Author: WorkCompAcademy

Floyd, Skeren and Kelly is pleased to announce our 2015 Northern California Employment Law Conference, set for January 30, 2015 at the Hilton Garden Inn, 1800 Powell Street Emeryville. We will feature as our Keynote Speaker Dale Brodsky, Esq., Councilmember of the California Fair Employment and Housing Council.

The Conference will cover important workplace topics related to the Interactive Process, Disability Leave, Pregnancy Leave, the Affordable Care Act, Workers’ Compensation and the crossover issues related to the Fair Employment Act, and much more. Some of the topics covered are:

1) Understanding the Numerous, and Often Overlapping, California Leave Laws
2) An Overview of Proposed Regulatory Changes to the California Family Rights Act
3) Guidance on Preventing a Straightforward Workers’ Compensation Case from Turning Into a FEHA Nightmare
4) Mastering the Complexities of Pregnancy Leave: How Much Time is Required by Law and Why it Could be More Than 7 Months
5) An Affordable Care Act Update for Employers: What Changed as of January 1, 2015, Employer Responsibilities
6) Overview of New California Employment Laws in Effect as of January 2015
7) Reduce Work Comp Costs: Avoid Seven Common Mistakes

This conference will include helpful information for employers, supervisors, managers, claims adjusters, risk managers, attorneys and any other professional associated with human resources and employment law. For more information and to register visit us at: FSK HR TRAINING.

This program, has been approved for 7 (HR (General)) recertification credit hours toward PHR, SPHR and GPHR recertification through the HR Certification Institute. We will release the program number the day of the training in your materials, please be sure to note the program ID number on your recertification application form. For more information about certification or recertification, please visit the HR Certification Institute website at www.hrci.org

A federal bankruptcy judge ruled this week that a worker who used his workers compensation settlement and Medicare set-aside account funds to buy real estate and a new truck will not have to include those items as assets under his Chapter 7 bankruptcy proceedings.

According to the story in Business Insurance, Jesus Arellano, 44, broke his hip while working for an unidentified employer in 2010. Court filings in his case filed in the U.S. Bankruptcy Court in Wilkes-Barre, Pennsylvania allege that he settled a workers comp claim related to the injury for $225,000 in workers comp benefits, as well as $72,742 placed into a Medicare set-aside account for future medical treatment.

The federal Medicare Secondary Payer Act requires self-insured employers and insurers to act as primary payers for workers comp and liability claims involving Medicare beneficiaries. U.S. Centers for Medicare and Medicaid Services advises workers comp payers to set up Medicare set-aside accounts to pay for future medical costs for a beneficiary’s injury, but beneficiaries aren’t required to use the funds for their health care.

After receiving the settlement and Medicare set-aside funds in January 2012, Mr. Arellano allegedly used the money to buy a 2005 Ford F-150 truck and two properties in York, Pennsylvania, court records show. Mr. Arellano later sold one of the properties to his brother under an installment payment agreement, under which his brother is slated to pay $1,200 a month until June 2020.

Mr. Arellano filed for Chapter 7 bankruptcy protection in March 2014, but asked for the truck, the two properties and remaining money from his workers comp settlement to be exempted from bankruptcy proceedings. He did not disclose in court filings the installment agreement between him and his brother for one of the properties, nor the fact that he is receiving income from that agreement. The trustee in Mr. Arellano’s bankruptcy case objected to Mr. Arellano’s exemption request, contending in court filings that bankruptcy laws did not allow Mr. Arellano to exempt property that was the proceeds of a workers comp claim.

However, Mr. Arellano countered in part that the exemption should be allowed under bankruptcy law because the property and related workers comp payments represented “a payment in compensation of loss of future earnings” that is used to reasonably support Mr. Arellano and his dependents, filings show.

On Monday, federal bankruptcy court Judge Mary D. France agreed with Mr. Arellano and found that his properties and workers comp settlement funds should be exempted from bankruptcy proceedings. In her ruling, Judge France said the workers comp settlement funds are reasonably necessary to support Mr. Arellano’s family.

That finding was based in part on the fact that Mr. Arellano is now unemployed, that his wife ‘has a low-wage job at a fast-food restaurant” and that two of their three children are under the age of 18. Additionally, the judge said that while interest that Mr. Arellano’s brother is paying on one of the properties could be considered income, it is “sufficiently modest as to have a negligible impact” on Mr. Arellano’s bankruptcy case.

