Archive for July, 2016

C&R Set Aside Over MSA Defects: Attorney Fee Made Proceeds Insufficient to Fund MSA

July 15th, 2016 2 comments

Happy Friday, dear readers!

Your humble blogger has heard many-a-whispers of a case making the rounds (Alvarenga v. Scope Industries) discussing the interplay of Medicare Set-Asides (MSA) and Compromise and Release settlements.  From the looks of it, the parties entered into a C&R which was approved, but then defendant sought to set aside the Order Approving on the grounds of mutual mistake, to wit, that the MSA did not require Centers for Medicare & Medicaid Services (CMS) approval.

The case is an interesting one for many reasons.  The WCAB provided a discussion of CMS procedures and ultimately did rescind the order approving compromise and release, but not because of any allegations of mutual mistake – the WCAB found the settlement inadequate and that applicant was not properly advised of the impact the C&R would have on his Medicare benefits going forward.

With respect to CMS and MSA the WCAB panel noted that if the injured worker is (1) a Medicare beneficiary; or (2) has a reasonable expectation of becoming a Medicare beneficiary in the next 30 months, the parties must protect CMS’s interests.  In other words, you can’t just shift the obligation to pay for medical treatment for an industrial injury onto the federal government.  (42 USC sec 1395y(b)(1); identifying Medicare as secondary payer to workers’ compensation).

CMS, out of a workload consideration, won’t even review (and thus won’t approve) settlements for under $25,000 where the injured worker is a Medicare beneficiary, or $250,000 where the injured worker may become a Medicare beneficiary.

Accordingly, the WCAB pointed out that there is no requirement of CMS approval at all, and that approval by CMS of a Medicare set-aside will only be available to the parties when the workload threshold is met as above.

However, the settlement was still set aside on adequacy grounds.  The MSA came back at $24,079.23, and the C&R was for $39,000, less $11,040 for PDAs and $5,850 for attorney fees.  So the applicant was left with less than enough to cover the medical expenses as projected by the MSA.  But, had applicant’s counsel waived the attorney fee on the MSA portion of the settlement, the “new money” would have been $24,079.23 for the MSA and an additional $1,642.66 for applicant.

But… isn’t the attorney supposed to take a fee out of the MSA amount?  The WCAB has held that attorneys get a piece of the MSA as part of their fee.  Let’s take a case where the parties are five years out past the date of injury (so no chance of a new and further claim) and all TTD and PD has been paid (prior to representation of the injured worker).  All that’s left if the future medical care and for whatever reason, applicant is not entitled to a voucher.  If the MSA comes back at $24,000, and there’s no other benefit to settle, either the applicant’s attorney is entitled to a fee off the  $24,000 C&R, in which case there’s not enough money left to fund the MSA (leaving just $20,400/$24,000) or the attorney is not entitled to a fee.  Which one is it?

Additionally, the panel held that the C&R is inadequate because “based on the language contained within the C&R, it does not appear that applicant was adequately advised of the effect of the parties’ failure to conduct CMS review of the MSA.  If the parties wish to enter into a C&R with an MSA arrangement without obtaining CMS review, applicant should be advised of the fact that CMS may withhold future Medicare benefits if CMS deems the settlement to be inadequate.”   Well… in that case… why is there an attorney fee at all?

The injured worker is ponying up 15% of his settlement for a reason – the attorney is there to advocate for his interest and to advise him of his rights and risks in litigating his case.  If the burden is on the defense to advise a represented applicant of the effects of a settlement, should the WCAB award that 15% right back to the defendant for doing the applicant’s attorney’s job?

As a workers’ compensation defense attorney, I have the privilege of working with lots and lots of applicant’s attorneys.  Some are nice, some are jerks.  Some are competent, and some aren’t.  There are some that put the injured worker’s interests first, and some that will guide their clients by the nose to the operating table for needless but crippling surgeries.  But in all of these cases, the injured worker has his remedy: if the applicant’s attorney breaches his duty of loyalty and competency, there are available actions such as (1) state bar discipline; and (2) malpractice actions.

It’s hard enough being a defendant in California’s workers’ compensation system – let’s not make defendants serve the role of a second applicant’s counsel as well!

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Pokemon Go and Workers’ Compensation

July 13th, 2016 No comments

Alright, dear readers, bear with me, because you’re about to get a dose of two-parts nerd and two-parts dork.

For the longest time, Nintendo has had a franchise called “Pokemon” in which the players collect and train fictional monsters.  Well, modern technology has allowed this franchise to go one step further: the Pokemon Go game allows players to use their GPS and a basic map function to search for these monsters in the real world, and to “catch” them by using the phone’s camera function.

If I haven’t lost you yet, dear readers, I’m about to tie this into workers’ compensation.

