Archive for September, 2011

CSIA Conference!

September 30th, 2011 No comments

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!

Categories: Uncategorized Tags:

Double Dipping at the DMV

September 29th, 2011 No comments

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.

Categories: Fraud, Uncategorized Tags:

Timing Your Panel Request

September 28th, 2011 2 comments

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.

Categories: Medical Unit, QMEs Tags:

AB 378 On Governor’s Desk

September 27th, 2011 No comments

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.

Categories: Legislation Tags:

Lien Claimant Recovers In Contested Case

September 26th, 2011 2 comments

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.

Categories: Liens Tags:

Cop Shoots Self; Convicted of Fraud

September 23rd, 2011 No comments

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.


Categories: Fraud, News Tags:

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

September 22nd, 2011 No comments

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.

Categories: Tactics and Strategy Tags:

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

September 21st, 2011 No comments

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 § 4064California 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!

Categories: Tactics and Strategy Tags:

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

September 20th, 2011 No comments

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.

Categories: Tactics and Strategy Tags:

Lap Band Surgery as NOT Medically Necessary

September 19th, 2011 No comments

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.

Categories: 4600, Defenses Tags: