WCDefenseCA

Hey there dear readers, how is your week going?  Shall your humble blogger sweeten it with some good news?

A while back, your humble blogger had the pleasure to discuss the poison AB1213 with you because Sacramento was intent on squeezing even more out of California’s battered and besieged employers.  What AB1213 intended to do was extend temporary disability for the period between Utilization Review denial and IMR reversal.  In other words, if applicant was on TD for two months between the UR denial and the ultimate IMR reversal, those two months of TD would not count towards the 104-week TD cap, and applicant could potential received 2 years and 2 months of TD. 

AB1213 passed in the in the Senate 62 to 8 on May 26, 2023, and then in the Assembly 30 to 9 on September 11, 2023. 

Now, dear readers, you might be asking yourself… where’s the good news?  Well, the good news is that on October 8, 2023, Governor Newsom vetoed AB1213, which means that, despite all the effort, it will NOT become law any time soon.

Now that I’ve lured you in with the good news, not unlike Pennywise with a paper boat, let’s take a look at some unfortunate realities.  The California Legislature overwhelmingly passed this monstrosity of a bill and will likely do so again in the near future.  When it does, will Governor Newsome’s resolve remain firm?

Mark my words, dear readers, at the rate we’re going, your humble blogger’s April Fools’ post might become reality before too long!

Straight on till Friday, dear readers!

Happy Monday, dear readers!  Your humble blogger has a question for you… a riddle if you will.  What is a pirate’s favorite part of California workers’ compensation?

1. Labor Code 4662 (because of all the hooks and eye patches, etc.);
2. Lien litigation (because of legalized piracy); or
3. IM… wait for it… Arrrrrrr!

The answer is obviously C, but I would have also accepted U… wait for it… Arrrrr!

Now that you’re done rolling your eyes at me, let’s take a look at how IMR is doing.

The CWCI has a new report on IMR out, and the results are pretty favorable to the defense community.  IMR volume peaked in 2018 but has steadily declined to an all time low since the program started as part of SB-863.  In 2022, there were 127,215 requests for IMR as compared to 184,735 requests in 2018.  The cost of IMR is $345, so imagine the savings to defendants represented by the drop in IMR requests – almost $20 million!

And, of course, that’s just the cost of IMR alone, not to mention all the unnecessary treatment that defendants were not forced to pay for.

The other interesting statistic is the IMR uphold rate – 2022 saw an uphold rate of 91.1%, down from 92% the year before.

What does this mean?  Well, as the system stands right now, odds are very high (as in 91.1% likelihood) that a UR determination will stand.  That is why it is so important for defendants to conduct timely and technically effective utilization review of RFAs, which includes not only timely responses but also proper and timely communication of the results to the parties involved (AA, requesting doctor, etc.)

What else does it mean?  Sacramento sees a fortune of costs being avoided by employers and insurers and is working diligently to prevent those savings, or, at the least, curtail them as much as possible.  Efforts are under way in Sacramento to require all UR physicians to not only be licensed in the relevant specialty as required for the RFA, but also to be licensed in California. 

There is clearly no purpose to this other than to make UR more expensive for employers by limiting the pool of physicians available to conduct UR.  Likewise, as discussed previously on this most humble of blogs, Sacramento is attempting to increase TTD for those 8.9% of IMR results that reverse the UR determination, extending TD beyond the 104 week cap for periods spent awaiting an IMR reversal.  At present, there is little enough incentive for AAs to request IMR, let alone litigate any technical deficiencies in the IMR results, knowing that less than 10% of those decisions will be reversed.  The prospect of an extra 2 months of TD will provide plenty of such incentive. 

SB863 went into effect more than 10 years ago now, and while it failed to eliminate Ogilvie explicitly, and, sadly, failed to eliminate Almaraz/Guzman as well, limiting the jurisdiction of the WCAB to reverse UR and instituting the IMR process is likely proving to be one of the biggest cost-saving measures for California’s employers.

Avast ye mateys!  Wednesday ahoy!

Happy Monday, dear readers!  It’s another beautiful week in paradise.  We’ve celebrated Cinco de Mayo, and, as we are clearing away signs of those festivities, we are getting ready for Mother’s day this Sunday.  In this world of uncertainty, dear readers, you cannot expect another reminder that Mother’s Day is coming up this Sunday, May 14.  It might already be too late, but do try to make those lunch reservations, order those flowers, and set aside time to give your mother a call. 

I think if our dear friends and family members were to visit us in California, they would expect to see certain things.  If they were here for a week without Sacramento trying to crush another swath of California’s businesses, they’d feel like they missed out.

So, it only makes sense that we take a look at Assembly Bill 1213, which just passed through committee at the end of April.  What does AB1213?  Well, what doesn’t it do?!?

A lot, to be fair, but primarily AB1213 exempts any periods of TD pending IMR review of treatment (and eventual overturn) from the TTD cap of Labor Code section 4656.

So, let’s take a scenario.  Applicant has a DOI of 1/1/2020.  He goes on TD and his TD would be exhausted by 1/1/2022, as per 4656(c).  Well, if applicant’s PTP submitted an RFA on 3/1/2020, and UR came back with a denial on 3/6/2020, all the periods from that 3/6/2020 denial to the IMR overturn would not count towards the 104-week cap.

What do we need to do if AB 1213 becomes law?  Well, in every file, we set reserves and value cases based on a range of exposure, factoring maximum exposure of course.  How can defendants adequately set reserves or value cases for settlement when there is almost a perpetual TD range?

It’s not all doom and gloom, of course – in 2021, IMR upheld 92.8% of UR denials.  The ultimate impact is going to be limited.  But this isn’t the only squeeze California’s employers and insurers are feeling from Sacramento.  There seems to be pressure from every end to make $100 in payroll more and more expensive for businesses in California. 

Now, if life was fair and California was interested in seeing justice for both employer and employees, when IMR denies a method of treatment, and the PTP has no other suggestions that are likely to change applicant’s condition substantially in the next year, as contemplated by 8 CCR 9785(a)(8), then we would also have regular findings that applicant is P&S retroactively to the date of a UR denial, once the IMR appeal has been exhausted.  We would also have TTD overpayment credit as a matter of right, rather than judicial discretion. 

What is good for the goose is good for the gander, after all, no?

But instead, we see a continuous stream of policies and rulings that disproportionately favor applicants at the expense of defendants in Workers’ Compensation.  My beloved readers, the secret to youth, I have found, is to maintain that adolescent naivete which objects to injustice and life being unfair.  That is how your humble blogger maintains feeling like a 20-year-old.

Like so many other recent results from Sacramento, AB1213 seems worthy of watching.  But, likewise, we can watch the cost of doing business in California as it continues to rise.