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Workers' Compensation Daily News for Sep 09, 2010
WCAB Panel Decision Approves of Ex-Party Communication With QME Staff
Wed, 8 Sep 2010 05:57:31 - Pacific Time
In Alvarez v. Workers' Camp. Appeals Bd. (2010) 75 Cal.Comp.Cases 397, the Court of Appeal, Second Appellate District annulled a decision of the WCAB allowing a panel QME to telephone defense counsel, and held that section 4062.3 expressly prohibits ex parte communication with a panel QME . In Alvarez, the Court of Appeal stated that this "statutory language clearly evidences the intent of the Legislature to prohibit unauthorized ex parte communication," whether written or oral, between a party and an AME or panel QME. (id., at p. 403.) The Court of Appeal reasoned that "Neither the WCJ nor the WCAB may draft exceptions to a clear statutory prohibition language to accomplish a presumed legislative purpose or intent that does not appear on the face of the statute or from the legislative history. (citations omitted)." The Alvarez decision causes some concern about how to handle administrative matters with the QME. The WCAB may have given some guidance in the recent panel decision of Patrick O'Reilly v State of California Department of Corrections and the SCIF which should appear in Lexis shortly. In O'Reilly, the parties had objected to the opinion of the treating physician, and requested a QME panel. Brendan Morley, M.D was to be the PQME when it was discovered that he could not perform the examination within the 60 day time limit. A new panel was requested, but before it was provided, Dr. Morley arranged for an earlier appointment within the 60 day time limit. A new panel was provided after the date of the new appointment, and the defendants objected to the use of Dr. Morley even though he had rescheduled a timely appointment. They also objected to the ex parte communications with his staff which were made to arrange for this new appointment. For these reasons the defendant requested a new panel instead of Dr. Morley. However, in this case, all of the communications were made only with staff members of Dr. Morley's office, and were not made directly with the doctor. Dr. Morley's staff returned the calls made by applicant's counsel and advised of the availability of an earlier QME appointment. Applicant accepted this appointment date and notified defendant of the July 29, 2009 appointment. The WCAB concluded that it was not inappropriate for parties to communicate with QME staff and that such communication was not prohibited by the Alvarez decision. The WCAB refused to order use of the new panel and held "By its own terms, section 4062.3 does not include "staff' among the restricted communications. The plain language of section 4062.3 governs this matter. Moreover, we find that issuance of a new panel in this case is detrimental to the goal of section 4062.5 to ensure expeditious litigation." This panel decision helps clarify some of the limits of Alvarez. A panel decision is persuasive but not controlling law, but nonetheless is helpful guidance in what is expected of parties when scheduling QME examinations. Read More...
8th Annual California Workers' Compensation Forum Set for October
Wed, 8 Sep 2010 05:32:24 - Pacific Time
In October, hundreds of workers' comp professionals from across the state will gather at the Hyatt Regency in Huntington Beach for the 8th Annual California Workers' Comp Forum set for October 13 through 15. Speakers include the Honorable Ronnie Caplane and the Honorable Alfonso Moresi who serve as Commissioners on the California Workers’ Compensation Appeals Board who will discuss "Workers' Comp Appeals Board Update: New Litigation Trends and How to Enhance Your Chances of Success." John C. Duncan, Director California Department of Industrial Relations will provide an update on the DIR’s workers’ compensation goals and objectives for 2010 and 2011. He will discuss new legal-compliance challenges for employers, a status report on improvements to the workers’ comp system, and other vital issues.. Destie Overpeck Chief Counsel and Acting Chief Deputy Administrative Director of the DWC will provide an update from the DWC perspective. She will address the most recent regulations, return-to work initiatives, the latest on EAMS, changes in the medical fee schedule, and their impact on employers and other stakeholders. She will also discuss what is on the DWC’s agenda for the remainder of 2010 and what’s on the horizon for 2011. Mark DeSaulnier, Senator California State Senate keynote address will provide an update on the results of the 2010 legislative session. He will discuss the status of workers’ compensation, the economic recovery, and other key legislation impacting employers. Senator DeSaulnier will also discuss the legislature’s role in facilitating an economic recovery in California. The honorable Lynn A. Devine from the Los Angeles District Office of the WCAB will participate in a panel update on the most pertinent cases that have come down this year including Almaraz, Guzman, and Ogilvie and other significant decisions as well as what we might expect as we travel into 2011. These speakers will join dozens of industry leaders who will be present to discuss their views on California workers' compensation issues during this annual event. Read More...
