The Workers' Compensation Daily News for Mar 08, 2014
Cal Chamber Announces Job Killer Bills for 2014
Fri, 7 Mar 2014 13:20:11 - Pacific Time
Each year the California Chamber of Commerce releases a list of "job killer" bills to identify legislation that will decimate economic and job growth in California. The CalChamber will track the bills throughout the rest of the legislative session and work to educate legislators about the serious consequences these bills will have on the state.
A number of California Chamber of Commerce-opposed "job killer" bills first identified in 2013 on labor law topics appear to be dead for this year after missing legislative deadlines or being amended.
SB 626 (Beall; D-San Jose) would have resulted in dramatic workers’ compensation cost increases for employers. The bill was pulled from the January 15 hearing agenda for the Senate Labor and Industrial Relations Committee at the author’s request, therefore missing the January 17 legislative deadline for a 2013 bill to pass from policy committee to fiscal committee in the house in which it was introduced. SB 626 would have resulted in employers paying nearly $1 billion in benefit increases to injured workers without an expectation that the increases will be fully offset by system savings.The bill would have distorted the entire balance of the 2012 workers’ compensation reform deal, SB 863 (De León; D-Los Angeles; Chapter 363), that provides injured workers with needed benefit increases, but offsets these increased costs by closing certain loopholes and making California’s workers’ compensation system operate more efficiently with fewer disputes and litigation.
AB 1164 (Lowenthal; D-Long Beach) would have created a dangerous and unfair precedent in the wage-and-hour arena by allowing an employee who claims a wage violation to assert a lien on an employer’s real or personal property, or even a third party’s real or personal property, before any trial or administrative hearing has been held to determine if any wages are actually owed by the employer. AB 1164 was placed on the Assembly Inactive File on January 30, thereby missing the January 31 deadline to pass the house in which it was introduced in 2013.
SB 761 (DeSaulnier; D-Concord) Expansion of Paid Family Leave Program - Would have transformed the paid family leave program from a wage replacement program into a new protected leave of absence that will burden small and large businesses by allowing an employee to file litigation for any alleged retaliation or discrimination as a result of their intent, request, or use of the paid family leave program. The bill has been amended to deal with a different subject.
And now the Chamber has started the "job killer" bills list for 2014. Thus far there is nothing on the horizon of concern for California employers. The stagnation or removal of the holdover legislation from last year has cleared the deck for this years fight. Read More...
Report Says California Losing Film Industry Dominance
Fri, 7 Mar 2014 13:20:03 - Pacific Time
Three days before the Oscars, the Los Angeles film czar and a think tank delivered some damning news to Tinseltown: Hollywood's status as the home of American film and television production is threatened because places like New York are offering better financial incentives to studios. The study of employment and production data released on Thursday by the Milken Institute, an economic think tank and summarized in a story by Reuters, says California has lost tens of thousands of entertainment jobs to New York and other U.S. states in the past decade, and film and television productions with them. While it may be one of the best years for high-quality film in recent memory, with nine strong films nominated for the best picture Oscar, just one of the nine was filmed in California.
Ken Ziffren, a veteran California attorney recently appointed as Hollywood's film czar by the mayor of Los Angeles, said the report showed Hollywood was in a "bad spiral," both in terms of jobs and productions leaving California. Ziffren repeated a call for an expanded California film and tax credit, as did the Milken report - an issue that is politically controversial. Proponents say it is vital to keep middle-class jobs and film production in the state. Opponents say wealthy Hollywood studios don't need another tax break and question whether further financial incentives will produce a net gain in jobs and revenue.
The report by the Milken Institute, headquartered in Santa Monica, California, but with a national and international perspective, said California lost 16,137 film and TV industry jobs between 2004 and 2012, based on U.S. Labor Department statistics. During the same period, the report said, New York state gained 10,675 entertainment jobs. "California is losing film and television productions to New York and other states," the report said. "The data shows that other states are being more effective in using their incentives to bring in new productions and create jobs." The report said the loss of jobs was particularly troublesome because it represented the exodus of middle-class wage earners with high pay, an average of $98,500 per person, and businesses that thrive on the movie industry such as caterers.
