Archive for February, 2016

Correction! Correctional Officer Goes Down for WC Fraud

February 26th, 2016 No comments

Hello, dear readers!

Well, it looks like another workers’ comp fraudster has gone down!  The Sacramento County District Attorney’s Office has announced that Todd Phillips, a corrections officer, has pled guilty to misdemeanor workers’ compensation insurance fraud.

After being taken off work for a 2010 foot injury, Mr. Phillips complained of pain in his foot and being unable to work while playing in softball games (running bases, running to catch balls, and hitting his foot with the bat!).

The sentence? 60 days in county jail, with Sheriff’s release program recommended, 3 years’ probation, and almost $13,000 in restitution to the California Department of Corrections and Rehabilitation.

Your humble blogger congratulations the district attorney’s office on a successful prosecution, and welcomes this as another demonstration of diligent and effective investigation of a claim well past the 90-day mark.

However, it also provides some sad commentary on how slow the wheels of justice move: for misconduct that was video-taped in September of 2012, there is a conviction now, 3.5 years later.  There will probably be some time before the CDCR receives restitution, and, as always, the tax-payers foot the bill for the prosecution.  In this case, the tax-payers foot the bill for the investigation as well.

The workers’ compensation system, as it is, allowed this fraudster to slip through the cracks and continue to receive benefits.  The justice system, as it is, provided weak and slow justice to the ultimate victims – the taxpayers of California.

What about the fraudsters out there that decide that engaging in public displays of sports-competency and ability are not a good idea at a time that fraud is being alleged?  What about those that are simply happy to be paid not to work while retaining their health?  They can catch up on reading, their favorite movies, and spend quality time with their families while someone else foots the bill, and the likelihood of detection and prosecution is almost non-existent.

Something has got to give, dear readers… something has got to give.

Have a good weekend!

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On Attorney Fees and Permanent Disability Advances

February 24th, 2016 3 comments

Hello, dear readers!  Just recently, your humble blogger overheard the following conundrum at one of the WCAB venues: while unrepresented, applicant had received 100% of the PD value as advances, and nothing was withheld as an attorney fee.  Applicant subsequently became represented, tried (in vain) to increase the PD rating, and ended up where he began, at which point it was time to settle.

But the applicant attorney wanted something for his efforts, however ultimately futile they proved.  The defendant, in response, said that there was nothing from which to draw an attorney fee, seeing how all the PD had already been advanced.  Furthermore, a C&R was not the ticket either: a lien from EDD which would have been paid as part of any C&R would have wiped out any moneys from which to draw an attorney fee as well.

Naturally, the applicant attorney agreed that he should have thoroughly reviewed the case and the facts before expending any effort – the parties shook hands and went their separate ways.  Just kidding, dear readers – trying to see if you’re awake!

Applicant’s counsel claimed that defendant failed to withhold advances for a (possible) attorney to come on the scene, and so owed the attorney fee in addition to rather than out of, the PD value.

Crazy stuff, no?  What’s a defendant to do?

Well, let’s talk about advances first.  Labor code section 4650(b)(1) provides that “[i]f the injury causes permanent disability, the first payment shall be made within 14 days after the date of last payment of temporary disability, except as provided in paragraph (2).”  Paragraph (2), by contrast, tells us that “[p]rior to an award of permanent disability indemnity, a permanent disability indemnity payment shall not be required if the employer has offered the employee a position that pays at least 85% of the wages and compensation paid tot eh employee at the time of injury or if the employee is employed in a position that pays at least 100 percent of the wages and compensation paid to the employee at the time of injury…”

In other words, defendants (at least now) don’t have to make advances if the injured worker is earning at least 85% of pre-injury wages for the same employer, or at least 100% of pre-injury wages for another employer.

But what if advances are due?  After all, as we know from Berry v. WCAB (1969) defendants are required to make advances unless there is reasonable doubt as to the existence of permanent disability (a requirement that section 4650(b)(2) eases, of course).

On the other hand, defendants are required to withhold an attorney’s fee from advances and benefits paid, and failure to do so might expose a defendant to paying the fee on top of the benefits.

So what is a defendant to do?  On the one hand, there is the Scylla of facing penalty for failing to advance the last 15% (and reserving it as an attorney fee).  On the other hand, there is the Charybdis of advancing all funds, and then having an attorney appear on the scene and demand additional payment for “failing to withhold.”

From your humble blogger’s research, it appears that there is no affirmative obligation to withhold 15% in permanent disability advances for an unrepresented injured worker.  Accordingly, the sounder practice would be to continue all advances to avoid penalty for unreasonably withholding.

