Author Archives: Gregory Grinberg

Regulating the Economy Towards Prosperity

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The refreshing winds of September are filling the air, and as they sweep in, they bring with them that rosy scent of fresh legislation: as always, fiery, thick, and perfectly half-baked.  Two pieces of would-be/will-be law have come under the popular spotlight recently.  The first is that of Assembly Bill 889 put forward by Assemblyman Tom Ammiano (D – San Francisco).

The bill would require rest-breaks, over-time pay, and (you guessed it) workers’ compensation insurance for domestic workers such as care persons, nannies, babysitters and cleaners.

While exempting babysitters under the age of 18, I expect this bill, if made law, to send presently free-lance domestic workers into the arms of organized companies.  No matter how much I want to see a perfectly good classic movie ruined by a modern-recreation in a theater, I have no intention of hiring a human resources staff to help me comply with this law while hiring a babysitter for the evening.  I imagine the typical parent in California will likely feel the same way.

So free-lancing, self-employment for babysitters and other domestic workers might decrease, insurance profits may go up, and Sacramento will press harder on small employers with its left hand while continuing to squeeze larger businesses with its right.

The second piece of legislation is Senate Bill 684, which makes it more difficult for insurance companies to have and to enforce arbitration clauses in their workers’ compensation insurance contracts, by requiring a separate disclosure of the existence of the arbitration clauses, the venue and choice of law of the arbitration, and the fact that they are negotiable.

Authored by State Senator Ellen M. Corbett (D – San Leandro), the legislation was greeted with enthusiasm by Insurance Commissioner Dave Jones in a Department of Insurance Press Release.

Many insurance companies are regional or national, and so would normally be subject to the contract laws of several states (wherever their policy holders entered into the contract).  Arbitration clauses allow all disputes to be resolved in one state, and the insurance company’s legal department needs to know only one state’s laws.

Now, insurers will have to either face increased costs in negotiating, quoting, and preparing insurance contracts, or retain different legal departments for every state in which they offer their services.  But while the costs of operation go up, workers’ compensation insurance rates are set by law and cannot be increased.

SB 684 has passed both the Assembly and the Senate and now awaits Governor Brown’s signature.  Perhaps, if the legislation is signed into law, an update will be necessary on the benefits of self-insurance.

A Rejected Theory of Causation

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California Workers’ Compensation law allows the injured worker to recover not only for the actual injury sustained, but also many of the consequences that follow from the impetus of the injury.  An injured right knee turns into a bilateral knee claim, injured elbows can lead to psyche claims, and injured backs develop into compensable sleep disorders.  But, despite all evidence to the contrary, it appears that the “compensable consequences” is not a panacea for all of an applicant’s injuries, industrial or otherwise.

A recent writ-denied case rejected an applicant’s theory of causation of injury to his previously non-injured arm.

The case is that of Jantz v. Workers’ Compensation Appeals Board (2011 Cal. Wrk. Comp. Lexis 119).  Jantz injured his legs, elbows, back, left arm and left shoulder.  Some time afterward, he fell at his granddaughter’s softball game because of uneven cement, injuring his right shoulder.

His theory of causation for the right shoulder as a compensable consequence?  If his left arm had not been in a sling, he would have been able to use his left arm to stop his fall.  The theory was squarely rejected as speculative.

Jantz will hopefully lend itself easily to other cases to defend against other compensable consequence claims.

Another Extra-MPN Case

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As you might recall, the Valdez case, which is presently awaiting a new decision from the en banc Workers’ Compensation Appeals Board, was discussed here and here.

The original Valdez decision held that medical reports from doctors outside of defendant’s Medical Provider Network are inadmissible, and the defendant is not required to pay the bills for these reports.

Recently, the Court of Appeals issued a writ denied opinion for a WCAB decision with a similar holding – non-MPN doctors’ reports are inadmissible.  (Scudder v. Verizon California (2011Cal. Wrk. Comp. P.D. Lexis 138)).

The order denying applicant’s petition for writ of review can be found under the citation 2011 Cal. Wrk. Comp Lexis 126.

Had the Court of Appeal granted the petition for writ of review (and, ideally, affirmed the Scudder WCAB panel opinion) the Valdez case may have very well been moot.

Two of the commissioners on the Scudder panel are on the Valdez en banc panel as well.  Hopefully that is grounds for some optimism as to how the en banc decision in Valdez will ultimately empower or cripple Medical Provider Networks in California Workers’ Compensation practice.

As always, brave readers, when I know more, so will you.

Excluding a Co-Defendant From QME Communications

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Ever since the decision in Alvarez v. Workers’ Compensation Appeals Board  the issue of ex parte communication with a qualified or agreed medical evaluator, as prohibited by Labor Code § 4062.3 has been a cloudy one.  The very language of the Alvarez opinion (“an ex parte communication may be so insignificant and inconsequential that any resulting repercussion would be unreasonable”) leaves nothing more to grasp at than mist when one puts himself to the task of defining what is, and what is not, ex parte communication.

In the recent case of Morales v. Workers’ Compensation Appeals Board, the Court of Appeals denied a petition for writ of review of a decision touching on this topic.

The skinny:  providing the remedy of a replacement panel for applicant’s act of sending medical records to the a Qualified Medical Evaluator and only one of two defendants does not prejudice the applicant, nor is it a final order.

In this case, after the Workers’ Compensation Judge ordered a new panel to issue on defendant’s motion, applicant’s attorney petitioned for reconsideration or removal.  The petition for reconsideration was denied as the ordering of a replacement panel was not a final order.  The petition for removal was denied because applicant failed to show any prejudice from the WCJ’s order.

The facts of this scenario present some interesting questions regarding the right to a new panel.

The ideal outcome for co-defendants can be mutually beneficial, such as a favorable judgment regarding causation, extent of impairment or apportionment.  For co-applicants, such as competing dependents in a death claim, there is only one pie, and it can only be sliced so many times.

Let’s assume the last QME standing after the panel selection process is known to the defense community to issue high-rating reports.  Seeing that this panel QME is not good for either defendant, could one of them send an ex-parte communication to allow the other to demand a new panel?  Or, without planning it, could one defendant accidentally forget to serve the other, the way an applicant might not serve a second defendant, as appears to be the case in Morales?

The ethical implications of this tactic are questionable at best, but the thought does present an interesting question regarding the inner workings of the new-panel remedy.

In any case, absent a settlement, I expect we will see the case of Morales v. Workers’ Compensation Appeals Board again.

Average Temporary Disability Payments at Pre-Reform Levels

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The California Workers’ Compensation Institute has released the results of a data collection study showing an increase in the average temporary disability period for injured California workers.

The study can be viewed here.

The results show that temporary disability claims for injuries occurring in 2009 have reached pre-SB-899 levels.  12 months after the injury date, 2009 injuries average $6,050 paid, while 12 months after 2004 injuries the average paid in temporary disability was $6,071.

The report shows that this increase is part of an upward trend.  If you’re on the applicant’s side of the industry, it appears that a trend truly is your friend.

Some of us might think that the trend should level out after 24 months of temporary disability.  But with AB 947, as discussed in this post, pushing ahead, we can soon expect statistics for 240 weeks of temporary disability, rather than a maximum of 104.

An interesting subject for study might be the treatment costs associated with temporary disability periods.  Such a figure would more completely show the true cost to employers and insurers.

On Spinal Surgery Requests

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California Workers’ Compensation Defense practice offers few victories – but when they appear, they are sweet and make the whole effort worthwhile.

A recent decision from the Workers’ Compensation Appeals Board, Tomei v. Bay Alarm Company, addressed the application of California Code of Regulations section 9792.6(o).  As some readers might recall, earlier this month your humble author did a post on what constitutes a procedurally proper request for medical treatment.

The skinny:  A request for spinal surgery made in a narrative report must have the words “request for spinal surgery” clearly written by the surgeon across the top of the first page.

Applicant’s treating physician recommended spinal surgery, but the report in which the recommendation was made was in narrative form.  Although CCR 8 § 9792.6(o) allows requests for treatments to be made this way, it also requires “the document [to be] clearly marked at the top that it is a request for authorization.”

This treating physician didn’t mark the narrative report as required by § 9792.6(o), so applicant’s attorney did this for him in blue ink!  The report was sent to defendant with the words “request for treatment” hand-written across the top of the first page by the applicant’s attorney.

The WCAB held that the failure of the surgeon to clearly mark that the narrative report is a request for spinal surgery prejudices the defendant.  Therefore, the letter of the law applies.

In California Workers’ Compensation practice, defendants are given relatively little time to deal with spinal surgery requests.  The lesson here is that, when the physician requesting the treatment does not follow proper procedures, the defendant is shielded by the law.

As a habitual cynic, I can tell you that it is easy to become a perpetual cynic if you don’t keep your pessimism in check.  Cases like this one serve as an example of why it is important to fight for every inch of the relatively limited territory the law affords defendants.

Medical Records of 300k Californians Posted Online

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The San Francisco Chronicle has an interesting article on the state of medical records in California.  Apparently, “medical files belonging to nearly 300,000 Californians sat unsecured on the Internet for the entire world to see.”

It appears that a consulting firm working to collect unpaid workers’ compensation bills for doctors and hospitals, mercifully to remain nameless, put the files online.  The firm mistakenly believed that only its own employees could see the files.