California has a tax-credit program, but essentially only productions with budgets of $75 million or less qualify for the rebate of 20 percent to 25 percent. Proponents of legislation under consideration in California want the incentives to cover big-budget movies, as well as television pilots and dramas.
New York offers tax credits of between 30 percent and 35 percent and allocates more money - $420 million annually - out of its budget to give incentives to film and television production there, roughly four times what is awarded in California. Other states such as Louisiana, Texas and New Mexico have also drawn jobs and production from California in recent years through tax credits.
The Milken report says that production in California hit its peak in 2004, when 128 films were made there, while 50 were filmed in New York. In 2012, other states offering incentives were involved in 142 films, compared with 104 in California. Of the nine movies nominated for best picture Oscar on Sunday, only "Her," the science fiction romantic drama starring Joaquin Phoenix and Scarlett Johansson, was made in California. It had a relatively low budget of $25 million.
The key question for California is how much the state is willing to spend to preserve high-paying jobs and to give Californians who are still officially listed as working in the industry and residing in the state a chance to remain local. The economic impact of the incentives has been examined by sources such as UCLA and the Los Angeles Economic Development Corporation and questioned in turn by the California Legislative Analyst’s Office. Read More...
Tenet Healthcare Investigated by FBI for Kickbacks
Thu, 6 Mar 2014 12:19:07 - Pacific Time
A federal investigation into kickbacks allegedly paid by Tenet Healthcare Corp. marks the latest fraud inquiry involving the Dallas-based hospital giant over the last decade. Although not directly related to the current investigation, the company has a number of hospitals in California including many in Southern California. The report in the Dallas News comes as Tenet has tried to reshape its image and operations since 2006, when it reached a $900 million settlement, one of the largest ever, with the U.S. Justice Department to resolve fraud accusations.
The new investigation alleges that four Tenet hospitals in Georgia and South Carolina made improper payments in return for patient referrals. Both investigations also were triggered by whistle-blower lawsuits filed under the U.S. False Claims Act, leading federal authorities to intervene as plaintiffs. The FBI said in its release that the hospitals paid kickbacks to obstetric clinics serving "undocumented Hispanic women." The money was in exchange for providing labor and delivery services to the patients. The hospitals then falsely billed Medicaid for reimbursements tied to the procedures, the statement said. Anti-kickback laws are designed to prevent financial incentives from interfering with caregivers’ medical judgment.
Tenet officials said in their own statement that transactions with the clinics were proper. They would "vigorously defend against the allegations," the statement said. The agreements with the clinics provided "substantial benefits to women in under served Hispanic communities," Tenet said. "By ensuring that pregnant women received prenatal care and appropriate treatment during birth, these programs increased the likelihood of a safe birth and a healthy baby while reducing the overall cost to state Medicaid programs."
Federal authorities, however, used sharp language to stress the seriousness of the allegations. "Schemes such as this one corrupt the health care system and take advantage of vulnerable patients," Stuart F. Delery, assistant attorney general for the Justice Department’s civil division, said in the news release. "My office has made the investigation of health care fraud a priority," said Michael J. Moore, the U.S. attorney for the Middle District of Georgia. "In a time when too many people were struggling to get health care for themselves and their children, Tenet and these hospitals plundered a system set up for those truly in need."
Tenet operates in 12 states including several hospitals in California such as Los Alamitos Medical Center, Placentia-Linda Hospital, San Ramon Regional Medical Center, Sierra Vista Regional Medical Center in San Luis Obispo, Twin Cities Community Hospital inTempleton and others.Tenet owned Memorial Medical Center of New Orleans in 2005, when 45 bodies were found after the Hurricane Katrina floods. The corporation paid $25 million to settle a suit that accused it of being ill-prepared for the disaster. Tenet denied wrongdoing, saying poor levees and government rescue efforts were to blame. Other Tenet facilities were investigated in the early 2000s on improper billing. Tenet struck its 2006 deal with the government to settle some of the improper billing allegations as well as kickback accusations.
