WCDefenseCA

Are services for injured workers such as housekeeping, pool cleaning, and gardening “medical treatment” under Labor Code section 4600 and are treating physicians’ recommendations for such services properly referred to Utilization Review under Labor Code section 4610?  The Court of Appeals recently denied applicant’s petition for a writ of review of a divided Workers’ Compensation Appeals Board decision on these very questions.

In the case of James Bishop v. Workers’ Compensation Appeals Board, applicant allegedly sustained injuries to his back, gastrointestinal system, and bilateral knees over a period of twenty-six years, ending in November of 1996 (a specific injury date of September 24, 1996, was also plead).  In 2006, a Workers’ Compensation Judge found applicant sustained an industrial injury with a permanent disability rating of 77%, after apportionment, and awarded applicant future medical treatment.

Defendant, in abiding by this award, paid for bilateral knee replacements, a hip replacement, and left shoulder surgery.  I mention this little fact just to point out that the defendant was not trying to avoid its duties under this award, nor was defendant a cheapskate.  Applicant received extensive treatment and considerable expense to defendant.  So what’s the problem?  Applicant made demands for housekeeping (8 hours a week), pool cleaning (once a week), and gardening services (once a week), based on the recommendations of the treating physician and the Agreed Medical Evaluator, as well as other “treatment” such as a weight loss program.

The WCJ awarded these services and ordered penalties be paid for unreasonable delay of medical treatment.  Defendant filed a petition for reconsideration, arguing that such services were not medical treatment reasonable and necessary to cure or relieve the applicant from the effects of his injury, and so were not subject to penalties for their delay.  Defendant further argued that because these services were not medical treatment, there was no obligation to refer such requests to utilization review.  (The WCJ found that defendant’s UR denial of the treating physician’s recommendations was timely as to the weight loss program, but being silent on the issues of the housekeeping, pool, and gardening services, was not timely.)

The WCAB found that neither the reports of the treating physician nor the AME constituted substantial evidence because of the unexplained conclusion that such services were medically necessary.  The WCAB also concluded that such services were not “medical treatment” and so were not subject to UR.

The WCAB also instructed the WCJ to clarify his analysis regarding the imposed penalties.

So what should we take away from this?  I would still recommend sending recommendations for in-house services to UR – this was a divided panel and therefore offers even less authority than the typical unanimous decision; it looks like defendant caught a lucky break in this case.  But, all in all, this is a great decision for an obviously responsible and responsive defendant – the matters of medical necessity were paid for; the trivialities of milking the defendant for free house services were properly and effectively resisted.

Often enough, these services are awarded to applicants, but usually the treating physician and/or the A/QME have to do a bit more leg work in their reports.  If you keep a close eye on these reports and requests for treatments, you might catch an M.D. or, more likely, a D.C. cutting corners, and thereby cutting you a path to denying “treatment.”

What’s your craziest story?  Free hot tubs? Manicures and pedicures?  If you’ve got a crazy story, let me know – gregory@grinberglawoffice.com

Picture yourself in any store, or at the service counter of any business.  Whatever products you’re looking to buy or services you’re looking to retain are going to come with a price tag.  That price will tell you a lot about what happened before that loaf of bread made it to your grocer shelf or before that auto-mechanic could schedule your car maintenance.  Somewhere along the line, production costs, taxes, transportation fees and everyone’s paycheck all came into play.

So how much of your carton of milk goes to waste and abuse?  Would each package of dozen eggs be 30 cents cheaper if not for the burning of public dollars?

The reason I bring this up is because the California Workers’ Compensation Rating Bureau just hired a new president, William J. Mudge.  The WCIRB website does not disclose Mr. Mudge’s salary, but the Workers’ Comp Executive reports that the last president of WCIRB, Robert Mike, was paid $490,784 during his last full year as president.

For reference, the President of the United States is paid $400,000 per year and the Governor of California makes $173,987.  So where does the WCIRB get its funds, such that it can so generously compensate its president?

Well, California law requires all insurance companies to be members of a rating organization, and California’s rating organization is the WCIRB.  (See Labor Code section 11750 et seq.)  So, even though the WCIRB describes itself as a “private, nonprofit association comprised of all companies licensed to transact workers’ compensation insurance in California” it is essentially a quasi-government entity.  The WCIRB is then funded by the membership fees and assessments of its “members.”

Imagine if California passed a law saying that (1) everyone must visit an absolutely excellent and well written blog once a day; and (2) California’s excellent and well written blog is wcdefenseca.  Granted this would be an excellent and prudent law, but none the less, there is something a little fishy about it.  Here, you have every insurance company in the state forced into “membership” with this organization, which then takes its “non-profit” income and gives its president almost $500,000 in a yearly salary.  Really? Non-profit?

