Workers' Compensation Daily News for Mar 12, 2014
Contractors Lose Case Against Failed Construction Industry SIG Brokers
Tue, 11 Mar 2014 12:44:25 - Pacific Time
Plaintiffs Mark Tanner Construction, Inc. (Tanner), and Mt. Lincoln Construction, Inc. (Mt. Lincoln), are both general contractors located in Truckee. CAP is a self-insured workers compensation program for the construction industry. Compensation Risk Managers of California, LLC (CRM) administered a self-insured workers compensation program for contractors, Contractors Access Program of California (CAP). The Department of Industrial Relations granted CAP a Certificate of Consent to Self-Insure in 2004. CRM administers CAP and contracted with Diversified to market CAP. Diversified Risk Insurance Brokers (Diversified), later acquired by defendant HUB International Insurance Services, Inc. (HUB), marketed and sold CAP to plaintiffs Mark Tanner Construction, Inc., and Mt. Lincoln Construction, Inc.
California contractors were able to fulfill their obligation to obtain workers compensation insurance by joining CAP. Membership in CAP required an agreement to be jointly and severally liable for the workers compensation liability of all other members for that year of membership. Approximately 250 employers became members of CAP. Tanner and Mt. Lincoln became a member of CAP in 2006.
On December 31, 2009, CAP was terminated. The Director of the Department revoked CAP’s certificate to self-insure and CAP was placed into conservatorship. CAP’s estimated exposure for unfunded liabilities was over $20 million. In the spring of 2010, members were sent assessments for the anticipated exposure. Tanner was assessed $150,258 and Mt. Lincoln was assessed $42,784. Later that year, CAP defaulted on payment of benefits for its workers compensation liabilities.
Tanner, Mt. Lincoln, and two other companies sued HUB and others for professional negligence and constructive fraud. The first amended complaint (FAC) alleged that CAP was marketed through insurance brokers, including Diversified, as a less expensive and more effective means of handling workers compensation insurance claims. Diversified did not disclose to Tanner or Mt. Lincoln its exclusive broker relationship with CRM. Diversified allegedly did not inform plaintiffs of the following facts concerning the financial stability of CAP: (1) beginning in 2006, CAP incurred losses of over $28 million and then over $60 million; (2) CRM was involved in a multimillion-dollar lawsuit in New York over similar self-insured insurance programs; (3) CAP’s security bond was not renewed after 2008 and plaintiffs were unprotected if claims exceeded reserves; and (4) at least five other self-insured insurance programs administered by CRM in California had failed. The FAC alleged "[t]his information provided sufficient notice that agent brokers should investigate the proverbial health" of the self-insured workers compensation programs.
While a defense motion for summary judgment was pending, plaintiffs obtained a copy of a Regional Field Consultant Agreement (Agreement) between CRM and Diversified that had not been provided to plaintiffs in discovery. Plaintiffs believed the Agreement "significantly alter[ed] the legal landscape in this action." They argued the Agreement established that rather than acting as broker for them, Diversified instead was acting as the broker for CAP. Further, Plaintiffs argued that the Agreement revealed Diversified was part of a joint venture with CRM. These relationships had not been disclosed to plaintiffs. Plaintiffs moved for leave to file a second amended complaint to add new allegations and new causes of action arising from legal relationships revealed by the Agreement. They also moved to continue the hearing on the summary judgment motion to permit additional discovery pursuant to Code of Civil Procedure section 437c, subdivision (h). The trial court denied both motions, finding the Agreement was not the "silver bullet" that plaintiffs claimed. The trial court granted HUB’s motion for summary judgment. Plaintiffs appeal from the ensuing judgment. Plaintiffs contend the trial court abused its discretion in denying both the motion to amend the complaint and the motion to continue the summary judgment hearing.
The Court of Appeal sustained the dismissal in the partially published opinion of Mark Tanner Construction v. HUB International Insurance Services.
The trial court found that HUB was entitled to summary judgment on the professional negligence claim because insurance brokers had no duty to investigate the financial condition of the insurer, and "no facts were presented demonstrating that Defendants knew or should have known of the financial condition of CAP." As to the claim for constructive fraud, the trial court found a duty to disclose arose in an arm’s length business transaction only if there was a fiduciary relationship, and "Plaintiffs have failed to demonstrate a triable issue of material fact demonstrating that Defendants have a fiduciary relationship." "Apparently distracted by what they perceive to be an egregious discovery violation, plaintiffs fail [on appeal] to adequately challenge either the legal bases or the factual findings of the trial court’s rulings." The trial court denied plaintiffs’ request for a continuance. It found plaintiffs were dilatory in initiating discovery and that because the Agreement added little to the case, additional discovery based on this agreement was not necessary. Read More...
