Category Archives: Tactics and Strategy

On Demanding a Lien Representative’s I.D.

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On a regular basis, liens I encounter are filed by lien representatives.  Rather than prosecuting the lien itself, the lien claimant assigns the task to one office or another, generally for a percentage of the recovery.  In fact, a regular part of practicing California Workers’ Compensation defense is fighting off unwarranted and baseless liens.

Some cases go on for years, however, and a lien-claimant’s representative might change with the seasons – different person, different office or even a different firm/company.  How do you know if the “new” lien representative actually has the power to negotiate and settle a lien, and the old one no longer does?

For swapping attorneys in the case-in-chief, there is a process to substitute attorneys, as per the Code of Civil Procedure § 284. It appears that no such procedure is followed for lien representatives.

With that in mind, I have a suggestion:  When a lien representative sends that initial demand letter, a proper response includes some demand for documentation that the lien representative actually represents the lien claimant.  That includes authority to negotiate and settle the lien.

In a recent case, Green v. State Roofing systems, Inc., the Workers’ Compensation Appeals Board reviewed a Workers’ Compensation Judge’s granting of a Petition to Quash a Subpoena Duces Tecum, which, among other items, demanded documentation of the agreement and arrangement between the lien claimant and the lien representative.

The case was remanded to work out a discovery plan, but the point is a valid one – defendants must be able to know who the lien claimant is and who its representative is before the lien can be paid, adjusted or litigated.

STOP “Developing” the Record!

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Are you tired of locking down evidence at the Mandatory Settlement Conference, proving your case at trial, and then being told to start over again by “developing the record?”

Again and again, California Workers’ Compensation defense attorneys witness judges helping applicants take a second or third shot at the target, often being told specifically what evidence needs to be added to the second trial to justify an award (or a bigger award).

Two recent Workers’ Compensation Appeals Board panel decisions seem to be starting the trend away from this practice.

In the cases of Bates v. Valley Vintners Wine Company (2011) and Elias v. Saticoy Lemon Association (2011) [Full disclosure: the former case was handled masterfully by Thomas J. Harbinson and Laura K. Lachman] the panel put a stop to this “develop the record” trend.

In Bates, after the MSC and trial, the Workers’ Compensation Judge disregarded defendant’s references to apportionment evidence and the rater’s use of an incorrect occupational group number for the applicant, finding him permanently and totally disabled based solely upon the Le Boeuf expert’s independent opinion without backup support.

Following defendant’s petition for reconsideration, the WCJ rescinded the Findings and Award, and instructed the parties to appear for further trial proceedings to “develop the record” to allow additional testimony from applicant’s vocational rehabilitation expert on the issues of “vocational feasibility, labor market survey, and/or necessity for vocational testing.”  Defendant responded by filing a petition for removal.

Citing Labor Code § 5502(e)(3), the WCAB held that discovery closes at the MSC.  Furthermore, once “the record is supported by substantial evidence from which a decision can properly be made, there is no basis to order development of the record.”  (Citing San Bernardino Community Hosp. v. Workers’ Comp. Appeals Bd.)

Similarly, in Elias, the WCJ vacated the submission of evidence and ordered development of the record on the issue of causation, also demanding the production of an additional opinion from the treating physician.

Defendant petitioned for reconsideration (which the WCAB held was improper, and instead ordered removal).  The WCAB again held that, absent a “showing that there was evidence applicant could not have discovered or obtained in the exercise of due diligence prior to the MSC,” Labor Code § 5502(e)(3) [the statute is erroneously cited as (d)(3) in the opinion] prohibits the admission of new evidence.

My favorite quote from the Elias opinion?  “In ordering parties to obtain [additional evidence] the WCJ is, in effect, doing applicant’s attorney’s job.”

Both WCJs were instructed to issue a decision on the present record.

Fingering Subsequent Injury Fund for Liability

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California Workers’ Compensation provides a fund for serious subsequent injuries where a previous injury combines with a more recent one to cause permanent disability (PD).  (See Labor Code section 4751)

Subsequent Injury Fund’s (SIF) coffers present an additional pocket for the injured worker.

In the case of Becerra v. WCAB (2011), an applicant filed a claim for a 1999 injury to his back and psyche.  He already had a past injury that resulted in the amputation of one joint of the right index finger.  The parties used Agreed Medical Evaluators for both injuries, resulting in 67% PD for the back and 44% PD for the psyche.

