Here we are again, dear readers, at the end of the week. So, what your humble blogger would like you to check your files for liens Liberty Medical Group, Inc., of Rancho Cucamonga. The reason why is, Doctor Kevin Tien Do has agreed to plead guilty to fraud in relation to his work for Liberty Medical Group.
InsuranceJournal.com reports that Dr. Do wrote reports for Liberty Medical Group, Inc., related to the Subsequent Injuries Benefit Trust Fund. When Dr. Do was suspended from participating in the workers compensation program, he continued to write reports (and bill for them) but Liberty Medical Group would submit the reports as if they were authored by other doctors, thus circumventing the suspension.
Dr. Do admitted that he “conspired to defraud the state of millions of dollars by defrauding California’s [SIBTF].” But don’t let the semantics fool you – SIBTF is funded by state collections from employers, which means the depleting of the fund results in more payments by employers to correct. Of course, that means higher costs for the rest of us when patronizing the businesses not driver to closure by the cost of doing business in California.
Seriously… what the heck?
In this particular case, SIBTF was the target of fraud. But what system do we have in place to avoid the same practice where the target is a self-insured employer or a workers’ compensation insurance company?
Imagine the time and the effort it takes to get a dishonest doctor out of the comp system, only to have him or her come back by recruiting a doctor with a good name and authoring (and billing for) more poison reports.
Your humble blogger does not have a solution in mind for this practice, but it serves as more evidence that the workers’ compensation system is open to exploitation by unscrupulous actors.
Your humble blogger has a post for you today, dear readers, that is both serious and was drafted willfully. Let’s begin with a question – what are the benefits due under a finding of serious and willful misconduct on the part of the employer?
Under Labor code section 4553, [t]he amount of compensation otherwise recoverable shall be increased one-half, together with costs and expenses not to exceed two hundred fifty dollars ($250)…”
Easy enough, right? Well, the Supreme Court is going to be addressing this issue where it pertains to a corrections officer injured in a pre-planned attack by inmates. The most pressing issue in the case of Department of Corrections & Rehabilitation v. WCAB, Ayala, isn’t whether or not the defendant is liable for Serious and Willful Misconduct, but rather what benefits should be counted to determine exposure.
Government code sections 19871 and 19871.2 provide for industrial disability leave in some injury cases, basically equating to one year of full wages rather than temporary disability benefits. However, Labor Code section 3207 defines compensation as the benefits or payments “conferred by this division upon an injured employee.” The Government code is not part of the division of the labor code, so would those difference between temporary disability benefits and wage continuation go into the Serious an Willful exposure compensation?
Let’s play with some numbers! An employee injured on 1/1/23 would have a maximum TD rate of $1,619.15. Let’s say that employee was earning $2,700 rather than $2,428.72 per week. Well, for TD benefits for 52 weeks, that applicant would receive $84,195.63, but under the industrial leave benefits of Government Code section 19871, the employee would receive $140,400 instead, a difference of just over $56,200. Prevailing under a theory of Serious and Willful Misconduct would yield an increase of just over $28,000, if those additional benefits are calculated as part of the package.
So… should they be?
Well, in this case, the WCJ found that the additional benefits under the Government code should not be included in the calculations, while the WCAB found it should. The Court of Appeal then weighed in, siding with the trial judge and defendant, excluding the additional benefits under the Government code from the calculation.
The Court of Appeal relied on LC 3207 to come to its conclusion, but it also had a very interesting reason to reject applicant’s argument under Labor Code section 3202 (the notorious and very frustrating “liberal construction” section). To the Court of Appeal, Ayala argued that the court should “liberally construe” labor code section 3207 to include the additional benefits found in the Government code. The Court of Appeal responded that while this particular holding doesn’t help applicant, it might help applicants in other situations, such as those defendant an employer claim of the employee’s Serious and Willful Misconduct. Thus, the COA reasoned, “had Ayala’s injuries been caused by his own serious and willful misconduct, his industrial disability leave would not have been reduced by one-half for the very same reason it does not increase by one-half here.” (emphasis original).
We don’t know what the Supreme Court will do with the Ayala case, of course, but assuming it leaves the Court of Appeals decision intact, perhaps we can draw from that (1) that any benefits the employee would receive originating outside of the Labor Code are not to be calculated towards Serious and Willful Misconduct claims; and (2) if a WCJ or the WCAB uses the “liberal construction” doctrine found in Labor Code section 3202 to reach its reasoning, doesn’t this dicta militate against it if the interpretation can be applied adversely to other injured workers?
Welcome back dear readers! I hope your weekend was more restful than mine. After hours upon hours child-proofing my house, they still got in! (Tip your waitress, folks, I’ll be here all night).
Anywho, your humble blogger has a really interesting panel decision for you, Sanchez v. Agser Contracting. Applicant is the widow of Agser’s employee, and retained her own doctor who offered an opinion concluding that the death was caused by, in part, the contributions of work exposures. The panel PQME, however, found that the death was non-industrial.
At trial, the WCJ excluded the retained physician’s report and relied on the PQME’s report to issue a “take nothing” order. Why would the WCJ exclude applicant’s privately retained physician’s report? After all, Labor Code section 4605 specifically provides that “[n]othing contained in this chapter shall limit the right of the employee to provide, at his or her own expense, a consulting physician or any attending physicians whom he or she desires.”
The WCJ reasoned that section 4605 specifically provides this right to an employee and not a dependent seeking death benefits. On reconsideration, the WCAB rejected this reasoning, finding that 4605 has to do with evidentiary rights, and denying this evidentiary procedure to dependents would violate due process rights. Thus, the WCAB ordered the retained physicians report admissible.
However, the ultimate ruling was not disturbed.
First, the available pool of medical evidence included one QME report which found the injury to be non-industrial, and one 4605 report which found it did. On what basis could the WCJ or the WCAB find an industrial injury? Solely on the 4605 report, of course. And Labor Code 4605 specifically provides “[a]ny report prepared by consulting or attending physicians pursuant to this section shall not be the sole basis of an award of compensation.”
The WCAB panel opinion found the 4605 report to be speculative and found the PQME report more persuasive, leaving the “take nothing” order undisturbed.
Here’s some food for thought, dear readers. When your file starts getting sprinkled with these 4605 reports on a denied claim, ask yourself this: is there a lien?
Can the 4605 physician produce bills showing they are paid by the applicant?
Your humble blogger’s thought is as follows: if there is an unpaid bill, especially with the anticipation that the defense will ultimately be asked to pay it, then the report is not “at [applicant’s] own expense” and thus should not qualify as a Labor Code 4605 report. Therefore, it should not be reviewed by the PQME or admissible as evidence.
The Sacramento County District Attorney’s office announced that fraudster Gustavo Cisneros has pled no contest to felony insurance fraud.
According to this press release, “Cisneros had at least six previous workers’ compensation claims. In these claims, Cisneros used different social security numbers and dates of birth to make his actions more difficult to detect.” The sentence for this fraud is 150 days in county jail, 2 years of formal probation, and restitution to the victim.
As always, your humble blogger is happy to see that the fraud has been detected and that the prosecutor has taken up the case. However, this is far from a perfect result.
Only a fraction of the fraud referrals sent to the district attorney’s office are taken up.
But this tactic used by Cisneros is not uncommon. Often enough, we see applicant’s represented by the same applicant attorney filing claims with “typos” on the date of birth or the spelling of the name. If you’re a cynic like your humble blogger, there’s no “error” here but a deliberate effort to conceal prior claims.
The WCAB appears to offer no remedy for this – there is no penalty for an incorrect DOB, social security number, or failing to list prior workers’ compensation claims or injuries in paragraph 8 of the application.
Certainly, defendants can explore this with a deposition or an ISO report, but these methods take time and carry their own expense. Furthermore, even when these discovery methods are used, when you have an applicant such as Cisneros who is actively trying to avoid detection of prior claims and is willing to engage in fraud, a deposition under oath is of limited assistance.
What are the remedies that are available for such issues?
When it is the allegedly injured worker filing the application, a government photo ID would address some of these issues, especially if the failure of the pleadings to conform to the government ID data (date of birth, spelling of name, etc.) is a basis to dismiss the application.
Furthermore, when an applicant attorney is involved, perhaps the failure to disclose prior WC claims for which the same firm represented the same applicant should be sanctionable. If an applicant attorney assumes representation after an application has been filed, an amended application listing prior claims for which the same firm represented the same applicant can be filed within 45 days of assuming representation.
I defer to the wisdom of the legislature and the WCAB if the added burdens on applicants and their attorneys from the suggestions above outweigh the public’s interest in deterring and preventing fraud and reducing the delays and costs of workers’ compensation litigation.
Slowly and steadily, dear readers, our beloved swamp of workers’ compensation is moving into the future.
Your humble blogger applauded the use of telephone conference lines to conduct status conferences and mandatory settlement conferences in response to the COVID19 pandemic, but long bemoaned the bow ties and suits that sat unused in their various owner’s drawers where once they brought grace, dignity, and a slight hit of Mad Men to the WCAB. Well, no longer (or, almost no longer).