The Iatragenic or Jurigenic Effects of Industrial Medicine and Litigation
Tue, 7 Sep 2010 06:09:02 - Pacific Time
The terms iatrogenesis and iatrogenic effect refer to inadvertent adverse effects or complications caused by or resulting from medical treatment or advice. It has long been recognized in medicine, that some patients are worse after treatment than before, The iatrageniic effect can be caused by many things such as reactions to drugs, or infections obtained while in medical facilities or medical malpractice. Judge Michael A. Town, Circuit Court Judge First Circuit, State of Hawaii has coined the phrase jurigenic effect in many articles he has written, which similarly encompasses the adverse effect of being subjected to the process of a legal system. In Workers' Compensation, it has been well recognized in medical literature that many claimants who are in the workers' compensation system have worse medical outcomes than patients who undergo the same medical procedure outside the system. In simple terms, the Workers' Compensation system makes many people sicker than they would be if they were not in the system. This iatragenic or jurigenic effect is well documented in medical science. Yet another confirming medical journal article appeared in this months issue of Spine (Volume 35, Number 19, pp 1812–1817 - Clinical Outcomes After Posterolateral Lumbar Fusion in Workers’ Compensation Patients - A Case-Control Study). The article authors summarize existing literature on this topic when they state "There is substantial evidence suggesting inferior results of treatment in workers’ compensation populations. Studies have shown worse outcomes in patients undergoing rehabilitation for low back pain and with lumbar disc surgery. Previous studies have also demonstrated poor outcomes in patients receiving workers’ compensation after lumbar fusion. However, these studies were either retrospective case series or unmatched comparison groups; study designs that do not control for other factors known to affect clinical outcomes after lumbar fusion." To improve upon the design prior scientific studies, this study used a case-control propensity matched study design to compare clinical outcomes after lumbar fusion in patients receiving workers’ compensation with a case-matched control group with similar demographics and similar preoperative outcome scores who are not on workers’ compensation.The authors propose in their current study to determine if they can confirm prior findings with a more controlled scientific method. They used a database of 1064 patients from a single specialty spine clinic who underwent posterolateral fusion from February 2002 to November 2006. 783 of them had complete preoperative and 2-year postoperative outcome measures. Of these, 60 patients who were receiving workers’ compensation before surgery were identified. The results confirmed prior studies and were not unexpected. "The nonworkers’ compensation patients had almost a threefold greater improvement in the ODI (Oswestry Disability Index) compared with those on workers’ compensation. The magnitude of ODI improvement in the control group approached the values observed in the unmatched cases, as well as to those reported in the literature." This is a more recent and well designed but not surprising outcome study. Sadly, billions of dollars are spent on treatment of injured workers who statistically have a lower chance of recovery than those who seek the treatment outside the social system. These findings should at some point raise questions for legislators and administrative policy makers. How can the system be reformed to minimize or eliminate the well documented iatragenic or jurigenic effect that makes some workers sicker than they would be had then been left alone? Read More...