Practically speaking, however, shouldn’t applicant attorneys be tasked with performing some sort of triage before accepting a case?  And, furthermore, if an applicant attorney takes a case, and, regardless of the effort, generates exactly $0 in results for his or her client… why should there be any fee at all?

My beloved readers may recall that I made the point, some time ago and resulting in many dirty stares and cancellation of party invitations, that applicant attorneys should not receive a fee when they fail to make gains on a settlement offer made when the applicant was unrepresented.

That’s my thinking on it, dear readers.  What are your thoughts?

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CWCI Study: Roughly 85% of UR Upheld by IMR

February 22nd, 2016 No comments

Hello, dear readers!  It’s a glorious Monday Morning, and your humble blogger has some rather interesting news for you:  it appears that about 85% of UR denials are upheld (and, sometimes, even held up) by IMR.

Insurance Journal reports that CWCI’s study concludes that if you get a UR denial, you are likely to get an IMR affirmation.

Thinking about it in terms of dollars and sense (see what I did there?) if you’re paying your UR, whether the treatment is denied or recommended, and you’re paying your IMR vendor, whether the treatment is denied or recommended, perhaps it’s time to run the numbers again.

What’s the best formula for deciding whether to override a UR denial?

If [cost of IMR] x .85 > cost of treatment, override it!

On the bright side, things like physical therapy, chiropractic visits, and acupuncture are limited, by statute, to 24 (see Labor Code section 4604.5(c)(1)), so even if you override UR, after 24 visits you  might not have to provide the treatment anyway.  But, as the conventional wisdom goes, it might make sense, globally, to pre-authorize certain treatments so that you can even skip out on the UR bill too – odds are that certain injuries are going to require physical therapy or prescription medication, etc., so why suffer the UR bill when you’ll likely have to provide it anyway?

In summary, dear readers, this is pretty good news, at least for now.  As you will recall, IMR was dearly paid for with a lot of momentum to get SB-863 on the Governor’s desk and signed, and the battle still rages in the courts to about its constitutionality.  Although, as you may have heard, the Court of Appeal in Stevens held that IMR, even when late, is constitutional and the California Supreme Court, on February 17, 2016, denied to review it.

What do you think, dear readers?  Is it worth it to send every single RFA to UR and to allow an IMR?  Or would defendants be wise in adopting a measured response?

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WCAB En Banc: Attorneys Can Use Unbonded Copy Services

February 19th, 2016 No comments

Happy Friday, dear readers!

Your humble blogger wishes to remind you that we, as human beings, are social animals: we need community, interaction, and bonding with our fellow-man [and woman – easy there PC police!]  But there are certain individuals amongst us that have no need of this bonding and are exempt from this very human necessity: the recluse, the socially awkward but equally humble blogger, and, according to a recent en banc decision by the WCAB, professional photocopy services.

Business and Professional Code section 22451(b) exempts professional photocopiers who are “employees, agents, or independent contractors” of “[a] member of the State Bar” from having to obtain a certificate of registration and a $5,000 bond as required by section 22455(a).

In the case of Cornejo v. Younique Café Inc., a copy service sought to have its liens paid by the defendant, but the WCJ ruled that because the copy service failed to show proof that it was bonded at the time the copy services were provided, the lien was not recoverable.

On appeal, the WCAB commissioners, en banc, ruled that section 22451(b) specifically exempts copy services when acting in the charge of a member of the state bar.  So, if an applicant’s attorney asks a copy service to go get records, then they don’t need to be bonded to collect on the lien.

So… does 22451 have any benefit for employers and insurers?

Well, in theory at least, if an unrepresented injured worker were to retain a professional photocopier to obtain records, that lien could be defeated by showing that the copier was not bonded as per section 22451.

For the time being, requiring copy services to post a bond and register is not going to be a viable defense in most cases.  On the bright side, we can still use the other defenses afforded by the labor code, and the WCAB returned the Cornejo matter to the trial level for a determination of the merits of the lien.

All this, mind you, for a lien of $1,585.56.

Have a good weekend, folks!

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Defendant Liable for Post-C&R EDD Lien

February 12th, 2016 No comments

Happy Friday, dear readers!

Your humble blogger brings you a cautionary tale – one which is a good reminder of all of us on the defense side: the dreaded EDD lien.

Often enough, applicants will receive money from EDD and will decline to tell the defendant about this.  Sometimes they’ll get it at the same time as they’re getting TTD benefits… sometimes at the same time as PDAs, or sometimes they’ll get EDD benefits after one or another specie of benefits is exhausted.

