WCDefenseCA

One of the stories making the news around the internet is that Walmart has elected to opt out of the workers’ compensation system in Texas.  Now, now, before you get all excited about escaping a system that leaves every possible participant dissatisfied (except the occasional lien claimant), California does not allow its employers to opt out of workers’ compensation.  Texas and Oklahoma do.

Why is this relevant to California?  More and more businesses in California are finding the Golden State to be a bit too expensive for their business-blood.  When big-name employers like Walmart (and Target) decide the workers’ compensation system is not worth it, it makes waves in the news world and posits the question to California businesses – is California worth it?

As a defense lawyer, I am very well aware that my entire practice depends on employers staying in California and, ideally, growing in California.  Insurance companies understand this as well – the client, the customer, the almost-business-partner, is the array ranging from the solo practitioner who wants to get insurance for himself to the Walmarts of the world (but not Texas) buying insurance for their thousands of employees.

Applicants’ attorneys and labor unions don’t seem to understand this – even the settlers of Easter Island eventually realized that you can only cut down so many trees before there aren’t any left.

This blog has made the point before and will, with all decorum, make the point again:  unless something is done to cut the costs of the workers’ compensation system, Texas employers will continue to opt out, and California businesses will become Texas businesses.

Maybe this whole workers’ compensation thing isn’t worth it.  After all, the purpose of the workers’ compensation system was a trade-off: employers get caps on their liability, employees get quicker access to benefits, and the variable of fault is no longer part of the equation.  So, slip on a banana peel at the supermarket where you work, and you get benefits, unless you were shopping on your day off, then you’re just a klutz.

But what if you’re an employer and you’re fed up with this ridiculous system!  You’re tired of applicant’s attorneys demonizing you to your employees; you’re tired of paying insurance companies or defense lawyers or being audited again and again by the state just for self-insuring?  What if you could just opt out?

What if an employer could opt out of the workers’ compensation system?

That’s not the thinking in California, but it is in Oklahoma.  Having passed the House and the Senate of the state where hard work still conquers all, the law now awaits calibration between the two houses of the state Legislature before going to the Governor’s desk.  Texas already has an opt-out process for workers’ compensation, but in typical Texas fashion, was the only state to do so (until now).

One of the stated purposes of House Bill 2155 is to “[a]ssist the state in attracting and retaining business, thereby contributing to the overall economic development and well-being of its citizens.”

But where would Oklahoma, as a state, attract business from … except other states?  Perhaps other states like … California?

Sacramento – the rest of the Union is out to poach California businesses.  Please don’t make it easy for them to do so by driving every employer off.

One of the wonders of the United States if Federalism: 50 concurrent laboratory experiments all running different methods to see what works, what doesn’t, and why.  In California, for example, we have workers and employers, physicians and lawyers, services providers, insurers, self-insurers, re-insurers, and self-insured groups, all sewn together into a giant sack called California’s workers’ compensation system.  And, in fact, there is constantly growing frustration as to how the system works, or rather why it doesn’t.

Injured workers often feel they’re not getting enough.  Un-injured workers sometimes feel their allegedly injured counterparts are getting too much, and shrinking their paychecks in the process.  The employers would rather have independent contractors, and often try to contract for independent contractor status, only to have the once eager-to-agree worker now seek to have this agreement nullified by the Workers’ Compensation Appeals Board.  Employers often express frustration with bearing not only the cost of the benefits, but also of administering the benefits.

What if we were to restore the right of individuals to contract once more?  That’s what Texas has done with its “opt-out” law, and, as of May of 2013, Oklahoma adopted its own “opt-out” law for workers’ compensation as well.

It looks like Tennessee may be getting the ball rolling in that direction too.  Mark Green, state senator from the volunteer state, has announced that one of his proposals in the 2015 legislative session will be to allow Tennessee employers to “opt out” of the state’s workers’ compensation system.

Your humble blogger has previously proposed consideration of allowing employees to purchase their own workers’ compensation insurance, but an opt-out would not be a bad idea for Californians to consider at this point.  Certainly, with a population of almost 40 million, the suggestion that there should be flexibility in approach to an area that covers industries spanning from ancient farming methods to futuristic high-tech and everything in between is not unfounded.

In any case, Tennessee is apparently going to be exploring new options, and California employers may soon find yet another destination to explore, much like Tesla explored Nevada, Toyota explored Texas, and a few other examples that are just a google search away.  Perhaps it’s time for California to figure out a way to be more flexible and dynamic, and to free up the exchanges between employees and employers.

Now, that being said, your humble blogger is going to get back to work finding a relocation

My beloved readers may recall that Oklahoma mounted an unsuccessful attempt to introduce an “opt-out” provision to its currently compulsory workers’ compensation program.

Well, folks in Oklahoma are not to be discouraged by an unsuccessful attempt!

It looks like Oklahomans… Oklhamonites… Oklahomanians… the fine people of Oklahoma are going to try again, this time including an option to opt out as part of a larger workers’ compensation reform bill.

Oklahoma Senate Bill 1062 will seek to let employers opt out of the workers’ compensation system (see sections 120 et. seq.

Now, my dear readers, before you start glaring at your monitor, cursing your humble blogger or his humble blog, and demanding to know why California readers should waste their time learning about the crazy doings of Okla… Okla… well the people of Oklahoma, I submit to you the following:

As Texas is currently the only opt-out state in the Union, so if Oklahoma gets this done, we might be looking at somewhat of a trend… and a trend is your friend!

Opting out means that employers can set up a benefit plan of their own, although how it will all play out is not certain yet – after all, the bill could meet defeat once again, and anyone who stands to lose money from an efficient workers’ compensation system is not going to go along quietly.

But, California can take a lesson or two from our good friends over in Texas and Oklahoma – perhaps some friendly competition in the form of an opt-out provision can help force workers’ comp costs down.

WCDefenseCA, from its post of influence in California, wishes Oklahoma luck in passing its reform, and hopes that the wise elected leaders of the Sooner State “O.K.” the opt-out clause.  (Get it? OK?).

Well, my beloved readers, we made it to another Wednesday.  I know, I know, you woke up this morning wondering if your humble blogger was going to hit you with a reference to Wednesday Addams, or perhaps a camel for hump day?  But such trivialities are not appropriate for such a serious, and august blog, be it ever so humble.

So, instead I will just make a casual reference to Woden and leave it at that. 

But you’re clearly not reading this blog for an etymology lesson.  You’re reading it for updates on California workers’ compensation world (either that or you noticed that I have disabled and removed the “unsubscribe” button so now you’re stuck with me).  So, let’s get to it!

Today’s post is on the split panel decision Hernandez v. Ventura Post Acute.  The WCJ relied on the PQME’s opinion to award 45% PD after applicant sustained a fall.  However, applicant sought reconsideration, demanding the WCAB instead find her permanently and totally disabled based on an Ogilvie rebuttal of the PDRS.

Applicant offered evidence from her vocational rehabilitation expert that she was not amenable to rehabilitation and totally precluded from the workforce.  The WCAB majority granted applicant’s petition and substituted a new award for permanent total disability.

The majority was persuaded by the analysis offered by applicant’s vocational rehabilitation expert as to the work restrictions.  The way those restrictions were interpreted, applicant argued, there was no feasible job available – even a sedentary one.  For example, the VR expert interpreted the QME’s prohibition on bending and stooping as precluding any job, even sedentary, that would require the occasional bending to reach a low filing cabinet or pick up a dropped item.

Even though the QME assigned apportionment, 67% non-industrial, the WCJ rejected that opinion at trial, so the VR expert’s opinion was not challenged on apportionment grounds either.

The dissenting opinion pointed out that a preclusion from bending, stooping, or twisting referred to precluding any job that required these activities, as opposed to the occasional and incidental movements along those lines.

Just imagine how much whiplash this case must have caused?  To go from a PQME report that rated 15% PD ($14,645.00) after apportionment on its face to having the apportionment rejected at trial and facing an award for 45% PD ($68,440.00) to having the WCAB issue a permanent total disability award…

Now your humble blogger has no inside knowledge about this case, and it’s entirely possible that the following was explored, but generally speaking, there are a few things defendants can consider.  For starters, if the QME is offering apportionment of permanent disability, and applicant is seeking VR evidence, one can ask the QME if the specific work restrictions, rather than just the permanent disability, are caused in part by non-industrial or prior-industrial causes.

Furthermore, if defendants feel that the restrictions offered by the QME are being exaggerated or misinterpreted by the VR experts, a supplemental report can be sought from the QME to comment on the VR report and ask if the interpretations of the QME’s restrictions are correct or if they need to be rephrased. 

Neither of these options were discussed in the WCAB’s majority opinion, nor in the dissent, so perhaps they were attempted and came to naught.  But, in any case, this opinion should make us defendants mindful of how quickly a case can decay from a 15% PD rating to a permanent and total disability award.

What are your thoughts, dear readers?

Happy Monday dear readers!

Your humble blogger is still around – never fear!

Now, please allow me to ask you a question: what issue in California’s workers’ compensation system keeps adjusters, attorneys, and risk managers up at night?  What is the number one biggest concern shared by the defense community?

Well, if you guessed 5710 fees, I would be really surprised.  They don’t even rank in the top 10 probably.  But, since the humble blogger is nothing if not a merchant of disappointment, let’s do a blog post on 5710 fees anyway!

For those unfamiliar with Labor Code section 5710 governs depositions in the workers’ compensation system (with due deference to the Code of Civil Procedure).  But, if you wake up any applicant attorney in the middle of the night with a violent shake his or her first response will be “protect 5710(b)!”  Why? Because Labor Code section 5710(b)(4) provides for a “reasonable” allowance for attorney fees for representing the deponent in a deposition.

Just as a fun aside, this section, last amended in 2016, reflects “[t]he administrative director shall, on or before July 1, 2018, determine the range of reasonable fees to be paid.”  There does not appear to be a fee schedule set by the administrative director as yet.  Instead, common practice is for the Judges in each WCAB venue to adopt practices of reasonable fees.

Mind you, dear readers, the typical rates for defense attorneys ranges from $170 to $210 per hour, depending on the terms and circumstances.  However, the range for 5710 fees for applicant attorneys as set by the various WCAB venues typically range from $250 to $450 per hour depending on experience of the applicant attorney.

It’s odd really – you could have a defense attorney billing at $195 per hour with 20 years of experience, but if that attorney represents a family member as an applicant attorney, he would be awarded $450 per hour.  The market and the WCAB are clearly not in sync.

Anywho, I want to bring to your attention an interesting case your humble blogger recently had occasion to review – Cowens v. ABC Unified School District, a 2022 panel decision.  Therein, Applicant was deposed by defense counsel, and at that deposition was represented by an applicant attorney with 14 years of experience and who was not a certified specialist.  The firm submitted a bill for $450 per hour, plus $50 for a half hour of “staff time.” 

Defendant objected to the rate for the attorney, agreeing to pay $400 per hour, and objected to the “staff time” out of hand.

There are some other issues in the panel decision as well, but the key one your humble blogger would like to address is that the WCJ found a reasonable rate for the applicant attorney involved was $400 per hour.  If the attorney involved had 14 years of experience at the time of the deposition, and the WCJ awarded $400 per hour… doesn’t this panel decision set at least some authority for a ceiling of $400 per hour for 5710 fees?

We see this dispute come up often and we have the glaring difference between what the “free market” pays to defense attorneys and the WCAB awards to applicant attorneys.  The difference does not turn on years of experience or certified specialist status.  But, without formal guidance from the administrative director as contemplated by Labor Code section 5710, does this panel opinion signal that the WCAB finds up to $400 per hour reasonable?

If so, shouldn’t the Cowens panel decision, which affirmed the WCJ’s opinion and rate, be used as the basis for an objection to any 5710 fee demand in excess of $400 per hour?

What are your experiences, dear readers?  Let your humble blogger know!

Happy Friday, dear readers!

Well, we made it yet another week and the weekend is just around the corner.  So, I figured I’d take a “shot” at bringing you a relatively unorthodox blog post today, and it’s about guns!

Naturally, since June 24, 2022, when the United States Supreme Court issued its ruling overturning Roe v. Wade, almost all attention has been focused on that decision and understandably so.  Few issues in American political discourse trigger such strong emotions and such polarizing disagreements.  Further, the issue is rarely one that is hypothetical but has real world applications.  But for this blog post, I direct you to another decision: New York State Rifle & Pistol Association Inc. v. Bruen wherein the Supreme Court struck down New York’s law regarding concealed carry permits.  A law nearly identical to that of California.

Although the feelings regarding this decision are many and fractured, one area of near unanimous agreement is about the result – this ruling will increase the frequency of concealed carry permits issued to private citizens.  The California Attorney General issued OAG-2022-02 on June 24, 2022, directing that “[p]ermitting agencies may no longer require a demonstration of ‘good cause’ in order to obtain a concealed carry permit.”

As a result, are we going to see more firearms in the workplace?  May employers already have prohibition on bringing firearms to work, but some don’t or have no mechanism of enforcement given that the very nature of the issue is that it is concealed.

A reminder, dear readers, that Labor Code section 3208.3 has a lower standard for AOE/COE for psyche claims when the applicant sustains “direct exposure to a significant violent act” (from 51% to 35-40%).  In all likelihood, any violent act involving a gun is going to be considered a “significant violent act.”

Further, Labor Code section 4660.1 allows for increased permanent disability for a compensable consequence psyche claim where there is “exposure to a significant violent act within the meaning of Section 3208.3.”

In light of the high probability that a growing number of Californians will be carrying firearms on their person, employers may want to determine if the circumstances merit adoption of policy regarding firearms at work.  Being the cynic and devil’s advocate that he is, dear readers, your humble blogger can’t help but wonder if failure to proactively address the potential for firearms at work might lead to Serious and Willful Misconduct claims as well.

Now, all that being said, there are some advantages to having sane, trained, and law-abiding employees armed at work.  For example, in 2015 Syed Rizwan Farook and Tashfeen Malik allegedly carried out the San Bernardino massacre, murdering 14 and injuring some 22 co-workers in a horrific act of terrorism.  Not one of the victims was armed and all were rendered defenseless. Similar mass shootings in California have typically had a defenseless pool of victims.  But each employer will have to decide for itself, using its best knowledge of its employees and the dangers of the world, where the greater risk lies: in disgruntled employees and accidental shootings, or in intentional violence and no opportunity for mitigation. 

It is truly a sad thing that this is the calculus we are faced with, but face it with must.

So, on that cheerful note, your humble blogger wishes you a good weekend and hopes to see you back here early Monday morning!

And it’s Wednesday again dear readers!  So glad you could come back!

Here’s a hypothetical for you, dear readers.  You’re ready to settle your case by way of C&R, and you’ve ever reached an agreeable figure.  The applicant is saying “give me the money, and I never want to see you again.”  The defendant is saying “take this money, and I never want to see you again.”  At last, after depositions and med-legals and subpoenaed records and 5-hour trials over whether the UR report denying the $20 aspirin was timely, you’re finally ready to part ways forever and ever and ever.

Now here’s the problem.  At the start of the case, applicant looked like the guy on the right, and by the time you are ready for a C&R, he looks like the guy on the left.  So now you need an Medicare Set-Aside.

But both parties are ready to go and want the money now, and you don’t want the hassle of having CMS review and possibly sink the settlement.  So you do what’s called a “non-submit MSA,” where your vendor makes an overly cautious estimate of future medical and you proceed with the C&R without getting CMS’s sign-off. 

Well, the Federal Gubmn’t would like to have a word with you about that.

On January 10, 2022, CMS issued its “Workers’ Compensation Medicare Set-Aside Arrangement Reference Guide (Please shoot me an e-mail if you would like a copy!)  Section 4.3 specifically addresses such an approach with some scary consequences.  In short, if the MSA was not approved by CMS, CMS will require proof that the entire C&R was exhausted prior to providing benefits.

If there is a med-legal report that rates to 16% PD ($16,095) and future medical care is reasonable estimated at $20,000, and the parties end up settling for $60,000 to resolve all issues, including right to reopen, some disputed TD, AOE/COE on a denied body part, etc., then it looks like CMS would not provide benefits until there is proof that all $60,000 was exhausted, not just the $20,000 reasonably earmarked for future medical care.

