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Author: WorkCompAcademy

WCIRB CEO Describes Organizational Transformation

In an open letter to the California workers’ compensation community posted on the WCIRB website, President and CEO Bill Mudge describes some of the transformations taking place at the WCIRB including a new mission statement, new core values, and a renewed commitment to openness and transparencys.

The letter also noted that one of the WCIRB top priorities is monitoring and analyzing the impact on system costs of SB 863 as they emerge in statewide loss and loss adjustment expenses.

To that end, the WCIRB developed, in collaboration with industry experts who serve on its Claims Working Group and Actuarial Committee, a detailed and comprehensive SB 863 Cost Monitoring Plan. As data becomes available, the WCIRB will make it available to everyone in the workers’ compensation community. This plan has been submitted to Insurance Commissioner Jones for approval.

SB 863 is not the only significant change to occur for the WCIRB in 2012. It embarked on an ambitious transformation and modernization of the WCIRB’s business operations and culture, and developed a new mission statement which sharply defines the WCIRB’s role and will guide actions in the coming years. The new mission statement is: “The WCIRB is California’s trusted, objective provider of actuarially-based information and research, advisory pure premium rates, and educational services integral to a healthy workers’ compensation system.”

The WCIRB transformation started at the top with a restructuring of the senior management team. It promoted David Bellusci – the WCIRB’s highly respected Chief Actuary – to the position of Executive Vice President and Chief Operating Officer. It also promoted Eric Riley to the newly-created position of Chief Customer Officer – a job dedicated to the WCIRB commitment to broad external outreach and customer service to its members and all system stakeholders. The WCIRB brought on board a new Chief Information Officer, Raj Marwah, to lead its ambitious technology modernization efforts. Completing the senior management team is Senior Vice President and Chief Legal Officer Brenda Keys who serves as the WCIRB’s primary liaison with the California Department of Insurance and has responsibility for all legal issues.

Looking forward in 2013, the WCIRB will deploy Phase 2 of STAR (its new operating system for processing unit statistical data and reports and for the promulgation of more than 125,000 experience modifications a year) to incorporate a new policy audit system and significantly extend our online services. Taken together, these two initiatives will allow WCIRB members and other data submitters to completely eliminate paper interaction with the WCIRB. Our goal together is to reduce costs while increasing process speed and efficiency.

Researchers Find “Staggering” Over-Diagnosis of Depression

Americans are over-diagnosed and over-treated for depression, according to a new study conducted at the Johns Hopkins Bloomberg School of Public Health. The study examines adults with clinician-identified depression and individuals who experienced major depressive episodes within a 12-month period. It found that when assessed for major depressive episodes using a structured interview, only 38.4 percent of adults with clinician-identified depression met the 12-month criteria for depression, despite the majority of participants being prescribed and using psychiatric medications.

“Depression over-diagnosis and over-treatment is common in the U.S. and frankly the numbers are staggering,” said Ramin J. Mojtabai, PhD, author of the study and an associate professor with the Bloomberg School’s Department of Mental Health. “Among study participants who were 65 years old or older with clinician-identified depression, 6 out of every 7 did not meet the 12-month major-depressive-episodes criteria. While participants who did not meet the criteria used significantly fewer services and treatment contacts, the majority of both groups used prescription psychiatric medication.”

Using a sample of 5,639 participants from the 2009-2010 United States National Survey of Drug Use and Health, Mojtabai assessed clinician-identified depression based on questions about conditions that the participants were told they had by a doctor or other medical professional in the past 12 months. The study indicates that even among participants without a lifetime history of major or minor depression, a majority reported having taken prescription psychiatric medications.

“A number of factors likely contribute to the high false-positive rate of depression diagnosis in community settings, including the relatively low prevalence of depression in these settings, clinicians’ uncertainty about the diagnostic criteria and the ambiguity regarding sub-threshold syndromes,” said Mojtabai. “Previous evidence has highlighted the under-diagnosis and under-treatment of major depression in community settings. The new data suggest that the under-diagnosis and under-treatment of many who are in need of treatment occurs in conjunction with the over-diagnosis and over-treatment of others who do not need such treatment. There is a need for improved targeting of diagnosis and treatment of depression and other mental disorders in these settings.”