But, if it’s the insurance companies that are being robbed, who cares?  Right?  I mean, it’s not like tax dollars are being wasted – this is the WCIRB and California, not the city council of Bell!  Well, we should care – all of us.  When we think back to how that loaf of bread made it to the grocery shelf, some of the money we’re paying for it went to cover the increased workers’ compensation insurance costs of the grocer and the bread-baker.  And their increased workers’ compensation insurance premiums went to their respective insurance companies, who in turn had to pay more membership fees into the WCIRB so that the president of this non-profit organization could make more than the President of the United States.

On the other hand, maybe the gas station where you’re filling up didn’t get its costs inflated by this sort of behavior because they self-insured…

In the case of County of Mendocino v. Workers’ Compensation Appeals Board, the Court of Appeal denied a petition for writ of review because of a procedural error – it appears that the appellant failed to include exhibits pursuant to the California Rules of Court.

The rule, in pertinent part, reads:

“(1)A petition to review an order, award, or decision of the Workers’ Compensation Appeals Board must include:

(A)The order, award, or decision to be reviewed; and

(B)The workers’ compensation judge’s minutes of hearing and summary of evidence, findings and opinion on decision, and report and recommendation on the petition for reconsideration.”

Even in our time of electronic transmittals, one-click file-sharing, and EAMS connectivity, it appears that exhibits must still be attached to appeals.

From what your humble blogger can gather, the merits of the appeal were never reached.

A recent article from the Los Angeles Times makes the futile effort of communicating hope to legitimate businesses still in California regarding the government’s intentions towards illegal activity.

“State officials” are apparently promising to crack down on employers who pay their employees in cash to avoid “payroll taxes, workers’ compensation insurance and other government mandates.”  Christine Baker, Acting (at least until the California State Senate approves her appointment) Director of the Department of Industrial Relations (you can watch the two-hour long hearing here), testified that her department is using software to try to catch cheats.

The article has quotes from legitimate businessmen, who naturally and reasonably complain of the lack of a level playing field – they compete with businesses who avoid many of the costs that should equally fall on all industry participants, and then those illegal practices are reflected in lower costs than those offered by honest businesses.

Despite being your loyal blogger and a workers’ compensation defense attorney, I still enjoy my rights as a citizen, so I ask this question of our government – do you not see the writing on the wall?

We have employer after employer leaving the state, and then employer after employer going underground (to the tune of $7 billion lost annually in tax revenue).  Does that not tell you that employers are overburdened with payroll taxes, government mandates, and especially workers’ compensation costs?

Workers’ compensation simply costs too much – it costs too much to fight the frivolous claims made by many applicants and their attorneys, it costs too much to deal with prescription-heavy and scruple free medical lien-claimants, it costs too much to appeal the applicant-friendly and law-hostile rulings made by many of the Workers’ Compensation Judges, and it costs too much to pay the hyper-generous benefits applicants enjoy in this state.

Of course law-breaking should be prevented and deterred, but must the law make law-breaking so lucrative for employers?

There is a solution to this underground economy, and it doesn’t have to be driving business out of California.  The legislature needs to understand the burdens they pile onto the employers in California and fix this before it is too late.

The case of City of Redondo Beach v. Workers’ Compensation Appeals Board is not a recent one, but when it was brought to the attention of your humble blogger, the Law and Order music started to play and a post was deemed absolutely necessary.

Applicant Gene Tomatani apparently has three exciting accomplishments in his life (no doubt there are others as well).  The first is to serve as President of the Police Officers Association; the second is to embezzle money from the association; and the third is to file a workers’ compensation claim.

An Agreed Medical Evaluator found that applicant’s left ventricular hypertrophy and hypertension predated applicant’s criminal activity of embezzling over $72,000 from the Police Officers Association.  Therefore, as per the AME’s apportionment analysis, the injury is 2/3rd industrial.

At trial, the Workers’ Compensation Judge found that applicant had sustained an industrial injury, that he had an impairment rating of 52%, and that no apportionment was appropriate.  Now comes the interesting part – applicant was questioned regarding the extent of his criminal activity, and he plead the 5th Amendment.

The WCJ ruled that, as there were still other charges that could be brought against applicant, even though he had already plead guilty to one of them, applicant retained his right to not testify regarding the extent of his criminal activity.

Neither the Workers’ Compensation Appeals Board nor the Court of Appeal were inclined to disturb the ruling that so clearly rewarded the stress of embezzlement with workers’ compensation benefits.

