is because of applicant’s theory and its rejection by the WCAB.

Applicant argued that she heard a vague rumor was aware that another employee with a non-industrial injury had stricter restrictions and yet was allowed to keep her job.  The Workers’ Compensation Judge found this to be a violation of Labor Code § 132a, and defendant petitioned for reconsideration.

The WCAB granted reconsideration, reasoning that the vague allusion to some worker, without bringing the worker to trial as a witness, was not enough for applicant to carry the burden of proving a 132a claim.

In other words, the rules of evidence matter at least a little bit, even in the realm of California’s Workers’ Compensation.

On Systematically Fighting Fraud

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A recent article on MarketWatch covered the efforts of the California Restaurant Mutual Benefit Corporation in combating insurance fraud.

The article focused on a solid victory for the self-insured group.  CRMBC’s investigation lead to charges being filed against a former manager of Jack-in-the-Box.  Jeanette Gallo entered a plea of no contest on two counts of felony fraud linked to her workers’ compensation stress claim for a robbery in which she participated.

Fraud is a regular topic for this blog, particularly because of its permanent damage – employers will never recover the money fraudulently obtained; it is always spent long before any charges are filed.  The only remedies are deterrence, which requires the cooperation of law enforcement, and prevention, which can be achieved through the proactive efforts of employers.

Having read the MarketWatch article, I reached out to the CRMBC to find out more about their anti-fraud program.  I was lucky enough to speak with Joe Burgess, the Senior Executive Vice-President at CHSI, the program administrator for the CRMBC.

What he described came across as a practical, thorough, and clearly effective program to detect, prevent, and deter the white-collar robbery of California employers by disloyal and unscrupulous employees.

The program begins with education.  CRMBC’s members are given information on how to investigate fraud and how to properly (read: legally) respond to it.

Joe explained that the first three days following an alleged injury are key – after that, witnesses get forgetful, surveillance tapes get written over, and the physical evidence that would normally poke holes in the applicant’s story gets cleaned, put away and forgotten, as the business stops being a fraud crime scene and returns to being a business.

“The key to success in fighting fraud is immediate, documented investigation by the employer and engagement with the employee,” says Joe.

Members are kept updated by newsflash e-mails, training sessions, and a library of materials on the membership website.

The next phase is the bigger investigation, which covers the applicants using surveillance and background checks, and the providers, making sure they are actually performing the services they are billing for (unlike some providers we’ve heard of).

The final stage is the deterrence, which includes cooperation with law enforcement to see these cases prosecuted and the fraudsters convicted.  But, as any prosecutor will tell you, the best evidence on which to build a case would probably have been collected by the employer at the time of the alleged “injury.”

But the value of the program is not in the final step, says Joe: “Success in fighting fraud is not measured in arrests and convictions – those are not that common.  Success in fighting fraud is fewer serious indemnity claims – because  the employer puts processes in place such as rapid response, good initial investigation, [and] engagement with the employee.”

Fraud is a parasitic plague which saps the strength of the workers’ compensation world.  To stop these ticks in their tracks, employers must become their own guardsman – the employers are the best situated to take the lead here.

As Joe puts it, “we can control what we do, not what others do – but by creating the right structured environment we can make it less likely that fraud will flourish.”

Valdez Decision Gets it Right on MPN

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In previous posts we discussed the case of Valdez v. Warehouse Demo Services, how it provided force for the medical provider networks, then vanished in a puff of smoke as the commissioners of the Workers’ Compensation Appeals Board needed to think more about their various positions on the issue.

Your humble blogger expressed concern that the WCAB would attempt to fix something that had not yet been broken,  by rendering the MPN system useless and without force.  It appears that those concerns were much like the mythical city of Gregtopia– unfounded.

The original Valdez decision proclaimed that the reports of treating physicians outside a validly established MPN are inadmissible and the defendant is not liable for the costs incurred of treatment or drafting the report.

The WCAB then took time to consider the issue further, reasoning that there might be instances in which non-MPN treator reports are admissible.  The verdict is now in – there aren’t.

Over the concurring in part/dissenting in part opinions of two of the five commissioners, the WCAB finally concluded that the MPN provides a shield against increasing litigation and questionable medical opinions.

In what is no doubt an overstatement of the gravity of this decision…

CSIA Conference!

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Today I am at the California Self-Insurers Association Conference in Oakland.  If you see me, be sure to say hello.  Your loyal author will be engrossed in the subject matter, so , sadly, no “live blogging” of the conference will follow.

If there are tickets still available, I can’t urge you enough to attend.  I went to the conference last year and it was informative and interesting – you get to meet a lot of great people too.

I hope to see you there!

Double Dipping at the DMV

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Fortunately for those of us practicing on the defense side of California’s Workers’ Compensation system, not everyone is willing to be complacent in blatant acts of fraud.  Often enough, a co-worker or neighbor will report deception and cheating when they become aware of it.

Mia Rachel Brown of West Covina, has been arrested on charges of workers’ compensation fraud, according to this press release by Dave Jones, Insurance Commissioner.