Mr. Arellano “purchased a modest home for his family and a 2005 truck,” the ruling reads. “The second parcel of real property purchased with the proceeds of his workers’ compensation settlement was acquired as an investment. With the payments made by his brother on the installment agreement, (Mr. Arellano) has monthly disposable income of $705……”

Judge France also found that Mr. Arellano’s Medicare set-aside fund should not be included in bankruptcy proceedings because it was slated for Mr. Arellano’s medical expenses – even though he didn’t use it for that purpose – and is “not property of the bankruptcy estate.

“Because I find that the (Medicare set-aside) payment was to be held in trust for the benefit of providers of medical services related to (Mr. Arellano’s) workers’ compensation claim, I find that the (set aside) is not property of Debtor’s bankruptcy estate and, as such, may not be administered by the Trustee for the benefit of creditors,” the decision reads.

Arrow Recycling Solutions, Inc., and Arrow Environmental Solutions, Inc is a metal recycler. Just before its workers’ compensation insurance coverage was due to expire Arrow provided payroll information to Patriot Risk and Insurance Services, Inc, an insurance broker,.for the purpose of obtaining a proposal for a replacement policy. Patriot replied with a Producer’s Quote and the estimated “annual pay-in amount” was $232,094. Arrow executed a Request to Bind this policy, and later received a policy and related profit sharing agreements with the insuring entities.

Arrow alleges in a civil complaint it later filed against the carriers and broker that despite a “very good claims history,” the actual pay-in amount billed for the first year was approximately $490,000, which exceeded the estimated annual pay-in amount of $232,094. Arrow alleges that the reason for this discrepancy was that the Billing Terms “contained mathematical falsehoods” involving the misclassification of payroll amounts from higher premium classifications to lower premium classifications. Arrow alleges that it would not have purchased the workers’ compensation insurance if it had known of this inaccuracy.

However the the “Request to Bind” document signed by Arrow included an arbitration provision . The words “Initial Here” appeared under a box next to the arbitration provision. That box was empty and contained no initials in the copy of the Request to Bind attached to the complaint. Later Arrow received as part of its policy package a Reinsurance Participation Agreement (RPA). Paragraph 13 of the RPA included an arbitration provision.

The defendants filed a motion to compel arbitration and stay the trial court proceedings. They argued that all of the counts alleged against them were within the scope of the arbitration agreement in the RPA. Alternatively, they argued that any claims not covered by the arbitration agreement in the RPA were within the scope of the arbitration agreement in the Request to Bind. They also argued that Patriot had agreed to participate in any court ordered arbitration and that the fact that Patriot was not a party to the arbitration agreements did not preclude arbitration. The trial court denied the motion to compel arbitration and the defendants appealed. The Court of Appeal affirmed the denial of the motion in the unpublished case Arrow Recycling Solutions v. Applied Underwriters.

A party moving to compel arbitration bears the burden of proving by a preponderance of evidence the existence of an arbitration agreement.. An officer of Arrow stated in his declaration that the box next to the arbitration provision in the Request to Bind that he signed was left blank and did not contain his initials. His assistant Patti declared that she sent the signed Request to Bind to Patriot and that neither the initials nor the word “none” was present on the document that she provided. Defendants claim the document they received had the box checked, but the officer claimed that the handwriting was not his and the defendant’s copy was initialed by someone else.

The defendants as the parties moving to compel arbitration had the burden of producing evidence sufficient to establish the existence of an arbitration agreement in the Request to Bind, such as evidence that Patriot initialed the Request to Bind as Arrow’s agent. The defendants failed to present such evidence. The Court of Appeal concluded that the declarations of Arrow’s officers and his assistant constitute substantial evidence supporting the implied finding that Arrow never agreed to the arbitration provision in the Request to Bind and that, therefore, there was no such arbitration agreement.

It’s estimated that more than half of adults in the United States diagnosed with knee osteoarthritis will undergo knee replacement surgery. While improvements in implantable devices and surgical techniques have made the procedure highly effective, pain control after surgery remains a common but persistent side effect for patients.

A Henry Ford Hospital study, presented recently at the American Association of Hip and Knee Surgeons meeting in Dallas, found that injecting a newer long-acting numbing medicine called liposomal bupivacaine into the tissue surrounding the knee during surgery may provide a faster recovery and higher patient satisfaction.