Lakewood Man Sentenced in $5 Million Fraud Case
Tue, 7 Sep 2010 05:49:21 - Pacific Time
The 60-year-old general manager of a demolition company was sentenced to five years of formal probation and ordered to pay $200,000 in restitution for his guilty plea Tuesday to charges related to a multi-million dollar workers' compensation and tax fraud scheme. James Gregory Campbell of Lakewood pleaded guilty to making false or fraudulent statements to reduce insurance premiums, perjury, and making fraudulent statements to obtain or deny compensation, according to court records. Scores of other related charges were dismissed as part of the plea agreement with prosecutors. Deputy District Attorney Debbie Jackson dismissed all charges against Campbell's son, Robert Scott Campbell, 27, of Bellevue, Wash., because investigators learned that his name was forged on multiple fraudulent documents. "It was one of those things, I had a gut instinct" he was innocent, Jackson said. "But we could not eliminate him initially because his name was all over it." James Campbell paid $100,000 in restitution today and agreed to pay $1,667 a month until he pays the other half, Jackson said. If he fails to do that he can expect to serve time in prison, the prosecutor added. It will take the elder Campbell five years to pay the remainder of the restitution. Co-defendants Joseph Perry Soares, 48, and his wife, Kimberly Janes Soares, 44, of La Habra Heights, pleaded guilty Feb. 22. Joseph Soares pleaded guilty to making a false or fraudulent statements to reduce an insurance premium, perjury, tax evasion, and he admitted a sentencing enhancement for fraud or embezzlement more than $500,000, according to court records. He was sentenced to six years in prison, Jackson said. Kimberly Soares pleaded guilty to making a false or fraudulent statement to reduce an insurance premium, perjury, tax evasion, grand theft, making a fraudulent statement to obtain or deny compensation, and she admitted a sentencing enhancement for fraud or embezzlement more than $500,000. She was sentenced to two years in prison. "The main player was Joe and his wife was less involved than he was," said James Campbell's attorney John Barnett. "My client was less involved than her." James Campbell agreed the victims lost $5 million in the scheme, Barnett said. Campbell may be subjected to civil actions seeking the rest of the losses and cannot declare bankruptcy to escape his debt, Jackson said. The three set up shell companies at multiple Orange County address, including post office boxes, to avoid paying millions in workers' compensation premiums, according to prosecutors. They conspired, between Dec. 21, 2001, and March 1, 2009, to avoid paying workers' compensation premiums, despite having 60 to 120 employees on demolition of construction clean-up jobs during the eight years. They would obtain a minimal insurance policy from the State Compensation Insurance Fund to show proof of insurance and get jobs, but they claimed they had only one full-time workers and a sole part-time clerical employee. They avoided paying insurance by claiming the demolitionists were sub- contractors. Injured workers were discouraged from pursuing workers' compensation insurance benefits with some taken to walk-in clinics to be treated. One worker had his leg impaled on a wrought-iron fence while on a job in Palm Springs and had to wait for someone to drive from Orange County to take him to a Garden Grove clinic, according to prosecutors. Read More...
The Politics of California Workers' Compensation
Fri, 3 Sep 2010 04:41:09 - Pacific Time
The California Society of Industrial Medicine and Surgery and The California Applicants’Attorneys Association have scheduled a cocktail reception for Attorney General Jerry Brown on Sunday, September 19, 2010. The this event costs $1000 per couple. The event will be held at the home of "Arny" Gilberg, M.D., Ph.D.,1230 Shadow Hills Way, Beverly Hills, CA 90210. Dr. Gilberg is often used by litigants as an AME in psychiatry. The announcement for this event indicates that "Under California law, Brown for Governor 2010 ID # 1321867 may accept contributions up to $51,800 ($25,900 each for primary and general elections) from individuals, businesses, corporations, unions, PACs or other legal entities. Contributions to Brown for Governor 2010 are not tax deductible." CSIMS states that "The announcement was not printed or mailed at public expense." However, their fund raiser may be too late. The new SurveyUSA poll of the California gubernatorial race gives Republican Meg Whitman an expanding lead over Democrat Jerry Brown. The numbers: Whitman 47%, Brown 40%. The survey of likely voters has a ±4.2% margin of error. In the previous Survey USA poll from three weeks ago, Whitman was only ahead by a narrow 44%-43%. According to Rasmussen polls, Republican Meg Whitman is coming off last weekend’s state GOP Convention, moving out to her best showing yet in the race to be the next governor of California. The latest Rasmussen Reports telephone survey of Likely Voters in California finds Whitman earning 48% support, while Democrat Jerry Brown picks up 40% of the vote. Six percent (6%) prefer some other candidate in the race, and six percent (6%) are undecided. These new numbers move California from a Toss-Up to Leans GOP in the Rasmussen Reports Election 2010 Gubernatorial Scorecard. The Brown fund raiser organized by the California Society of Industrial Medicine and Surgery, and by the California Applicant Attorneys Association leave little doubt that the injured worker advocates see a win by Attorney General Brown as a key goal for their side. On the other hand, the direction of the current polls, and the few weeks remaining before the November elections leaves deteriorating hope that they will succeed in helping Brown take the Governor's seat next year. Read More...