Apparently, while she was receiving disability checks connected to her claimed injury, which (allegedly) occurred while working for Dean Foods, insured by Liberty Mutual Insurance Company, Mia Brown was working for the Department of Motor Vehicles.  At a sworn deposition, she had testified she had not worked since November of 2009.

Although it seems unlikely that the Department of Insurance or Liberty Mutual will recover their costs of benefits paid or investigation and prosecution (thanks to Ms. Brown’s fraud), a plugged leak is a plugged leak, even if the plug is late in coming and pricey at that.

Timing Your Panel Request

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The California Workers’ Compensation Appeals Board has issued a new en banc opinion on the issue of timeliness of panel requests.  In Messele v. Pitco Foods, Inc., the defendant objected to the treating physician’s report and proposed the use of an Agreed Medical Evaluator to applicant, setting up the requirements for a request for a panel in accordance with Labor Code § 4062.2(b).

Applicant responded with his own AME proposals and then requested a panel.

Defendant then filed its own request for a panel.  The timeline was as follows:

Date of Injury———————————1/29/10

Defendant’s Objection ****************4/20/10

Applicant’s AMEs—————————-4/26/10

Applicant’s Panel Request *************5/01/10

Defendant’s Panel Request————-5/04/10

The Medical Unit, no longer resolving disputes, issued a panel in response to each request, with different specialties.  The Workers’ Compensation Judge ruled that the 5-day “mailbox” rule of the Code of Civil Procedure (§ 1013(a)) applies, and that applicant’s panel request was untimely, so defendant’s panel stands.

For the folks keeping score at home, the first day the panel request could have been filed would have been May 6 (April 20 + 10 days is April 30; plus 5 days for mailing is May 5, so the first day a panel could be filed is May 6.  In the WCJ’s report and recommendation on applicant’s petition for removal, the WCJ acknowledges this error and recommends that both panels be found premature.

On a petition for reconsideration, which the WCAB found should have been a petition for removal, applicant’s petition was granted and the WCJ’s order was rescinded.  The WCAB found that CCP § 1013(a) and 8 CCR § 10507 require the application of the “mailbox” rule to the process of panel requests.

Applicant’s argument that the mailbox rule doesn’t apply and defendant’s argument that the controlling date is when the Medical Unit received the request, not when it was made, were both rejected.  The rule applies and the controlling date is the date the request for a panel is made.

What does that mean for us in the industry?  Once an objection to a primary treating physician’s report has been made by either side, fill out a panel request form dated for the sixteenth day after the date of the objection.

So if the objection was made on November 1, 2011, the counting begins on November 2, 2011, and the panel request form should be dated for November 17.  As soon as November 17 comes around, the panel request should be in the mail, in order to be the first one in and thereby control the specialty.

As yet another aside, the rules clearly state that the specialty of the panel should be the same as that of the treating physician unless documentation is provided for a good reason to the contrary.  But, in terms of practice, this rule of often enough ignored by the Medical Units and the WCJs alike, and it is much better to be the first to request a panel.

AB 378 On Governor’s Desk

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Governor Jerry Brown is facing an overflowing “in-box” of love-notes from the Legislature, each one hoping to bear his autograph and move from the overcrowded and often populated “bills” population group to the powerful elite of good (and bad, just horribly, unspeakably bad) ideas that have become law.

The Honorable Brown can make repetitive signing motions without fear, of course, as California’s Workers’ Compensation system will no doubt provide him with yet another retirement fund upon his leaving office if he should sustain a cumulative trauma to his wrists, sleep disorder, etc., as a result of his work.

But one bill in particular has employers and unions alike hoping for passage.  That is, of course, Assembly Bill 378, which will strive to rein in the compound drugs industry sucking the last few drops of life’s blood out of California’s battered employers.

The problem of compound drugs was mentioned briefly in this post. California has a medical schedule which puts a cap on the amount doctors and medical equipment providers can charge for treatment, procedures, drugs, and equipment.

But this doesn’t apply to so-called compound drugs, which a doctor can both prescribe and make himself.  Combining aspirin with some placebo, a doctor could make a pill that is nowhere to be found on the fee schedule.

In theory, the self-insured employer or insurer could analyze the pills and apply the fee schedule to its component parts, but this brings with it the cost of bill review and litigation, leaving the defense grasping a Pyrrhic Victory.

AB 378 will strive to change this by preventing self-dealing in pharmacy goods, which means no more prescriptions for drugs produced by the doctor or the doctor’s relatives.  The bill also ties the cost of these compound drugs to the “lowest priced product of equivalent therapeutic effect.”

The bill appears to have support from both Labor and Employer groups, and hopefully will bear the governor’s signature before too long.  Naturally, the physicians and pharmaceutical interests will have some objections to AB 378 becoming law and to its application by the courts.

In other words, there are some fun times ahead.

Lien Claimant Recovers In Contested Case

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Lien claimants can not recover if there is no underlying industrial injury, right?  After all, the employer is not liable for treatment, temporary disability, or permanent disability in cases where the injured worker can not prove an injury occurred or that it arouse out of employment/caused by employment (AOE/COE).

