Author Archives: Gregory Grinberg

All About Applicants’ Attorneys’ Fees (Part 2 of 3)

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In yesterday’s post, we talked about the problems defendants encounter when facing an injured worker who has yet to file an application.  One approach to this problem, when the injury or causation itself is contested, is to withhold benefits until an application is filed, but there are other options that don’t come with the same risks and liabilities.

There are, after all, times when filing an application for adjudication of claim will not (or at least, should not) trigger Labor Code § 4064.  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.”

However, § 10400(b) states that “[a] case opening Compromise and Release Agreement, a case opening Stipulations with Request for Award, and a Request for Findings of Fact under section 10405 are each an ‘application’ for purposes of invoking the jurisdiction of the Workers’ Compensation Appeals Board, but none of these documents shall be deemed an application for purposes of Labor Code section 4064(c).”

Therefore, at least in theory, filing settlement documents without having first filed an application for the unrepresented applicant, should not trigger future liability for applicant’s yet-to-be-hired attorney.  But, it appears that there were different results in the case of Monument Car Parts v. WCAB (Teach) (2007), in which the Workers’ Compensation Judge ruled that defendant’s filing of a compromise and release agreement for approval triggered a duty to pay attorney’s fees.  However, the facts of that case reflect a defendant somewhat unresponsive to the Judge’s inquiries regarding the adequacy of the proposed settlement.

Another alternative course of action is simply roll over and pay out for all treatment and permanent disability in accordance with the treating physician’s report.  But then the defense loses many of the benefits of discovery, including possible grounds for apportionment (Labor Code §§ 4663 and 4664) or defenses based on Arising Out of Employment/Course of Employment (AOE/COE).

So what happens if the defense files an application for the unrepresented applicant?  Check back tomorrow for Part III!

All About Applicants’ Attorneys’ Fees (Part 1 of 3)

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The work of an applicant’s attorney in California’s Workers’ Compensation system is rarely a venture in charity – applicant’s attorneys are paid a fee out of the applicant’s recovery.  But there are factual circumstances under which the employer must pay the applicant’s attorney’s fees in addition to, rather than out of, applicant’s benefits.

This can happen when the self-insured employer or the insurer over-advances without reserving funds for attorney fees, which is a subject of an article written by Lisa Kasselik of Harbinson Tune Kasselik.  The defendant can also be required to pay applicant’s attorney’s fee if the defendant files the application for applicant.

Usually, an employee is injured and fills out a claim form.  The employer decides to conduct some form of discovery, such as deposing the applicant or witnesses.  But the cases of Donna Yee-Sanchez v. Permanente Medical Group and Natalie Piatt v. Eureka Union School District tell us that discovery is prohibited, (see 8 C.C.R. § 10403), and even sanctionable, before the commencement of a case, and a case is only commenced by the filing of an application for adjudication of claim.  (Labor Code § 5500.5)

If applicant has not retained an attorney and has not filed an application him or herself, how is the defendant to proceed?  One option, when injury is in dispute, is to withhold benefits, forcing the employee to lawyer-up or file an application.  Of course, when injury is NOT in dispute, this comes with a 10% delay penalty (or 25%, depending on the facts).  (Labor Code § 5814).

Whatever the benefits withheld may be, the employer faces a 10-25% penalty only on those benefits already due and withheld.  On the other hand, by filing an application for the employee, defendant exposes itself to 15-18% of all permanent disability benefits in attorney’s fees.

However, there is a danger in using this tactic.  If an applicant retains an attorney in response to withheld benefits and there is no dispute as to the injury, any attorney worth his salt would file a petition for penalties with his notice of representation.  This would bring the penalties to 25% of the withheld benefits (or a maximum of $10,000).  This could also bring upon the insurer or self-insured employer administrative penalties under California Code of Regulations § 10111.1.

Another disadvantage to this tactic is the fact that, when the injury is not in dispute, the defense is essentially using bad-faith delay tactics.  This is inappropriate, unethical, and will likely result in long-term self-injury such as damage to reputation and ability to maintain an insurance certificate.

All in all, this course of action is a gamble and brings with it a slew of its own risks.  But there are other options available to the defense in such cases.  Check back tomorrow for Part 2 of 3.

Lap Band Surgery as NOT Medically Necessary

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Are there limits to the Labor Code § 4600 duty to provide all medical treatment reasonably necessary to cure or relieve the worker from the effects of an industrial injury?  The cynical California Workers Compensation defense attorney might answer “no,” but in fact there are.