Tenet Healthcare Corporation agreed in August 2013 to pay $54 million to resolve government accusations that doctors at Redding Medical center in Northern California conducted unnecessary heart procedures and operations on hundreds of patients. The settlement was the largest in a case involving what is known as medical necessity fraud, or billing government health programs for tests and treatments that the patient's condition did not require. The settlement preempts any civil and criminal charges by the Justice Department against Tenet, its hospital division and the hospital itself, which did not admit wrongdoing. Nevertheless, in settling, Tenet signaled it would rather pay a record fine than argue in court that there was a medical reason for the patients to undergo the procedures or operations. The scandal and subsequent federal investigation are described in the book Coronary: A True Story of Medicine Gone Awry by author Stephen Klaidman.. Read More...
Travelers Now Biggest National Workers' Compensation Carrier
Thu, 6 Mar 2014 12:19:01 - Pacific Time
Travelers Cos. Inc. was the largest workers compensation insurer in the nation last year, overtaking Liberty Mutual Holding Co. Inc. for the top spot, according to market share data released this week by the National Association of Insurance Commissioners.
Travelers had $4.14 billion in direct written workers comp premiums in 2013, or roughly 8% of the national workers comp market share, according to NAIC. Liberty Mutual had $3.6 billion in direct written comp premiums last year, or roughly 6.97% of the market share. The report includes tentative data that will be updated through the end of March, Washington-based NAIC said in a statement Monday.
Finalized NAIC data from last year showed that Liberty Mutual had $4.18 billion in direct written workers comp premiums in 2012, or 8.69% of the national workers comp market share that year. Travelers was in second place with $3.8 billion in workers comp premiums in 2012, or 7.91% of the national comp market. The next-largest workers comp insurers have remained largely unchanged, NAIC data shows. Hartford Financial Services Group Inc. remained in third place with $3.34 billion in direct written comp premiums in 2013, up 1.8% from $3.28 billion in 2012. American International Group Inc. remained in fourth place with $2.84 billion in workers comp premiums last year, down 3.5% from $2.95 billion in 2012. Swiss-based Zurich Insurance Group Ltd. stayed in fifth place with $2.53 billion in comp premiums last year, down 8.5% from $2.77 billion in premiums for 2012.
The NAIC's report, along with data for other property/casualty lines, is available here. Read More...
WCAB Says SB 863 Allows Five Extra Days to Strike QME From Panel
Wed, 5 Mar 2014 08:42:25 - Pacific Time
Carlos Razo claimed that while employed as a driver by Las Posas Country Club during the period May 7, 2011 through May 7, 2012, he sustained a cumulative trauma (CT) injury to his psyche, sleep disorder, head, eyes, back, digestive system, hernia, knee, hands and head. After the employer denied the claim, a dispute arose over the panel QME selection process.
At trial the parties stipulated to the facts of the QME process. In the field of internal medicine, an original panel of QMEs initially issued on October 18, 2012. A replacement panel was ordered on November 30, 2012. The replacement panel issued on January 3, 2013. On January 11, 2013, defendant exercised its right to strike a member of the panel. On January 24, 2013, defendant designated one of the other panel members to be the QME. On January 15, 2013, applicant exercised his right to strike a member of the panel. In the field of orthopedics, an original panel of QMEs initially issued on October 18, 2012. A replacement panel was ordered on November 13, 2012. The replacement panel issued on January 3, 2013. On January 11. 2013, defendant exercised its right to strike a member of the panel. On January 14, 2013, defendant designated one of the other panel members to be the QME. On January 15, 2013, applicant exercised his right to strike a member of the panel. The parties further stipulated that all dates with respect to the issuance of the QME panels reflect the dates that were written on the panel forms sent to the parties, and not the receipt dates.
The dispute was submitted on the issues of whether applicant timely exercised the right to strike a member of the panel pursuant to Labor Code section 4062.2(c), and "whether that code section in its 2012 version or ... in its 2013 version is applicable[.]" In the May 28, 2013 Findings and Order, the WCJ found that applicant timely exercised his right to strike members from replacement QME internal medicine and orthopedic panels assigned on January 3, 2013. The WCJ applied former section 4062.2(c). In his Opinion on Decision, the WCJ explained that to make a timely strike, applicant had 10 days after assignment of the QME panel on January 3, 2013 plus "three working days," i.e., until January 16, 2013. Since applicant made his strike on January 15, 2013, it was timely.
The WCAB agreed with the WCJ that applicant's strike was timely in the panel decision of Razo v Las Posas Country Club. However, it disagreed that former section 4062.2 applies. Instead,it applied section 4062.2 as amended by SB 863.
