Archive for July, 2011

Some thoughts on California’s climate

July 15th, 2011 No comments

I’ve heard it said that if you can’t stand the heat, get out of the kitchen.  Perhaps California’s kitchen has the heat a little too high for a business-friendly climate?

CNN Money has an article that speaks to this.  The doom-and-gloom headline: “California companies fleeing the Golden State.”  Business friendly states are offering their advantages to court California business,Arizona in particular “is trying to capitalize on [companies finding ways to reduce their costs] by promoting its lower workers compensation and unemployment insurance.”

In a similar vein, the Insurance Journal has an article about the 3% increase in California Workers’ Compensation loss and expense payments.  This shows an increase of 3% to over 11 billion for the industry.  Now, my fingers only go up to 10, so instead of counting I’ll just summarize and say that this is a lot of money.  If you are an employer in California, including a city, or state employer, you bled into the river that gushed 11 billion dollars strong in 2010.

Once, the generally accepted method of blood-letting was thought to cure many ills.  We now know that bleeding patients to death was not the best treatment for their ailments.  Sadly, this lesson is not learned with bleeding California’s employers.

Aside from heavy Workers’ Compensation costs, organizations such as the California Applicants’ Attorneys Association are throwing their weight behind Senate Bill 432, requiring hotels to use fitted sheets and long-handled mops for hotel housekeepers.  Perhaps a law requiring all work to be done by robots would eliminate the risk of any injury?  Of course, the law would not need to be implemented as its passage would scatter California’s employers to the four winds before it could be implemented, and no employees would get hurt because there would be no employees in California.

There are several more articles along these lines: taxing, regulating and scaring away business from California.

California’s employers and businesses put their resources and votes behind Workers’ Compensation Reform and produced the victory that is SB-899.  Because of this, Workers’ Compensation defense attorneys and adjusters have a lot more tools at their disposal for defending against fraudulent and excessive claims.

But something is different in the atmosphere now – it is no longer 2005, and the roster of self-insured employers shows more subsidiaries but fewer new members.

The courts have chipped away at the crown jewel of SB-899: the adoption of the AMA Guides, bringing order and predictability to the rating of impairment, has been gutted by Almaraz even with the limiting aspects of Guzman III.

Now, perhaps, California’s employers are finding it better to vote with their feet than with their dollars, and move to cooler climates: ones with cooler heads and colder shoulders when it comes to crippling taxes and debilitating regulations.

I for one do not want my job shipped to Texas or Arizona or any other place that would require me to move to follow it.  I’m guessing I’m not the only Californian to feel that way.

So I’m committed to doing what I do best – fighting tooth and nail to make sure employers and their insurers don’t have to shed a drop of blood more than what’s ordered by the good doctor(s), and sometimes even persuading the good doctors to order less.  Are you going to help me turn down the heat on California business?

Categories: News Tags:

A Day Late and a Supplemental Report Short

July 14th, 2011 2 comments

The stars have finally aligned – you got a panel with a known defense doctor, a known applicant’s doctor, and a doctor completely unknown to both sides.  Why does that mean the stars aligned?  Because, just this once, that unknown doctor, the one left standing after the panel process, gave you a slam-dunk report!

Applicant’s counsel, unsurprisingly less than content with an attorney’s fee of 15% of nothing, has written to the Panel Qualified Medical Evaluator to request a supplemental report.  You smile to yourself as you read the applicant’s attorney’s letter, knowing that the QME is not going to budge and you’ve dodged a major bullet.

In California Workers’ Compensation practice, if something seems too good to be true, it probably is.  This goes doubly so for the defense.  Naturally, day sixty passes without the QME having produced a supplemental report, and applicant’s attorney is ready on day sixty-one with a demand for a new panel.

California Code of Regulations, title 8, § 38(a) provides a remedy for initial or follow-up comprehensive medical-legal evaluation reports not submitted within thirty days of the evaluation.  That remedy is a new panel.  But in terms of supplemental reports, governed by subsection (h), what if there is a report submitted after the sixty days allowed?

The section itself does not provide a remedy, nor is there one to be found in the regulations for late supplemental reports.  What’s the answer?  Should the applicant get a new panel?