“Yes,” you might say, “but what does that have to do with the price of tea in China?”  Well, if you were optimistic about getting those non-submit MSAs into your C&R, you might have cause to deflate a bit.  Applicant attorneys, once they hear about this, will be hesitant to recommend such arrangements to their clients lest they be faced with a mal-practice lawsuit or, even worse… a negative review on Yelp!

And even if you can get past a sleepy applicant attorney, all settlements must be approved by a workers’ compensation Judge, who must assess the settlement for adequacy.  In light of the CMS’s approach to non-submit MSAs, the WCJ might be reluctant to find a C&R adequate.

What can the defense community do in these situations to move files along?  Well, besides the obvious of stipping every case or submitting every MSA to CMS (which no one wants to do, of course), it looks like the only other real approach is to have either the defendant or the MSA vendor agree to pay, adjust, litigate, or defend the non-submit MSA in the event CMS declines to provide benefits. 

Another thing we should all be doing is cursing the name of CMS for ruining all of our fun.  A closed file is a happy file, and CMS’s approach is going to ensure that a lot fewer files get closed.  That makes for a lot more unhappy files, no?

Straight on to Friday, dear readers!

Happy Monday dear readers! And happy new year too!

Here we are in 2020 part two 2022 and ready to bravely face all the new fun and adventure that awaits us.

There is just so much to go over that it won’t fit in a blog post, possibly not even ten blog posts, but let’s do our best and see how far we get.

Most urgently, the WCAB announced new regulations effective on January 1, 2022, in terms of procedures to be observed before the WCAB, which can be viewed in full here.

I would suggest everyone, attorney and adjuster alike, review these new rules, but here are the big takeaways, at least according to your humble blogger:

1. Attorneys and hearing representatives must now list their e-mail address in any notice of representation, and service can now be effected by e-mail, even without prior consent, but a proof of service must reflect the e-mail used for service;
2. The WCAB has authority to make any hearing an electronic hearing, including trials and expedited hearings, and Notice of Hearing must reflect whether the hearing will be electronic or in-person.  If a party objects to a trial or expedited hearing being conducted electronically, it must make an objection and the presiding Judge should make a ruling on the issue.  A party may request to appear electronically for an in-person hearing by filing a petition to that effect and citing good cause;
3. Parties must meet and confer BEFORE a mandatory settlement conference occurs, and should have a completed Pre-Trial Conference Statement ready to be filed before the end of the hearing.  Further, each party must have a person available with settlement authority at every hearing and defendants must have a Benefits Printout available for inspection at the Mandatory Settlement Conference.

So, what does your humble blogger recommend?

When the claims department gets a notice of hearing, THAT is the time to provide your attorney with a current benefits printout and to make sure that there is settlement authority, or at least schedule a time to talk to your attorney to provide settlement authority.

There also needs to be someone prepared to address settlement at every hearing.  This means that adjusters must adopt similar procedures to their attorneys – if you can’t be available on the day of the hearing by phone, someone else needs to be.

In determining whether to ask a hearing be held in person or electronically, one of the issues to consider is whether credibility is at issue, and what is the best way to allow the trial judge to assess credibility.  While electronic trial allows the Judge to see the witnesses without a mask, variables such as camera quality and internet connection might make that determination less effective as compared to in-person testimony with a mask on.

Buckle up, dear readers, the fun is just beginning!

Welcome back dear readers!  Your humble blogger wrote on Monday that the DIR was extending emergency regulations regarding tele-medicine evaluations and reporting for med-legal exams into October.  Well, what better follow-up blog post than one interpreting and applying those regulations?

A few months ago, the WCAB issued a panel decision in the matter of Pettway v. Trillium Staffing Solutions, wherein defendant sought to compel an in-person examination rather than one over video and phone.  But first, a bit of background…

Emergency regulations were promulgated to allowed for safer examinations at a time of COVID19 and a rapidly evolving situation (and possibly virus) constantly changing the rules for safety.  Your humble blogger is old enough to remember when were told COVID19 can’t spread from person to person, then masks didn’t do anything, then masks helped but not all masks, then it would only be 15 days to stop the spread… and on it went as new information became available.

Well, among those relevant regulations were the various subsections of Reg. 46.2, which provided for having a QME or AME “interview the injured worker either by telephone or by any form of video conferencing” with in-person exams to follow once the stay-at-home orders are lifted. 

In some situations this works great – a psychiatric evaluation really doesn’t need to measure range of motion, so video exams should be fine.  In other cases, such as those that call for the measurement of grip loss, or to observe a potential malingerer as to his or her gait, video isn’t the best.

Well, in Pettway, applicant sustained orthopedic injuries and failed to attend an in-person exam with the PQME.  Defendant sought to compel his attendance at the next exam, but the Workers’ Compensation Judge declined to compel physical attendance until the lifting of the Shelter in Place Order.

Defendant appealed with some interesting arguments.  Initially, it argued that it was entitled to medical-legal evaluations pursuant to sections 4050 and 4053 of the Labor Code, and, secondly, because medical facilities are “essential businesses as contemplated by the Shelter-in-Place Order.

Well, your humble blogger opined previously that Governor Newsom’s orders were in conflict with the constitution when it came to presumptions of compensability, particularly because the California Legislature has plenary power over all things workers’ comp and the executive branch has no business meddling with the workings of our beloved swamp.

Presumably, to the extent that the WCAB is promulgating regulations in conflict with the Labor Code based on presumed authority granted by the executive branch’s executive orders, the same rule would apply: the Labor Code as to in-person evaluations should control.

But, as happens often enough in times of panic and mass hysteria, these arguments go by the wayside.  Your humble blogger is also old enough to remember when post 9/11 security and investigatory efforts rebuffed challenges based on due process, civil liberties, and privacy rights with the retort “the Constitution is not a suicide pact.”  So, too, in an effort to respond to the dangers of COVID19, no one wants to risk seeming to ignore the danger posed by the pandemic.

Your humble bloggers ramblings and soap-box preaching aside, what did the Pettway panel do with this case?  They kicked it down to the trial level again, with instructions to explore a way to make everybody happy: “Although an in-person evaluation with the QME may not be possible at this time due to state and local public health orders, we will return this matter to the trial level to permit the parties to address whether the medical-legal evaluation with the panel QME … may proceed in some fashion in accordance with the DWC’s emergency regulations.”

So, let’s look at the situation, dear readers: the QME seems willing to do an in-person examination and is not requiring a phone or video med-legal exam.  Defendant wants this and is willing to pay mileage and transportation costs (presumably).  The only hold-up is applicant.  Is there a basis in the emergency regulations for applicant to refuse to submit to an examination?

Well, for starters, section 46.2(a) provides “[d]uring the period that this emergency regulation is in effect a QME, AME, or other medical-legal evaluation may be performed as follows:” (emphasis added).  That sounds like permissive language, not mandatory.  Further, all the subsections to 46.2(a) appear to give the authority to set remote med-legal exams to the QME and AME, and NOT the injured worker.

Accordingly, unless the QME is refusing to do an in-person exam, compelling attendance of an in-person exam appears to be in accordance with the emergency regulations.

The practical application for this for defendants is particularly harsh.  If the injured worker is receiving temporary disability benefits, often enough, the QME might be the only way to cut off TD benefits.  So long as the applicant is steered to a physician who seems him or herself as a “patient advocate” rather than an objective evaluator of medical conditions, the TTD status can be expected for the long haul.

Please recall, dear readers, that at the time these regulations first became effective, May 14, 2020, there was no vaccine for COVID19.  Then first vaccine was authorized by the Trump Administration with an Emergency Use Authorization in December of 2020.  Although recently extended, these current emergency regulations do not account for the fact that perhaps the PQME and the injured worker are both vaccinated, which the CDC advises is now safe for in-person visits.

As we get closer to the emergency regulations being one year old, especially in light of all the changes in scientific conclusions and available remedies that were not available in May of 2020, what relevance the regulations will have and how the WCAB will apply them. 

Carry on, dear readers!