Labor Code § 4600 not only requires employers to provide treatment for industrial injuries, but for non industrial injuries as well (as in some cases, discussed in a previous post).  But in a recent workers’ compensation case, the Workers’ Compensation Judge and the Workers’ Compensation Appeals Board rejected a push for the limits of § 4600 and treatment of non-industrial injuries to be expanded even further.

In Navarro v. Vengroff Williams Associates, applicant sought to have her non-industrial obesity treated with lap-band surgery (at employer’s expense).  Applicant’s attorney tried valiantly and repeatedly to lead the Agreed Medical Evaluator to agree that lap band surgery was reasonably necessary to treat applicant’s industrial injury.

Fortunately, all applicant’s attorney came away with from the deposition was the AME’s concurrence that a healthy weight (a lower weight in applicant’s case) would benefit her health, as it would anyone else’s.

Utilization Review had non-certified the request for treatment and applicant went charging for the Board.  The Workers’ Compensation Judge and the Workers’ Compensation Appeals Board were not impressed.

My favorite quote from the WCAB panel’s opinion denying reconsideration?

“It is no surprise that Dr. Wertheimer agreed with applicant’s attorney that losing weight would be beneficial to applicant, who is pre-diabetic, and would decrease her symptoms and increase her activities.  Those improvements might occur for any individuals weighing over 300 pounds who lost weight, regardless of whether they had sustained any injury, industrial or otherwise.  However, that losing weight is beneficial is not equivalent to the medical necessity of Lap Band surgery.”

The panel also rejected the “highly improper” request that the Utilization Review report be considered untimely because a request for treatment “should have been presumed” to be made orally at the AME’s deposition.  We have covered the procedural requirements for a request for treatment in this post and this one.

Clearly, applicant’s attorney would benefit from becoming a regular reader of this blog (as would anyone… hint-hint).

If nothing else, this opinions shows that the reasonable and necessary standard of § 4600 still has some teeth peeking out of its otherwise harmless gums.  And that is something that even a workers’ compensation defense cynic can be happy about.

What Constitutes a “Lawful” Personnel Action?

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Applicant, a psychiatric nurse, filed a psyche claim after repeatedly being told by a supervisor (a psychiatric technician) to administer a drug at a more frequent rate than that prescribed by the treating physician.  The disagreement had to do with the meaning of “24 hour period.”  The technician incorrectly believed that a 24-hour period ran from midnight to midnight, rather than an actual 24 hour cycle beginning with the first administration of a drug.

The Workers’ Compensation Judge interpreted applicant’s claim as hurt feelings based on resentment at being under the supervision of a technician, and found applicant had suffered no actual injury.  Applicant filed a petition for reconsideration.

The Workers’ Compensation Appeals Board denied applicant’s petition, adopting the WCJ’s opinion and concluding that defendant’s conduct was a lawful, good-faith personnel action and regarded applicant’s claim as a means of confronting the defendant hospital over the issue of its chain of command.

The Court of Appeals took a different approach to this matter.  In its opinion, the Court annulled the decision of the WCAB and remanded the case to determine if the action of defendant, through its supervising technician, was, indeed, lawful.

Labor Code § 3208.3 governs psyche claims, and subsection (h) provides a defense against those psychiatric injuries substantially caused by “a lawful, nondiscriminatory, good faith personnel action.”

At least in this case, the good faith personnel action defense to a psyche claim turns on the meaning of the word “lawful.”  The psyche technician’s interpretation of “24 hours” seems at odds with the definition used in the practice of medicine, and likely the common sense meaning of the term (imagine a patient, in following the prescription of 1 pill every 24 hours, taking one pill ten minutes before midnight and another twenty minutes later.).

That being said, does such a mistake and deviation from generally accepted practice somehow make the supervisor’s actions anything other than lawful?  At most, this seems like an act of negligence.

Hopefully, lawful and correct will remain two distinct terms and the good-faith personnel defense will be one less chip worse for the wear.  Let’s all keep our eyes open for how this case turns out.

AB 375 DOA

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Although your humble author is an admitted cynic, as a compensable consequence of  California Workers’ Compensation Defense practice, he is always happy to report a victory for employers (read: California’s survival).

Assembly Bill 375, introduced by Assemblywoman Nancy Skinner (D – 14th District), was voted down in the senate last Friday (September 9, 2011).

AB 375 would have created yet another presumption, this time for hospital workers.  If enacted, infection of certain bloodborne diseases would have been presumed compensable, even if the injury arises 180 days after the last day of work.

Admittedly, this is a limited victory.  It lightens no load for employers while merely checking one of the many encroachments against the employer survival rate.  However, a victory is a victory and even a cynic can be happy about that.

132a When Employee Says He Can’t Do the Job? Not in My Workers’ Comp!