In the case of Gwen Lloyd v. County of Alameda, the Workers’ Compensation Appeals Board adopted and incorporated the opinion of the Workers’ Compensation Judge, granting applicant’s petition for a new panel.

The facts were similar to those described above.  The WCJ recognized that no remedy specific to supplemental reports could be found in the regulation, and decided the case on policy: the anti-doctor-shopping policy offered by the defendant and the anti-delay-policy offered by the applicant.  The applicant’s policy proved the stronger, and the WCJ cited the need to speed up the process of benefits for the applicant.

In other words, if you have a QME who has given you a bad report, send him or her a supplemental report request and prepare your demand for a new panel.  If the supplemental report is not in your hands at 4:59 p.m. on day sixty, it’s time to file a demand for a new panel at 9:00 a.m. on day sixty-one.

There are a few issues raised by this case that are not addressed by the WCJ’s opinion, nor by the WCAB’s adopt and incorporate order.

Issue One – what if the applicant had received the doctor’s report on day sixty-one, read it, and then demanded a new panel on day sixty-two?  The opinion does not address the issue of whether a late report must also be un-submitted to trigger this new-found remedy of a fresh panel.

Issue Two, which doesn’t seem to concern too many minds in the Workers’ Compensation world, is the purse of the defendants.  At any given point in a case, the defense may have already paid for evaluations, supplemental reports, record reviews and depositions (not to mention the attorney time that goes along with all of these steps in the process).

Will the WCJ issue an order to disgorge these costs from the slow-responding QME?  Or must the defense now expand its reserves to account for the second, third or fourth QME until a doctor can be found whose Hippocratic oath does not commit him to making patients wait?

One way to side-step this new QME-killer is to stay on top of the QME.  If you or the other side has requested a supplemental report from a QME good for the defense, once you hit day 30, you need to send weekly letters asking for that supplemental report.

As for a QME that isn’t too friendly towards the defense, perhaps one should stay quiet until day sixty-one and then quickly file a petition for a new panel?

As an aside, the WCJ writes that she does not know the difference between a “follow-up” report and a “supplemental” report as contemplated by the regulation.

I was always under the impression that follow-up pertained to a report produced after an in-person evaluation, such as when the QME evaluates an applicant, and finds applicant is not yet permanent and stationary.

The supplemental reports are document-based, with no interaction between applicant and the QME, and produced in response to a letter asking additional questions.  Thus, the former is due in thirty days and the latter in sixty.

Does anyone have a different take?  Comment or shoot me an e-mail with your thoughts:

These finer issues are sure to be re-litigated in the future.  In the meantime, however, your humble author wishes you a sharp eye on your case-file, a wary sentry on your calendar, and, as always, good hunting.

Categories: QMEs Tags:

Judge by Day and Investigator by Night

July 13th, 2011 2 comments

In civil and criminal cases, jurors aren’t allowed to conduct their own experiments or investigations, and must make do with the evidence presented at trial.

In the California Workers’ Compensation system, the Workers’ Compensation Judges are the finders of fact.  How far outside the courtroom can the WCJs go to perform their own investigations?

In a recent case, Madrigal v. 99 Cents Only Stores, the WCJ issued rating instructions to the DEU rater to rate the AME reports.  The DEU rated the reports at 57% permanent partial impairment.

Defendant requested to cross-examine the rater, and provided rebuttal testimony from its own rater, who rated applicant’s impairment at 11%.  The WCJ issued a Findings and Award, completely rejecting the testimony of defendant’s witness as biased.

The basis for this conclusion was the WCJ’s out-of-courtroom review of the witness’s company’s website, which appeared to be partial towards insurance companies.

In granting the petition for reconsideration, the Workers’ Compensation Appeals Board cited Advisory Committee Commentary to Canon 3 B (7) of the Code of Judicial Ethics, “explicitly prohibiting a judge from independently investigating the facts in a case.” (See page 13.)

Sure, the defendant was wronged, but a WCJ can just as easily look on Facebook to see post-injury photos of the “permanent total disability paraplegic” applicant jet-skiing two weeks before trial.

What are some ways around this?  Well, for one, adjusters and defense attorneys need to become familiar with the modern online search.  Pretend your teenage daughter is about to go out with a new boyfriend: maybe it’s time to learn a bit about him?

