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DWC Posts Updated Time of Hire Pamphlet

The Division of Workers’ Compensation (DWC) has posted an updated time of hire pamphlet on its website. The pamphlet now has the new predesignation of personal physician and notice of personal chiropractor or acupuncturist forms that are effective on July 1, 2014.

The pamphlet, which is posted in English and Spanish versions, meets the requirements under Labor Code section 3551 to notify new employees about California workers’ compensation rights and benefits either at the time of hire or by the end of the first pay period.

The time of hire pamphlet was created in 2011 to help employers and claims administrators ensure employees know what to do in case of workplace injury. It was modified in 2013 to reflect changes made to California’s workers’ compensation system by SB 863.

This pamphlet can be customized as long as the text meets the “time of hire” legal requirements. Title 8, California Code of Regulations section 9883 allows insurers, employers or private enterprises to prepare and publish the pamphlet upon prior approval of the form and content of the pamphlet by the Administrative Director. An entity may no longer use a previously approved pamphlet with the old predesignation forms. A revised pamphlet should be submitted for approval with the new forms. Claims administrators will be provided a grace period until September 1, 2014 to send an updated pamphlet.

California 20th State to Legislatively Restrict Football

California lawmakers on Thursday moved to restrict the number of football practices in which students are allowed to tackle each other, due to concerns that permanent brain damage could result from concussions among high school athletes.

The measure, which would require approval from a medical professional before students who suffer head injuries may return to the field, is the latest action by U.S. lawmakers to try to minimize brain damage to professionals and students during sporting events. “We have a multitude of evidence that this does not just affect professional athletes, but that younger kids who are still developing are just as susceptible,” the bill’s author, Democratic Assemblyman Ken Cooley, said in a statement. “Medical research has shown hits don’t have to produce a concussion to have long-lasting effects.”

If signed by Democratic Governor Jerry Brown, the measure, AB 2127 by Democratic Assemblyman Ken Cooley of Rancho Cordova .passed by the state senate on a 23-5 vote on Thursday, would make California the 20th U.S. state to restrict practices by middle school and high school football teams during which tackling and other full-contact activities are allowed.

Several studies have noted an increase in high school concussions in recent years, although it is not clear whether the rise is due to more injuries or improved diagnosis. Numerous professional players have developed severe symptoms believed to have been caused by repeated head trauma.

Under Cooley’s bill, any player who is suspected of having a head injury must be removed from athletic activity for the rest of the day. He or she cannot return to play unless the activity is approved by a licensed health care provider. The bill also forbids high school or middle school football teams from conducting more than two practices per week during the season and pre-season during which tackling and other full-contact activities are allowed.

Such practices are banned altogether during the off-season, and may last no more than 90 minutes during the season.

Federal Class Action Concludes Delivery Truck Drivers Are Employees

Fernando Ruiz previously worked as a driver for Penske Logistics Corporation, a furniture delivery company that had a contract with Sears. His job status was that of an “employee.” When Sears terminated its contract with Penske in November 2003, Sears advised the drivers that Affinity Logistics Corporation, a company providing home delivery services for various home furnishing retailers, would take over Penske’s contract.

Affinity told Ruiz and the other drivers that if they wished to be hired by Affinity, they had to become independent contractors. Specifically, a manager told the drivers they needed a fictitious business name, a business license, and a commercial checking account. Affinity then advised the drivers on how to complete the necessary forms. Affinity went so far as to complete the forms for Ruiz, leaving only the spaces for his signature blank. With Affinity’s help, Ruiz formed his own company and obtained a Federal Employer Identification Number and a separate business banking account. Additionally, to work for Affinity, each driver was required to sign an Independent Truckman’s Agreement (“ITA”) and Equipment Lease Agreement (“ELA”). The ITA and the ELA included clauses stating that the parties were entering into an independent contractor relationship.

Drivers regularly worked about five to seven days per week. An Affinity employee would call the drivers each day to tell them whether or not they were working the following day. Drivers had a fairly regular rate of pay since they worked five to seven shifts per week, and every route had approximately eight deliveries. Drivers had to request time off three to four weeks in advance, and Affinity had discretion to deny those requests. Affinity denied requests for time off when it decided the delivery schedule was too busy. Drivers were required to paint their trucks white, and could not put signs on their trucks. The trucks had a Sears logo and Affinity’s name and motor carrier number on the door. Most drivers drove the same truck every day. Affinity handled upkeep of trucks and arranged for loaner trucks when trucks broke down, deducting these costs from drivers’ pay. Affinity required drivers to stock their trucks with certain supplies, as outlined in the Procedures Manual. These supplies included appliance and furniture totes, plastic mattress return bags, protective blankets, pads, tie-down straps, and tools including a level, power drill, and drill bits. Affinity required that drivers use a specific type of mobile telephone. Affinity supplied the phones and deducted monthly costs for the phones from drivers’ paychecks. Affinity also required each driver to have a “helper” or secondary driver on the truck with them. Helpers had to submit to a background check and be approved by Affinity. Drivers were required to wear uniforms and abide by certain grooming requirements.

Ruiz filed a class action claiming Affinity’s wrongfully classified the drivers as independent contractors and failed to pay drivers sick leave, vacation, holiday, and severance wages; and Affinity improperly charged drivers for workers’ compensation insurance.

After a three-day bench trial the district court concluded that Georgia law applied to the independent contractor/employee question and that Ruiz was an independent contractor under Georgia law. Ruiz appealed the district court’s ruling. Reversing the district court’s judgment on remand, the federal 9th Circuit Court of Appeals panel in the published case of Ruiz v Affinity Logistics Corporation held that home delivery drivers who alleged failure to pay sick leave and other state-law causes of action were employees, rather than independent contractors, under California law. The panel reasoned that the drivers’ employer had the right to control the details of their work, and that additional, secondary factors also weighed in favor of a finding that the drivers were employees. The panel remanded the case to the district court for further proceedings.

Under California law, once a plaintiff comes forward with evidence that he provided services for an employer, the plaintiff has established a prima facie case that the relationship was one of employer/employee. The undisputed facts indicate that Affinity had the right to control the details of the drivers’ work, and the application of the secondary factors weigh in favor of a finding that the drivers were employees.

15 Indicted In Alleged Compound Drug Fraud Scheme

An article on the Southern California Public Radio website reports that the Orange County Grand Jury has indicted 15 people – including a major donor to President Barack Obama’s re-election campaign, 10 doctors and a pharmacist – for their alleged involvement in a multi-million dollar workers compensation fraud scheme. The alleged ringleader and two others also face one charge of involuntary manslaughter. The sealed indictment – obtained by KPCC – accuses Obama donor Kareem Ahmed of orchestrating the elaborate operation. According to the filing:

1) Ahmed allegedly hired pharmacists to produce three compounded transdermal creams.
2) Ahmed then paid kickbacks to a number of physicians and chiropractors to prescribe the creams to their workers’ compensation patients.
3) Ahmed then allegedly conspired with the doctors to submit fraudulent workers’ compensation claims.

Ahmed allegedly paid physicians a total of more than $25 million to dispense the compound creams between June 15, 2010, and Dec. 31, 2012, according to the indictment. The amounts individual doctors received between 2010 and 2013 ranged from $600,000 to more than $2.5 million, it alleged. Among those Ahmed allegedly paid were Daniel Capen, M.D. (more than $2.5 million); Andrew Jarminski, M.D. (more than $1.9 million); pharmacist Michael Rudolph (more than $1 million); and Rahil Kahn, M.D. (more than $1 million), according to the indictment.

KPCC tried to reach Capen, Jarminski, Rudolph and Kahn for comment, but they were unavailable.

Ahmed allegedly gave the “‘kickback’ scheme the appearance of legitimacy by requiring the physicians and the pharmacists to sign a contract for purchase of future accounts receivables,” the indictment said.

One of the 44 counts in the indictment charged Ahmed, Rudolph and Jarminski of involuntary manslaughter. It alleged that on or about Feb. 3, 2012, the three “did unlawfully and without malice kill Andrew G. (a minor) … in the commission of a lawful act which might produce death, in an unlawful manner and without due caution and circumspection.” The indictment gave no other details.