Next Week – Floyd, Skeren and Kelly Employment Law Conference

Only one week remains before the Floyd, Skeren and Kelly LLP 3rd Annual Employment Law Conference, which will feature keynote speaker Phyllis W. Cheng, Director of the California Department of Fair Employment and Housing (DFEH). The conference will be held on May 9, 2013 at the Disneyland Hotel.

This is an all-day event, designed for employers, supervisors, managers, claims adjusters, risk managers, and any other professionals associated with human resources and employment law. The conference will focus on the latest employment law cases, most recent legislation, and provide helpful practical guidance related to numerous workplace topics, including: the new California disability regulations (which impact an employer’s policies and procedures on reasonable accommodation, the interactive process and medical certifications); an overview of important OSHA workplace requirements; a review of 10 critical steps an employer can take to stay out of court and avoid costly and time consuming employment related lawsuits; a workers’ compensation case law and legislative update; helpful guidance on preventing workers’ compensation fraud; a review of the new comprehensive pregnancy disability regulations now in effect; and, an update on the evolving role of social media in the workplace.

Cost of attendance is $120.00

Discounted room rates at the Disneyland Hotel and discounted Disneyland tickets are available for attendees and their guests. Upon registration this information will be provided to you.

Please visit for more details and online registration. You can also contact Christina Bardelli by phone (818) 854-3239 or, email

Monterey County Field Worker Pleads Guilty In Fraud Case

After claiming for three years she damaged her hand desperately enough she was unable to even drive, a field worker pleaded guilty Tuesday to making false statements that allowed her to reap the benefits of workers’ compensation.

According to the story in the Salinas Californian, video surveillance capturing Ema Pantoja, 52, of Greenfield, performing activities inconsistent with her testimony provided the fodder necessary for the Monterey County District Attorney’s Office to file charges for insurance fraud, according to a release.

In January 2007, Pantoja alleged she sustained an injury to her left wrist and elbow while working in the fields owned by Scheid Vineyards. Although she received medical treatment and returned to work, by May 2007 Pantoja told an investigator she was unable to do anything with her lefthand, a premise she repeated to multiple doctors.

On May 7, 2008, Pantoja testified at a hearing about her physical limitations. She continued to receive medical treatment until May 2010.

Although Pantoja stated she couldn’t even drive and was forced to wear a wrist brace at all times, she was caught on tape performing impossible activities if her injury were true, according to the release.

She will be sentenced by Judge Larry Hayes on June 27. Insurance fraud as a felony carries a maximum penalty of five years in the California Department of Corrections and a fune of up to $150,000 or double the fraud amount. In addition, she may be on the hook for restitution which can include attorney’s fees and the cost of investigation.

DIR Observes Workers’ Memorial Day

Workers’ Memorial Day takes place annually around the world, an international day of remembrance and action for workers killed, injured or made ill on the job. The observance is held each year on April 28, the day Congress passed the Occupational Safety and Health Act in 1970. Workers’ Memorial Day is an opportunity to highlight the preventable nature of most workplace accidents and to promote campaigns in the fight for improvements in workplace safety and health.

“While we pause this day to remember those who died simply by trying to earn a living, we must honor their memories by continuing to make workplace safety a priority,” said DIR Director Christine Baker. “We will focus our efforts and resources on identifying and targeting the most serious safety violators, and we will continue working closely with model employers who are making safety a part of their workplace culture.”

California has a long history of improving workplace safety and continues to lead the nation in protective safety standards. Cal/OSHA was established by the Occupational Safety and Health Act of 1973 to enforce effective standards, assist and encourage employers to maintain safe and healthful working conditions, and to provide for enforcement, research, information, education and training in the field of occupational safety and health.

Cal/OSHA last year launched a statewide Confined Space Initiative after seven workers died in 2011 due to confined space hazards in various industries. This ongoing initiative includes outreach and enforcement to educate employers and workers about these hazards. Cal/OSHA issued a Confined Space Hazard Alert to help employers and employees identify confined space hazards and take immediate steps to train and protect workers and have emergency procedures on site. Cal/OSHA has also posted extensive resources on confined space hazard materials online.