Under the 1997 rating schedule (see page 7-16), these two values combine to 86% permanent disability.  The WCJ did not find applicant 100% permanently disabled on medical grounds alone.

The dueling vocational experts did not find the finger injury a factor in applicant’s lost ability to compete in the labor market.  Applicant was found 100% permanently disabled based on the medical and vocational evidence, attributed solely to the 1999 injury.

After settling his case in 2009, applicant filed a claim for SIF benefits, claiming that the amputated finger joint and back injury combined to create a greater disability – the back/psyche injury of 1999 did not make him 100% disabled, but rather 97% permanently disabled (the finger, as the theory went, did the rest).

The WCJ rejected applicant’s theory, reasoning that nothing in the record suggested any portion of applicant’s permanent disability, or vocational rehabilitation analysis, came from the missing finger joint.

The WCJ found for SIF, the Workers’ Compensation Appeals Board denied reconsideration.  The Court of Appeals’ response?  Writ of review denied.

Defendant didn’t benefit much from SIFs involvement in this case.  However, if you have an applicant with a past injury, bringing SIF in as a secondary target should always be explored.  If nothing else, more settlement money in the room means less settlement money out of your pocket!

Limiting Applicant to One Bite at the Apple

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Have you heard the one about the applicant who tried for two bites at the apple?  The story goes like this:

The applicant claimed an injury.  His treating physician found relatively limited permanent disability, and the impairment he sustained was mostly not industrial in causation.  So he demanded a panel and got a list of three physicians.  He picked one (perhaps randomly, perhaps after an internet search of each doctor’s name).

The Panel Qualified Medical Evaluator confirmed the treating physician’s diagnosis, and the defendant-employer/insurer issued a denial notice.  So the applicant decided to call in the cavalry and lawyer up.

By the time this case reaches the applicant’s attorney’s desk, the applicant has painted himself into a corner.  With the treating physician and the PQME both finding against most of his claim, there is only one course of action – get a new panel, of course!

In California’s Workers’ Compensation system, the law is clear: only one bite at the apple.  Labor Code § 4062.1 specifically states: “[i]f an employee has received a comprehensive medical-legal evaluation under this section, and he or she later becomes represented by an attorney, he or she shall not be entitled to an additional evaluation.”

So applicant’s attorney will try to find some defect with the panel or some defect with the defendant’s conduct while applicant was unrepresented, and demand a new panel based on this.  Don’t let him get away with it!

Labor Code § 4062.3(f) gives applicant one of two mutually exclusive choices: either proceed with the evaluation as scheduled or demand a new panel.  Once applicant has set foot in the PQME’s office, the panel gravy train grinds to a halt (or should, at least, if the law has any control over the matter).

When applicant has waived every right to a new panel and proceeded with that initial evaluation, the fallback argument for the applicant’s attorney involves the following: “But my client didn’t know his rights! No one advised him!”

At that point, you take out your letters and benefits notices sent to applicant, showing the form language “you have the right to consult an attorney, etc., etc.” and you’re (hopefully) home free.

In any case, the defendant has already paid for one evaluation and had zero input on who the PQME would be.  After all, in unrepresented cases, no party gets to strike a PQME, the applicant just chooses one.  (Labor Code § 4062.1)  One bite out of defendant’s budget is plenty.

I’ve encounter some other arguments for why a formerly unrepresented applicant deserves a new panel, but that is material best left for another post.

As always, dear readers, your humble author wishes you luck in your coming trials, in court and out, and hopes this modest article has provided some assistance.

Curb Your MPNism (SCIF Style)

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A story making the rounds recently is the announcement that State Compensation Insurance Fund (State Fund) has implemented a new contract within its medical provider network.  Labor Code § 4616 allows self-insured employers and insurance companies to create Medical Provider Networks (MPN) which limit the list of treaters an applicant can choose.  State Fund already had an MPN in place, but in mid-June sent out additional requirements for membership to the physicians in its MPN.

Essentially, the new terms restrict the provision of more than 60 days of supplies for opioid medications unless the prescribing doctor shows cause.   Another limit is placed on prescription of compound drugs.  The compound drugs are a money-maker for some doctors.  Because doctors make their own varieties, these drugs are not any medical schedule and have no set price – that bill goes to the self-insured employer or insurance company, of course.  The Insurance Journal has an article on it here.

Here is the take of the California Society of Industrial Medicine and Surgery on this matter.  I imagine that, even without clicking the link, you can guess how an interest group advocating for a major source of income for its members feels about the breaks being put on the proverbial gravy train.