From the looks of things, though, the walkthrough calendar is NOT returning to remote appearance, which may have the unintended (or possibly intended?) effect of discouraging walkthroughs.
In the meantime, that’s not the only change. AB-2337 took effect January 1, 2025 (I know, I know, dear readers, this should have been covered in my 1/1/25 post, but no one wants too much of a good thing) as well, which means that the chronic degradation of the quality of settlement paperwork due to printing, signing, and re-scanning will hopefully be done for too. AB-2337 specifically allows for electronic signatures on all filings with the WCAB “subject to restrictions or requirements that may be adopted by the administrative director or the Workers’ Compensation Appeals Board.” Hopefully we can look forward to more legislative and regulatory assistance to help us make this practice nimble and efficient.
How, your humble blogger is a dreamer at heart, a poet in his soul, and a warrior in his fantastical imagination. So what can technology do to make workers’ comp practice better?
For one thing, perhaps we can retrofit the various WCAB Boards to make it more convenient for WCJs to conduct trials remotely. Presently, several board rooms are completely ill-equipped for this, requiring the trial judge to move to the hearing room in the building set up for remote trials. Upgrades of this sort would make remote trials more feasible and will eliminate the travel costs involved.
This isn’t only for the benefit of applicants, mind you – how many times have you encountered difficulty in your cases when the non-employee witness doesn’t want to undertake the travel to get down to the Board? As always, the party offering the witness should bear the burden of making sure that witness is technologically set up. I would not object to never again having to drive 3 hours just to be told that there’s no court reporter available and now we have to reschedule, just to drive another 3 hours back.
Your humble blogger would also like a requirement that QMEs and AMEs must make themselves available for telephone or video deposition. The suggestion that parties must incur the cost of travel to ask the QME 15 minutes of questions is absurd, especially when electronic depositions are not some “new fangled do whacky that all the kids learned about on the interwebs”.
What do you think, dear readers? Is there some new app that can make all the workers’ compensation headaches go away? Straight on till Friday, dear readers!
Who is in the mood for a brief discussion on 5710 fees? Your humble blogger anticipates a resounding “we are” emanating from all his beloved readers in unison.
Labor Code section 5710 allows for the payment of an applicant’s representative at deposition of the applicant. Often enough, disputes arise as to what time is compensable related to the deposition as well as what the rate should be. For example, how much time is reasonable to prepare an applicant for deposition? An hour? What if an interpreter is necessary? What about the applicant attorney’s time preparing to prepare the deponent?
Then there’s the deposition itself – if applicant’s counsel and defense counsel discuss settlement for 30 minutes off the record, is that time included? How about after the deposition – should the AA be compensated for time spent going over the transcript with the applicant for the errata sheet?
The typical procedure after a deposition is to have AA send a demand for 5710 fees to defense counsel. Defendants will typically pay the bill in full, with or without an objection, or reduce the bill by a reasonable amount. To my wonderful colleagues representing injured workers all across the state, although I agree that every moment of your precious time really is priceless, all y’all need to get real with how much an hour of a workers’ comp attorney’s time is really worth. Spoiler alert: whatever you think it is, I assure you, it’s less.
The regulations provide the procedure for resolving these disputes, found in 8 CCR 10547, which provides the form and content necessary for said petition. Of interest, although there is some provision for hearing representatives attending deposition, section 10547 does not seem to provide for hearing representatives, but instead requires, in subsection (f), “the name of the attorney who attended the deposition along with the attorney’s State Bar number.”
Anywho, a recent panel decision, one of the last of 2024, touched on the issue of 5710 fees. In the case of Amezcua v. Milgard Windows Manufacturing, AA wanted to set the issue of $115 in disputed 5710 fees for trial. When the WCJ took the matter off calendar, AA filed a petition for reconsideration. The WCAB cited its En Banc decision of Ledezma v. Kareem Cart Commissary and Mfg. for the holding that a petition for reconsideration is NOT appropriate for an Order Taking Off Calendar. Not only was the petition for reconsideration denied, the petition was treated as one for removal and denied as well, as there was no evidence that deferring the issue until the trial in the case-in-chief would not cause substantial prejudice or irreparable harm to applicant (or applicant’s counsel).
The WCAB emphasized that seeking reconsideration from an order taking off calendar is sanctionable. The opinion then gave notice of intent a monetary sanction on applicant’s counsel absent written objection and good cause for the contrary.