Don’t just Google the applicant or the applicant’s witness – did you check LinkedIn? Facebook? Twitter? MySpace? Google Plus?  What about a local Craigslist search for handy-man services offered?  Maybe Joe Applicant has been working another job this whole time.

What about past cases?  Did you run the applicant’s name through Lexis?

Once you have pictures you can put them before the judge, served on the applicant, and the bar and exclusion of this case will melt away.  It’s entirely possible that a WCJ wants to see this information but can’t investigate it because of restrictions such as in the Madrigal case.

Another important lesson from this is the effect of easy information on these cases.  In this case, the WCJ admitted the search and added it to the evidence; another judge might not be familiar with this case and find an internet investigation harmless and not worthy of mention.

That’s why defendants must scrutinize every word of a Finding and Award to make sure the evidence actually supports the findings, and the findings actually support the award.  If there is a missing link in that chain, it’s time to push the Recon button.  Even so much as a $0.03 error should be caught and dealt with immediately.

Perhaps some day WCJs will find their internet history made public record to ensure that no robed sleuths apply magnifying glass to the cyber-sidewalk?

In any case, your humble author wishes you a keen eye, a lucky day in court, and, as always, good hunting.

Categories: WCJs Tags:

Curb Your MPNism (SCIF Style)

July 12th, 2011 No comments

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.

Ramps and Fertility Treatments in WC

July 11th, 2011 No comments

Should fertility treatments and vacation-home modifications be covered by California Workers’ Compensation?

In a recent case, Croushorn v. WCAB,  applicant George Croushorn made a claim for over $83,000 in improvements to his vacation home (installing a wheelchair ramp) and over $70,000 in fertility treatments as reimbursable under his 100 percent Permanent Disability and future medical award from 1998.

In 1995, Mr. Croushorn sustained an injury to his spine, legs, arms, head, neurological system, psyche, internal system and shoulders.  The injury was admitted and resulted in a stipulated award.

Defendant cited Labor Code § 4600 taking the position that fertility treatments and vacation-home wheelchair ramps were not “reasonably required to cure or relieve the injured worker from the effects of his or her injury.”  After all, defendant had already modified applicant’s primary residence twice.

The applicant, however, cited the need for a vacation home to treat his psyche symptoms and the need for fertility treatments because the injury had rendered him unable to have children without them.

The result?  The Workers’ Compensation Judge found for the applicant, concluding that the treatments and the wheelchair ramp were both reasonably necessary.  Defendant, not being content with an unnecessary extra $150,000 in benefits to pay out, petitioned for reconsideration.

Although the Workers’ Compensation Appeals Board had no doubt that several expenses could be undertaken to help applicant’s psychiatric condition, the question was whether modifying a vacation home was reasonable – and it was not.

The issue of the home modification was remanded to the WCJ to determine if defendant had, as applicant claims, promised to modify three homes.

On the issue of in vitro fertilization, the WCAB found that defendant must pay for the extraction of applicant’s sperm, but not the in vitro fertilization of his wife.

The Court of Appeals denied applicant’s Petition for a Writ of Review without prejudice to await the determination of the issues sent on remand.

In the past, I’ve seen items from vans with disabled ramps to hot tubs with extra jets to computer games being found reasonably required to cure or relieve the injured worker from the effects of his or her injury.  The reason I post on this case is because I am pleasantly surprised to find at least some sort of limit to what the defendant is burdened with paying for.

What’s the craziest treatment you’ve seen covered by  § 4600?  Let me know –

Categories: 4600 Tags:

Three pennies for your thoughts?

July 8th, 2011 No comments

Would you go to the mattresses over three cents?

In a recent Sacramento case that went up on petition for reconsideration before the Workers’ Compensation Appeals Board, a defendant petitioned for reconsideration on what was, essentially, a clerical error of $0.03.

The facts are essentially these: defendant took credit for over-payment of $13,113.36 in applicant’s upper extremity claim.  The judge then sanctioned defendant $2500 for taking the credit without a judicial determination, but allowed the credit for equitable reasons.  Then it got interesting.

In the minutes of hearing, a clerical error shorted defendant by three cents, providing for $13,113.33 in credit.

The defendant in this case was self-insured (some of the many benefits of which are discussed here) and was administered by a Third Party Administrator.