Taking the position that these compound drugs are necessary to treat patients, the SCIMS is trying desperately to make State Fund appear the greedy villain, denying patients the medication they need.  This contention is easily addressed – if doctors would lower the prices of these compound drugs to reflect a reasonable profit over the cost of production, this cost-cutting restriction would probably not be necessary.  An accusation of greed serves as a sharp sword, but one that cuts both ways.

Not only will a limit on opioids serve to protect patients from over-prescription, but it will also limit the amount of drugs entering the black market.  At the California Self-Insured Association Fall Educational Program in 2010, I heard a gentleman speak about the services his company provided – drug testing of applicants to make sure they are actually taking, and not just re-selling, the drugs they are prescribed!

As an aside, your humble author can’t recommend this conference enough – the lectures are informative, and the case materials and law updates prove to be a useful resource and desk-reference for the rest of the year.  If you have the time, contact Phil Millhollon about attending, I’m sure you won’t regret it.

Basically, some of the physicians are upset that the compound and opioid prescription faucet is tightened to a trickle.  Naturally, the California Applicants’ Attorneys Association is unhappy with this as well.  Inflated future medical treatment estimates translate easily into larger Compromise and Release figures, and increased need for expensive compound drugs and opioids plays to this as well.

So far, State Fund is standing its ground, and I salute its courage and determination.

Just a word on MPNs – if properly established, they are a fantastic tool to cut costs.  The MPN can be used to filter out doctors who over-prescribe, over diagnose and/or engage in fraud.  The notice requirements of MPNs have even withstood elastic interpretation regarding notice requirements.

State Fund is setting a great example, and hopefully more insurers and self-insurers will follow suit.  With enough properly established and properly limited MPNs, we can form a phalanx against fraud and workers’ compensation abuse.

When the Almaraz shoe is on the other foot

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The practice of California Workers’ Compensation defense is often one of struggling against the stream.  Once in a while, one finds himself swimming with the current.

In a recent case, a truly rare and wondrous event occurred.  An AME used Almaraz-Guzman to actually reduce the whole person impairment of an applicant.  In Riley v. City of Pasadena (2011) 39 CWCR 117, the AME evaluated applicant’s claims to injuring both her knees.

In rating the right knee, he found that the strict AMA rating would have included 24% whole person impairment (WPI) for the cartilage interval, 2% WPI for the 1.5 cm circumference difference between the left and right knee, and additional impairment, unspecified in his report, for Table 17-33.

The combined values here would have been in excess of 26% WPI, especially when adding the impairments for Table 17-33.  However, the AME instead found a more appropriate rating in another table, giving a WPI for the right knee of 26%.

Furthermore, because there were no limitations on activities of daily living, and because applicant testified she could fulfill all her job duties, the AME testified at his deposition that no rating above 7% was warranted.

Perhaps if applicant’s attorney were a regular reader of this blog, he might have been elected to denounce Almaraz and vigorously cite Guzman.  The Workers’ Compensation Judge still awarded applicant 15% permanent disability.

On petition for reconsideration, the WCAB granted the petition, finding that the AME’s rating should have been followed, the 15% PD rating was unsupported by the facts and that no evidence, other than applicant’s own testimony, supported the finding that applicant’s left knee injury was the result of her right knee injury, and so was not compensable.

In short, it’s entirely possible that an AME, or even a QME, might come along and use the power of Almaraz/Guzman to actually decrease the whole person impairment rating.  Prophesies of this are written in ancient texts hidden deep beneath the foundations of the DWC buildings.

If you should find yourself in such a situation, immediately do the following:

(1)    Pinch yourself to make sure you’re not dreaming;

(2)    Pinch yourself harder to make sure you’re not dreaming;

(3)    Don’t let the Workers’ Compensation Judge stray from this finding, dropping the name Riley if need be.  For all the times a WCJ has complained of being powerless to disagree with the medical evidence, a break for a defendant is a precious thing indeed, and well worth fighting for.

As always, dear readers, good hunting!

On Benson (Part II)

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Yesterday we discussed the use of the Benson decision and how we can break up large permanent disability ratings into smaller (and cheaper) ones.

But what about large periods of cumulative trauma?

Well, look to see if there were any gaps in the cumulative trauma or any periods of disability dotting the timeline of alleged disability.

