A Humble Wish from the Humble Blogger — MPN Reform!

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Your humble blogger has often thought, dear readers, that if he was given unlimited power and control over California’s workers’ compensation system, there are a lot of changes he would make. 

Bow ties would be mandatory, always and forever.  Judges would be powerless to sanction defense attorneys for doing air quotes when addressing the deponent as “doctor” during a deposition.  5710 fees would be limited to comparable rates for defense attorney hourly fees.

Once the drunk-with-power period faded, however, there are some substantive changes that I would like to see made to the way we navigate our beloved swamp of workers’ compensation.  So, introducing as of today, the humble blogger’s wish-list series!

Today’s wish is a reform of MPN mileage rules to reflect the realities of telemedicine.  Pursuant to 8 CCR 9767.5, one of the requirements for MPN validity is to provide at least 3 physicians ready to serve as PTP within 15 miles or 30 minutes of an applicant’s residence or workplace (or only the workplace, depending on which panel decisions you follow) and 60 minutes or 30 miles for occupational health services and specialists.

What does that mean in a world where a growing number of physician visits are conducted over telemedicine?  If applicant challenges the validity of an MPN based on distance requirements, can the defense realistically offer PTP’s exactly zero miles from applicant’s home because the internet connects to applicant’s living room?

Your humble blogger would revise 9767.5 to offer an exception to the distance requirements, which could be inserted as 9767.5(a)(3) as follows:

Any treating physician equipped and willing to treat a covered employee’s injury or injuries via telemedicine will be considered as having satisfied the access standards set out in subsection (a), above.

Easy, no?

I understand, dear readers, that your humble blogger, when taking up the task of a running wish list, would make such a modest proposal… well… one could be seriously underwhelmed.  However, isn’t this perfectly consistent with the aspirations of a man who dreams of unrestricted power to force everyone to wear bow ties?

Hopefully this will be an ongoing series throughout these blog posts, dear readers.  But if you have any proposals, particularly those that would mitigate the destructive and poisonous effect the current workers’ compensation system has on employers, then your humble blogger is like a corn field right before harvest time: all ears.

Yet Another Shameless Plug: Webinar next week!

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Your humble blogger’s readers are not only the best informed, but also the most patient and quickest to forgive. No doubt, that is why they tolerate these endless streams of self-promotion and shameless self-advertising from the humble blogger.

To that end dear readers, if you don’t have particularly important plans at 10:00 a.m. Thursday, September 22, 2022, perhaps you will join us for a webinar on the going and coming rule and work-from-home injuries?

Please register here!

As a special deal only for my beloved readers (and literally everyone else in the world), the first 1,000 registrants will get a free subscription to WCDefenseCA!

Your humble blogger would be grateful for your attendance and looks forward to your thoughts on the presentation.

CAJPA, Privette, and McCullar

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Hello there readers!  Your humble blogger is back from yet another conference.  This time I had the pleasure of attending CAJPA for the first time and, let me just say – phenomenal! 

The lectures were varied and some touched directly on workers compensation, but the opportunity to meet so many interesting people and hear about the issues facing their various risk systems was wonderful.

The big shadow over the event was of course, Senate Bill 1127, which would severely penalize certain public sector employers for failure to accept certain claims within 75 days (that’s right, 75, not 90).  Your humble blogger periodically refreshed the leginfo website to see if Governor Newsome had signed or vetoed the ridiculous piece of legislation.

Now lets discuss the Privette doctrine!  As some of my readers will recall, your humble blogger originally hails from the former Soviet Union.  There, “privette” was and still is a common greeting.  Imagine how happy I was to get my start in workers’ compensation defense law and learn that there was an entire doctrine, by order of the Supreme Court, requiring friendly greetings.  Imagine how sad I was to learn that workers’ compensation isn’t nearly as friendly a place as I thought, once I learned what the Privette doctrine really was!

Say Privette, comrade!

Recently, the Court of Appeals elected to publish its decision in McCullar v. SMC Contracting Inc. wherein it applied the Privette doctrine to an industrial injury case.  Summarizing the doctrine, the Court of Appeal wrote “a strong presumption exists that a hirer of an independent contractor delegates to the contractor all responsibility for workplace safety.”    In the McCullar case, plaintiff was an employee of a sub-contractor hired to install automatic sprinklers who slipped using a ladder placed on a floor covered in ice.

So why is there a case at all? This can’t be the first time that someone fell off a ladder at work, can it?  Well, there’s more to the story than that.  Mr. McCullar appeared at the jobsite to do the work of installing fire sprinklers but noticed there was ice all over the floor.  He asked the SMC foreman about this, who told him that to go back to work and walked away.  He asked his own employer’s foreman who told him to “get the job done.”  At that point, he placed the ladder on the ice and the obvious happened. 