The “monsters” appear just about everywhere, but especially in publicly frequented areas and businesses – at Whole Foods by the deli, on the street in front of Pottery Barn, in the waiting room at the local Dignity Health hospital.  You know where else they appear?

While crossing the street.  While driving. While standing in a dangerous area.  This addicting little game which seems to be garnering a lot of attention on social media is also providing a vehicle for a lot of accidents and injuries.  Not only can employers expect their own less-attentive workers to sustain injuries due to being oblivious or taking ridiculous chances while going about their duties, but third parties can be expected to be careless as well.

A Man "catches" a monster as his wife gives birth.

A Man “catches” a monster as his wife gives birth.

Just a thought, dear readers – given this latest craze, employers left and right can expect to lose productivity from their employees as they chase virtual monsters all around them.  Let’s not double the loss by seeing a spike in “work-related” injuries.

Some ways to combat this?  Well, if the employer provides the actual phones for the employees, care should be taken to restrict which applications can be loaded onto the phone (hint: Pokemon game should probably be blocked).

If the employees are bringing their own phones, clear instructions should be made to ban such activity, and, really, the careless use of the phone while walking around or driving.

Finally, if there are any injuries reported that make you scratch your head and ask “who could possibly be THAT oblivious?!?” it’s time to investigate possible smart phone use.  Even if this doesn’t lead to an outright denial of the claim, it may give rise to a reduction of employee benefits under Labor Code section 4551 (employee serious and willful misconduct).

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Too Disabled for Police Work; Ok For Strongman Competitions?

July 11th, 2016 No comments

Work restrictions: the patient is prohibited from any law enforcement activity.  However, he is able to participate in strongman competitions.

Crazy, right? Well, welcome to California, my friend!

Happy Monday, dear readers.  We’ve all heard of Bogdan, the world’s strongest man:

But in our corner of the world, California has its own “strong man” competitions and recently, charges have been filed against a Santa Barbara police officer for competing in strongman competitions while receiving disability benefits.

Presently, this is just an allegation, but we’ve seen similar instances on this blog such as (1) firefighters competing in MMA; and (2) professional dancers performing in car commercials as hamsters while on disability.  Accordingly, this wouldn’t be the first time allegations have flown of an injured worker displaying disability for the worksite and super-human ability away from the eyes of the employer.

Until details emerge, of course, the office charged is entitled to the benefit of the doubt.  Not all injuries preclude all physical activities, and if the strong-man competitions were made under physician supervision, there’s an argument against a finding of Fraud.

The takeaway, for us in the workers’ comp world is that it makes sense to check up on people.  The longer the claimant is on TD, the more it makes sense to check up on him or her.

Most investigator offices will offer you services in the form of a social media or online check, but there are a few basic tricks you can do yourself:

  1. Have you done a basic search on Facebook or Twitter?
  2. Have you set up a google alert for your claimant’s name?
  3. Have you checked any professional updates on LinkedIn?

Just some ideas, dear readers.

See you on Wednesday!

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Happy Independence Day!

July 4th, 2016 No comments

Helllllllooooo dear readers! Your humble blogger is taking a quick break from his BBQ and his fireworks and his flag waving to wish you a happy independence day!

Given the recent news out of Great Britain, it seems like it would be a bit of the ol’ hypocrisy if the Crown were to hold a grudge against the U.S. of A for shrugging off the control of a distant empire.

Anywho – I hope you folks get to enjoy the day and, if you’re really such a glutton for punishment that you’re reading this blog post on Monday, I offer you these thoughts:

We are a people who engage in self-governance.  Whether on the Federal level or in the halls of power in Sacramento, we are, effectively deciding our own fate.  Accordingly, we have exactly the legislature we deserve and exactly the workers’ compensation legislation we have chosen (collectively speaking).  I know this is a thought that is likely to induce nightmares, but it is also a cause for hope: we still have it in us to fix the problems we deal with on a day to day basis.  That’s a reason to wave our flags, grill our burgers, and blow up small pieces of our air-space today.

Here’s another thought – just something else to consider: We often give thanks to our veterans, especially on days like Independence Day.  Freedom is won and freedom is kept not by the benevolence of our would-be conquerors, but, often enough, by the courage and blood of our armed forces.  The best way to thank the men and women who served and survived injury for our country? Be mindful of your fireworks.

It comes as little surprise that explosions overhead of brightly colored fireworks can bring back memories of explosions everywhere of not-so-bright IEDs, RPGs, and a whole host of small arms.  Be mindful of the veterans that live near you and don’t turn their 4th of July into another Fallujah rerun.

Ok – that’s all I’ve got.  Let’s have some fun, celebrate, and get back to work tomorrow with a new zeal to see claims denied!

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