WCDefenseCA

Insurance Commissioner Dave Jones announced the recent arrest of two business owners for workers’ compensation fraud.  As alleged, the business owners lied to their insurer about the nature of the work their employees performed, claiming it was only inside electrical work.  This resulted in a lower premium for the owners and tragedy for the family of a worker who died as a result of an injury sustained at work.

The worker was run over by a company car as he was working on a project to repair street lights in Redwood City.  After his death, a claim was filed by his family and the fraud was discovered.  The insurance company rescinded the policy and family was left without a death benefit.

The money saved by the husband-and-wife business owners was roughly $11,500 for the years of 2007 through 2009.

Fraud is fraud, regardless of who commits the act.  In this case, the fraud alleged is the employer’s and while enjoying the benefit of a smaller overhead as compared to honest competitors, the business owners shifted a considerable amount of risk to the worker’s family.

If everything is true as alleged, then this is a reckless act by an employer, but also reflects the desperation many California small business owners face.  Without making any sort of excuses for fraud, we must recognize why the “underground” economy is such a tempting one for business owners.  Somehow, the climate in California makes honest and open business practices less appealing than the “underground” or moving out of state.

By all means, prosecute the fraudsters of California, whether they are employee or employer, but let’s not forget that there are carrots as well as sticks – a more business and employer-friendly California will see less fraud and less of such harsh results for the families of injured workers.

Have you ever wondered if Almaraz/Guzman can be rejected in a case?

That appears to be what happened in the case of Emilia Olguin v. ESIS Division of Ace/USA Insurance.  The Court of Appeal recently denied applicant’s petition for a writ of review after the Workers’ Compensation Appeals Board likewise denied applicant’s petition for reconsideration.

One of the issues was whether the WCJ-appointed regular physician’s application of A/G to inflate the permanent disability rating was properly rejected by the WCJ.

The “regular physician” provided an impairment rating both under the strict AMA Guides and A/G, but the WCJ rejected the A/G rating based on Guzman III.  In fact, he cited some of the same language your humble blogger did in drafting this blog post.

In preparing his A/G analysis, this physician noted that applicant’s ratable symptoms produce a 0% whole person impairment for the left elbow and a 1% whole person impairment for the right elbow.  Therefore, according to this physician, the impairment should be rated according to A/G.  But the WCJ in this case, much like Hamlet, was unwilling to be played upon as on a pipe.  Merely saying the magic words “Almaraz Guzman” was not enough.

The physician failed to meet the requirements laid out in Guzman III, and the physician’s efforts were deemed by the WCJ “as an indirect attempt to obtain a desired result.”  The WCJ also held that, because the physician was attempting to integrate 1997 schedule work restrictions with the AMA Guides, both A/G II and Guzman III were violated.

In reviewing applicant’s petition for reconsideration, the Workers’ Compensation Appeals Board adopted and incorporated the WCJ’s report and issued a denial.  The Court of Appeal likewise denied applicant’s petition for a writ of review.

Dearest readers – with the proper amount of leg work, A/G can be stopped from inflating applicant’s impairment balloon… sometimes, it can also turn the balloon to one of lead.  And before you start rolling up your sleeves to badger the PQME into admitting that he got his degree online, he doesn’t recycle, and that he hasn’t met the standards set out in Guzman III, remember – it is the applicant’s burden to rebut the AMA Guides.  If the PQME has not toed the line and met the requirements set out by Guzman III, outline your arguments and shoot for the strict rating.