He sued SMC on theories of negligence and failing to provide a safe work space, but SCM sought summary judgment.  SMC invoked the Privette doctrine, not as a Soviet greeting but as grounds for escaping liability.  I guess one could say that SCM said “Privette” but meant “Dasvidaniya.” 

The trial court granted the motion and McCullar appealed, but found the relief he sought behind an iron curtain.  The Court of Appeal acknowledged exceptions to the Privette doctrine: the “hirer” remains liable when it retains control over the independent contractor’s work and negligently exercises that control or when a landowner knows of a concealed hazard and fails to adequately warn the independent contractor. 

SMC clearly wasn’t the landowner, and ice on the ground is not concealed, so the second exception wouldn’t apply.  But did SMC exert control to the point of being liable?  The Court of Appeal ruled it didn’t.  Ultimately, the Court of Appeal ruled SMC did not exercise actual control because it did not have the right to, nor did it, exert control over the manner in which the work was done.  Had SMC’s foreman stood over Mr. McCullar’s shoulder and told him how to install the sprinklers, perhaps there would have been a different result.  Merely telling Mr. McCullar to “get back to work” was not sufficient to cause an exception to Privette.

What does that mean for us in the workers’ compensation world?  Well, for one thing, employers will have an even bigger target on their backs, as the difficulty in collecting from contractors up the chain has been refreshed by the Court of Appeal in McCullar.  Further, when these injuries occur due to the negligence of the general contractor, McCullar reaffirms that there is no subrogation potential for the negligence-free employer through applicant’s recovery in a third-party suit.

In short, dear readers, this is a great result for employers, but doesn’t do very much to help workers’ compensation defendants, as it cuts down the available pockets to satisfy applicants, plaintiffs, and, most importantly of all, their attorneys.

Till Wednesday, dear readers!

Good News from SCIF!

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Who is ready for some good news for once?

Your humble blogger has some good news to share, but also some news that isn’t so great.

First the bad news – plans were in the works to completely eliminate the paid subscription for the blog and make it free for everyone.  But, sadly, despite attending CAJPA with the best of intentions,  your humble blogger’s gambit of betting all his money on black at the roulette wheel did not pay off.  Sadly, my beloved readers will have to continue subsidizing my grandiose lifestyle with their monthly payments.

Now for the good news!

SCIF is reporting that it’s program to reduce opioid prescriptions is a resounding success: 82% reduction since 2014!  The plan appears to focus on educating doctors and workers, reducing the initial prescriptions for opioids to a few days at a time, and peer reviewing prescriptions.

Despite all outward appearances, and the oath taken before the State Bar of California, your humble blogger is not only a lawyer but also a human being who is thoroughly pleased that concerted efforts have reduced the suffering – the REAL suffering – of injured workers.  Avoiding addiction and returning to a productive life as victory conditions.

But, for those of us who have upgraded their hearts to abaci and who are primarily focused on advancing towards having a swimming pool of gold coins not unlike Scrooge McDuck, there’s good news for you too! 

Lower opioid abuse means lower costs of medical treatment, shorter periods of TD, fewer compensable psyche, depression, and suicide claims, and, of course, more successful returns to productive labor.  As the kids used to say: win-freakin-win!

We don’t often get good news in this industry.  Your humble blogger very rarely does as the files to hit his desk aren’t the ones where everything is going great but the ones that need mitigation, or fraud is suspected, or the worst-case-scenario seems likely and some humble-blogger-magic might just help improve the outlook.  Naturally, my outlook is going to be on the gloomier side.

Opioid abuse is a plague on this country and our workers comp system, and your humble blogger commends SCIF for its efforts to alleviate the symptoms.

AB 257 Signed Into Law

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I don’t know who your favorite Addams Family member is, but I’m fairly certain, dear readers, that it’s Wednesday… at least today.

Greetings from beautiful Lake Tahoe dear readers!  The air is thick with the smell of cigarettes, the floor is littered with eternal optimists nervously trying to “make back what [they] lost so they can at least break even,” and your humble blogger is here, jumping from one side of the border to the other madly chanting “Now I’m in California, now I’m in Nevada, now I’m in California again.”  This magical place never gets old!

But since you’ve made the commitment to visit the blog or open your e-mail, I owe you some news which I am not exactly thrilled to deliver.   Governor Newsome, in an effort to make a meal less affordable for Californians, has signed the disastrous AB 257 into law.

This will allow the state of California, through a council, to increase wages for fast food restaurants which are part of a “fast food chain” consisting of “100 or more establishments nationally that share a common brand or that are characterized by standardized options for décor, marketing, packaging, products, and services” up to $22 per hour.  Just for reference, the general minimum wage in California is set to reach $15.50 per hour on January 1, 2023.