Ahmed is president and CEO of Landmark Medical Management, an Ontario firm. In response to a request for comment, his assistant Ladonna Hieber emailed a statement: “Kareem Ahmed and his staff are innocent of all charges that have been alleged. The charges are meritless and we expect full exoneration of any wrongdoing.”

A spokeswoman at the Orange County DA’s office said she cannot comment on the indictment, since it is sealed.

An October 2012 article by Talking Points Memo first raised questions about his alleged business practices. The Orange County DA’s office raided Landmark Medical’s offices last October.

Ahmed was a top donor to Democratic efforts in 2012. He gave more than $1 million, with most of it going to the pro-Obama super PAC Priorities USA Action, according to data compiled by the Center for Responsive Politics.

Superior Court System Still Under Funded

If you are waiting for your subrogation case to go to trial, do not expect much to happen in the immediate future. The Los Angeles Daily Journal reports that the Superior Court system remains severely under funded in the current California budget.

Trial courts are left many millions “short of the amount necessary” to sustain services, said Brian Walsh, presiding judge of the Santa Clara County Superior Court and chair of the Judicial Council’s presiding judges committee. In Santa Clara, that’s going to push the court to close courtrooms and reduce resources for various public services, including family court mediation and self-help centers. Clerical staffing will also be reduced, which will increase wait times for the public. Walsh said the court would absorb the funding shortfall by not filling positions as workers retire. “Our vacancy rate has [grown] to 28 percent,” Walsh said. “Now, we expect it will go up to 33 to 35 percent.”

Many other courts are planning similar strategies. Barry Goode, presiding judge of Contra Costa County Superior Court, said furlough days were one way his court would deal with cuts. “Last year, because of one-time solutions, we were able to not furlough [and] keep the courts open,” Goode said. “But we’re looking at the numbers, and it appears we may have no choice.” The court has the option to force staff to stay home without pay for up to nine days a year, Goode said. With employee compensation comprising the largest chunk of courts’ budgets, that could save the court hundreds of thousands of dollars annually. Goode said prior years’ cuts had forced the court to already close some courtrooms. Many courts across the state have had to reduce staffing to the point where many of their judges lack an assigned courtroom, and litigants are forced to travel long distances to handle cases. The Legal Aid Foundation of Los Angeles has even filed a lawsuit against Los Angeles County Superior Court over its strategy of consolidating court operations by shuttering many regional courthouses.

Marsha Slough, presiding judge of the San Bernardino County Superior Court, said her historically underfunded court made severe cuts in previous years that have eliminated rural residents’ access to nearby facilities. However, she said her court wouldn’t be making new cuts. Additionally, a new method of divvying up funding for courts by workload, which the Judicial Council voted to gradually phase in last year, will account for more than 15 percent of courts’ funding in 2014-15. While that will slightly shrink the coffers of traditionally better funded courts, it will slightly increase allocations to courts  like San Bernardino. However, the current budget means slashed services can’t be restored, Slough said. “We were very hopeful if we got what the [chief justice] asked for, we’d be able to restore limited services in remote areas,” she said.

Douglas Miller, a 4th District Court of Appeal justice and Judicial Council member, said branch leadership understood many agencies throughout the state hadn’t gotten any funding increase, and the judiciary is grateful for the funding increase they received. But “It still falls short, and it’ll have a big impact on courts and their ability to provide access to justice,” he said. The budget raises courts’ funding by $129 million, about $86 million of which goes toward trial court operations, and $43 million of which covers increased employee health and pension costs, although the branch estimates the cost increase at around $65 million. It also sends an additional $30 million to backfill a projected $60 million fee revenue shortfall. The budget also allocates $15 million to collaborative courts.

Among other funding for the branch, the state Supreme Court and appellate courts get an increase of $7 million, and a one-time allotment of $40 million goes to the branch’s previously raided court construction program. All told, it’s an increase of about $223 million for the branch. But after the loss of about $1 billion in general fund support over the past six years, and the depletion of branch and court savings, judges say it’s not enough. Miller said court leaders had to get ready to quickly begin pushing for more funding next year, above and beyond an automatic 5 percent increase proposed in the 2014-15 year’s budget – $90 million – for court operations in the 2015-16 fiscal year.