Although it may seem naïve, perhaps the appropriate thing for the defense to do in this situation was to contact the district attorney’s office from the start of the case, and determine a joint course of action.  As a citizen, I would like to think that the activities of a cheating, lying, thieving police officer would be at the top of the DA’s list – public trust in law enforcement is a fragile creature, after all.  If the DA’s office is not going to pursue additional charges, there should be some affirmative statement to that effect which could be presented at the Board.

In any case be forewarned that, even in the murky world of California’s workers’ compensation law, the 5th Amendment right against self-incrimination appears to be alive and well.

As my dedicated and well-read readers will no doubt know, Labor Code section 4658(d) allows employers to take a 15% decrease in permanent disability payments if they make an offer of regular, modified, or alternative work to an injured employee within 60 days of that employee becoming permanent and stationary.  I’ve had the opportunity to blog about some interesting cases touching on this section.

What happens when there are two different P&S dates?  In the case of Velgrace Smith v. Workers’ Compensation Appeals Board, applicant sustained an injury and filed a workers’ compensation claim.  The parties eventually went to an AME, who evaluated applicant on November 29, 2006, finding her permanent and stationary as of September 2006.   Defendant made of offer of regular work, within the AME’s prescribed work restrictions, on December 29, 2006.  There was no response from applicant.

On April 30, 2008, applicant was re-evaluated by the same AME, who revised his opinions regarding her P&S status: she actually became P&S in March of 2007.  Defendant renewed its offer of regular work.

Here’s a timeline:

08/25/2005   –   Date of Injury (end of a cumulative trauma period)

09/??/2006   –   Retroactively found Permanent and Stationary Date (1)

11/29/2006   –   Evaluated by AME; AME issues report

12/29/2006   –   Defendant makes offer of regular work (1)

03/??/2007   –   Retroactively found Permanent and Stationary Date (2)

04/30/2008  –   Re-evaluated by AME; revised P&S opinions

05/??/2008    –   Defendant makes a second offer of regular work (2)

The matter proceeded to trial and the Workers’ Compensation Judge found that applicant was entitled to a 4658(d) increase of 15% because defendant did not make an offer of regular work within 60 days of March, 2007.  The WCJ acknowledged that this was physically impossible for the employer to do, but (for some reason) the literal application of the law was appropriate in this case.

Defendant petitioned for reconsideration and the WCAB granted said petition, holding that the 60 days during which a defendant has to make an offer of regular, modified, or alternative work begin to run upon defendant’s receipt of the report, not the actual date of the report or the date elected as the permanent and stationary date.  Furthermore, the WCAB held:

“a mere change in permanent and stationary date does not invalidate an offer of modified work for the purposes of Labor Code section 4658(d) unless there is also a change in the permanent work restrictions which renders the offer of modified work inconsistent with the work restrictions. To the extent that the December 29, 2006 offer of modified work was compatible with the applicant’s permanent work restrictions as of March 2007, the defendant should gain the benefit of the decrease outlined in section 4658(d)(3)(A) with regard to its entire permanent disability indemnity liability. However, if the applicant was given different or more restrictive work restrictions, a new 60-day period runs from the date of knowledge of the new work restrictions.”

The Court of Appeal denied applicant’s petition for a writ of review.

Assuming the second P&S dates comes with additional restrictions, does the defendant get the benefit of a 15% decrease on all permanent disability payments made after the offer of regular work was made, but before service of the new P&S date?  I would argue yes – the policy behind 4658, according to the WCAB, is to encourage retention of injured workers through the use of monetary incentives.  If you’re aware of a case with a contrary holding, I would be interested in reading it – gregory.grinberg@htklaw.com.

Governor Brown, who I still salute, despite his other faults, for the workers’ compensation bills he signs into law as much as those that he vetoes, has seen fit to appoint a new chairman of the Workers’ Compensation Appeals Board.  At press time, the Department of Industrial Relations website still showed the chairman as Joseph M. Miller, but according to the governor’s website, Commissioner Ronnie G. Caplane is to take over as chairman of the WCAB.

Chairman Miller was appointed by the former governor in 2005.

In that hope springs eternal, your momentarily optimistic blogger wishes the new chairman the best of luck in guiding the WCAB to just and sound decisions.  We all know that California’s Workers’ Compensation system certainly needs them.

In the recent case of Valerie Morales v. General Design Concepts, the Workers’ Compensation Appeals Board granted defendant’s petition for removal where the Workers’ Compensation Judge allowed applicant to proceed directly to trial on the issue of entitlement to certain medical treatment, without first going through the process outlined by Labor Code section 4062.

Applicant’s treating physician recommended surgery for an admitted 2007 cumulative trauma injury which had been settled by stipulations with need for further medical treatment.