In the case of Ferguson v. WCAB (1970) 35 CCC 452, the applicant claimed a cumulative trauma, but had a period of disability in the middle of the timeline for which he was off work.  The Board held that, under Labor Code § 3208.2, the applicant actually sustained three injuries:

(1)    A cumulative trauma ending at the time of the specific injury;

(2)    A specific injury

(3)    A cumulative trauma beginning after the applicant returned from disability for the specific injury, and ending with the last day worked.

If you’re faced with a long period of cumulative trauma, try to look for periods of disability.  A theory with some potential, one which I’m not aware of having been tried yet, is to argue that periods off work for non-industrial injuries should serve to break up cumulative trauma into separate injuries as well, akin to the specific injury in Ferguson.

Once you use Ferguson and § 3208.2 to effectively break up the single cumulative trauma into several little ones, write to the Qualified or Agreed Medical Evaluator requesting that each injury be given its own rating under Benson (Benson v. WCAB (2009) 170 Cal.App.4th 1535) and Labor Code § 4663.

Remember, permanent disability indemnity goes up drastically as you climb the impairment ladder.  One of the best ways to bring that impairment number down (as well as the amount the applicant will eventually be entitled to) is by breaking the whole impairment into its individual parts.

Good hunting!

On Benson (Part 1)

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Ready for a discussion of Benson and related authorities that lasts the span of a few minutes?  California Workers’ Compensation allows the defense a few maneuvers here and there to keep things interesting.  Here’s what you need to know about Benson.

Each injury, past or present, gets its own rating and the impairment of an applicant gets broken up into injuries and causes.  (Exception: if there is no way for the physician to parcel out the individual injuries with reasonable medical certainty, then a combined award may be appropriate.)

Pre-SB 899, the rule governing multiple injuries to one body-part was articulated in Wilkinson v. WCAB ((1977) 42 CCC 406).  The rule there was:  if there are several injuries to the same body part that become permanent and stationary at the same time, there is no apportionment and there is one massive impairment rating.

This means that four injuries to a body part that each cause an adjusted 5% disability ($2,760.00 x 4 injuries = $11,040.00) would actually be calculated as 20% disability ($17,365.00).  Mind the $6,325.00 gap – imagine the difference with the higher impairment brackets!

Enter SB 899 and the case of Benson v. WCAB (2009) 170 Cal.App.4th 1535.  Benson held that “each distinct industrial injury [must] be separately compensated on its individual contribution to a permanent disability.”  (Benson, supra, 170 Cal.App.4th at p.  1560.)

Remember to cite Labor Code § 4663 as well, especially subsection (b): “Any physician who prepares a report addressing the issue of permanent disability due to a claimed industrial injury shall in that report address the issue of causation of the permanent disability.”

If a treating or evaluating physician doesn’t include a discussion of apportionment, even amongst the various claimed injuries, then the report is not complete under subsection (c).  Usually, a letter requesting a supplemental report should do the trick.

So if you have an applicant claiming both a cumulative trauma and a specific injury, invoke Benson and break that claim up into pills a bit easier to swallow.

But that’s not all Benson is good for!  What if you have a claim for a lengthy period of cumulative trauma – one which comes with a QME report of heavy impairment rating?

Video: 

The dramatic conclusion… tomorrow morning.

Almaraz/Guzman – the howling in the night (Part II)

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Last time we covered the state of the law – specifically the state of Almaraz/Guzman and the wiggle room given to evaluating physicians to increase the whole person impairment.   Is there nothing that can be done to curb the inflation of permanent disability?  As a matter of fact, there is.

Your typical Almaraz/Guzman medical report reads something like this:  “The applicant underwent a partial medial and lateral meniscectomy.  Utilizing Table 17-33, this is a 4% whole person impairment.  Taking into consideration the Almaraz/Guzman case, noting his symptoms, Table 15-6 should be used and I would assign him an additional 9% whole person impairment.”

The rating just went from an unadjusted $2,760.50 in permanent disability indemnity to an unadjusted $9,717.50.  Factoring in profession, age, etc. the ratings can go drastically up.  Often enough, these ratings are combined as expressly prohibited by the AMA Guides.  So what’s the solution?

Milpitas Unified School District v. WCAB (Guzman III) (2010) 187 Cal.App.4th 808 pricks the ever-inflating whole person impairment balloon.  According to Guzman III, an evaluating physician can only deviate from the AMA Guides in “complex or extraordinary cases.”  These are cases that are “new or complex … or the range, evolution, and discovery of new medical conditions.”