Cal/OSHA was the first in the nation to adopt an Injury and Illness Prevention Program (IIPP) standard in 1991, to ensure that all employers have effective safety and health programs tailored to their specific workplaces.

Cal/OSHA was also the first in the nation to enact a standard and comprehensive program to prevent workers from suffering heat illness and death working in high heat outdoors. Cal/OSHA’s program has been effective in preventing many heat-related illnesses and deaths to farmworkers, construction workers, landscapers, and others through enforcement, education and outreach, media and partnerships with business and labor organizations to educate employers and workers about the risks of heat illness and simple steps necessary to prevent illness and death. Cal/OSHA has posted extensive resources on heat illness prevention on its website.

Nevada Hospital Accused of Dumping Patients in California

Federal authorities have taken disciplinary action against a Las Vegas hospital cited for improperly sending newly released psychiatric patients by bus to neighboring California and other states in a practice called “patient dumping.” According to the story in Reuters Health, the Rawson-Neal Psychiatric Hospital was warned it was in violation of Medicare rules governing the discharge of patients and could lose critical funding under the federal healthcare insurance program if it failed to correct the problem. The notice came in a letter on Friday from the Centers for Medicare and Medicaid Services, an agency under the U.S. Health and Human Services Department, to the Southern Nevada Adult Mental Health Services agency, which is licensed to run the hospital for the state.

The letter said a March compliance survey, which remains confidential, “reported serious deficiencies” in discharge planning and governance. Rawson-Neal has until May 6 to furnish a plan to remedy the problems or face further actions to terminate its Medicare provider agreement, the letter said. Rufus Arther, a Medicaid operations branch chief for Nevada and California, said he was unable to quantify the exact amount of money at stake for Rawson-Neal.

Dr Tracey Green, Nevada’s top state health officer, estimated less than 10 percent of the hospital’s billings come from Medicare and none from Medicaid. Most of the hospital’s funding comes from the state, she said. “We are 100 percent confident that we will get the plan of corrections implemented and there will be no loss of federal funds,” she said. The hospital has tightened discharge policies to ensure patients released to other states have appropriate after-care treatment plans, Green said. She also said all psychiatric patients would from now on be chaperoned when the state pays to put them on Greyhound buses, planes or trains.

The hospital has faced increasing scrutiny since the Sacramento Bee newspaper documented in an investigative series that began last month that Rawson-Neal gave one-way Greyhound Bus tickets to up to 1,500 patients for destinations in California and 46 other states in the past five years. Some of those patients – how many remains the subject of multiple investigations – were put on buses without sufficient food, medicine or plans for housing and continued medical treatment. The Bee’s expose grew from its story about one particular discharge, that of James Flavy Coy Brown, 48, who was put in a taxi to a Greyhound Bus station with a ticket for a 15-hour ride to Sacramento in February and a three-day supply of pills to treat his schizophrenia, depression and anxiety. Staff at a Sacramento homeless shelter described him as arriving frightened and disoriented, without money or medication, though Brown eventually was reunited with a daughter from the East Coast who had not heard from him for years.

A state review of the matter led to discipline against two employees, and Nevada health and human services spokeswoman Mary Woods said earlier this week that an ongoing probe has uncovered violations of hospital policy in four or five discharges. While vowing to fully investigate the issue, Nevada Governor Brian Sandoval and state health officials have denied that illegal, out-of-state busing of patients is rampant or that the state condones or practices patient-dumping

Local officials in San Francisco and Los Angeles have said they are looking into the matter. The Bee found one-third of the patients given bus tickets went to California, the bulk of them arriving in Los Angeles, while 36 ended up in San Francisco.

Federal Jury Convicts Anaheim Physician in Fraud Case

A federal jury in Los Angeles found an Anaheim physician and two others guilty last week for their roles in a $1.5-million Medicare fraud scheme involving power wheelchairs.

