Author: WorkCompAcademy

A new California Workers’ Compensation Institute (CWCI) report suggests that the number of work injury claims involving obesity could increase sharply, along with the associated costs, following the recent vote by the American Medical Association (AMA) to reclassify obesity as a treatable disease.

In mid-June, the AMA approved a resolution reclassifying obesity as “a disease state,” effectively declaring that one third of all Americans suffer from a medical condition that requires treatment, a move that is widely expected to increase pressure on doctors to address the condition when treating obese patients, and on health care payers to pay for obesity consultations and treatment. And that designation, according to the report, will likely affect diverse areas of employment, including the Americans with Disability Act and Equal Employment Opportunity Commission claims; life, disability, and workers’ compensation insurance; weight bias; insurer and provider responsibility; physician reimbursement; and diagnostic and procedure coding.

In workers’ compensation, obesity has historically been a co-morbidity – a condition that occurs at the same time, but usually independent of, an injury or illness. In the past, a medical provider might include an obesity co-morbidity code on their medical bill if they felt the condition needed to be addressed so that the work injury could be treated and the patient could recover and return to work (e.g., if an obese injured worker needed to lose weight before they could have back surgery.) Even as a co-morbidity, however, obesity in workers’ compensation has gone largely unreported. A CWCI survey from 2011 found that even though 28% of injured workers reported that they were obese, only 0.9% of the job injury claims from those workers included an obesity co-morbidity diagnostic code, indicating that obesity has only infrequently been deemed a condition that needed to be addressed in order to treat most work injuries and illnesses.

CWCI says that may change, however, if medical providers feel a greater responsibility to counsel obese patients about their weight and to treat the condition, especially if there is a greater likelihood that they will be paid for doing so. Aside from its status as a comorbidity, obesity could become a primary workers’ comp diagnosis, particularly in sedentary jobs like office work, or long-haul trucking, according to the report.

“In such scenarios the viability of the claim would likely hinge on proving that the work actually caused the obesity, which would be an issue ripe for dispute and which could lead to additional litigation,” the report states. “In light of the increasing evidence of genetic pre-disposition for various medical conditions, defining causation and relative causation will be critical in claims involving obesity, and also may arise in other employment areas such as pre-employment screening.”

The “disease” designation doesn’t bode well for employers or for long-term workers’ comp rates employers may be faced with paying if claims do rise, said Jerry Azevedo, a spokesman for the Workers’ Compensation Action Network, a group that represents the interests of employers. “The implications are grim, especially if statutory or case law proves ineffective in limiting employers’ liability to true industrial causation or direct compensable consequences,” Azavedo said. “Unfortunately, there’s a tension created through litigation in the workers’ comp system, where plaintiffs’ lawyers want to make everything under the sun a part of the injury claim to run up the bills and inflate benefits. Employers are forced to defend against that and have fought hard for policies that reinforce what should really just be common sense – which is employers should pay for what was directly caused by the work injury. ”

Michael Vincent Petronella owned several businesses, including The Reroofing Specialists, Inc., doing business as Petronella Roofing, Western Cleanoff, Inc., and Petronella Corporation. In September 2006, an SCIF claims adjuster received a telephone call from Petronella Roofing’s secretary, reporting an employee named Morales was still receiving workers’ compensation benefits although he had returned to work. The adjuster asked the secretary to provide documentation. She received a copy of Morales’s pay stub, reflecting he worked for Western. Noticing that Western had been reported to be dormant and removed from coverage under the policy, but was still listed as an active entity on the Secretary of State’s Web site, the adjuster reported the discrepancy to SCIF’s special investigations unit.

An SCIF claims manager compiled a list of 42 persons who filed workers’ compensation claims under Petronella Roofing’s policy whose payroll had not been reported to SCIF. A certified public accountant compared the payroll reports and audit documents defendant provided SCIF with the quarterly employee wage reports actually received by EDD. The accountant prepared a report reflecting the difference between the quarterly payroll defendant reported to EDD and the payroll reports he submitted to SCIF from the fourth quarter of 2000 to the fourth quarter of 2008. Over that 8-year span, the difference in payroll reported to EDD and that reported to SCIF exceeded $29 million.

The prosecution charged defendant with one count of grand theft, 36 counts of violating Insurance Code section 11880, subdivision (a), plus numerous tax evasion crimes. The information also alleged an enhancement under Penal Code section 186.11, subdivision (a). During trial, the court dismissed the grand theft charge at the prosecution’s request and granted defendant’s motion for acquittal on the bulk of the tax evasion charges. The jury found defendant guilty of 33 counts of violating Insurance Code section 11880, subdivision (a), but acquitted him on three other similar counts and the remaining tax evasion charges. As to counts 2 through 20, the jury returned true findings the prosecution of these charges began within four years of when the crime reasonably should have been discovered. Finally, the jury also found defendant engaged in a pattern of related fraudulent felony conduct resulting in over $500,000 in losses.

The superior court sentenced defendant to 10 years in state prison. It also and ordered him to pay $500,000 in restitution under Penal Code section 1202.4. Defendant appeals from the judgment raising numerous evidentiary, instructional, and sentencing issues. Both defendant and the People appeal from the trial court’s restitution award. The Court of Appeal reversed the trial court’s restitution order, but otherwise affirmed the judgment in the published case of The People v Michael Vincent Petronella.

The Court concluded that “a review of the trial court’s reasons for awarding SCIF $500,000 in restitution clearly indicates it abused its discretion in reaching this decision.” By ” failing to consider all of the evidence presented to it concerning restitution and relying on irrelevant factors to pick a figure out of thin air that was less than what the jury found to have been SCIF’s loss…” The matter was remanded to the Superior Court for further proceedings on the restitution award.

About half of a small group of patients with fibromyalgia — a common syndrome that causes chronic pain and other symptoms — was found to have damage to nerve fibers in their skin and other evidence of a disease called small-fiber polyneuropathy (SFPN). Unlike fibromyalgia, which has had no known causes and few effective treatments, SFPN has a clear pathology and is known to be caused by specific medical conditions, some of which can be treated and sometimes cured. The study from Massachusetts General Hospital (MGH) researchers will appear in the journal PAIN and has been released online.

“This provides some of the first objective evidence of a mechanism behind some cases of fibromyalgia, and identifying an underlying cause is the first step towards finding better treatments,” says Anne Louise Oaklander, MD, PhD, director of the Nerve Injury Unit in the MGH Department of Neurology and corresponding author of the Pain paper.

The term fibromyalgia describes a set of symptoms — including chronic widespread pain, increased sensitivity to pressure, and fatigue — that is believed to affect 1 to 5 percent of individuals in Western countries, more frequently women. While a diagnosis of fibromyalgia has been recognized by the National Institutes of Health and the American College of Rheumatology, its biologic basis has remained unknown. Fibromyalgia shares many symptoms with SFPN, a recognized cause of chronic widespread pain for which there are accepted, objective tests.

Designed to investigate possible connections between the two conditions, the current study enrolled 27 adult patients with fibromyalgia diagnoses and 30 healthy volunteers. Participants went through a battery of tests used to diagnose SFPN, including assessments of neuropathy based on a physical examination and responses to a questionnaire, skin biopsies to evaluate the number of nerve fibers in their lower legs, and tests of autonomic functions such as heart rate, blood pressure and sweating.

The questionnaires, exam assessments, and skin biopsies all found significant levels of neuropathy in the fibromyalgia patients but not in the control group. Of the 27 fibromyalgia patients, 13 had a marked reduction in nerve fiber density, abnormal autonomic function tests or both, indicating the presence of SFPN. Participants who met criteria for SFPN also underwent blood tests for known causes of the disorder, and while none of them had results suggestive of diabetes, a common cause of SFPN, two were found to have hepatitis C virus infection, which can be successfully treated, and more than half had evidence of some type of immune system dysfunction.

“Until now, there has been no good idea about what causes fibromyalgia, but now we have evidence for some but not all patients. Fibromyalgia is too complex for a ‘one size fits all’ explanation,” says Oaklander, an associate professor of Neurology at Harvard Medical School. “The next step of independent confirmation of our findings from other laboratories is already happening, and we also need to follow those patients who didn’t meet SFPN criteria to see if we can find other causes. Helping any of these people receive definitive diagnoses and better treatment would be a great accomplishment.”

Fitch Ratings affirmed the ‘AA’ rating on approximately $559.5 million in California Infrastructure and Economic Development Bank workers compensation relief bonds, series 2004A and 2004B. The bonds are limited obligations of the infrastructure bank, payable solely from pledged revenues consisting primarily of special bond assessments imposed by the California Insurance Guarantee Association (CIGA) upon all insurers providing workers compensation insurance policies in the state.The bonds are secured by a first lien on an unlimited, mandatory special assessment on all insurers writing workers compensation policies in the state. The special assessment is established annually at a level projected to provide 1.1x coverage, and supplemental assessments may be levied as necessary.

The bonds are secured by a first lien on a mandatory and unlimited special benefit assessment (SBA) charged to all insurers writing workers’ compensation policies in California. CIGA sets the SBA rate annually at a level projected to cover expected debt service by 1.1x; if insufficient, supplemental SBAs may be levied as necessary to ensure coverage. The minimum levy is 1% of net direct premium. CIGA’s calculation of the SBA includes a variance factor for series 2004B, which were issued as auction rate bonds and are held by the bank.

CIGA’s regular assessment on workers compensation insurers, levied at 1% of net direct premium, and the SBA are deposited first to the trustee to meet debt service requirements; regular assessments are available to CIGA thereafter. By statute, CIGA may use other resources including its regular assessment to pay bonds, but these funds are not pledged. Moreover, if an insurer’s payment is insufficient, amounts received are statutorily applied first to cover the SBA levy. Residual SBA revenues are held by the trustee and available for early bond repayment. A debt service reserve is also funded at maximum annual debt service.

Fitch noted that the California workers compensation system has undergone considerable reform over the last decade. Prior to reforms in 2003 and 2004, the market faced a high level of payouts, fierce price competition, and subsequent insurer insolvencies and voluntary departures from the market. Reforms included significant changes to medical delivery and treatment for injured workers, higher statutory deposit requirements for insurers, higher regular assessments on insurers, and authorization for up to $1.5 billion in bonds supported by the SBA.

The outstanding bonds were issued in 2004, with proceeds used by CIGA to pay claims on insolvent insurers. A second issuance, planned for 2006, was never undertaken. The remaining bond authorization, which was intended to expire in 2006, has been extended by the state’s legislature. Interest on the auction rate bonds is calculated on a weekly basis, linked to one of two short-term reference rates. The authorization provides flexibility to CIGA to refund the 2004B auction rate bonds, if necessary, should interest rates rise significantly. Any additional issuance also requires levying a sufficient SBA as well as consent of the state insurance commissioner.

Attorneys representing John Pike and the University of California will try to reach a deal over the former UC Davis police lieutenant’s worker’s compensation claim, out of court and away from the media spotlight. The sides had been scheduled to take part in a mandatory settlement conference on Aug. 13 in Sacramento to discuss Pike’s claim of psychiatric injury. That hearing has been scratched from the calendar, according to State Department of Industrial Relations spokesman Peter Melton. The case will not go before a judge unless the sides fail to reach an agreement.

Pike, a former U.S. Marine with 17 years of law enforcement experience, gained worldwide notoriety after he pepper-sprayed seated, unarmed Occupy UC Davis protesters who blocked police on a Quad sidewalk on Nov. 18, 2011. Hackers posted his personal information online, and Pike received threatening calls and emails.

After the Davis Enterprise first reported Pike’s injury claim on its website July 25, the pepper-spraying regained regional and national attention. That may have pushed the sides back to the table.

Protesters with ties to Occupy UCD had planned to hold a tongue-in-cheek “support” rally for Pike outside the scheduled hearing, mocking an injury claim that would see the former cop “rewarded” for his actions, in the words of Davis attorney Bernie Goldsmith. Because the hearing was removed from the court calendar, another event, the Officer Pike Fiesta of Emotional Support has also been canceled. The fiesta was meant as an opportunity for a demonstration for those opposed to Pike receiving workers’ compensation.

Pike ceased to be a university employee in July 2012. He was fired, according to a Sacramento Bee account, despite a confidential internal affairs investigation finding his actions “reasonable” and recommending discipline, not termination. He remains entitled to retirement credit for his years of service, but he was to receive no other payout. He collected eight months of his $121,680 annual salary while being investigated by a separate task force that found both the police and UCD administration at fault.

Protesters pepper-sprayed or arrested that day split a $1 million settlement. Criminal charges were not filed against police or protesters.