Health Insurers Balk at Genetic Sequencing

Once strictly the domain of research labs, gene-sequencing tests increasingly are being used to help understand the genetic causes of rare disease, putting insurance companies in the position of deciding whether to pay the $5,000 to $17,000 for the tests. But, according to an article in Reuters Health, a number of insurers, including Blue Cross Blue Shield, have reacted by putting the brakes on reimbursement. Insurers are demanding proof that the results will lead to meaningful treatments among the estimated 2 million Americans with a serious, undiagnosed disease, still an unlikely prospect in the majority of cases.

Genetics experts say that sequencing more than doubles the chances that families get a diagnosis, and saves spending on multiple tests of single genes. Even if no treatment is found, the tests can also end hugely expensive medical odysseys as parents frantically search for the cause of their child’s furtive illness.  Until the reimbursement issue is resolved, some smaller diagnostics players will likely stay on the sidelines, leaving the field to early adopters of the technology such as Ambry Genetics and Bio-Reference Laboratories’ GeneDx. And families short on resources will be left scrambling for funding.

Howard Jacob was the first to use gene-sequencing tools to unravel the mystery of a rare disease in 2009, leading to a bone marrow transplant that saved a little boy named Nic Volker. Five years later, Jacob’s molecular genetics lab at the Medical College of Wisconsin has done more than three dozen whole genome sequences, a test that reads the more than 3 billion letters that make up the human genetic code. They have sequenced 400 whole exomes, tests that look only at the protein-making segments of DNA known as exons, which represent 2 percent of the genome but account for 85 percent of disease-causing mutations.

Baylor College of Medicine in Houston, Texas, has handled 3,500 exome-sequencing cases since it started offering the test in 2011. A study of its first 250 cases showed whole exome sequencing identified the disease-causing gene in 25 percent of cases. Since the findings were published last October, the rate has increased to 28 percent as the list of known mutations has grown, said Dr. Christine Eng, who directs Baylor’s Whole Genome Sequencing Laboratory. Eng said insurance companies initially paid for most of the tests, but as volume has increased, more claims are getting denied. “There are some companies that are saying out and out, we won’t cover this test.”

Dr. Allen Bale, director of the DNA Diagnostic Lab at Yale School of Medicine in Connecticut, has seen a 500 percent increase in orders for exome sequencing since 2011. The lab does about 750 whole exome tests a year, and there, too, reimbursement is becoming an issue.

Dr. Julie Kessel, who directs coverage policy for Cigna, said sequencing requests were scarcely noticed five years ago. Now, “they’re very, very much on the radar.” Cigna generally does not cover whole genome or whole exome sequencing unless there is a clear clinical reason.

At Aetna Inc, Dr. James Cross, vice president of national medical policy and operations, said sequencing has gotten ahead of the evidence. Traditionally the company has made coverage decisions based on the individual test and whether it affects patient outcomes, he said. “With sequencing, you’ve got a lot of information that we don’t have that kind of evidence around.”

Last August, one of the industry’s biggest players, Blue Cross Blue Shield, issued a report saying exome sequencing might pinpoint the genetic cause of disease in up to half of patients, but only a fraction of those will be able to use that as guidance because treatments don’t exist yet. Since then, Blues plans in Louisiana, North Carolina and Pennsylvania have deemed exome sequencing “investigational,” meaning not eligible for coverage.

Insurers say their objections stem from a lack of evidence that the tests can improve patient care. But, there are some celebrated examples that it can, such as Alexis Beery of California, whose genetic defect left him with health problems similar to cerebral palsy. Genome sequencing led to highly effective treatments to replace the missing neurotransmitters that were causing the symptoms.

WCRI Study Identifies Predictors Of Injury Outcomes

Eight new state-specific studies published by the Workers’ Compensation Research Institute identified new predictors of worker outcomes that can help public officials, payors, and health care providers improve the treatment and communication an injured worker receives after an injury – leading, it claims, to better outcomes.