In terms of actually performing an Almaraz/Guzman increase, simply invoking the name Almaraz/Guzman is not enough.  Guzman III holds that “[i]n order to support the case for rebuttal, the physician must be permitted to explain why departure from the impairment percentages is necessary and how he or she arrived at a different rating.”

In other words, when you’re faced with an Almaraz/Guzman rating, ask yourself the following questions:

1)      Did the evaluating physician describe a condition that is “complex or extraordinary,” and one that deals with a “new or complex case” dealing with the “range, evolution, and discovery of new medical conditions?”  If the answer is no, then the impairment rating as increased by the non-strict application of the guides is not substantial evidence.

2)      Did the evaluating physician “explain why departure from the impairment percentages is necessary?”  If Dr. Ouch! simply says it is based on his experience, then the portions of the report addressing Almaraz/Guzman increases are not substantial evidence.

If one, or both, of those questions is answered in the negative, then the report should proceed on strict AMA Guides ratings only.

This argument was used successfully in a recent unpublished panel decision, where the WCAB held that “the AME has not adequately explained his use of [the tables] for spinal impairment for station and gate disorders, where the Guide specifically states that gait derangement impairment is not to be combined with a Diagnosis Based Estimate method.”

The Almaraz/Guzman increase-happy report can be whittled down, and this is how you do it.

In the near future, I’ll discuss how you can use the arguments to permanently shave off the Almaraz/Guzman increases.  But that is a post for another time.  Good hunting!

Almaraz/Guzman – the howling in the night (Part I)

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So there’s the bad news and the not as bad news.  First, the bad news.

Circling the wagons against the Wild West of permanent disability and waiting for the Court of Appeals cavalry, hoping  for a reversal against the ravages of Almaraz/Guzman, is no longer an option.  The sun has set, no Cavalry bugle will sound, and the latest appeal of Almaraz/Guzman had dried up.  Almaraz has at last received closure from the 5th Appellate District.

The reforms of SB – 899 brought several changes to the California Workers’ Compensation system, most of them very good.  Among those reforms was the American Medical Association’s Guides to the Evaluation of Permanent Impairment, Fifth Edition (AMA Guides, or the Guides, for short), at least according to Labor Code § 4660.  As enacted, there would be one set rule for rating and appraising permanent disability, making Workers’ Compensation liability consistent, uniform, and objective, as called for by Labor Code § 4660.  That was the dream that drew our wagons out West to begin with.  Then, came the troubles…

The joint cases of Almaraz/Guzman, to some extent, did away with this portion of the reform, and brought back the uncertainty that ruled pre-SB 899.  Almaraz/Guzman seized upon the language of § 4660(c), specifically the fact that “[the AMA Guides] … shall be prima facie evidence of the percentage of permanent disability to be attributed to each injury covered by the schedule.”  (Almaraz v. Environmental Recovery Services (2009) 74 Cal. Comp. Cas 1084).

According to Almaraz, and its companion case, Guzman v. Milpitas Unified School District, the AMA guides, contrary to the call for “consistency, uniformity, and objectivity” can be twisted and turned to suit the vagaries of “fairness” and “equity,” inflating the whole person impairment rating and exhausting insurance reserves.

Before a series of appeals chipped away at this decision, the only limitation (like limiting a child to all the cookies in the cookie jar), was that the evaluating physician had to remain within the four corners of the AMA Guides, in order to “adequately” evaluate the applicant’s impairment.

So where are we now?  Well, on the final round of appeals, Almaraz and Guzman split off.  While Guzman went on to produce the Guzman III opinion (more on this later), Almaraz is done with.

The bad news is that Almaraz is, for now, the law of the land – evaluating physicians can use any part of the AMA guides to evaluate the impairments of the applicant.  This means using charts for the spine to provide an impairment degree for the knee, combining methods of measuring impairments such as grip loss and range of motion loss (specifically prohibited by the Guides), and whatever else appeals to the doctor’s (and the persuasive letters of the applicant’s attorney) sense of judgment.

Left at that, self-insured employers and insurance companies rightly fear the Almaraz beast that stalks the night – by day, an ordinary man; under the full moon the monster that ravages the country-side of Workers’ Compensation.  Fortunately, there is a silver lining (or a silver bullet?)

What’s the less-bad news?  While Almaraz lets evaluators loose on Workers’ Compensation defendants, Guzman reigns them in with a tight leash.  How to use this silver bullet on the charging Wolfman?  Stop by tomorrow, and you’ll see.