CWCI Study Confirms Concern Over Compounded Pharmaceuticals
Fri, 3 Sep 2010 04:04:28 - Pacific Time
The California Workers' Compensation Institute recently studied the use of the state's workers' compensation prescriptions. According to CWCI, the Food and Drug Administration (FDA) has become increasingly concerned about potential health and safety issues associated with compound drugs, and has ratcheted up its monitoring and enforcement efforts. Regardless, compound drugs, co-packs and medical foods have been promoted to workers' compensation physicians and injured workers as an alternative to FDA-approved pain management pharmaceuticals, and like repackaged drugs, anecdotal reports suggest that these therapies are often used as a means to supplement physician revenue. To estimate changes in the volume and cost of these prescriptions, CWCI examined data on California workers' compensation prescriptions filled between 2006 and the first quarter of 2009 - a sample that encompassed more than 3 million prescriptions identified by specific National Drug Codes (NDCs) or product billing codes. After calculating quarterly distributions for the various prescriptions, the Institute analyzed the growth in the use of bulk and component drugs used in compound medications, co-packs and medical foods across the 40-month study period. The results show that the percentage of California workers' compensation prescription codes linked to compound drugs, co-packs and medical foods nearly quadrupled from 1.2 percent in the first quarter of 2006 to 4.7 percent in the first quarter of 2009; with the biggest surge coinciding with the regulatory elimination of differential pricing for repackaged drugs in March 2007. A closer look revealed that the sudden increase in the volume of these prescriptions in the second quarter of 2007 was initially fueled by the expanded use of co-packs and medical foods, though within a year, the use of compound drugs was up sharply as well. The growth in the billed and paid amounts for these products showed a similar pattern, as compound drugs, co-packs and medical foods climbed from 2.2 percent to 11.8 percent of the total amount billed for California workers' compensation prescriptions between 2006 and 2009, and from 2.3 percent to 12 percent of the total dollars paid for injured worker prescriptions. he Institute study shows that that even though reforms such as modified fee schedules and non-differential pricings for repackaged drugs have curbed some of the excesses in California workers' compensation, compound drugs, co-packs and medical foods have emerged as a significant pharmaceutical cost driver in the system. This trend is likely to continue until state policymakers enact specific statutory controls and administrative oversight in order to determine the true efficacy and the appropriate use and reimbursement of these products, CWCI said. Read More...