The studies, Predictors of Worker Outcomes, found trust in the workplace to be one of the more important predictors that has not been examined before. To describe the level of trust or mistrust in the work relationship, the studies’ interviewers asked workers if they were concerned about being fired as a result of the injury. WCRI released the following findings from the studies regarding this predictor:

1) Workers who were strongly concerned about being fired after the injury experienced poorer return-to-work outcomes than workers without those concerns.
2) One in five workers who were concerned about being fired reported that they were not working at the time of the interview. This was double the rate that was observed for workers without such concerns. Among workers who were not concerned about being fired, one in ten workers was not working at the time of the interview.
3) Concerns about being fired were associated with a four-week increase in the average duration of disability.

The studies also identified workers with specific comorbid medical conditions (existing simultaneously with and usually independently of another medical condition) by asking whether the worker had received treatment for hypertension, diabetes and heart problems. The medical condition may have been present at the time of the injury or may have manifested during the recovery period. Among those findings:

1) Workers with hypertension (when compared with workers without hypertension) had a 3 percentage point higher rate of not working at the time of the interview predominantly due to injury.
2) Workers with heart problems reported an 8 percentage point higher rate of not working at the time of interview predominantly due to injury and had disability duration that was four weeks longer.
3) Workers with diabetes had a 4 percentage point higher rate of not working at the time of the interview predominantly due to injury than workers without diabetes.

The studies are based on telephone interviews with 3,200 injured workers across eight states. The eight states are Indiana, Massachusetts, Michigan, Minnesota, North Carolina, Pennsylvania, Virginia and Wisconsin. The studies interviewed workers who suffered a workplace injury in 2010 and received workers’ compensation income benefits. The surveys were conducted during February through June 2013 – on average, about three years after these workers sustained their injuries.

Court of Appeal Publishes Case on WCAB Privilege

The legal difference between a Court of Appeal case that is published, or unpublished is not well known in the workers’ compensation community. The difference is the result of California Rules of Court section 8.1115. This Rule provides that “an opinion of a California Court of Appeal or superior court appellate division that is not certified for publication or ordered published must not be cited or relied on by a court or a party in any other action.” An attorney who refers to an unpublished opinion in a Court subject to the California Rules of Court violates the Rules, and is subject to sanctions. Thus, an unpublished opinion does not set precedent that can be used in similar litigation in a Court subject to the California Rules of Court.

However, the WCAB is not subject to the California Rules of Court. It has its own rules of Practice and Procedure. The WCAB does not have an equivalent to Rule 8.1115. For that reason, litigants can refer to an “unpublished” opinion at the WCAB trial level, and on Reconsideration, but not in cases that move to the Court of Appeal and above. LexisNexis publishes the California Compensation Cases, volumes containing California workers’ compensation Appeals Board decisions and appeals court cases. This publication includes the text of unpublished Court of Appeal opinions, and litigants can use the California Compensation Cases citation to unpublished cases that would otherwise not appear in the Official Reporter of the California Courts. The legal effect of an unpublished opinion in a workers’ compensation case as a result of this Court Rule is somewhat murky.

Last month the Court of Appeal decided in the then unpublished case of The Regents of the University of California v WCAB and Shirley Lappi that Labor Code section 5708 sets forth a general rule authorizing the WCAB to adopt its own “rules of practice and procedures” and specifies that in the conduct of hearings and investigations, the WCAB “shall not be bound by the common law or statutory rules of evidence and procedure.” However, when it comes to the treatment of privileged information specifically, division 8 of the Evidence Code trumps this provision of the Labor Code. Division 8 expressly applies to “any action, hearing, investigation, inquest or inquiry (whether conducted by a court, administrative agency, hearing officer, arbitrator, legislative body, or any other person authorized by law) in which . . . testimony can be compelled . . . .” Moreover, Evidence Code section 910 explicitly overrides any other statute which might otherwise be viewed as limiting application of the “rules of evidence” generally: “The provisions of any statute making rules of evidence inapplicable in particular proceedings, or limiting the applicability of rules of evidence in particular proceedings, do not make this division inapplicable to such proceedings.”