SB 863 became effective January 1, 2013. However, section 84 of SB 863 states: "This act shall apply to all pending matters, regardless of date of injury, unless otherwise specified in this act, but shall not be a basis to rescind, alter, amend, or reopen any final award of workers' compensation benefits." (Stats. 2012, ch 363, § 84.). Because section 4062.2 governs the panel QME process, it is a procedural statute. Therefore, its application in this case is prospective, not retroactive.
The WCAB also held that pursuant to the discussion of Code of Civil Procedure (CCP) I 013 in Messele v.Pitco Foods, Inc. (2011) 76 Cal.Comp.Cases 956 (Appeals Board en bane) ("Messe/e"), that section 4062.2(c) allows a party ten days from the Administrative Director's assignment of a QME panel, plus five days for U.S. mail, to strike a name from the QME panel. In Messe/e, the Board held that when the first written AME proposal is ''made" by mail or by any method other than personal service, the period for seeking agreement on an AME under former Labor Code section 4062.2(b) is extended five calendar days if the physical address of the party being served with the first written proposal is within California. Thus it construed the phrase in amended section 4062.Z(c), "assignment of the panel by the Administrative Director," to mean not only assignment but also service of the names of the panel QMEs on the parties by U.S. mail.
The panel was aware that in Alvarado v. Workers' Comp. Appeals Bd. (2007) 72 Cal.Comp.Cases 1142 (writ den.) the Board panel found CCP section 1013 inapplicable to extend the time for a party to strike a physician's name from a QME panel because the operative trigger for the time period was not service, but assignment of the panel. The Board stated that "the time limits prescribed by Labor Code § 4062.2(c) run from the date of assignment of the three-member panel, not from service of the panel." (72 Cal.Comp.Cases at p. 1145.). Alvarado is distinguishable because it involved application of former section 4062.2. which gave the parties a right to strike a name from the panel "within three working days of gaining the right to do so[.]" The statute now provides that each party has 10 days from assignment of the panel and, as construed here, an additional five calendar days for service of the assignment by U.S. mail. Read More...
Woman Gets 11 Years For Second Comp Fraud Conviction
Wed, 5 Mar 2014 08:42:18 - Pacific Time
Alyce Leticia Biggs, 44, of Lake Arrowhead was sentenced last week to 11 years in state prison for committing workers’ compensation insurance fraud, tax fraud and grand theft.
In 2010, Biggs was convicted of workers’ compensation insurance fraud, tax fraud, and grand theft. At that time, she was placed on probation and ordered to serve a year in custody. After her custody time was completed and while on probation, Biggs, a bookkeeper, continued to steal from at least two of her clients.
"Biggs would take bank deposits from the victims that consisted of cash and checks, and, on the way to the bank would pocket the cash, and only deposit the checks," said Deputy District Attorney Michael Chiriatti, Jr., who prosecuted the case.
According to Chiriatti, Biggs’ criminal activity continued for at least three years. As a result, she was rearrested, her probation was revoked, and a new criminal case was filed.
On Jan. 17, 2014, Biggs pleaded guilty to six new counts of grand theft, admitted a white collar crime enhancement, and admitted that she was in violation of her prior grant of probation. She also agreed at that time to serve 11 years in state prison, and pay back the victims all of the money she took from them. At the sentencing hearing, victim Vicki Center told the Court, "This whole event has been tragic to me." When asked if she had anything she would like to tell the Court or the victims, Biggs stated she did not. Read More...
Court of Appeal Reinstates Malpractice Claim Against Applicant Attorneys
Tue, 4 Mar 2014 13:19:21 - Pacific Time
Appellant Chris Fopiano sued applicant attorneys Leonard Stern and Steven Barry for legal malpractice arising out of their representation of Fopiano in a workers’ compensation case. He claimed they improperly waived his right to seek reasonable disability accommodations from his employer. The trial court sustained the attorneys’ demurrer without leave to amend on the ground that the action was time-barred. Fopiano appealed, and the Court of Appeal reversed the dismissal and reinstated the case in the unpublished opinion of Fopiano v. Stern.
Fopiano suffered pulmonary injuries while working for his employer, Eastern Municipal Water District (EMWD). In July 2008, he hired attorneys Stern and Barry to represent him in a workers’ compensation case against EMWD. In January 2011, in the course of their representation of Fopiano, he alleges they waived his right to seek reasonable accommodations for his disability, although Fopiano had never discussed this with respondents, and did not know he possessed such a right. Additionally, Stern allegedly advised Fopiano that if he did not request early retirement, his employer could force him to retire. On March 14, 2011, Fopiano accepted an award of $69,813.62 for his permanent disability and voluntarily retired.
Soon thereafter, on March 25, 2011, Fopiano filed a pre-complaint questionnaire with California’s Department of Fair Employment and Housing (DFEH) to institute a disability discrimination complaint against EMWD. EMWD was afforded an opportunity to respond and denied Fopiano’s allegations of disability discrimination. EMWD asserted that Fopiano was not offered reasonable accommodations for his disability because respondents waived his right to seek reasonable accommodations and indicated to EMWD that Fopiano would instead retire.
Fopiano sued his comp attorneys on May 24, 2012, alleging they committed legal malpractice by waiving his right to seek reasonable accommodations from EMWD that would have allowed him to continue working. His attorneys demurred, arguing the allegations were insufficient to state a cause of action because they failed to allege when Fopiano learned of the attorneys’ wrongful conduct. The trial court sustained the demurrer to an amended complaint without leave to amend, finding Fopiano’s claim was time-barred because the fact that he filed a DFEH pre-complaint questionnaire demonstrated he knew of his attorneys’ malpractice at least by March 2011, which was more than one year before he filed his complaint. Fopiano timely appealed from the resulting judgment of dismissal.
The Court of Appeal reversed. The limitations period for legal malpractice is set forth in Code of Civil Procedure section 340.6, which states, in relevant part: "An action against an attorney for a wrongful act or omission, other than for actual fraud, arising in the performance of professional services shall be commenced within one year after the plaintiff discovers, or through the use of reasonable diligence should have discovered, the facts constituting the wrongful act or omission, or four years from the date of the wrongful act or omission, whichever occurs first. . . ."
The allegations in the second amended complaint did not show Fopiano’s claim was time-barred. Fopiano’s complaint alleged Stern erroneously counseled Fopiano to retire and negligently waived his right to seek reasonable accommodations for his disability. DFEH allegedly informed Fopiano in October 2011 of correspondence between respondents and EMWD in which respondents effected this waiver. Fopiano filed his complaint less than a year later, in May 2012. Assuming these allegations are true,Fopiano discovered respondents’ wrongful conduct within the one-year limitations period. Read More...
CHSWC Annual Report Calls For Integrated Health Care and Medical-Legal Reform
Tue, 4 Mar 2014 13:19:14 - Pacific Time
The Commission on Health and Safety and Workers’ Compensation (CHSWC) examines the health and safety and workers’ compensation systems in California and makes recommendations to improve their operation. At the request of the Executive Branch, the Legislature and the Commission, CHSWC conducts research, releases public reports, presents findings, and provides information on the health and safety and workers’ compensation systems. Accordingly, CHSWC has now published its 352 page 2013 Annual Report.
CHSWC is again this year recommending the integration of workers' compensation medical care with general medical care insurance. The Report notes that health costs have been rising more quickly than inflation and wages. These costs create financial challenges for employers, especially those in industries with already high workers’ compensation costs. Furthermore, group health care and workers’ compensation medical care are typically delivered through separate provider systems, resulting in unnecessary, duplicative and contraindicated treatment and inefficient administration. Suggestions have been made to integrate workers’ compensation medical care with the general medical care provided to patients by group health insurers in order to improve the quality and coordination of care, lower overall medical expenditure, reduce administrative costs, and derive other efficiencies in care. Research also supports the contention that an integrated 24-hour care system could potentially provide medical cost savings, as well as shorten the duration of disability for workers.
Nonetheless, CHSWC determined that SB 863 has indeed resulted in some medical cost savings. In 2012, based on a California Workers' Compensation Institute analysis, the WCIRB estimated an approximate $20,000 per claim reduction on claims involving spinal implant hardware due to the SB 863 provisions related to duplicate reimbursement for spinal implant hardware. Preliminary WCIRB data suggests savings of more than $15,000 per claim on affected spinal surgery claims in 2013. In 2012, the WCIRB estimated that the revised fee schedule for ambulatory surgery center (ASC) facility fees required by SB 863 would reduce those fees by approximately 25 percent. Preliminary WCIRB data for 2013 services suggest a 26 percent reduction in ASC fees.
The cost of the total medical benefit decreased by 23 percent from 2003 to 2007, and then increased by 35 percent from 2007 to 2012. Payments to physicians decreased by 42 percent from 2003 to 2009, and then increased 20.5 percent from 2009 to 2012. Pharmacy costs peaked in 2004, declined by 27 percent from 2004 to 2007, and then increased overall by 26 percent from 2007 to 2012. Hospital costs declined by 39 percent from 2003 to 2006, increased overall by 37 percent from 2006 to 2011, and then decreased by 18 percent from 2011 to 2012. Direct payments to patients averaged $226 million from 2003 to 2005, increased sharply 4 times from 2005 to 2006, and then more than doubled from 2006 to 2012. Expenditures on medical cost-containment programs in 2005 were less than a half of what they were in 2003, increased 4 times from 2005 to 2010, and then decreased by 29 percent from 2010 to 2012.
CHSWC complains about the high cost of medical legal examinations. Medical-legal evaluation costs peaked in 2008 at $289 million (an increase of 58 percent from 2003), decreased by 19 percent from 2008 to 2009, and then gradually went back to 2008 level from 2009 to 2012. The average number of psychiatric evaluations per claim in California increased by 19 percent from 0.062 in 2002 to 0.074 in 2010. Psychiatric evaluations are nearly always billed under the ML-104 code that is the most expensive. The average cost of a psychiatric evaluation more than doubled from $1,528 in 2002 to $3,719 in 2010. It was an increase of 13 percent from $3,302 in 2010. The Southern region produces over 60 percent of all psychiatric evaluations in California and has the biggest impact on both the frequency and cost of medical-legal evaluations statewide.The complexity of impairment rating under the AMA Guides, new rules for apportionment, and the criteria for medical treatment decisions under the Medical Treatment Utilization Schedule are among the reasons cited for rising costs per exam. Thus, the Report recommends that a study of the operation and potential improvements of the QME system. Read More...
WCAB Declares QME Rule 35.3(e) is Invalid
Fri, 28 Feb 2014 08:22:55 - Pacific Time
In 2009, Ismael Navarro filed an application and claim form alleging a cumulative injury from February 9, 2008 to February 9, 2009 to his back and ear and was evaluated by panel QME J. Yogaratnam, M.D., Then in 2010, applicant filed applications for adjudication with claim forms alleging a specific injury of June 1, 2010 to his back, lower extremities and legs and a specific injury of August 31, 2010 to his back and left leg.
In 2012, defendant petitioned to compel an evaluation of applicant’s two subsequent claims of injury by original panel QME Dr. Yogaratnam, but it did not seek to have applicant reevaluated regarding his previous claim of cumulative injury. Applicant objected. The WCJ found that applicant was entitled to a new panel QME in his specific injury cases and that QME Rule 35.5(e) that seems to require an applicant to return to the original QME did not apply.
Defendant filed a Petition for Removal contending that Rule 35.5(e) applies and because Rule 35.5(e) applies, applicant must return to original panel QME Dr. Yogaratnam. The WCAB in the En Banc decision of Ismael Navarro v.City of Montebello, administered by Corvel Corporation disagreed with defendant and affirmed the order for a new panel.
The WCAB reviewed the Labor Code provisions for the use of a QME and concluded "we see no provision in the Labor Code that requires an employee to return to the same evaluator for a subsequent claim of injury. And, we see no provision that distinguishes between procedures for evaluation of claims of injury based on the same or different body parts".Thus the Labor Code does not require an employee to return to the same evaluator for a subsequent claim of injury.
"Rule 35.5(e) appears to impose an unwarranted limitation on the Labor Code, particularly sections 4060(a), (c), and (d), 4062.1, 4062.2, 4062.2(a), 4062.3(j), 4062.3(k), 4064(a), and 4067. Thus, Rule 35.5(e) appears to be invalid to the extent that it imposes an additional requirement that an employee return to the same evaluator when a new injury or illness is claimed that involves the same body parts and the same parties." Applicant’s two claims of specific injury were reported after the original evaluation but before a subsequent evaluation by a new evaluator. Thus, under sections 4062.3(j) and section 4064(a), it appears that applicant is entitled to be evaluated by one new evaluator for his two subsequent claims of injury.
The WCAB therefore indicated its intent to rule that "The requirement in Rule 35.5(e) that an employee return to the same evaluator when a new injury or illness is claimed involving the same parties and the same type of body parts is inconsistent with the Labor Code and that this requirement is therefore invalid." The Petition for Removal was granted, and the parties were given 20 days notice of this intended ruling and an opportunity to respond.
In the event that this case becomes a final ruling, this will be the second QME rule to be declared invalid. In 2010, the En Banc decision of Amelia Mendoza v. Huntington Hospital, Permissibly Self-Insured; and Sedwick Claims Management Services, Inc. declared rule 30 to be invalid. The Appeals Board held in that case that: (1) California Code of Regulations, title 8, section 30(d)(3) (Administrative Director Rule 30(d)(3)), which states that when a claim has been entirely denied by the defendant only the employee may request a panel of Qualified Medical Evaluators, is invalid because it conflicts with Labor Code sections 4060(c) and 4062.2 and exceeds the scope of section 5402(b); (2) the time limits of section 4062(a) for objecting to a treating physician’s medical determination do not apply when the injury has been entirely denied by the defendant; and (3) section 4062.2 does not establish timelines for initiating or completing the process for obtaining a medical-legal report on compensability. Read More...
WCAB (Not IMR) Must Decide Medical Necessity When UR Decision is "Invalid"
Fri, 28 Feb 2014 08:22:46 - Pacific Time
In 2003 and 2004, Jose Dubon sustained industrial injuries to his spine and other body parts while employed by World Restoration, Inc., Applicant’s primary treating physician for both injuries has been Mark W. Brown, M.D. His consulting orthopedic surgeon has been Albert Simpkins, Jr., M.D. The agreed medical evaluator (AME) in orthopedics has been Israel Rottermann, M.D.
In a report dated July 1, 2013, Dr. Simpkins requested authorization to perform an anterior and posterior fusion from L4 through S1 with decompression. On July 19, 2013, Bunch CareSolutions, SCIF’s UR agent, sent Dr. Simpkins a letter denying authorization for surgery as not medically necessary. The letter was based on the July 19, 2013 report of SCIF’s UR physician, Donald A. deGrange, M.D., a board certified orthopedic surgeon. Dr. Simpkins invoked Bunch CareSolutions’s internal UR appeal process. On August 2, 2013, a second UR denial was issued based on the report of board certified orthopedic surgeon Kevin Mark Deitel, M.D. In all significant respects, this report was identical to that of Dr. deGrange.
On August 12, 2013, applicant signed an application for IMR. On August 14, 2013, applicant filed a declaration of readiness (DOR) for an expedited hearing regarding his entitlement to spinal surgery. In the DOR, applicant contended that defendant’s UR denial was defective because, among other reasons, there was insufficient record review.
In her Opinion on Decision, the WCJ observed that: (1) Dr. deGrange did not identify the 18 pages of additional medical records he reviewed, in violation of section 4610(g)(4) and AD Rule 9792.9.1(e)(5)(D) (Cal. Code Regs., tit. 8, § 9792.9.1(e)(5)(D); see also § 9792.9(l)(3));5 and (2) there was " wealth of medical records"that Dr. deGrange did not review, including all reports of Dr. Brown, the reports of Dr. Simpkins (other than the July 1, 2013 report), the AME report of Dr. Rottermann, and the discogram report of Dr. Lowenstein. The WCJ said that Dr. deGrange’s failure to review all of the relevant medical records "was a critical error" because "The determination [of medical necessity] is made in part based upon the severity of pain, duration of pain, radiculopathy as well as a review as to whether conservative care had been undertaken." The WCJ added that a UR physician "is compelled by ACOEM to look at objective testing performed coupled with subjective complaints, history of radiculopathy, and history of conservative care" and that "a complete review of applicant’s medical condition and prior treatment "is especially important when utilizing ACOEM Guidelines in determining whether treatment should be authorized." Despite the procedural defects with defendant’s UR that the WCJ identified, she concluded that any alleged procedural defects must be resolved through IMR. The WCJ further concluded that the WCAB cannot allow the surgery recommended by Dr. Simpkins because the issue of medical necessity must be determined by IMR.
The WCAB in the en banc decision of Jose Dubon v. World Restoration, Inc.; and State Compensation Insurance Fund agreed that the UR was inadequate but disagreed with the solution.
In reviewing the UR decision the sole focus of the IMR physician is the medical necessity of the proposed treatment. (Lab. Code, §§ 4610.5(c)(2), (c)(3), (k), 4610.6(a), (c), (e).) Because the role of an IMR physician is limited to assessing medical necessity, disputes over whether a UR decision is timely and/or procedurally proper must be resolved solely by the WCAB. (Lab. Code, § 4604 ["[c]ontroversies between employer and employee arising under this chapter shall be determined by the appeals board, upon the request of either party, except as otherwise provided by Section 4610.5" (italics added)].) Judicial scrutiny of the procedural validity of a UR decision is of particular importance since SB 863 amended the Labor Code to bar an injured worker from renewing a treatment request for 12 months absent a documented material change in circumstances. (Lab. Code, § 4610(g)(6).) Furthermore, requiring strict compliance with mandatory time limits and other regulations governing UR will ensure the integrity of the UR process and the decisions rendered. This result will be beneficial to the workers’ compensation system as a whole.
But, not all procedural violations of section 4610 or the AD’s Rules render a UR decision invalid. Instead, a UR decision is invalid only if it suffers from material procedural defects that undermine the integrity of the UR decision. A UR decision is invalid if it suffers from material procedural defects that undermine the integrity of the UR decision. If, however, there are only minor technical or immaterial defects, a defendant’s UR determination remains fully subject to the IMR process.
If a UR decision is invalid because its integrity was undermined due to the defendant’s failure to provide the UR physician with adequate medical records or because the UR physician failed to consider them, there is no valid UR determination and no basis for the employee to invoke IMR. Although both the defendant and employee may submit medical records and reports to the IMR organization (Lab. Code, § 4610.5(l)(1), (f)(3); see also Cal. Code Regs., tit. 8, § 9792.10.5(a)(1), (f)(3), (h)(1)), a defendant may not use this as a vehicle to cure defects in its UR process if the UR decision has been found invalid. The need for a UR physician to be provided with and review sufficient medical records to determine the medical necessity of a treatment request and to disclose what those records are goes to the very core of a UR decision. Where there is no valid UR decision subject to IMR, the issue of medical necessity must be determined by the WCAB. Read More...
Past Week News Archive
Federal OSHA Preempts DA From Pursuit of Civil Penalties in Workplace Fatality: Thu, 27 Feb 2014 12:46:54 - Pacific Time: Read More...
S.B. 863 Reduces Ambulatory Surgery Center Charges by 28%: Thu, 27 Feb 2014 12:46:48 - Pacific Time: Read More...
DWC Will End IMR "Reminder Letters" on April 1: Wed, 26 Feb 2014 12:11:03 - Pacific Time: Read More...
Whilstleblowers Provide Details on Pacific Hospital Comp Fraud: Wed, 26 Feb 2014 12:10:57 - Pacific Time: Read More...
Calderon Political Machine Focus of Attention After Not Guilty Plea: Tue, 25 Feb 2014 10:38:08 - Pacific Time: Read More...
DWC Announces Appointments to Ethics Committee: Tue, 25 Feb 2014 10:38:02 - Pacific Time: Read More...
Calderons Indicted On Bribery Charges Involving Workers Compensation Laws: Mon, 24 Feb 2014 11:28:03 - Pacific Time: Read More...
Pacific Hospital of Long Beach Owner Pleads Guilty to Massive Comp Fraud: Mon, 24 Feb 2014 11:27:56 - Pacific Time: Read More...
Study Says Healthcare Providers Easy Target for Hackers: Fri, 21 Feb 2014 08:12:53 - Pacific Time: Read More...
DWC Announces Changes to OMFS: Fri, 21 Feb 2014 08:08:44 - Pacific Time: Read More...