I’m a big fan of modern technology in general and the paper-less world especially.  That being said, even though fire was a wonderful invention, it came with its own dangers and to this day it must be handled with care.

Defendants and defense attorneys can benefit greatly from paperless environments – no more coffee-stained original documents; access for the entire office at the same time to any file; service of all medical records by CD or e-mail.

At the same time, records get accidentally attached and sent; e-mails are dispatched that should have been filtered (read: censored) by cooler heads; and, as here, the medical records of unsuspecting individuals are made available for the world to see.

Given the facts of this story, the defendants in the victims’ respective workers’ compensation cases are blameless (and probably safe from liability).  However, such a slip-up could have easily happened to a private investigator firm hired by a third-party administrator or a careless Agreed Medical Evaluator’s office.

In other words, the modern professional need not fear technology or the paperless environment any more than he or she fears a camp fire; but the same attention and care that goes into keeping a camp fire safe and contained should go into keeping that precious information neatly under a tight lid.

As your caveman author chisels this blog post into a stone tablet, he wishes you the safe and successful use of modern technology to increase your efficiency and reduce your costs, hopefully without the price of a privacy and security breach.

On The Inclusion of Medicare C&R Language

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Centers for Medicare and Medicaid Services’ (CMS) regulations regarding Medicare Set-Asides have had a devastating effect upon California Workers’ Compensation practice.  Even when the parties want to settle a claim for a legitimate, good-faith amount, the nature of CMS’ approval system makes this nearly impossible.

Presently, CMS will not review set-asides for settlement amounts under $25,000, citing a shortage of man-power.  This means that the parties can settle a claim by compromise and release for under $25,000, only to have CMS later recoup costs from the self-insured employer or the insurer.  Naturally, this proves a strain to settlement negotiations.

Some parties have been adding language as an addendum, shifting the responsibility of all future medical costs to the applicant as part of the Compromise and Release.  A vendor is usually hired (Gould and Lamb is one example, Carr Allison is another) to perform a Medicare Set-Aside Analysis report, providing an estimate of how much future medical treatment will cost.  This figure is ear-marked for that purpose.

In one recent case before the Workers’ Compensation Appeals Board, Isaac v. Paramount Pictures, the validity of this addendum language was tested.  The Workers’ Compensation Judge rejected the addendum language, yet still held the rest of the compromise and release binding upon the parties.

Defendant filed a petition to set aside the order approving the compromise and release.

The skinny:  an addendum to a compromise and release agreement addressing the interests of Medicare may not be rejected by a WCJ without rejecting the entire agreement.

The WCAB ordered the approval of the compromise and release with the CMS addendum included.  The extent to which the addendum language will be binding on CMS down the road is questioned by the WCJ, WCAB, and most likely the parties as well.

But, if nothing else, the efforts on the part of the defense in this case firmly establish that the interests of the Federal Government have been fairly considered, and efforts have been made not to shift any of the burden of applicant’s treatment to Medicare.

If the applicant is on Medicare or is soon to be on Medicare, it’s probably a good idea to include some language in a compromise and release agreement addressing future medical costs.

Liability to Contractor’s Employees

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The California Supreme Court recently issued an opinion addressing the extent of liability parties have to the employees of hired contractors.

Jack hires Jill Inc. to have his lawns mowed.  When Jill’s employee hurts himself on Jack’s lawn, is Jack liable?  What if Jack had violated Occupational Safety and Health Administration (OSHA) guidelines on how razor-sharp he can keep his blades of grass?  What if Jack’s own employee, Albert, hurt himself in the same way as Jill’s employee and received workers’ compensation benefits?

The skinny:  a party owes no duty to the employees of its contractors.  Even if two workers get hurt in the same event, the big boss is on the hook only for his own worker, not the employee of the contractor.

US Airways hired a contractor to maintain and operate a conveyor at San Francisco International Airport.  One of the contractor’s employees injured his arm inspecting the conveyor.  As it turns out, the conveyor “lacked certain safety guards required by applicable regulations.”  Fortunately, it wasn’t a back sprain while gently removing luggage from the conveyor.

The Court of Appeals held that the violation of an OSHA safety regulation imposes liability upon US Airways.  According to the Court of Appeals, observing OSHA safety regulations is a non-delegable duty.

The Supreme Court reversed, relying on its opinion in Privette v. Superior Court.  The Court re-affirmed the rule that a hirer owes no duty to the employees of the contractor.

Will this apply to the Workers’ Comp world?  Time will tell how Workers’ Compensation Judges respond to this ruling.  But I have a feeling that the world of Serious and Willful defense will never be the same.