Before I go any further, I want to make clear that I have not spoken to any parties or their attorneys in this case, and this post is based entirely on the opinion of the WCAB.  If the WCAB overlooked a fact or something didn’t make it into the record, then consider this post incomplete.

The WCAB noted that a request to correct a clerical error would have been the appropriate course of action for defendant’s counsel, rather than a petition for reconsideration.  The WCAB further noted that the minutes of hearing actually reflected two sums, one correct and one erroneous, and this escaped the defendant’s attorney’s notice as well.

Ultimately, the petition for reconsideration was granted, but an additional $500 fine was imposed on the defendant, the defense attorney and her firm (joint and several liability).

Being a California Workers’ Compensation defense attorney, I can sympathize with the defendant in this case.  So often do the defendants find themselves with the deck stacked against them, even three cents can feel like a victory!

In this industry, probably more so than in many others in the legal profession, it is important not to turn cynical or bitter.

It’s not very likely that the outside world will know what happened in this case.  Was it the client, driven by principle?  Was it the TPA, instituting a policy of thousands for defense but not three pennies for tribute?

Ultimately, this is a case for the record books, and a reminder to us all that we mustn’t let all these trees block our view of the forest.  Peek your head out of the foxhole, hold the line, and leave the Pyrrhic victories to King Pyrrhus.  And, as always, good hunting!

Categories: Sanctions Tags:

Employers pay for fraud police; DOI gets the credit.

July 7th, 2011 No comments

Insurance Commissioner Dave Jones announced that approximately $32 million in grants is to go to the various District Attorneys’ Offices in California to help combat California Workers’ Compensation fraud.  You can read the press release here.

Although I generally don’t like the state spending money, especially at times like these, I find myself applauding the efforts to finance the fight against fraud.  I’ve detailed a few instances of insurance fraud before, including cases of applicants defrauding the state and local governments and insurance companies.  It’s never pretty and there are rarely appropriate remedies for the defrauded – just money spent in benefits, investigation and prosecution that will never return to its rightful owner.

However, good does come out of these efforts, chiefly in the form of personal deterrence, preventing the convicted fraudster from collecting more benefits, and general deterrence, in the form of would-be fraudsters being deterred from stealing from insurance companies and self-insured employers.

The law enforcement community is full of brave, hard-working and diligent men and women, both investigators and prosecutors, who work with their hard-working and diligent counterparts amongst the ranks of the adjusters to limit the fraud plaguing California’s Workers’ Compensation insurance industry.

One part of the press release which ended up giving my computer the frowning of a life-time was the following:

“The grant funding is the result of assessments on California employers that are determined annually by the Fraud Assessment Commission.”

If I am the victim of a pick-pocket, or if I come home to find my house burglarized, I should have access to police protection and assistance in investigating and prosecuting the case.  After all – I paid for them with my taxes.  Otherwise, shouldn’t my taxes go down and I can spend the money on private security?  California’s employers are already taxed – again and again, from corporate to payroll to income to who-knows-what-else.

Fraud is a crime that targets an individual business, but the effects are felt everywhere through higher prices, just like with any other form of theft.  It is unfair to levy yet another tax on the employers of California, burdened as they already are.

Perhaps we should consider pay-as-you-go uniformed police and fire departments as well?

In any case, for all your would-be and currently Workers’ Compensation fraudsters out there… Justice is Coming!

Categories: Fraud, News Tags:

The trigger to the 60 days of 4658(d)

July 6th, 2011 5 comments

When does the 60 day time-period to make an offer of regular work begin?  This issue is a regular character in the California Workers’ Compensation Defense drama.

We all know that an employer has 60 days from when an applicant becomes permanent and stationary to make an offer of regular work.  In fact, the employer faces a 30% difference under Labor Code § 4658(d) – either a 15% increase in permanent disability indemnity, or a 15% decrease in the same.

Let’s say Dr. Cu’Emee finds that applicant became permanent and stationary January 1, 2011, based on his evaluation, which occurred March 1, 2011, but then doesn’t sign or send the report until May 1, 2011.

When does the 60-day time period start?  If it starts after the applicant becomes permanent and stationary, then by the time the report reaches the defendant, the 60 days have passed.  If it is based on the date of the report, then the employer isn’t afforded the full 60 days either.