According to the story in Reuters Health, federal prosecutors said at trial that Godwin Onyeabor, 49, an officer at Fendih Medical Supply Inc. in San Bernardino, paid kickbacks to physician Sri J. Wijegunaratne, 58, and another healthcare professional, Heidi Morishita, 48, for fraudulent prescriptions for durable medical equipment.

Officials said that as a result of this scheme, which ran from 2007 to 2012, those prescriptions were used to bill Medicare $1.5 million for false and fraudulent claims. Medicare paid nearly $1 million on these claims.

Several Medicare patients testified at trial that they were lured to medical clinics with the promise of free items such as vitamins and juice, only to get power wheelchairs they didn’t need.

Onyeabor, Wijegunaratne and Morishita face up to 10 years in prison and a $250,000 fine for each count they were found guilty on, prosecutors said.

The case was investigated by the FBI and the Los Angeles regional office for the U.S. Department of Health and Human Services’ inspector general.

The Obama administration has tried to crack down on fraud and abuse in Medicare in hopes of recovering some of the estimated $60 billion lost annually in the federal program. The government’s enforcement efforts have taken on added importance at a time of rising entitlement spending and mounting federal debt.

CompWest Insurance Launches Health Care Industry Insurance Program

CompWest Insurance has signed an agreement with Phoenix Risk Management Insurance Services, to write California health care workers’ compensation insurance program for specific classes in the health care industry.

Under the terms of the accord, CompWest will combine its underwriting, specialized loss control and integrated claim management services with Phoenix Risk Management’s significant experience in this particular segment to minimize injuries and reduce long-term insurance costs for policyholders.

The team will provide service-oriented, long-term, stable market for the growing health care industry for customers and retail agents.Targetting California operations with an annual premium between $75,000 and $500,000, the program aims a variety of classifications such as residential care for children, nursing homes, convalescent homes or hospitals and rest homes, physicians’ offices, residential care for elderly or adults and residential care for the developmentally disabled.

CompWest Insurance is part of the Accident Fund Holdings, which is a workers’ compensation insurance holding company conducting business through four operating units in the US – Accident Fund Cos., located in Lansing, Mich.; United Heartland, located in New Berlin, Wisc.; CompWest, located in San Francisco; and Third Coast Underwriters, located in Chicago. Accident Fund Holdings, Inc. is one of the largest privately held monoline workers’ compensation carriers in the country and is rated “A-” (Excellent) by A.M. Best. It is a wholly-owned subsidiary of Blue Cross Blue Shield of Michigan.

WCAB Panel Says Lien Activation Fee Not Required for 2013 Lien Trial

Maria Elana Mendez settled her claims against Le Chef Bakery and Pacific Compensation Insurance by a compromise and release in 2010.

On April 30, 2012, Dr. Fatolomi filed a medical-legal lien claim and concurrently filed a DOR requesting a lien conference. A lien conference was held on June 14, 2012 and continued to July 20, 2012. (before SB 863 became law) The parties filed a pretrial conference statement, and the case was scheduled for a December 12, 2012 trial, which was continued to January 3, 2013.

Dr. Fatolomi did not pay a lien activation fee prior to the January 3, 2013 lien trial. The WCJ concluded that, under WCAB Rule 10582, Dr. Fatolomi’s filing of a DOR “activated” his lien and that the intent of section 4903.06 is that, beginning January 1, 2013, a lien claimant must pay an activation fee whenever it uses the WCAB to collect on its lien, regardless of whether the first appearance in 2013 is at a lien conference or lien trial. Therefore, the WCJ dismissed Dr. Fatolomi’s lien with prejudice for failure to pay the fee.

Dr. Fatolomi filed a petition for reconsideration contending that Labor Code section 4903.06 does not require payment of a lien activation fee prior to a lien trial and, therefore, his lien should not have been dismissed. The WCAB in a significant panel decision agreed and reversed the dismissal in the case of Maria Elana Mendez vs Le Chef Bakery and Pacific Compensation Insurance.