Experts Predict the Dawn of the Age of Genomic Medicine
Tue, 11 Mar 2014 12:44:18 - Pacific Time
An article in Reuters Health predicts changes on the horizon in the word of medicine that will have far reaching consequences for third party payers who reserve files for future medical care. "We are at an inflection point," said Dr. Francis Collins, who now directs the National Institutes of Health. In a telephone interview, he said he never expected an "overnight, dramatic impact" from sequencing the human genome, in part because of cost. But recently, a combination of lower-cost sequencing technology and a growing list of wins in narrow corners of medicine are starting to show that genomic medicine is on the verge of delivering on at least some of the early claims.
Recent advances in sequencing have been "pretty stunning" and genomics is "just on the threshold" of delivering results, Craig Venter, the pioneer in the field, told Reuters. Although much is left to be learned about the genome, scientists believe knowing a person's genetic code will lead to highly personalized treatments for cancer, better predictions for diseases in babies and help unlock the puzzle of mysterious genetic diseases that currently go undiagnosed and untreated. Venter is staking his latest entrepreneurial venture on that expectation. Earlier this week, he announced formation of a new company, Human Longevity Inc., to undertake a massive project: sequencing 40,000 human genomes a year in a search for new therapies to preserve health and fight off diseases, including cancer, heart disease and Alzheimer's. To do that, Human Longevity will use two HiSeq X Ten machines and has an option to buy three more. The sequencers, made by Illumina Inc., can map a single genome for as little as $1,000. Venter's new company, Human Longevity, has picked cancer as its first sequencing target. Working with the University of -California, San Diego, the company plans to sequence the genomes, as well as the tumors, of every cancer patient treated at UCSD's Moores Cancer Center.
Collins' government-funded Human Genome Project spent $3 billion and took 13 years to sequence the human genome. Breaching the $1,000 genome could prove to be a watershed. At that cost, said Illumina Chief Executive Jay Flatley, ambitious projects like Venter's are economically feasible and clinical results more achievable. "We've still only scratched the surface of what the genome holds," he said. "What we need to do now is get hundreds of thousands to millions of genomes in databases with clinical information," he added.
Advances in sequencing equipment and the advent of next-generation sequencing has transformed the work Dr. Elizabeth McNally does as director of the Cardiovascular Genetics Clinic at the University of Chicago. In seven short years, she said, her group has gone from testing just one gene at a time to testing 60 to 70 genes and she is moving quickly into whole genome sequencing. Although McNally uses panels of 70 to 80 genes in her clinic, she has started experimenting with whole genomes. With the reduced cost of gene mapping, whole gene sequencing is a potentially cheaper, more powerful tool. The reduced cost of mapping is cutting the cost of research, too -- another factor that could speed clinical outcomes. McNally's team recently published a paper in the journal Bioinformatics in which she used Beagle, a supercomputer housed at Argonne National Laboratory, to analyze 240 full genomes in about two days. Such an endeavor normally takes months. "That dramatically decreases the cost associated with analysis because we sped up the time," said McNally.
Dr. Jay Shendure, associate professor of Genome Sciences at the University of Washington in Seattle, said the impact of gene sequencing is beginning to emerge in specific areas -- after a startup period that was longer and narrower than expected. "I do think there are these corners of medicine, which are important ones, that may happen relatively quickly," he said. A key example is the use of a pregnant woman's blood to see if her fetus may have trisomies -- chromosomal abnormalities associated with Down syndrome and other disorders. "Almost overnight, sequencing is in the process of taking over as the primary means of screening for trisomies in at-risk populations, and maybe eventually to everyone," Shendure said. The clinical results are promising. A trial of Illumina's test published last week in the New England Journal of Medicine found about 3.6 percent of standard tests for trisomies had false positive results, compared with 0.3 percent with Illumina's verifi test. That means fewer women would need to go through invasive follow-up diagnostic tests using amniocentesis or chorionic villus sampling, both of which can cause miscarriages. If the tests become routine practice, Goldman Sachs analyst Issac Ro estimates the market could reach $6 billion a year. Read More...
Projected IMR Administrative Savings May Not Materialize
Mon, 10 Mar 2014 09:31:56 - Pacific Time
California’s sweeping SB 863 workers’ compensation reform is working for the most part, but some of the savings may not materialize thanks to pressure on the system, according to Dave Bellusci, executive vice president, chief operating officer and chief actuary at the Workers’ Compensation Rating Bureau.
According to the report in the Insurance Journal, Bellusci was speaking recently on the state’s workers’ comp system at the Golden Gate Chapter of the Chartered Property Casualty Underwriters Society during the group’s "All Industry Day." The group held their daylong conference at the Delancey Street Conference Center. Also addressing the large group of insurance professionals at the conference was Alex Swedlow, president and chief executive officer of the California Workers’ Compensation Institute. Both men talked about the state’s workers’ comp reform law, Senate Bill 863, passed at the end of 2012 and implemented last year.
Among the host of changes the bill made was to establish an independent medical review process. IMR takes the process of reviewing cases that were elevated from utilization review away from a process that included judges and other members of the workers’ comp community and puts it in the hands of doctors. The IMR process was projected to produce a savings of $400 million related to administrative costs. However, that was assuming that between 50,000 and 60,000 disputes would make it to IMR each year. But many more cases have been going to IMR, according to Bellusci. By WCIRB’s estimates more than 14,000 IMR cases are being brought each month, putting the system on pace for more than 170,000 cases for the year. "We think the administrative costs are probably not going to materialize if they stay at this level," Bellusci said.
According to Swedlow, other than that, the new system seems to be working as intended. Based on the medical treatment utilization schedule or other guidelines, 75 percent of all treatment requests are being approved at the initial level without further review, according to Swedlow. Out of the one-fourth of cases that get elevated for further review, slightly more than 23 percent of the time that treatment is either modified or denied, he said. When it’s all added up, that means less than 5 percent of requests are either modified or denied, Swedlow said.
One trouble spot for Swedlow in both the new and the old systems is that pharmacy costs continue to dominate. According to Swedlow, 43 percent of utilization reviews are over pharmacy spending and more the one-third of IMRs are for pharmacy. Much of the pharmacy spending in workers’ comp comes from physicians prescribing opioids, Swedlow said. According to him, 30 percent of the pharmacy spending goes to Schedule II and Schedule II opioids. Nearly half the Schedule II opioids, like morphine and oxycodone, are being prescribed for minor injuries, Swedlow said, adding that the opioid problem has become worse across the U.S. each year. "This is truly an national epidemic," he said.
Another epidemic that continues to impact workers’ comp is obesity, which may become a bigger problem for the system he said. Swedlow fears that a decision in June 2012 by the American Medical Association House of Delegates reclassifying obesity as "a disease state" may elevate the cases of injured workers who are obese. With obesity reclassified as a disease, medical providers may feel a greater responsibility to counsel obese patients about their weight, or if treatment for a compensable injury causes significant weight gain, Swedlow said. "We feel thanks to AMA obesity may move from being treated as a comorbidity to a compensable injury," Swedlow said. Read More...
Sheryl Chalupa Appointed SCIF Chair
Mon, 10 Mar 2014 09:31:49 - Pacific Time
Governor Edmund G. Brown, Jr. has appointed Sheryl Chalupa as Chair of the State Compensation Insurance Fund Board of Directors effective immediately. Chalupa succeeds Larry Mulryan who has served on State Fund’s Board since 2009 and as Chair for the past three years. Mulryan will remain a member of the Board and chair of the Governance Committee. She was appointed by Governor Arnold Schwarzenegger to State Fund’s Board of Directors in 2007, re-appointed by Governor Edmund G. Brown in January 2014, and named Chair in March 2014.
Since 2001, Chalupa has been President and CEO of Goodwill Industries of South Central California overseeing the non-profit corporation’s work in Kern, King, and Southern Tulare counties. Chalupa also served as Executive Director of Girl Scouts-Joshua Tree Council between 1994 and 2001. A native of California, Chalupa is active in her local community. She served as Chair of the Greater Bakersfield Chamber of Commerce in 2011; currently serves on the boards of the California State University, Bakersfield Foundation and the Westside Energy Services and Education Center (WESTEC); and is an active member of the Bakersfield Rotary Club.
Chalupa received both her bachelor’s degree in Political Science and her Masters of Public Administration from the California State University, Bakersfield. She holds a Certificate in Nonprofit Management from Case Western Reserve University in Cleveland, is a Certified Executive with Goodwill Industries International, and is a Governance Fellow with the National Association of Corporate Directors.
State Fund insures more than 130,000 California businesses. In 2013, State Fund wrote over $1.1 billion dollars in premium, making it one of the largest workers’ compensation insurers in the nation.
"I am honored to serve as chair and appreciate the confidence Governor Brown has demonstrated in me and this organization," said Chalupa. "State Fund’s Board is focused on building a competitive company with a resourceful, creative workforce that provides fair prices and excellent service, creates stability in the market, and delivers significant value to California employers and injured workers." Read More...
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...
Past Week News Archive
Court of Appeal Reinstates Malpractice Claim Against Applicant Attorneys: Tue, 4 Mar 2014 13:19:21 - Pacific Time: Read More...
CHSWC Annual Report Calls For Integrated Health Care and Medical-Legal Reform: Tue, 4 Mar 2014 13:19:14 - Pacific Time: Read More...
WCAB Declares QME Rule 35.3(e) is Invalid: Fri, 28 Feb 2014 08:22:55 - Pacific Time: Read More...
WCAB (Not IMR) Must Decide Medical Necessity When UR Decision is "Invalid": Fri, 28 Feb 2014 08:22:46 - Pacific Time: Read More...
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...