Several Comp Bills Await Governor's Signature While Major Issues Remain Unresolved
Thu, 2 Sep 2010 07:31:03 - Pacific Time
The California Legislature took action on several workers' compensation measures recently, passing bills that, among others, would extend death benefits until the youngest child reaches 19 if the parent died while serving in certain law enforcement services (AB 1696); and require a physician who conducts a utilization review of workers' compensation medical treatment to be licensed in California (AB 933). According to AB1696 text, children under age 19 can receive workers' compensation death benefits if the parent died while on duty as a specified law enforcement officer or during firefighting services. Additionally, AB 2253 presumes that cancer is assumed to be a compensable injury among active firefighting members of certain state and local fire departments and certain peace officers, and therefore should be compensable even after employment is terminated. Existing law establishes a presumption that the cancer for these special officers is presumed to arise out of, and in the course of, employment, unless proven otherwise. AB 2253 extends the presumption to a member following termination of service for a period of three calendar months for each full year of the requisite service, but not to exceed 120 months in any circumstance, commencing with the last date actually worked in the specified capacity. AB 2253 was in response to lobbying efforts by the police and firefighter's unions and shows a continuing proclivity of the California legislature to shed special benefits and protections to unionized governmental employees no matter what the condition of the state economy. Previously, the law said the presumption could not exceed 60 months in any circumstance. A so called "anti-discrimination" bill passed the legislature that would reduce opportunities for apportionment based upon race, religious creed, color, national origin, age, gender, marital status, sex, sexual orientation, or genetic characteristics (SB 145). This bill was ostensibly politically crafted as an "anti-discrimination bill" but at a deeper level it is squarely aimed at apportionment based upon genetic risk factors. These bills, and others acted on in the last month of the 2009-2010 legislative session, are awaiting the governor's signature and it is likely that he will veto some if not all of them. The Association of California Insurance Companies (ACIC) is not happy with the legislative year. According to their spokesman "In spite of the mounting cost pressures in workers' compensation, little was done to address challenges in the system," said ACIC Vice President Mark Sektnan. "We were disappointed with the failure of AB 2779 (Solorio) which would have closed a loophole in the pharmacy fee schedule that is driving up pharmacy costs significantly. We have seen example of drug costs for individual patients increasing ten fold through the use of compound drugs without any proof that the drugs are more effective or even safe. Other bills passed by the Legislature like AB 933 (Fong D-Cupertino) and SB 145 (DeSaulnier D-Walnut Creek) which would weaken the 2004 reforms and further increase the cost of workers' compensation for California's employers. ACIC will be requesting vetoes of these two bills." Read More...
Couple Arrested for Forging Work Comp Insurance
Thu, 2 Sep 2010 07:25:46 - Pacific Time
California Department of Insurance detectives arrested Sir Isaac Lindsay, 61, and his wife Veronica Lindsay, 57. They are charged with felony forgery after allegedly presenting fake documents to demonstrate that their business had workers' compensation insurance, when they were not insured. The Lindsays were booked at the Central Detention Center in San Bernardino County with bail set at $25,000 each. If convicted, the Lindsays could face a prison sentence of up to 18 years. Sir Isaac Lindsay, owner of Lindsay Motorcade and Protective Services, bid and was awarded a contract to provide security services to the Moreno Valley Unified School District. As part of the bid process, Lindsay provided documentation the school district required to be awarded the contract. Among the documents required was proof of insurance, including workers' compensation coverage, which Lindsay and his wife provided. On August 14, 2006, an employee of Lindsay Motorcade and Protective Services was murdered while patrolling one of the school district's campuses. As a result of this incident, it was discovered that Sir Isaac Lindsay did not have workers' compensation coverage and the documentation he submitted to secure the contract with the school district was fraudulent. The fraudulent documents reflected that Lindsay Motorcade and Protective Services was insured with State Compensation Insurance Fund, but because the documents were fraudulent, the school district was responsible for paying more than $100,000 in relation to the murder of Lindsay's employee.The case is being prosecuted by the San Bernardino County District Attorney's Office. Read More...
U.S. Risk Acquires Workers' Compensation Wholesaler - Unisource
Wed, 1 Sep 2010 07:17:17 - Pacific Time
U.S. Risk is is an independently owned and managed sales and service organization and one of the largest wholesale brokerage and specialty lines underwriting managers in the United States. They are headquartered in Dallas, Texas and operate out of office locations throughout the U.S. including San Francisco and Santa Ana. U.S. Risk Insurance Group Inc. has taken over Florida-located Unisource Program Administrators, a wholesaler of workers' compensation, for an undisclosed sum. The deal will enable the Dallas-based U.S. Risk to double its workers' compensation written premium and to add four A-rated national carriers to its markets line-up, the company said in a statement. The takeover is also expected to enable U.S. Risk to offer monoline workers' compensation on a national scale. According to CEO Randall Goss, the transaction is a "strategic acquisition to enhance our product offerings and expand the production footprint." The specialty workers' compensation office in Sarasota will continue to operate as Unisource Program Administrators. U.S. Risk will gain the ability to offer additional workers' compensation markets to its network of 4,000 retail producers. Unisource's existing distribution network of 1,900 retail producers will be able to access to the U.S. Risk product portfolio which offers all forms of property, casualty, automobile, umbrella, professional, and risk management products and services. "Unisource has been seeking this kind of opportunity to better serve our agents by adding other lines of insurance and to continue expanding our workers' compensation footprint," said Karen Bolinder, vice president of Operations at Unisource Program Administrators. Read More...