Aside from making fast food either ridiculously expensive or unprofitable to the point that it would no longer be available, especially when being provided by smaller franchise groups, it’s also going to drive up costs on workers’ comp TD and PD benefits.

Imagine if this council raises a fast food employee’s wages up to $22 per hour from $15 per hour.  Aside from the fact that the employer is being squeezed without any respect for its own rights, a full-time employee working at $15 per hour has an average weekly wage of $600, but an employee making $22 per hour for those hours has an AWW of $880 per hour.  The $280 difference per week yields an additional $186.67 per week in TD benefits.

Adjusters should keep this in mind as applicants out on TD can very well be awarded increases based on a raise in base-wage by operation of AB 257.   

Likewise, employers and supervisors should keep a regular and open line of communication with their claims adjusters to advise them when a particular location is struck by this council, so that the defense can avoid penalties and interest and, of course, audits by California.

Until next time, dear readers!

About those no-submit MSAs…

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Happy Monday, dear readers!

Your humble blogger is returned alive and mostly well from the WCRC in Dana Point!  The conference was wonderful and good times were had.  After so many years in workers’ compensation it’s nice to have such a positive and welcoming community and a lot of fun to see familiar faces again and again.

There were many interesting sessions (including your humble blogger’s of course) and even a know-it-all like yours truly came away feeling that I learned quiet a bit.  Side note, dear readers, that if you missed the Special Mission Impossible presentation at WCRC, feel free to join our webinar this month as we’ll be presenting it to the internet connected public.

While discussing the effects of not submitting Medicare Set-Asides for CMS approval, the discussion turned to a certain panel decision issued last year, Harrison v. Canyon Springs Pools and Spas, Inc.  In that case, the WCAB denied defendant’s petition for reconsideration where applicant successfully had a C&R rescinded!  Isn’t that a dreadful feeling – because even when your C&R is approved and you’re “done”, you’re still not done!

Applicant, while represented, went to an AME who ultimately found no impairment and thought applicant was exaggerating his symptoms based on observing him through a window.  Applicant, at some point, entered into a C&R with defendant, and ultimately dismissed his attorney. 

The parties obtained a “zero dollar” MSA and did not submit it to CMS.  However, applicant was charged with approximately $900 by CMS and required to pay that money to CMS, at which point he sought to set aside his C&R.  The trial judge did so, reasoning that there was “mutual mistake” on the point that CMS would accept a zero dollar MSA, which it apparently did not.

The WCJ also ruled that the parties were both mistaken in concluding that the AME found no industrial injury – he did, just no impairment and some harsh criticism of applicant for alleged malingering. 

The WCJ ordered the C&R set aside and rescinded the Order Approving Compromise and Release and suggested the parties obtain substantial medical evidence in support of an amended C&R.

So, dear readers, what does that mean for us?  Earlier, your humble blogger wrote about another case where the WCAB not only allowed applicant to assume the risk for an MSA which CMS had rejected as being $500,000 light, but also allowed him to self-administer his MSA over the objections of defendant.  In this case, however, the WCAB determined that it must be mutual mistake if the parties agree to a $0 MSA without seeking CMS approval.

Since CMS’s enforcement mechanism are almost entirely based on refusing to provide benefits to the injured worker, isn’t the assumption that applicant is always assuming the risk?

Perhaps it makes sense to have C&Rs clearly reflect that there is no mistake – applicant is knowingly assuming the risk that the $0 MSA might not be recognized by CMS.  But, as the WCJ pointed out in the Harrison matter, “[i]t could not possibly have been the parties’ intent to subject applicant to unlimited bills from Medicare, potentially up to the entire amount of the settlement.  If the undersigned had understood that to be the intent of the parties, the settlement would never have been approved.”

The WCAB is consistently inconsistent in this regard because there are rarely monolithic rulings binding on all the WCJs and on ever WCAB panel of judges – en banc opinions occurs but certainly with not even close to the frequency of panel decisions. 

What do you think dear readers?

Remembering 9/11 in 2022

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Your humble blogger trusts that you will forgive him for, once again, invading your inbox in this unscheduled way, dear readers, but the solemnity of the day requires it.

On September 11, 2001, as your humble blogger was getting ready for another ordinary day as a high school senior in San Francisco, as countless other Americans were going about their ordinary days, carefully planning out their 1, 5, and 10-year plans, vicious terrorists intent on murdering Americans boarded planes and prepared to execute a horrific assault that would bring to mind images of Pearl Harbor.

Thousands of our countrymen were murdered in the World Trade Center towers, the airplanes used to deliver the blows, and the Pentagon.  Countless more would die in the years following, from injuries, physical and psychological, chemical exposures, and clean-up efforts.