In any case, EDD is supposed to let you know about this.  California Code of Regulations section 10770(d)(1) tells us that “[a]ll original and amended lien claims, and all related documents, including supporting documentation and any document listed in subdivision (c)(4) shall be served on: (B) any employer(s) or insurance carrier(s) that are parties to the case and, if represented, their attorney(s) or other agent(s) of record.”

My reading of this is that EDD is required to SERVE (not just mail) notice of EDD’s interest in a case to the employer, the insurer, the TPA, and the attorney.  Of course, EDD has sometimes taken the position that automated mailing is sufficient, and that only the employer or the insurer need to advised of the lien.

But you know all this already, so why do I mention it?

In the case of Borbeck v. ACE Building Maintenance, the WCAB denied reconsideration of the WCJ’s ruling that defendant must pay EDD the lien amount of $33,921.68.  There was an overlap in TD and EDD benefits, but defendant argued that, as EDD was advised of the benefits, EDD should have stopped paying the supplemental amounts.

Although the WCAB panel opinion gave some discussion to whether notice was sufficiently provided to EDD, the WCAB ultimately ruled that, because defendant agreed to pay, adjust, or litigate any liens of record, it could ultimately be found liable for EDD’s lien.

The commissioners admonished defendants to make specific provisions for how EDD’s lien would be resolved before the settlement was paid out.

So, here are your humble blogger’s thoughts:

EDD is right in that, if the lien is meritorious, defendant should be liable for a legally supportable sum to satisfy the lien.

However, EDD continued to pay benefits when it had been advised that benefits were already being paid, and disregarded this notice to continue paying benefits.  After all, don’t we tell medical treatment providers to blame themselves when they have been served with MPN based objections to treatment and bills?

Furthermore, EDD provided defective service.  Even though defendant had actual notice of the lien, the same section, 10770, provides that “any violation of the provisions of this section may give rise to monetary sanctions, attorney’s fees, and costs under Labor Code section 5813 and Rule 10561.”  (Subdivision k).  And if you think EDD is somehow exempt, take a look at subdivision (l).  Shouldn’t the defective and informal service by EDD negated the lien, or at least mitigated its total value for the additional costs incurred by the defendant?

We also have to remember what EDD is: applicant paid into the EDD account, and now will have the EDD account replenished to use again.  He’s already gotten the benefits from this account and should look to himself to replenish it.

But, of course, this only goes to the question of whether the lien is meritorious, and not to the question of whether or not defendant agreed to defend the lien.

If a file has been flagged for an EDD lien, we should take precautions of course, but, ultimately, we have to come to grips with the fact that an EDD lien may sink a C&R, and applicants (and their attorneys) should devote their own energy into making sure that EDD liens are resolved.

Let this be a warning to us all, dear readers – leave no EDD lien unresolved before seeking that Order Approving C&R!

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Long List of Bribers and Kickbackers in S. Cal WC Investigation

February 10th, 2016 No comments

Hello, dear readers!  I think it’s time to bring up the ol’ MPN and check for a few names, based on the latest story from the San Diego Union Tribune, documenting the vast criminal conspiracy in Southern California to trade patients like so many Magic: The Gathering cards (or Baseball cards, if that resonates more…)

According to the Tribune, Crosby Square Chiropractic, Amir Khan of Orange, David C Nguyen of Huntington Beach, Phong H Tran of Irvine, George Reese of North Park, Foremost Shockwave Solutions, Julian Garcia of National City, and Ronald Grusd (of California Imaging Network Medical Group) of Los Angeles are all involved in a massive FBI investigation where medical practitioners and medical equipment providers were paid referral fees (bribes) to herd injured workers towards unnecessary treatment to be billed to workers’ compensation insurers and employers.

This is nothing new in our wonderful world of workers’ comp, but the size of this things warrants some recognition.  For the most part, though, it appears to be confined to Southern California, which makes it a matter of interest for your humble blogger, but little effect for your wise and zealous defense attorney.

While this case is far from closed, and there are no convictions as yet (except for a few early guilty pleas, including one San Diego workers’ compensation attorney), we should all check our MPNs and unpaid bills (and incoming bills) for the names listed above.  It might make sense to go over past paid invoices or settled liens to add to the growing list of victims of the alleged fraud.