The Court of Appeal concluded that “In light of these provisions, it is clear that while the WCAB is free to adopt rules of practice and procedures which ignore the “rules of evidence” set forth in the Evidence Code, it nonetheless remains bound by the statutory requirements for dealing with privilege found in division 8 of that code, including section 915. As a consequence, the WCAB erred in this case when it ordered an in camera review of the University’s allegedly privileged documents by a special master for the purpose of assessing the merits of that privilege claim.”

Fortunately, the Court of Appeal recognized the importance of this previously unpublished opinion. On June 17, it issued the following order. “The opinion in this matter filed on May 23, 2014, was not certified for publication. Requests have been received to order publication of the opinion and it appears that our opinion meets the standards set forth in California Rules of Court, rule 8.1105(c). The requests are GRANTED. The opinion is ordered published in the Official Reports.”

The decision can now be cited at the WCAB level and above, and has become binding precedent on all lower courts and judges.

Court of Appeal Remands Case to Consider 22 Non MPN Reports

Mirian Garcia was employed by Cooper Cold Foods, Inc. as a custodian. On March 18, 2010, she was cleaning offices when she slipped going up some steps. Garcia fell onto her knee and put her hands down to stop herself.

Twenty-two medical reports prepared by seven individuals (Drs. Boyarski, Capen, Karlsson, Brickman, Zlotolow, Furman, and Musher) were excluded from the record by the workers’ compensation judge because the reporting persons were not a part of the “medical provider network” (MPN) provided by the employer. The Workers’ Compensation Appeals Board (appeals board) affirmed this decision.

On the same day of the appeals board’s decision, Second District Court of Appeal, issued its opinion and decision in Valdez v. Workers’ Comp. Appeals Bd. (2012) 207 Cal.App.4th 1. The court held on pertinent facts identical to those in the present Garcia case that medical reports could not be excluded for the sole reason that they were prepared by persons not in the MPN. The Supreme Court granted review in Valdez and affirmed the Court of Appeals’ decision without any modifications.

Following the Supreme Court’s decision, the Court of Appeal issued a writ of review in Garcia vs WCAB and Midwest Insurance, informing the parties that it was inclined to annul the decision of the appeals board. It offered the parties an opportunity to file a stipulation which would allow this court, without filing of the record or any briefing, to annul the decision of the appeals board and to return the case to the appeals board to conduct additional proceedings that would conform to the decision and opinion in Valdez, supra, 57 Cal.4th 1231. The parties have not filed such a stipulation.

The decision of the appeals board denying Garcia’s petition for reconsideration was annulled. The case was remanded with directions to rule upon the admissibility of the heretofore excluded medical reports, and any further medical reports and records Garcia may wish to introduce into evidence. In ruling upon the admissibility of medical evidence, the workers’ compensation judge and the appeals board are to be guided by Valdez, supra, 57 Cal.4th 1231.

WCIRB CEO Says Comp Vital Signs Are “Mixed”

The health of the workers’ compensation system in California and statewide economic trends likely to impact the system in the future were among the topics discussed at this months Annual WCIRB Workers’ Compensation Conference in San Francisco. The Conference is an opportunity for WCIRB members and other industry stakeholders to discuss issues of common concern and to hear from leading voices in the California workers’ compensation system.

WCIRB President and CEO Bill Mudge opened the Conference with a “health checkup” on the State’s 101 year old workers’ compensation system from the perspective of injured workers, employers and insurers. Based on Mr. Mudge’s observations, “vital signs” for the California system are mixed.

1) For injured workers, fewer injuries and timely access to care and benefits are balanced by concerns over the level of wage replacement, the problems associated with high rates of long-term opioid use and delays getting back to work.
2) For employers, fewer injuries, numerous insurance choices and a charged rate level that remains approximately 50% below what it was a decade ago are balanced against a litigious, costly and complex workers’ compensation system.
3) For insurers, the size of the workers’ compensation market, pricing flexibility and competition are balanced against volatile insurer results, unpredictable outcomes, and a complex benefit delivery system.

Overall there has been an 83% reduction in claim frequency in the past 50 years. 85% of injured workers who responded to a survey were satisfied with the medical care they received. Yet California has 47% of lost time claims with permanent disability. This ranks as the seventh highest state. California is among the top ten states with longer term opiate use.