In a recent case, Soto v. ACE Ins. Co. (2011) 39 CWCR 122, applicant became permanent and stationary, according to the QME, on August 14, 2007 (the same date as the P&S report).  But the report wasn’t mailed until September 18, 2007 and an offer of regular work wasn’t made until October 24, 2007, and the form sent was unsigned.

The Workers’ Compensation Judge awarded applicant the 15% increase under 4685(d).  On petition for reconsideration, the Workers’ Compensation Appeals Board granted reconsideration, holding that the 60 days do not begin to run until the defendant has been properly served with the Permanent and Stationary report.

Just before you begin to sigh with relief as you picture ACE Insurance Company riding off into the sunset, a 15% decrease in its pocket and a smile on its face, no such happy ending blessed our brave defendant.

In its order, the WCAB instructed the WCJ to evaluate if, because the offer of regular work was unsigned, the employer failed to comply with the requirements of § 4658(d).

So, the two lessons to take away from this:

(1)   The 60 days don’t begin to run until after there has been proper service of the permanent and stationary report; and

(2)   Make sure to sign page 3 of the offer of regular work form.

Armed as you are with today’s post, I wish you all good hunting!

Categories: 4658 Tags:

On MPNs and Illiteracy

July 5th, 2011 2 comments

Labor Code section 4616 allows for the creation of a Medical Provider Network (MPN).   MPNs are an effective way to reduce excessive medical bills.  Although applicants and their attorneys might sometimes disagree, MPNs also serve the injured worker by preventing excessive, unnecessary and sometimes dangerous “treatments” from being administered to the unknowing applicant.  The MPN is one of the gems that came out of SB-899 and California Workers’ Compensation reform.

When an applicant demands treatment or a treator, the MPN is a great defense against overpriced and over prescribing samples of both, but it also comes with technical requirements that must be met for it to be valid.  Among these requirements is the necessity of providing the worker with written notice of the existence of the MPN.

That’s all well and good, but what if the applicant can’t read?  The Workers’ Compensation Appeals Board recently addressed this issue in the case of Rodriguez v. Grimmway Enterprises, Inc.  (As an aside, it appears that Grimmway Enterprises, Inc., is self-insured.  For some of the benefits of self-insurance, see here.)

There, the applicant was illiterate, and the employer’s notices regarding its MPN went unanswered.  Oddly enough, applicant’s attorney, who in all likelihood is literate, was copied on these notices as well, yet did not respond to them.

The WCAB held that applicant is not entitled to self-procure medical treatment because “[t]here is nothing in the rules requiring defendant to determine applicant’s literacy and there is no evidence that defendant knew or should have known of applicant’s illiteracy.”

Reading this case, a few questions seem to come forward:

(1)   What if the applicant is literate, but only in a language other than English?

(2)   What if the defendant had known that the applicant was illiterate?

One is easily answered – 8 CCR § 9767.12 specifically state that the notices regarding an employer’s/insurer’s MPN are to be made in English and Spanish.  If your applicant is only literate in Russian, Portugese, Gaelic or any language other than English or Spanish, then it appears he or she is out of luck.

Regarding the second question, there is no way to know for certain.  The language used by the WCAB appears to leave open the question of what would have happened had the employer known that applicant was illiterate.  In any case, whatever heightened duty the WCAB might find owed by the employer to its illiterate employees, your humble author would argue that this duty is discharged by serving a copy to applicant’s attorney.  Ideally, the attorney would be (1) literate; and (2) familiar enough with his or her client to know that he or she is NOT literate.

Another point that is so obvious that it might go unnoticed is the following:  since reconsideration was granted, the Workers’ Compensation Judge agreed with applicant’s position.  This is another example of the discouragement defendants can often experience, but it is also an example of why decisions absolutely must be appealed and fought, especially when they are in clear conflict with the law.

In either case, Grimmway made the smart move by (1) setting up an MPN; and (2) sending written notices in English and Spanish.  Are you doing the same?

Categories: Medical Provider Network Tags:

Happy 4th of July!

July 4th, 2011 No comments

Happy Independence day!  And here’s something to make you smile:

America… what a country!

Categories: Uncategorized Tags: