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DWC to Resume Lien Trials September 14

The Division of Workers’ Compensation and Workers’ Compensation Appeals Board continue to improve their ability to hold hearings during the COVID-19 pandemic.

The following changes are effective September 14.

DWC will continue to hear all mandatory settlement conferences, priority conferences, status conferences, case-in-chief trials, lien conferences, Special Adjudication Unit (SAU) trials and expedited hearings telephonically via the individually assigned judges’ conference lines as announced in newslines issued on April 3, April 28, May 28 and August 12.

Beginning September 14, DWC will resume holding lien trials. Lien trials will be limited to one per judge per day to start.

Parties will continue to use individually assigned judges’ conference lines on the day of trial. However, judges will have the option of conducting any trial or expedited hearing through the judge’s LifeSize virtual courtroom if needed. If that is required, the judge will provide a link to the parties allowing them to log into the video platform.

Stakeholders should download the software prior to a hearing where a video option may become necessary. Neither DWC nor LifeSize will charge for participants to use the platform.

However, parties will need to have certain system requirements to fully participate in the video option. Parties will also need to have a web camera. Participants without access to a web camera may use a smart phone with the program, although it is not recommended. Additional information on LifeSize and how to use the program may be found on the DWC website.

All parties scheduled for a hearing should continue to call the conference line for the judge in front of whom the case is set, at the designated time listed on the hearing notice. When prompted, the parties should enter the access code assigned to that line. DWC staff will instruct participants as to the procedure to follow during the call.

District offices will not hold in-person hearings.

DWC will not accept walk-in filings, walk-through documents or in-person requests at this time. DWC will only accept electronic filing via EAMS and JET File, and paper filing by U.S. mail.

DWC will accept limited email filings pursuant to WCAB’s en banc decision dated April 6 and its newsline issued on April 23. Email filings are limited to documents that are subject to a statute of limitations that cannot otherwise be efiled, JET filed or filed by U.S. mail.

DWC will continue to accept an electronic signature on any settlement documents, applications, pleadings, petitions or motions that are sent to the district offices or filed in EAMS. For all e-forms, parties should utilize “S signature” as shown in the E-forms Filing Reference Guide and the JET File Business Rules.

Injured workers who are unable to file utilizing the available options or need assistance may contact DWC’s call center at 909-383-4522.

The WCAB office in San Francisco is operating with limited in-office staff. The WCAB commissioners and staff continue to work remotely. All practitioners are encouraged to regularly check the WCAB and DWC websites for updates about the district offices’ and the WCAB’s operations during this period.

WCRI Study Shows Early PT Effective in Spine Injury

As an increasing number of workers with injuries are receiving physical therapy, a new study from the Workers Compensation Research Institute finds that for workers with low back pain only injuries, early initiation of PT is associated with lower utilization and costs of medical services and shorter duration of temporary disability.

“This is a comprehensive study that shows a strong association between PT timing and outcomes for workers with low back pain,” said WCRI President and CEO John Ruser. “While the study cannot conclude that early PT causes better outcomes, it does suggest that the potential benefits of early PT should be considered when planning care for these injuries.”

The study ─The Timing of Physical Therapy for Low Back Pain: Does It Matter in Workers’ Compensation? ─ focuses on claims with LBP-only injuries, recognizing that PT is often used as first-line treatment for LBP and other musculoskeletal injuries before considering opioid prescriptions and invasive procedures. Controlling for a rich set of factors that might influence both PT timing and outcomes, the study finds the following:

Later timing of PT initiation is associated with longer TD duration. On average, the number of TD weeks per claim was 58 percent longer for those with PT initiated more than 30 days post injury and 24 percent longer for those with PT starting 15 to 30 days post injury, compared with claims with PT within 3 days post injury.
Workers whose PT treatment started more than 30 days post injury were 46 and 47 percent more likely to receive opioid prescriptions and MRI, respectively, compared with those who had PT treatment initiated within 3 days of injury. The differences between PT after 30 days post injury and PT within 3 days post injury were 29 percent for pain management injections and 89 percent for low back surgeries.
— The average payment for all medical services received during the first year of treatment was lower for workers with early PT compared with those with late PT. For example, the average medical cost per claim for workers who had PT more than 30 days post injury was 24 percent higher than for those who had PT within 3 days post injury.
— Among claims with PT treatment starting more than 30 days post injury, the percentage with attorney involvement was considerably higher (27 percent compared with 13 – 15 percent among those in the early PT groups) and workers received initial medical care much later (on average 18 days compared with 2 – 3 days in the early PT groups).

This study is based on nearly 26,000 LBP-only claims with more than seven days of lost time from 27 states, with injuries from October 1, 2015, through March 31, 2017, and detailed medical transactions up through March 31, 2018. The 27 states are Arkansas, California, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nevada, New Jersey, New York, North Carolina, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, and Wisconsin.

The study was authored by Dongchun Wang, Kathryn Mueller, and Randy Lea.

“Non-Profit” AARP Criticized for Massive Insurance Profits

According to a new public policy report, .AARP finances its operations by overcharging members for health care policies and through its billion-dollar relationship with UnitedHealth Group.

Despite its “non-profit” status, AARP’s profits have been increasing for years largely due to the organization’s practices of marketing of products and services. The report, published by public policy think tank American Commitment, mainly examined AARP’s source of revenue since the passage of The Affordable Care Act in 2010.

AARP reported $1.6 billion of revenue and $246.4 million of profit in 2018, the most recent year in which data was available. In total, AARP received more than $5.3 billion tax free from UnitedHealthGroup from 2007 through 2017.21 Between the year of Obamacare’s passage and 2017, the organization made nearly $4.2 billion in those eight short years.

AARP not only makes money from UnitedHealth- Group – and its members – directly, it does so indirectly as well. The Report claims the organization has established a grantor trust, through which it funnels payments for insurance policies issued by UnitedHealth and other insurers, including MetLife, Genworth, and Aetna.

In the past four years, AARP has been sued three times by its own members over its royalty fee policy, which they argued was deceptive, according to court filings. However, AARP ultimately won each of the cases.

U.S. District Court of Washington D.C. Judge Beryl Howell ruled in favor of AARP in May dismissing the plaintiffs’ class action lawsuit. The plaintiffs, led by AARP member Helen Krukas, argued that the organization misrepresented its Medigap royalty fee structure, according to Forbes.

The plaintiffs specifically argued that AARP was “micromanaging the sale of Medigap and therefore [the 4.95% fee] is not really a royalty fee for its intellectual property. They are a salesman. This is a commission and it’s taxable,” Jacobs said.

Howell originally rejected AARP’s motion to dismiss the case in March 2019 giving credence to Krukas’ argument. Krukas “sufficiently and plausibly alleged that the defendants engaged in unfair trade practices – by materially misrepresenting information about the 4.95% charge,” Howell wrote.

But, in May Howell ruled that Krukas’ argument misses the mark. She said Krukas failed to prove that AARP has a fiduciary relationship with its members.

Similarly, U.S. District Judge Dean D. Pregerson of Los Angeles dismissed two separate AARP class action lawsuits, Forbes reported. Pregerson ruled against plaintiff Simon Levay in November 2018 and against Jerald Friedman in November 2019.

The second dismissal came after the three-judge panel Ninth Circuit Court of Appeals ruled in favor of the plaintiffs. The panel ruled that AARP “transacts” and “solicits” insurance without a license and engaged in fraud by calling the 4.95% commission a “royalty,” according to Forbes.

Pregerson didn’t agree, however, saying the plaintiffs failed to prove they suffered economic harm, Forbes reported

The House Ways and Means Committee investigated AARP in 2011. The investigation pointed out several potential issues with AARP’s structure including its royalty fee practices and concluded with a series of suggestions for the Internal Revenue Service to consider.

California “Urgently” Walks Back AB-5 Employment Test

Gov. Gavin Newsom has promptly signed into law, a bill that exempts more occupations from Assembly Bill 5, the controversial law that required most independent contractors to become employees of their clients.

Assembly Bill 5 included exemptions for many politically-connected occupations like real estate agents and doctors, but ensnared many others, drawing particular criticism from musicians, independent truck drivers, franchise business owners and freelance writers.

The amendments in AB 2257 specific to writers, photographers, videographers, editors, and illustrators make changes to AB 5 that further accommodate the needs for those individuals in the industry that operate as their own small business.

The new law establishes an exemption for services provided by a still photographer, photojournalist, videographer, or photo editor, as defined, who works under a written contract that specifies certain terms, subject to prescribed restrictions.

It also establishes an exemption for services provided to a digital content aggregator, as defined, by a still photographer, photojournalist, videographer, or photo editor.

It also establishes an exemption for services provided by a fine artist, freelance writer, translator, editor, content contributor, advisor, narrator, cartographer, producer, copy editor, illustrator, or newspaper cartoonist who works under a written contract that specifies certain terms, subject to prescribed restrictions.

The law creates additional exemptions for various professions and occupations. It exempt from the ABC test people who provide underwriting inspections and other services for the insurance industry, a manufactured housing salesperson, subject to certain obligations, people engaged by an international exchange visitor program, as specified, consulting services, animal services, and competition judges with specialized skills, as specified.

The law would also create exceptions for licensed landscape architects, specialized performers teaching master classes, registered professional foresters, real estate appraisers and home inspectors, and feedback aggregators.

The law revises the conditions pursuant to which business service providers providing services pursuant to contract to another business are exempt.

The law revises the criteria pursuant to which referral agencies and service providers providing services to clients through referral agencies are exempt and would revise applicable definitions.

The law also create an exemption for business-to-business relationships between 2 or more sole proprietors, as specified. The bill would provide that a hiring entity need only satisfy all of the conditions of one of the exemption provisions to qualify for the exemption from the ABC Test.

The new law makes conforming changes to tax law regarding the determination of the status of a worker as either an employee or an independent contractor per the criteria described above.

The new law takes effect immediately as an urgency statute.

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Political Back Story to Gig Worker Law Walk Back

A major complaint among Californians affected by the state’s anti-freelancing law, AB5, is that the labor unions wrote it and essentially paid for its passage and that the purpose was to enrich unions by creating millions of new “employees” to “organize.”

The bill’s author, Asm. Lorena Gonzalez-Fletcher has admitted that the California Labor Federation sponsored the bill but denies that the unions ensured its passage, saying that its purpose was to provide benefits and a guaranteed minimum wage.

Newsom had up to 30 days to sign AB-2257, the AB-5 walk back, so it’s significant that he signed it only three days after passage. And that the new law was deemed an “urgency statute” so that it take effect immediately.

There’s bad blood between San Francisco Democrats and Los Angeles/San Diego Democrats, and Gonzalez-Fletcher’s already made Gavin Newsom’s life more difficult this year by failing to negotiate clean-up provisions for AB-5, and by publicly battling with Elon Musk, a long-time friend of Newsom and major job creator in the state.

Entering stage left, is Willie Brown, who perhaps put his thumb on the scales of legislation once again. For those not familiar, Willie Brown is not only one of the most powerful politicians to have ever graced the floor of the California State Assembly; he’s been the most powerful Democrat in the state since the 1960s.

At age 86, he still wields considerable power as a “kingmaker” in the state. After serving 32 years in the Assembly, Brown was Mayor of San Francisco for eight years and was succeeded by his protege, Gavin Newsom. Kamala Harris’ political career started when Brown appointed her to a state commission then helped her become the elected District Attorney of San Francisco.

Brown wanted AB2257 signed immediately because, as a weekly columnist for the San Francisco Chronicle, he had hit his 35 story limit under AB-5, and they were prohibited from publishing additional columns until AB2257 was signed.

Brown fumed of the move by Hearst Newspapers’ flagship publication. “For 12-plus years, every Sunday, I’ve written that column in the paper and never taken a vacation. And this is the most important year. This is a campaign year, when there’s really a contest.”

I signed the bill, write the damn column!”’ Newsom wrote to Brown in a text message that Brown shared with POLITICO.

Earlier in the day, some of Brown’s powerful friends in politics, including attorney Joe Cotchett, contacted Newsom in an effort to get him to move quickly on the bill to get Brown’s Sunday column back in the paper as soon as possible, sources said.

“If there was a place to picket organized labor, I’d do it today,” Brown said. “If there was a place to picket a legislator, I’d do it,” he said. As Assembly speaker, “I made sure that special interests, no matter who they were – labor or non labor – did not take advantage of the Legislature,” but he said it was clear this time was not the case.

“Those bastards,” he added.

August 31, 2020 – News Podcast


Rene Thomas Folse, JD, Ph.D. is the host for this edition which reports on the following news stories: Couple Injured While Assisting Sheriff Limited to Workers’ Comp. Ascertaining the “Date of Injury” in a CT Case Matters. So. Cal. Compounder Sentenced for Kickbacks in $62M Fraud. L.A. Chiropractor Sentenced for $4.8M Fraud. Mountain View Contractor Gouged NASA for Comp Costs. CMS Webinar on First Level Appeal of Demand Determination. DWC Posts Updates to MTUS. New SIU Regulations Effective on October 1. Liberty Mutual Receives Innovation Award. Telecommuting New Normal for Comp Industry.

Study Reveals Surge in “Mega” Comp Claims Over $3M

The surge in workers compensation “mega claims” of at least $3 million continues as medical treatments and technologies advance, according to a report by Business Insurance about research by ratings bureaus around the country.

While mega claims comprise a statistically small percentage of all workers comp claims, claims are reaching the mega threshold more quickly, primarily because of the associated costs of technological advances in medicine. Experts say that upward trend is likely to continue.

Overall, mega claims account for upwards of $2 billion in workers comp costs each year, according to research compiled by the National Council on Compensation Insurance, California’s Workers Compensation Insurance Ratings Bureau and other states that pooled their data to report on mega claims trends across the country.

The study includes data from 43 states and the District of Columbia. It found that more than 4,500 claims from these states and D.C. incurred losses in excess of $3 million (at 2018 cost levels) from 2001 through 2017. Of those claims, 57% cost between $3 million and $5 million, 33% between $5 million and $10 million, and 10% in excess of $10 million, with mega claim counts for 2017 at a 12-year high, according to the report released on Aug. 25.

While fewer than 50% of mega claims reach the $3 million threshold by 18 months from policy inception, these claims are reaching that number more quickly than in the past, the study found.

The types of claims most likely to develop into mega claims include spinal cord injuries, brain injuries and severe burns. Presumption laws – such as those covering a range of cancers for firefighters or heart conditions for law enforcement officers – can also lead to claims cresting the mega threshold.

Then there are the “massive claims that shouldn’t be that big,” said William Zachry, San Carlos, California-based workers compensation consultant and board member of California’s State Compensation Insurance Fund. “We’ve seen an increase in the severity of claims, but not an increase in the severity of the injuries.”

These claims, which Mr. Zachry refers to as “jumper claims,” are those that cost millions of dollars not due to a severe injury, but such issues as a worker’s lack of coping skills, plaintiffs’ attorneys adding multiple body parts to the claim, repeat surgeries, overprescribing and poor care, leading the worker to believe he or she is disabled.

If you can identify and intervene very early, it is possible to really change the dynamic, change the outcomes,” he said.

Telemedicine Enhances Access to Palliative Care

A report in MedPage Today claims that the experience of hospitals with significant surges of severely ill COVID-infected patients has delivered a powerful marketing case for the future of palliative care beyond the current pandemic, experts say.

While studies have shown that palliative care improves quality of life and reduces caregiver burden, not everyone can access it, “partly because we don’t have enough clinicians, services, and programs — especially for people outside of the hospital who are seriously ill but not hospice-eligible,” she said.

Enter telemedicine, which can dramatically increase access for people in community settings, at home, in assisted living facilities, in long-term care. One clinician can see 8 to 10 seriously ill patients a day at multiple sites without leaving the office — exponentially increasing access.

It’s not only more efficient for the clinician, it expands access for patients who can get to the clinic only with difficulty because they are homebound, live miles away or constrained by geographical barriers, or depend on public transit.

At the height of the COVID surge in New York City, three large health systems separately recruited and deployed palliative care and other professionals from across the country to serve as back-up volunteers to hospital teams on the ground. They gave debriefings for frontline providers, held family meetings and goals-of-care conversations online, even offered psychological and grief support.

“We have made huge strides toward building palliative care into the healthcare system focused on the broad concept of improving quality of life, recognizing that serious illness can turn one’s life upside down,” says Ashwin Kotwal, MD, assistant professor of geriatrics at the University of California San Francisco. “It’s not just about end-of-life support but addressing physical symptoms throughout the disease trajectory, along with psycho-social and spiritual needs. And communication is a big part of what we do.”

Kotwal spent the last year building a tele-palliative care program at the San Francisco VA Medical Center, focusing on patients who were homebound or who lived four hours or more from the clinic. Then COVID came along.

For Michael Fratkin, MD, founder and CEO of Resolution Care Network in Eureka, California, the telemedicine encounter is not just more convenient, it’s superior.