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In California’s Workers’ Compensation world, how much consideration can a defendant give an applicant’s own concerns about performing his or her job duties after an industrial injury?

In the relatively recent case of Moreno v. Workers’ Compensation Appeals Board, applicant energy technician injured his lumbar spine and right hand.  He then filed a claim for additional benefits under Labor Code § 132a.  Labor Code 132a provides additional benefits if the applicant can show discrimination against him or herself in retaliation for filing a workers’ compensation claim.  By law, an employer cannot insure against a 132a claim.

The skinny:  Applicant can not prevail on his 132a claim when he fails to show that he was treated differently than a non-industrially injured worker would have been; defendant successfully asserted the “business necessity” defense by showing a reasonable concern for undue risk of harm to the applicant in his pre-injury job.

Applicant had complained of pain in performing his job duties within the work restrictions set out by the Agreed Medical Evaluator.  The employer then put him on the priority list for the next available job, but took the original work away.

If the worker himself says he can’t do the job because of industrial-injury related pain, shouldn’t that be enough?  Apparently so!

The Workers’ Compensation Judge ordered the applicant to take nothing on the 132a claim, finding that applicant did not meet the burden of proof.  That burden could have been met by showing that non-industrially injured workers were treated better than applicant had been.

Furthermore, defendant had met the burden of showing its actions were motivated by a business necessity.  The business necessity defense was met by showing that, at the time applicant wanted re-instatement to his old job, the employer reasonably believed applicant was unable to perform the duties without undue risk of harm to himself, based on the conflict between the AME’s restrictions and the job duties.

After defendant sought clarification from the AME on the imposed work restrictions, the AME rescinded some, and applicant returned to work.

The Workers’ Compensation Appeals Board denied applicant’s petition for reconsideration, and the Court of Appeals denied applicant’s petition for a writ of review.

Congress to the Rescue on Medicare

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Roberto Ceniceros, of Business Insurance has an interesting article on an issue that quickly became one of the more frustrating parts of California Workers’ Compensation practice.  The conflicts between employees and insurance companies, or the employee’s self-insured employers, can be heated and difficult, but that’s the nature of the game.  The frustration comes in when the parties have agreed and want to settle, but Medicare tells them they can’t.

This was the subject of an earlier post, but the efforts to change this system are the subject of Mr. Cenicero’s article.  H.R. 1063 sponsored by (former) Congressman Tim Murphy, the bill is now referred to the House Subcommittee on Health, and would limit the amount of time CMS could respond to a request for Medicare Set-Aside approval.

Presently CMS will not respond to a request for approval of a settlement amount $25,000 or less if the applicant is a current Medicare beneficiary or will enroll in Medicare within the next 30 months and the settlement amount is over $250,000.  The CMS explanation may be read here.

As the saying goes, if wishes were fishes, we’d all be full (except, of course, those of us who do not eat fish).  That being said, both sides of the ongoing struggle of California Workers’ Compensation can wish for H.R. 1063 to eventually see the President’s signature.  For those who need a brush-up on how this process works:

From China With Love

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A recent writ-denied case (Interwoven, Inc. v. Workers’ Compensation Appeals Board (2011) 13 WCAB Rptr. 13,252) explored, or rather declined to further explore, the extent to which a lien claimant must prove industrial causation in California’s Workers’ Compensation system.

The skinny:  A lien claimant has the burden of proving industrial causation by a reasonable probability standard, and not to a medical certainty standard.

Applicant traveled to China on business, and worked there for his employer, starting in April of 2000.  He fell ill in May of 2000, and his health quickly deteriorated until he expired in September 2001.

Prior to his death, he had been treated at Beijing Union Hospital, Stanford University Hospital, and UC Davis Hospital.  After the case in chief was settled by compromise and release in 2010, a lien-claimant, Healthcare Recoveries, Inc., came forward with a lien in excess of $2,000,000.

The facts present a murky issue at best – 29-year-old applicant is in China for a few months and some unknown event or substance causes him to fall ill and tragically die.

Though expert testimony entered into the record during the case in chief, the lien claimant met a standard of reasonable probability, but not medical certainty.

The standard, as articulated by the Workers’ Compensation Appeals Board panel (and which the Court of Appeals declined to review) was “more convincing force and greater probability of truth.  Thus, the preponderance of the evidence establishes that the decedent’s illness and death arose out of and occurred in the course of employment.”

Free Medical Care for Non-Industrial Injuries

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Labor Code § 4600, as part of California’s Workers’ Compensation system, imposes on employers, through self-insuring or through workers’ compensation insurance, to provide injured workers with medical treatment “reasonably required to cure or relieve the injured worker from the effects of” the injury.