“The pain scores for this injection technique averaged about 3/10, which is similar to the pain scores seen with our traditional method,” says Jason Davis, M.D., a Henry Ford West Bloomfield Hospital joint replacement surgeon and the study’s senior author. “Patients had pain relief for up to two days after surgery and better knee function compared with the traditional method.”

It is estimated that the number of total knee replacement surgeries has more than tripled from 1993 to 2009. Arthritis is the most common cause of chronic knee pain and disability. However, a June 2014 study found that 95 percent of knee surgeries are attributed to the epidemic of overweight and obesity in the United States.

During the two-hour knee replacement procedure, the orthopedic surgeon removes the damaged cartilage and bone, and inserts a knee implant to restore the alignment and function of the knee. More than 90 percent of knee replacements are functioning 15 years after surgery, according to the American Academy of Orthopaedic Surgeons.

In the Henry Ford study, 216 patients were evaluated for pain control the first two days after surgery from October 2012 to September 2013. Half of the patients received the traditional pain control method with continuous femoral nerve blockade, in which common numbing medicine is injected into the groin area, blunting the main nerve down the front of the knee. This method uses a pain pump to extend pain control for two days but causes some leg weakness. “Pain control came at the price of weakness and made patients somewhat tentative when walking during their hospital stay,” Dr. Davis says.

The other half of patients received the liposomal bupivacaine injection at the site of the surgery. Dr. Davis says many patients were able to walk comfortably within hours after surgery. Dr. Davis says the injection around the knee itself “optimizes pain control early on” without the side effects of the traditional technique. “Function-wise, it was a lot easier for patients to move around more confidently,” he says. “In the past decade, we’ve made major advancements in pain control for knee replacement surgery. This option is a promising, viable one for our patients.”

Hundreds of health professionals engaged in a spirited debate Monday about the proposed sale of a nonprofit Lynwood hospital to a for-profit hospital company in Ontario. According to the story in the Los Angeles Times, St. Francis Medical Center is one of six struggling Roman Catholic nonprofit hospitals that Prime Healthcare Services has agreed to buy for about $843 million in cash and assumed liabilities.

Because Prime Healthcare intends to convert the Daughters of Charity hospitals to for-profit status, the sale requires the approval of California Atty. Gen. Kamala D. Harris. Harris’ staff hosted a public hearing Monday in Lynwood to hear public feedback about the proposed sale of St. Francis. The hearing is one of six scheduled for this week in Southern and Northern California. Harris is expected to make a decision about the sale by early February.

Opponents urged Harris to reject the sale, saying Prime Healthcare places too big of an emphasis on profit and the sale would diminish the services that the Catholic hospitals provided to their primarily lower-income clientele. They also noted that the Justice Department is investigating Prime for alleged billing fraud.

Supporters of the sale note Prime’s history of rescuing struggling hospitals by reducing costs and increasing revenues, largely through tough negotiations with insurers. Prime owns 29 hospitals in California and eight other states.

Prime Healthcare Chief Executive Dr. Prem Reddy has vowed to keep the hospitals open for at least five years and retain all services, including emergency rooms. He also said he would continue to provide care to patients who are unable to pay for services.

Dr. Clayton Kazan, head of emergency care at St. Francis, was one of several of the hospital’s doctors who advocated the sale to Prime at Monday’s hearing. “Prime represents our lifeline,” he said. “Having never closed a hospital and never closed an emergency department, Prime represents our best hope.”

Scott Byington, president of the St. Francis Registered Nurses Assn., said he thinks that Prime will reduce services provided to those people unable to pay. “These patients will not be able to go to that hospital because it’s a for-profit institution,” he said.

Opponents of the sale wore blue T-shirts that said, “There is an alternative,” a reference to a competing offer to buy the hospitals from private equity firm Blue Wolf Capital.

Robert Issai, chief executive of Daughters of Charity, said the six Catholic hospitals probably would be forced into bankruptcy if Harris rejects the sale. Blue Wolf’s offer was not feasible because the firm offered to manage the hospitals without promising to buy them, he said. “It was crystal clear that Prime was the best choice.”

An independent consultant who reviewed the proposed sale for Harris had recommended that Prime be required to keep the hospitals open for at least 10 years. Reddy said that he would agree.

In addition to St. Francis, the Daughters of Charity hospitals include: St. Vincent Medical Center near in downtown Los Angeles, O’Connor Hospital in San Jose, Saint Louise Regional Hospital in Gilroy, Seton Medical Center in Daly City and Seton Coastside Medical Center in Moss Beach, north of Half Moon Bay.