WCIRB Reports California Workers’ Comp Combined Ratio is Highest Since 2001
Wed, 1 Sep 2010 06:57:47 - Pacific Time
The WCIRB has completed its review of March 31, 2010 experience submitted by insurers and a has released its findings as of August 26. The ultimate accident-year 2009 combined ratio is estimated to have reached 124 percent, the San Francisco-based Workers’ Compensation Insurance Rating Bureau of California said. California workers’ compensation insurers’ combined ratios climbed during 2009 to the highest level since 2001, while average claims costs continued increasing, according to a quarterly report on insurer experience. A ratio below 100% indicates that the company is making underwriting profit while a ratio above 100% means that it is paying out more money in claims that it is receiving from premiums.The combined ratio is comprised of the claims ratio and the expense ratio. The claims ratio is claims owed as a percentage of revenue earned from premiums. The expense ratio is operating costs as a percentage of revenue earned from premiums. The combined ratio is calculated by taking the sum of incurred losses and expenses and then dividing them by earned premium.The bureau estimated that the average cost, The ultimate accident-year 2009 combined ratio is estimated to have reached 124 percent, the San Francisco-based Workers’ Compensation Insurance Rating Bureau of California said in its "Summary of March 31, 2010 Experience." That is 14 percentage points higher than for 2008 and the highest level since 2001, when it declined to 143 percent from 184 percent in 1999. The bureau also projected an ultimate accident-year loss ratio of 80 percent for 2009, which is about 9 points above 2008 and the highest accident-year loss ratio since 2002. The calendar-year combined ratio for 2009 is 116 percent, which is 15 points higher than for 2008, it said. Combined ration is a measure of profitability used by an insurance company to indicate how well it is performing in its daily operations. or severity, of a 2009 indemnity claim will reach $60,000, a 5 percent increase over 2008. That comes after three years of severity increasing at about 15 percent per year.Meanwhile, average statewide insurer rate per $100 of payroll for policies written in 2010 is $2.47, or 5 percent above the average rate charged for 2009. These quarterly findings leave little doubt about where insurance premiums are headed next year. Read More...
Past Work Comp Academy News Articles
• Court of Appeal Clarifies Standard for Proving Causation of Valley Fever: Tue, 31 Aug 2010 04:49:41 - Pacific Time: Read More...
• Los Angeles WCAB Schedules Conference to Discuss Consolidation of Compound Pharmacy Liens: Tue, 31 Aug 2010 04:49:37 - Pacific Time: Read More...
• AG Eric Holder Speaks At Los Angeles Health Care Fraud Summit: Mon, 30 Aug 2010 04:34:09 - Pacific Time: Read More...
• Sacramento Physician Pleads Not Guilty to Rape Charges: Mon, 30 Aug 2010 04:11:53 - Pacific Time: Read More...
• Exclusive Remedy Defeats Television Extra's Premises Liability Claim Against CBS: Fri, 27 Aug 2010 07:39:12 - Pacific Time: Read More...
• DWC Announces Activities for "Labor Rights Week 2010": Fri, 27 Aug 2010 06:58:30 - Pacific Time: Read More...
• DWC Posts Proposed Amendments to Benefit Notice Regulations: Thu, 26 Aug 2010 07:15:23 - Pacific Time: Read More...
• FDA Tells J and J Unit to Halt Hip and Knee Device Sales: Thu, 26 Aug 2010 07:12:02 - Pacific Time: Read More...
• "Dallas" Jones Cancer Presumption Act of 2010 Awaits Governor's Signature: Wed, 25 Aug 2010 07:17:09 - Pacific Time: Read More...
• Bill to Stop 'Tax and Workers' Compensation Fraud Epidemic' Set for Vote: Wed, 25 Aug 2010 06:12:06 - Pacific Time: Read More...