It follows, then, that if there is no recovery, there is nothing to place a lien upon, and a lien claimant who can not prove injury and causation can not recover… WRONG.  Unfortunately, that is not the case in California Workers’ Compensation Procedure.

In the recent case of Herrera v. Civil Demand Associates, the Workers’ Compensation Judge ruled that the lien claimant Bell community was entitled to reimbursement for a medical-legal evaluation in a case where the employer denied injury.

The WCJ recognized, and the Workers’ Compensation Appeals Board reasoned (in adopting and incorporating the WCJ’s report), that the costs of a comprehensive report must be borne by the defendant when a lien claimant seeks to prove injury to collect on its lien, otherwise the lien claimant would be barred from contested claims.

Lien claimants already make ready use of scorched-Earth tactics, pestering the defense into paying for treatment or procedures not “reasonably required” or sometimes not performed at all.  Now lien claimants can further drive up the threshold for nuisance value settlements, threatening to invoke medical legal costs on top of the expense of discovery, appearances and trial.

The Court of Appeal had the opportunity to correct this mistake, but denied defendant’s petition for a writ of review.  (13 ABR 13,237)

Hopefully, this will not be a case that is followed by other WCJs, and the hordes of reserves-eating lien claimants will remain checked by Thomas clauses.

Cop Shoots Self; Convicted of Fraud

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Quis custodiet ipsos custodes?

Would you shoot yourself in the chest for a few days off from work?

Jeffrey Stenroos, a Los Angeles school police officer, has been convicted of several felonies and misdemeanors following his claim that he had been shot by a car burglar.  It appears that Stenroos shot himself in the chest (protected snugly by his vest), and then claimed that the armed gunman had fled.

What followed was the deployment of over 550 police officers and the lockdown of the surrounding neighborhood for over 10 hours.  The city is seeking $350,000 in restitution for the costs of the manhunt and Los Angeles Unified School District will try to recover the $58,000 paid for medical costs.

If the idea of shooting yourself and then filing a false report sounds familiar, it might be because you watched the HBO series “The Wire” and remember one particular police officer.

The damage this fraud does to the police officers actually injured in the line of duty is immeasurable.

It is often difficult to expose frauds in workers’ compensation – there are doctors that facilitate the fraud and applicant’s attorneys that turn a blind eye.  Everyone, after all, wins out except … the employer, the insurance company and California’s economy.

But fraud must be investigated and punished as often as possible.  The upfront costs seem prohibitive, and the long-term benefits are not measurable.  But the effect is there, fraud investigation and prosecution deters fraud and discourages it.  Police officers in California who had the same idea as Mr. Stenroos will hopefully think twice about cheating the system for some days off and extra money.

Source: http://latimesblogs.latimes.com/lanow/2011/09/cop-who-staged-shooting-a-digrace-schools-chief-says.html

All About Applicants’ Attorneys’ Fees (Part 3 of 3)

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In the last two posts, we discussed the difficulties in facing an unrepresented applicant who has not filed an application, and covered responses such as withholding benefits until an application is filed or simply paying all benefits.

The most common course of action in such cases is for the defendant to file an application for the unrepresented employee, and thereby become liable for applicant’s attorney’s fees.  There is a chance, of course, that applicant will eventually settle without ever hiring an attorney, making § 4064 inapplicable.  But the potential consequences should be weighed before deciding on the plan of attack.

Filing an application for an unrepresented applicant to be able to perform discovery (as per 8 CCR § 10403) will likely make defendant liable for applicant’s attorney’s fees; filing an application for the purposes of settlement approval will likely not (8 CCR § 10400(b)).  But what about other petitions a defendant might file?

Let’s say the employee is injured at work but some third party is at fault, such as the driver in a car accident or the manufacturer of a faulty ladder.  The injured worker is entitled to workers’ compensation benefits, but the employer is entitled to credit under Labor Code § 3861.

Often enough, these cases are not contested by the employer, and benefits are paid and treatment is provided on an industrial basis.  If the injured worker has not retained a workers’ compensation attorney and has not filed an application, how does the employer go about getting an order of credit?

Labor Code § 5500.5 tells us that a workers’ compensation case is commenced with the filing of an application, and California Code of Regulation § 10878 states that “[t]he filing of a compromise and release agreement or stipulations with request for award shall constitute the filing of an application.”

Generally, no Board file will be opened or started for the purposes of filing a Petition for Credit without an application being filed first.  The case law appears to be silent as to the question of whether an application filed on the sole issue of defendant’s petition for credit will trigger § 4064(c).  But speaking from policy, legislative intent and common sense (admittedly weak medicine for defendants to use in the world of California’s Workers’ Compensation practice), merely filing an application on the sole issue of third party recovery credit should NOT trigger liability for applicant’s attorney’s fees.

Having to pay the applicant’s attorney’s fees can make an expensive case 15% more burdensome.  So tread lightly and avoid the landmines that activate this additional liability.