But a person can be injured in more ways than one: an industrial shoulder injury and a non-industrial knee injury or an industrially injured respiratory system but non-industrial impairment of the circulatory system.  Does section 4600 turn an industrial injury into a ticket for medical buffet?  All indications point to section 4600 being ripe for abuse in this regard.

A recent panel decision denying reconsideration in the case of Hammerly v. Carrows Restaurant, in which applicant hurt her back.  The injury was accepted, and the agreed medical evaluator recommended psychological treatment to address persistent pain problems following a surgery performed on the injured area.  Applicant testified during her deposition that she had not filed a claim for injury to the psyche, nor did she intend to.

Defendant then argued that psyche treatment is unwarranted without applicant’s meeting the predominant cause standard of Labor Code § 3208.3.  Section 3208.3(b)(1) states that “in order to establish that a psychiatric injury is compensable, an employee shall demonstrate by a preponderance of the evidence that actual events of employment were predominant as to all causes combined of the psychiatric injury.”

Until applicant had met her burden of proof, argued Defendant, she was not entitled to any psychiatric treatment.

The Workers’ Compensation Judge and the Workers’ Compensation Appeals Board were not persuaded by this argument and instead held that section 3208.3 does not limit the application of section 4600.  Because treatment of a non-industrial impairment is necessary to relieve the effects of an industrial injury, the employer must pay for this treatment.

In other words, if an applicant’s non-industrial obesity makes surgery for an industrial injury less safe, applicant is suddenly entitled to a “free” gym membership, or perhaps even an at-home gym.

If applicant’s non-industrial depression makes physical therapy ineffective, applicant becomes entitled to psyche treatment.  Perhaps applicant is even entitled to a ramp on his vacation home.

So long as an applicant’s attorney can persuade a panel qualified medical evaluator or an AME to link the symptoms of a non-industrial injury with an industrial one, applicant becomes entitled to free medical care (not free to the employer, of course, just free to the applicant).

This, of course, translates to more leverage for the applicant to demand a higher settlement by compromise and release, forcing defendants to choose between paying the Danegeld or enduring a scorched Earth campaign.  Neither is appealing, especially when faced with a sympathetic evaluator.

The best way out of this trap is solid advocacy – the attorneys in the Hammerly case put forth a good argument, but sadly it did not work, despite its obvious merit.  The key battles appear to be in the initial selection of a QME and the persuasive depositions that follow.


					

		
		
	


				
					
	

		

						
Regulating the Economy Towards Prosperity

			
						

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The refreshing winds of September are filling the air, and as they sweep in, they bring with them that rosy scent of fresh legislation: as always, fiery, thick, and perfectly half-baked.  Two pieces of would-be/will-be law have come under the popular spotlight recently.  The first is that of Assembly Bill 889 put forward by Assemblyman Tom Ammiano (D – San Francisco).


The bill would require rest-breaks, over-time pay, and (you guessed it) workers’ compensation insurance for domestic workers such as care persons, nannies, babysitters and cleaners.


While exempting babysitters under the age of 18, I expect this bill, if made law, to send presently free-lance domestic workers into the arms of organized companies.  No matter how much I want to see a perfectly good classic movie ruined by a modern-recreation in a theater, I have no intention of hiring a human resources staff to help me comply with this law while hiring a babysitter for the evening.  I imagine the typical parent in California will likely feel the same way.


So free-lancing, self-employment for babysitters and other domestic workers might decrease, insurance profits may go up, and Sacramento will press harder on small employers with its left hand while continuing to squeeze larger businesses with its right.


The second piece of legislation is Senate Bill 684, which makes it more difficult for insurance companies to have and to enforce arbitration clauses in their workers’ compensation insurance contracts, by requiring a separate disclosure of the existence of the arbitration clauses, the venue and choice of law of the arbitration, and the fact that they are negotiable.


Authored by State Senator Ellen M. Corbett (D – San Leandro), the legislation was greeted with enthusiasm by Insurance Commissioner Dave Jones in a Department of Insurance Press Release.


Many insurance companies are regional or national, and so would normally be subject to the contract laws of several states (wherever their policy holders entered into the contract).  Arbitration clauses allow all disputes to be resolved in one state, and the insurance company’s legal department needs to know only one state’s laws.


Now, insurers will have to either face increased costs in negotiating, quoting, and preparing insurance contracts, or retain different legal departments for every state in which they offer their services.  But while the costs of operation go up, workers’ compensation insurance rates are set by law and cannot be increased.


SB 684 has passed both the Assembly and the Senate and now awaits Governor Brown’s signature.  Perhaps, if the legislation is signed into law, an update will be necessary on the benefits of self-insurance.