Here’s another fun fact: the investigation estimates several millions of dollars in bills fraudulently charged to workers’ compensation defendants.  So, the next time our friends over at the applicants’ bar pound their fists on the table and complain about those evil corporations who can’t spare a few dollars for the injured workers, we can direct their attention to the fraudulent billings instead.

no nice  things

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UR Invalid For Addressing Need for Scooter Instead of Scooter Repair RFA

February 8th, 2016 No comments

Hello, dear readers!  Another weekend is gone, another week is starting, and here we are: your humble blogger rampaging against good sense and common decency into his blog posts, and you, the reader, watching this train wreck and helpless to look away.  Let’s be honest folks… it’s either reading this blog post or going back to do real work – the choice is clear.

For those of you still reading, have you seen the Rodolfo Arroyo case yet?  It’s a recent panel decision which seeks to, once again, test the limits of the Dubon II (en banc) decisions giving sacrosanct status to UR determinations.

Applicant sustained an admitted injury and received a motorized scooter which broke down after about five years of use.  His treating physician requested either repair or replacement of the scooter, and, when the issue was submitted to UR, the UR determination addressed whether or not a scooter was necessary, rather than whether the repair or replacement was necessary.  In upholding the UR determination, the WCJ reasoned that once the UR G-ds had spoken in a timely fashion, the will of Olympus was not mortal men or women to dispute.

In granting applicant’s petition for removal, the commissioners the WCAB reasoned that “the UR considered whether provision of a scooter is medically supported, but that is not the issue raised by the request for authorization.”  Although it may be appropriate to stop treatment at a certain point, or, rather, it may be appropriate not to authorized further treatment of a kind that medically reasonable and necessary at one point, the issue here is that UR answered a question that no one asked.

Now, if you will recall, dear readers, there was a similar case to this one reported earlier on this blog.  In the Takafua case the PTP requested assistive devices, like handrails in the shower, and IMR, in upholding the UR denial, responded by denying authorization for in-home care.  In that case, the WCJ held that applicant was entitled to a new IMR decision, which appears to be the only remedy available for a defective IMR.

Now, as reasonable as the commissioners’ ruling is, in theory, here’s a thought to consider:  if UR is tasked with deciding whether repairs or replacement of an already-provided scooter are medically necessary and reasonable, the UR physician is really being asked whether the use of a motorized scooter is necessary NOW.  Whether or not it was necessary 5 years ago, the question remains of whether or not the injured worker still needs it.  Only after answering the first question, in the affirmative, can the UR physician address the second.

If the UR physician is saying “you don’t need repairs or replacement because you don’t need a scooter in the first place” then the denial should hold.

Now, here’s another thought –  what the commissioners DID NOT rule on was whether or not the repair or replacement of the scooter was medically necessary, but only that the WCAB has jurisdiction to review the question on the merits.

Defendant’s exhibit 1 is going to be the UR report, in all likelihood: the reasons militating against a scooter are the reasons militating against repair or replacement.

What do you think, dear readers?  Should this one have been confined to IMR?

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Bifurcating Lien Trial Not Due Process Violation

February 5th, 2016 No comments

Happy Friday, dear readers!

Have you gotten a chance to review the Salas case, recently denied review by the Court of Appeal?  It’s the one where lien claimant Southland Spine and Rehabilitation Medical Center complained about bifurcation of issues resulting in a total bar to the lien claim.

Ms. Salas sustained an admitted injury to her back and sustained a stress claim to boot.  She treated with Southland, which was outside of defendant’s MPN, but when the case settled by way of C&R, Southland showed up with its hand out.

The issues were bifurcated to allow the defendant to present its MPN defense, and all other issues were deferred.  When the WCJ found that defendant’s valid MPN barred Southland’s liens, Southland sought reconsideration.  The basis for the petition was the alleged defect under section 9767.12 in that there was no notice to the applicant in Spanish, and that Southland was denied due process when the issues were bifurcated.

Defendant showed that MPN notices were sent, and that applicant was treating within the MPN until she switched to Southland.  Defendant was also able to provide objection letters following the switch out of the MPN.

Defendant also cited the Knight case, where the WCAB held, en banc: “an employer or insurer’s failure to provide required notice to an employee of rights under the MPN that results in a neglect or refusal to provide reasonable medical treatment renders the employer or insurer liable for reasonable medical treatment self-procured by the employee.”  As applicant was receiving treatment within the MPN until she switched, any potential defects in the notices did not result in the “neglect or refusal to provide reasonable medical treatment.”

And recall, dear readers, that the WCAB has expressed similar reasoning before.

The WCJ also noted that even if applicant could not read English, her attorney, who received a copy of the notice, could read English, and so notice could be provided to the injured worker through her attorney.