The only silver lining that came from these evil acts was the fact that Americans, once again, shined brightly as brave and valorous.  Heroic police and firefighters, rescue personnel and volunteers, all worked tirelessly to try to save survivors in the rubble and evacuate the injured.  Blood banks had never seen so many donors come forth ready to give whatever was needed to help save lives.

And, of course, the courage of the passengers on UA 93, who rammed the cockpit and prevented even more deaths by denying the terrorists their intended target, will likewise never be forgotten.

We all said on that day in 2001 that we will never forget, and we never have.

Please indulge your humble blogger by granting a small favor: take some few minutes today to reflect on that evil, evil time more than 20 years ago.  Remember where you were, remember how you felt, and remember to tell those that may not have been around on that day what it was like.

Another Shameless Plug: WCRC?

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Alrighty dear readers – any chance you’re attending The WCRC today? Your humble blogger is presenting at 2pm in the Aegean Room and would love for you to stop by. And, if you can’t make that, please say hello if you should see me (dashing defense attorney with an awesome bow tie and a socially awkward demeanor…)

Here’s hoping to see you in Dana Point!

Happy Labor Day 2022!

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Hey there readers! Happy Labor Day to you from the humblest of the humble bloggers! Hopefully you are enjoying a well deserved respite from your labors today.

Of course, if you’re wondering, Labor Code section 6700(a)(9) recognizes today as a holiday. In other words, if today is the last day to take any action, the deadline is extended another day. So… there’s that!

Cheers!

WCAB Allows Applicant to Self-Administer Over Def. Objections

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Happy Monday, dear readers!  Your humble blogger welcomes you to the start of a new week. 

Imagine you’re in a particular situation – applicant wants to C&R a claim, and neither you nor the applicant can know with certainty what the cost of lifetime medical care will be.  Pretty common, right?  When we C&R a case, both parties are knowingly taking a gamble that the injured worker will be able to cover those costs with the proceeds of the C&R.  The WCAB probably processes several hundred C&Rs every workday and no one bats an eye.

If the WCAB is willing to allow applicant to assume the risk that the medical portion of the C&R is not adequate… what other risks will the WCAB allow applicant to take on?

For example, let’s take a scenario where the parties agree to a value for a C&R, but CMS finds the proposed MSA inadequate by some significant figure – like $500,000.  Well, defendant might take the position that a C&R is not worth it and propose stipulations instead.  If applicant is highly motivated to have cash on hand, can applicant stipulate that he will hold defendant harmless as to any action by CMS regarding the C&R?

In other words, can applicant tell the WCAB “look, I know that this C&R might end up costing me Medicare benefits in the future, but I’m willing to take the risk”?

Well, that’s what happened in the case of Villalpando vi Doherty Brothers.  Applicant resolved his claim for a 2002 injury in 2011, with language in the C&R that “released defendants from liability to Medicare related to the named injuries, and for any failure to create and correctly administer the MSA and any failure to obtain Medicare’s approval of any allocation or set aside arrangement.”

But your humble blogger isn’t polluting your in-box with old news from 11 years ago.  The case came up recently because applicant decided he wanted to change administrators from the agreed-upon vendor in the C&R to himself.  Yes, applicant declared that he wanted to move from California to Mexico and that administration in Mexico would be particularly burdensome.

The WCAB made basic inquiries and ultimately ruled that since there is defendant would not be harmed by the change of administrator, since no further liability or benefits could be due, it was not inappropriate to change administrators to make the MSA fund self-administered.

Now mind you, dear readers, it’s not that applicant MOVED to Mexico.  Applicant announced his intent to move to Mexico and that appeared sufficient. 

The reason there was a WCAB decision at all was because defendant contested rendering the MSA self-administered.

So, zooming back to our every-day C&Rs, can we apply this approach to all of our C&R settlements?  If applicant in the Villalpando case was able to absolve defendant of any liability with respect to CMS, and he can also choose to take on the risks of mismanaging his future medical funds, why can’t every applicant?

Take, for example, the cost of getting an MSA and the cost of professional administration.  What if defendant’s were to tell applicants that so long as applicant agrees to self-administer and release defendant from any CMS-related liability, the parties could split that money.

The result in the Villalpando matter certainly raises those questions, which, of course, raise an even more important one – to quote Clint Eastwood: “Do you feel lucky?”

Well, do you, dear readers?  If you’ve had any luck bypassing CMS by inviting applicant to agree to assume the risk, please let your humble blogger know.  The Villalpando case certainly seems to set a precedent and provide authority for the proposition that such arrangements should be approved by the WCAB so long as the parties are in agreement.