Payment of a lien activation fee was not required with a DOR filed prior to January 1, 2013 or at a lien conference held prior to January 1, 2013. This is because section 4903.06 was not effective until that date. Therefore, Dr. Fatolomi was not required to pay a lien activation fee based on his April 30, 2012 DOR or based on the June 14 or July 20, 2012 lien conferences. However, because section 4903.06 applies to all cases that were not final as of its January 1, 2013 effective date (Stats. 2012, ch. 363, § 84), the WCAB emphasized that if Dr. Fatolomi’s pre-2013 DOR had triggered a lien conference (rather than a lien trial) in 2013, he would have been required to pay the activation fee prior to the lien conference. Under the WCAB Rules, there is a clear and unambiguous distinction between a “lien conference” and a “lien trial.”

The panel concluded that a lien claimant is not required to pay a lien activation fee prior to a 2013 lien trial where: (1) the declaration of readiness (DOR) is filed prior to January 1, 2013; (2) the lien conference takes place prior to January 1, 2013; and (3) the lien trial takes place in 2013, without any intervening 2013 lien conference.

However the panel observed that section 4903.06(a)(5) provides: any lien filed pursuant to subdivision (b) of Section 4903 prior to January 1, 2013, and any cost that was filed as a lien prior to January 1, 2013, for which the filing fee or lien activation fee has not been paid by January 1, 2014, is dismissed by operation of law. Therefore, if a lien subject to the lien activation fee is not resolved or withdrawn by January 1, 2014, the lien activation fee must be paid by that date, or the lien will be dismissed by operation of law.

WCAB Decision in Orthomed Lien Dismissal Case Elevated to En Banc

Early this month an Appeals Board significant panel decision held that where a lien claim falls within the lien activation fee requirements of Labor Code section 4903.06: (1) the lien activation fee must be paid prior to the commencement of a lien conference, which is the time that the conference is scheduled to begin, not the time when the case is actually called; (2) if the lien claimant fails to pay the lien activation fee prior to the commencement of a lien conference and/or fails to provide proof of payment at the conference, its lien must be dismissed with prejudice; (3) a breach of a defendant’s duty to serve required documents or to engage in settlement negotiations does not excuse a lien claimant’s obligation to pay the lien activation fee; and (4) a notice of intention is not required prior to dismissing a lien with prejudice for failure to pay the lien activation fee or failure to present proof of payment of the lien activation fee at a lien conference.

The facts of the case showed that a lien conference was set for January 9, 2013, at 8:30 a.m. and one of the lien claimants, Orthomed, did not appear at the conference. Because Orthomed did not submit proof of prior timely payment of the lien activation fee, and because the WCJ reviewed the record and determined that the lien activation fee had not in fact been paid, the WCJ dismissed Orthomed’s lien with prejudice, without first issuing a notice of intention. The WCAB sustained the dismissal in a case classified as a significant panel decision.

Significant panel decisions are not binding precedent. Their intent is to augment the body of binding appellate court and en banc decisions. A panel decision will be deemed significant if: (1) it involves an issue of general interest to the workers’ compensation community; and (2) all Appeals Board members review the decision and agree that it is significant. (Elliott v. Workers’ Comp. Appeals Bd. (2010) 182 Cal.App.4th 355, 361, fn. 3 [75 Cal.Comp.Cases 81]; Larch v. Workers’ Comp. Appeals Bd. (1999) 64 Cal.Comp.Cases 1098, 1099-1100 (writ den.).)

To ensure uniform application of the law concerning payment of the lien activation fee and consequences for failure to do so, the Appeals Board voted to grant reconsideration of the April 5 significant panel decision on Board motion (Lab. Code, § 5911; see also §§ 5900(b), 5906, 5315) and the Chairwoman of the Appeals Board, upon a majority vote of its members, reassigned this case to the Appeals Board as a whole for an en banc decision. (Lab. Code, § 115.)

Thus the WCAB sitting en banc rescinded the April 5, 2013 significant panel decision and issue a new en banc decision, Eliezer Figueroa v B.C. Doering Co., Employers Compensation Insurance Co that essentially reiterated the prior result. Now that the decision is en banc, it is binding authority in all trial level cases.