Defendant forwarded the request to Utilization Review, and the UR determination did not certify the request, leading defendant to decline to approve the treatment recommendation.

Applicant then filed a declaration of readiness to proceed for expedited hearing, and the WCJ set the matter for trial.  Defendant petitioned for removal, arguing that applicant never objected to the UR determination in writing, as required by Labor Code section 4062, nor did applicant request a panel, as required by the same.

The WCAB granted the petition for removal, but (this is where your dedicated blogger becomes a bit unhappy) orders that the trial be taken off calendar and applicant be given an opportunity to be evaluated by the panel qualified medical evaluator.

Applicant missed her deadline – she is represented and twenty days passed from the UR determination without a written objection on her part.  The show is over – her objection is waived.  NO – SOUP – FOR – YOU.

Somehow, applicant’s procedural failings are translated into a time extension.  Even though applicant made no written objection to the UR determination, the WCAB reasoned that “[i]n this case, it is apparent that applicant objects to the UR determination.”  By that rationale, an angry phone call from the applicant would satisfy Labor Code section 4062 as much as an applicant “notify[ing]  the other party in writing of the objection.”

Hopefully this will not become a common interpretation of the law.

For extra credit, guess which venue issued the same type of ruling for a defendant who failed to meet a statutory deadline to object to a medical determination?  There is only one where such a thing happens… If you guessed the FLO Board, you are right!

Think back to all the lessons you learned when you had your own lemonade stand, and apply them to the following business model.  Step 1) defraud the State of California to the tune of $30 million; Step 2) get caught; Step 3) pay back a few million, give up $500,000 in jewels, plea to 10 years of probation; Step 4) Profit!

This is the approach taken by Devon Lynn Kile, who recently was convicted of running one of the larger California workers’ compensation fraud schemes, at least according to a few news sources, including ClaimsJournal and OCWeekly.

Kile, who, coincidentally, had previously applied to be one of the “Real Housewives of Orange County“, was convicted of 72 felony counts of variations of fraud, including the under-reporting of income and payroll.  As part of her plea deal, she will pay back $1.3 million to Employment Development Department, $1.5 million to the Franchise Tax Board, and some amount not yet determined to State Compensation Insurance Fund.

Kile was sentenced to ten years in prison, suspended for 10 years of probation.  If she is a model citizen, living off whatever remains of her ill-gotten goods, she will escape justice.

All-in-all, a profitable venture – your disappointed blogger applauds the Orange County District Attorney’s office for its investigation and prosecution of this case, but would have liked to see all the money returned before serving actual prison time was taken off the table.

On November 10, 2011, the sun dawned on a very different California.  The air smelled the same, the food tasted the same, but there was something different.  That difference was the sound that filled the atmosphere – the sound of the Court of Appeal standing firm for the law, as it was written, and consequentially for employers and insurers across the state.

In its November 10, 2011 unpublished decision in the case of State Compensation Insurance Fund v. Workers’ Compensation Appeals Board (James Dorsett) (which was subsequently ordered published, thanks to the efforts of the California Workers’ Compensation Institute) the Court of Appeal ruled that Labor Code sections 4663 and 4664 applied to the case at hand.

The facts are fairly straight forward – applicant glazier allegedly sustained an injury to the cervical spine in 2000 while working for employer A; and then allegedly sustained a cumulative trauma injury over the period of November, 2002 through June, 2004 while working for employer B.  Both employers were insured by State Compensation Insurance Fund.

The agreed medical evaluator opined that, although there are two injuries, the cumulative trauma was a compensable consequence of the specific injury, and the two injuries are inextricably intertwined.  However, during his deposition, the AME testified that he would apportion the level of applicant’s disability 50-50 between the two injuries.

The matter proceeded to trial and the Workers’ Compensation Judge awarded application 100% disability, reasoning that the two injuries could not be parsed out, presenting just one single injury.  Therefore, no apportionment applied.

Defendant SCIF petitioned the Workers’ Compensation Appeals Board for reconsideration, arguing that an injury could not both be a compensable consequence and a separate injury, and that the Labor Code required apportionment in this case.

The WCAB denied defendant’s petition.

Declining to give into discouragement, defendant then petitioned the Court of Appeal for a writ of review.

The Court of Appeal, in granting defendant’s petition, reasoned that if the doctor can “parcel out the causation of disability,” then separate injuries must be apportioned, even if they become permanent and stationary on the same date.

In this case, the AME testified to a 50-50 split in causation between the two injuries, satisfying defendant’s burden of proving apportionment.

Your modest blogger is an admitted cynic – but it’s mornings like these that irresistibly inject a bit of optimism into everyday life.