So, what can we take away from this? The WCAB’s position has now been made abundantly clear that seeking reconsideration of an order taking the matter off calendar is sanctionable, and, perhaps, seeking attorney fees for responding to such a petition should be an option to explore. Of course, removal appears to be a non-sanctionable way to appeal so long as the nature of the irreparable harm can be reasonably articulated in the petition.
What’s more, especially if your humble blogger has any say in this matter, the amount paid in 5710 fees needs to be revisited and brought down to reality – that is, it should be brought into line with what the market actually pays for attorney time and experience.
Happy Friday, dear readers! Are we all over the shock that rumors of your humble blogger’s incarceration, demise, and/or loss of his blogging fingers have all been exaggerated?
Well, let’s play a bit of catch up, shall we? How about a discussion of Kite and Vigil?
First, a brief history! The Permanent Disability Rating Schedule from 2005 calls upon us to combine various ratings for a final permanent disability. So, a fall that results in injury to the back and the knee would ultimately be combined using the PDRS formula. 20% for the lumbar spine and 20% for the knee would not add up to 40% ($58,290) but instead combine to 36% ($50,170.00). But as we get up higher in numbers the combined values yield more significant results. Two impairments of 50% each, rather than adding to 100% would instead be 75%. The basic formula is a (first PD) plus b (second PD) x (1 – a)
So, if we have 50% and 50%, the formula would be .50 + .50(1-.50) = .75 or 75% PD.
Then, of course, came the Kite decision. In Athens Administrators v. WCAB (Kite), the PQME found impairment to both hips, and opined that the impairment should be added rather than combined. The WCJ approved this approach and despite defendant’s appeals, the ruling was not disturbed by the WCAB or by the Court of Appeal.
After some back and forth with various panel cases interpreting the theory, some limiting some expanding its application, the WCAB took matters into its own hands. In the June 2024 En Banc decision in Vigil v. County of Kern, the WCAB endorsed the practice of adding rather than combining impairment, but only when “there is no overlap between the effects on ADLs as between the body parts rated; or … there is overlap, but the overlap increases or amplifies the impact on the overlapping ADLs.”
In the Vigil case, applicant sustained a CT to the bilateral hips and low back. The WCJ added the hips and combined the combined that amount with the back. So, the Vigil decision held that when there is no overlap of ADLs, the PD for the body parts should added rather than combined. (As an aside, dear readers, is it now fair to call applicant attorneys pushing for adding rather than combining impairment… Vigilantes?)
For example, a left knee injury which impacts standing and walking might not overlap with a psyche claim or an eye injury which limits sight. Likewise, when a person might otherwise use a left hand to compensate for a right hand injury, but now both hands are injured, the impact on ADLs is synergistic and triggers adding impairment.
But the en banc decision also provided guidance and gave the defense some maneuvering space in making arguments. For example, the decision notes “[w]e cannot stress enough that to constitute substantial evidence ‘… a medical opinion must be framed in terms of reasonable medical probability, it must not be speculative, it must be based on pertinent facts and on an adequate examination and history, and it must set forth reasoning in support of its conclusions.’” (emphasis original). The WCAB places the burden on the party attempting to deviate from the CVC (combining method) to explain why the adding method is justified, through an articulated discussion of the synergistic effect and overlapping ADLs.
The burden is applicant’s to show that (1) the ADLs do NOT overlap or (2) the ADLs overlap in such a way as to “increase or [amplify] the impact on the overlapping ADLs”.
Without naming names, I can think of a few medical-legal evaluators that will need hand-holding through a deposition in order to meet the requirements of the burden of proof on various issues, whether apportionment or Almaraz/Guzman or Kite/Vigil.
One odd thing about the result here is, though, that the Vigil court returned this matter to the trial level for the WCJ to consider developing the record. But why? There is a rateable report in the record already using the combined values chart. The fact that applicant failed to carry the burden of proof on rebutting the CVC does not mean the record is not developed, only that the burden was not carried. If your humble blogger was calling the shots (which he always does in his imaginary arguments), an Award would have issued on the current record using the CVC.
Of course, for good reason, our system of checks and balances keeps such crazy ideas out of decision-making process.
You’ve asked for it, you’ve demanded it, you’ve sent me cut up pieces of the labor code with cryptic notes saying “humble blogger or else”… whatever that means. But what can one humble blogger do in the face of such strong demand? Your humble blogger is back!
So, what better way to start off 2025 with an update on what’s new with the stroke of midnight?
Speaking of TD, the minimum TD benefit rate is now $378.05 (up from $364.29 in 2024) and the maximum is now $1,680.29 (up from $1,619.15 in 2024). PD rates, of course, remain stagnant at $290 per week since 1/1/2014.