“The heart of the matter is the preservation of boundaries in healing relationships. We find that a video visit in real time is substantially better than invading people’s homes,” he says. “This is such a leveling technology. Something about the framing of the computer screen sets limits and puts us more on the same level. Clients show me only what they want to show me in their homes. It keeps the boundaries clearer.”

What happens on these visits for Fratkin’s community-based palliative care service, which covers a large rural area: trust-building; goal setting; shared-decision-making; advance care planning; symptom management. Surprisingly, he says, there are greater opportunities for intimacy in this encounter, even though the clinician can’t reach out and put a hand on the patient’s shoulder.

Of course, the future of telemedicine in palliative care will depend on reimbursement. Currently, temporary emergency Medicare waivers, extended for three months on July 23, have allowed payment for professional telehealth and some telephone visits, including physicians’ advance care planning conversations with patients and families. The emergency will end eventually, but at least 20 bills have been introduced in Congress to make some aspects of telemedicine coverage permanent.

No. Cal. Employer Convicted for $2M Premium Fraud

57 year old Selina Singh, and 30 year old Kabir Singh, plead guilty to conspiracy to commit insurance premium fraud and related felonies. Both defendants also admitted an aggravated white collar crime enhancement for a loss exceeding $500,000 through a pattern of criminal activity.

The investigation of this case started after an employee severed his thumb while working on a Bara Infoware, Inc. construction jobsite at Fort Hunter Liggett. The injured employee and his site safety supervisor reported to Monterey County District Attorney investigators that Selina Singh directed them to lie about the injury occurring on a Bara Infoware, Inc. jobsite and report it occurred while working for the family’s other company, Federal Solutions Group.

The Monterey County District Attorney’s Office determined the companies were headquartered in San Ramon, California and started a joint investigation with the relevant local and State agencies.

Investigators determined that the defendants obtained government contracts, including construction contracts that required compliance with workers compensation laws.

Defendants then used their companies hire, employ, and pay construction laborers, carpenters, painters, and other workers in order to complete construction work, even as they fraudulently misrepresented the construction payroll to insurance carriers in less dangerous industries such as clerical, and consulting, in order to lower their insurance rates.

Investigators located another injured employee that reported that Kabir Singh asked him not to report his injury and offered to pay his medical expenses instead of reporting the injury to company’s insurance and located a third company, Eagle Solutions, that was used first to move money between Bara Infoware, Inc. and Federal Solutions Group, and then eventually directly to obtain workers compensation policies for non-construction payroll while running construction jobsites.

An audit by a forensic accountant at the Contra Costa District Attorney’s Office concluded that the scheme evaded over $2 million dollars of insurance premiums that law abiding competitors would have had to pay in seven years, in addition to over $200,000 of evaded payroll tax owed to the State of California.

Selina Singh pled guilty to conspiracy to commit insurance fraud, insurance premium fraud, payroll tax fraud, and a white collar crime enhancement. The maximum sentence for those charges is eleven years and eight months.

Kabir Singh pled guilty to conspiracy to commit insurance fraud, insurance premium fraud, and a white collar crime enhancement. The maximum sentence for those charges is eleven years and eight months.

Sentencing is scheduled for November 19 at 1:30 p.m. in Department 31 of the Contra Costa County Superior Court.

SCIF Declares $75M Mid Year Dividend

State Compensation Insurance Fund announced plans to distribute an approximate $75 million dividend to its qualifying policyholders with policies that took effect between January 1 and August 26, 2020.

This dividend equals approximately 10% of the estimated annual premium reported during that period.

State Fund’s Board will consider dividends again for the remainder of the 2020 policy year later this year. While the board cannot guarantee future dividends, this mid-year declaration does not affect the possibility of a future payout for the remainder of the 2020 policy year.

Through July of this year, State Fund reported approximately $700 million in estimated annual premium and approximately $60 million in realized capital gains.

“We’re working hard to support our policyholders in every way we can during this difficult time,” said State Fund President and CEO Vern Steiner.

Due to our strong, stable financial position and the claims outcomes we’ve seen over the past several years, we’re able to return money to policyholders and we want to let them know it’s coming as early as possible. This is money they can count on as they plan for next year amidst so much uncertainty.”

State Fund has paid out more than $5 billion in dividends to policyholders over its history – more than any other California workers’ compensation carrier.

Just last year State Fund declared an approximate $160 million dividend for 2019 policyholders.

State Fund policyholders eligible for a 2020 dividend will receive their payments after the expiration date of their individual policies.