The WCAB denied reconsideration and the Court of Appeal denied review.

Now here’s an interesting thought on the bifurcation issue: what possible harm was done to the lien claimant by requiring that the threshold issue of the MPN defense be addressed first?  Lien claimants and their representatives are aware of reserve requirements and the benefits to a defendant in closing a file.  For that reason, tactically, some lien claimants will attempt to delay trial or resolution, just to increase the costs associated and bring more money to the settlement table.

Don’t let them get away with it!

There are legitimate liens out there, sure – and those are the ones that should be paid.  Your humble blogger has seen instances of written authorization to treat next to bill denials: these things happen.  But when a treating facility is advised (and regularly) of a defendant’s MPN, and the treatment continues, there’s no sympathy to be found.  After all, one does not get an orphan’s leniency when being tried for the murder of one’s parent.

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Dancing Hamster Fraudster Goes Down!

February 3rd, 2016 No comments

Although this blog is most certainly humble, it strives to be at least somewhat respectable as well.  To that effect, one would not expect a search of the blog to turn up many references to the word “hamster”, but it’s there!

In any case, dear readers, you may recall the curious case of the Kia car commercial’s dancing hamster – a dancer who tangoed his way from a workers’ comp claim to a Kia commercial, and then waltzed his way from the commercial to a no contest plea for insurance fraud.  Leroy Barnes will serve 90 days of electronic monitoring, 400 hours of community service, and pay $24,000 in restitution.

I guess you could say Mr. Barnes bit off more than he could chew…

hamster eating carrot

In any case, this story reminds us, on the defense side, of the importance of regular check-ups: social media, sub-rosa, etc. to make sure that we weed out the fraudsters and that there are enough benefits available for the legitimately injured workers.

Special thanks for JJB for the tip on this story!

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Good Faith Personnel Defense Survives “Media Scrutiny” Challenge

February 1st, 2016 No comments

Happy Monday, dear readers!

We’re all familiar with the Labor Code section 3208.3(h) defense against psyche claims for psyche injuries “substantially caused by a lawful, nondiscriminatory, good faith personnel action.”  But what constitutes good faith?

In the case of Stolp v. California Dep’t of Developmental Services, applicant, a peace officer, was called with his partner to make contact with a staff member accused of “Tasing patients.”  Upon contacting the staff member, applicant confiscated a loaded handgun and a Taser gun but otherwise let the staff member go.  Patients were later found to have sustained “thermal burns” which would not have been caused by the Taser gun.

Six months later, an internal affairs investigation was launched into Mr. Stolp’s handling of the situation, and a while after that, a journalist picked up the story and publicly criticized the handling of the “Taser incident.”

The internal affairs investigation described Stolp’s actions in fairly harsh terms, and recommended a 10% pay reduction for 12 pay periods.  Applicant began seeing a psychologist, who documented experiencing symptoms as a result of the IA report.

Applicant’s psyche claim was denied citing the good faith personnel defense, but applicant countered with the claim that the IA investigation was not in good faith because it was done in response to media attention.

What is the standard for good faith, anyway?  The Court of Appeal in Northrop Grumman Corp v. WCAB, Graves (2002) 103 CA4th 1021 held that the standard is defined as “done in a manner that is lacking outrageous conduct, is honest and with a sincere purpose, is without an intent to mislead, deceive, or defraud, and is without collusion or unlawful design.”  Such was the language cited by the WCJ in finding that the internal affairs investigation was a good faith personnel action.

The WCJ further found that other employees, including supervisors and co-workers, were also subject to personnel action, which militates against a finding of discrimination.

It’s perfectly reasonable that after a harsh and damning internal affairs report, the subject of the report might develop psychiatric or other symptoms.  However, the defense is there for a reason – to allow employers to meet their various business and staffing needs without fear of an expensive workers’ compensation claim.

Of interest here is the fact that a whole lot of heads rolled for the “Taser incident,” and applicant did not receive the worst of the consequences.

But, hypothetically speaking, if the internal affairs investigation was undertaken only after being prompted by bad publicity… would that invalidate the good-faith personnel defense?  The investigation itself might start because of outside influence, but without evidence that the investigation was performed or the results obtained in such a manner as to be tainted with appeasing the public, wouldn’t the defense still hold?

In this case, the factual timeline showed that the internal affairs investigation was started six months or so after the incident, but another five months or so before the negative media attention, so the issue isn’t really present in this case.

How far do you think a defendant can stretch 3208.3(h)?

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