However, if you are paying out life pension, the COLA adjustment is 3.77588% based on the SAWW increase.
AB 1870, signed into law on July 15, 2024, now includes a provision in Labor Code section 3550 now includes subsection (d)(4) which reads “The injured employee may consult a licensed attorney to advise them of their rights under workers’ compensations laws. In most instances, attorney’s fees will be paid from an injured employee’s recovery.” So, if you have not already done so, you may want to update your benefits notices.
2024 has been a wild ride and your humble blogger has a feeling that 2025 will be anything but boring. Rest assured, dear readers, your humble blogger stands ready with dad jokes, puns, and the occasional crackpot idea to help us navigate our beloved swamp of Workers’ Compensation.
Hey there dear readers! How was your Halloween? Did you put on the costumes and do the trick or treating?
Your humble blogger took his lovely children door to door trick or treating. The sad thing is, of course, the futility of it all. Every family in my neighborhood went to Costco and bought the same bag of candy, and, of course, all our respective children collected each others’ candy. The end result? I have the same candy I put out in front of my house.
Anywho, as spooky and scary as Halloween can be for the kids, California celebrates Halloween every day when it comes to terrifying its poor, wretched, disenfranchised employers.
Not only is there no way to opt out of the workers’ compensation system, which, in California, so effortlessly delivers benefits to vendors, attorneys, treaters, and lien claimants, but also when trying to obtain said necessary insurance, employers can also fall prey to fraud.
What happens when an employer with one of those dummy policies has a claim brought against it before the WCAB? While this might be good cause to avoid the criminal penalties and sanctions, the WCAB is not going to force any insurance company to pick up coverage. In California, this isn’t throwing an employer into the water without a life jacket… this is throwing an employer out of a plane without a parashoot.
What can employers do to combat the sort of fraud as is alleged in the linked story? Well, for one thing, you can always check on coverage by doing an information WC Coverage Inquiry here. Upon receiving the insurance certificate, employers should also verify coverage by reaching out directly to the insurance company listed on the policy to verify the policy number and locations covered.
So you see dear readers? If you’re an employer in California, it’s Halloween all year round and it’s never “treat,” just “trick” or “horribly crippling costs driving you towards bankruptcy or to leave the state.”
In other words, dear readers, your humble blogger suggests that you keep on the sunny side of life!
Your humble blogger breaches no duty of confidentiality and betrays to national secrets to disclose that he is a very big fan of Seinfeld. One scene in particular comes to mind… the double dip!
In short, double dipping is bad. It’s so bad, in fact, that in Workers’ Compensation, we tend to discourage it by allowing for subrogation and third-party credit. Basically, whatever goes in the pocket for applicant from a third-party civil suit, with some exceptions, can be the basis of petition for credit before the WCAB.
Labor Code section 3861 provides that “[t]he appeals board … shall allow, as a credit to the employer to be applied against his liability for compensation, such amount of any recovery by the employee for his injury…”
Well, in a recent panel decision, Diaz v. Black Rock Milling Co., the WCAB had occasion to review the scope of the credit. Specifically, the WCJ had issued an allowance for third-party credit “against any and all indemnity workers’ compensation benefits due…”
But what about non-indemnity costs? Such as medical, mileage, etc.-? Well defendant appealed this very deficit and reconsideration was granted by the WCAB to further develop the record regarding the scope of the order granting credit.
But, looking at the plain language of LC 3861, it appears the Labor Code uses the term “shall” in directing the WCAB, meaning that this is not subject to discretion, and the credit is to apply “against [the employer’s] liability for compensation…” Where is the authority to limit liability for compensation solely to indemnity?
Other cases have applied this credit to medical-legal costs (SCIF v. WCAB (76 Cal.App.3d 136)); In SCIF v. WCAB (Borges), a 1997 Court of Appeals decision, it was held that “[c]ompensation in this context, is given a broad, expansive meaning … every benefit payable to or on behalf of the employee that is enumerated in division 4 of the Labor Code is to be considered compensation liability which may be offset by the employer’s credit.”
So, what’s going on?
The WCAB is given a mandatory directive by the Labor Code to grant credit (LC 3861). The Court of Appeal has already ruled that the credit is to be applied to all benefits (Borges). But now the defendant has to go through a reconsideration and a rehearing on this issue. What’s more, there is no apparent remedy to the delay in justice or the resources of litigation. Meanwhile, without an order to the effect of credit against all species of benefits, defendant is required to continue paying for medical benefits pending the determination of this issue.
Such is life, dear readers, such is life.
Does this mean you should not seek credit? Of course not! But getting the credit you deserve may take longer than you would like, unfortunately.
