Category: Daily News

In this commentary paper, Max Koonce, Sedgwick chief claims officer, details the aspects of workforce changes, healthcare and legislative/regulatory reform in his article “A view of workers’ compensation: past, present and future.”

The events and activities of the last few years have caused society to pause and consider many things from a cultural and political standpoint. Although workers’ compensation is generally not one of the headline considerations, the question remains as to what we can and should learn from past events and how it can influence the construct or functioning of workers’ compensation in the future.

The pandemic brought on heightened legislative and regulatory activity at the state and federal level. During 2020 and 2021, 18 states established COVID-19 presumptions for workers’ compensation via legislation, directives, emergency rules and/or executive orders. Two additional states -Tennessee and Washington – established a more general “infectious disease presumption.” At the time of this publication, only seven states have presumptions still in effect, although this was still a topic of conversation within many states through proposed legislation even in 2022.

It has been argued that “socialization of risk” occurred during the pandemic through the expansion of coverage under workers’ compensation for COVID-19 by presumption legislation/executive orders. Some contend that broadening workers’ compensation coverage beyond employment-related risks to those which employers have no ability to control or prevent seems not only counterproductive but also counterintuitive. Others contend that broadening such risks is supported, since society is a third interested party to the grand bargain of workers’ compensation, with the role of balancing protections for the employee with the critical role of business to a well-functioning economy.

Telehealth utilization increased dramatically during the pandemic, which brought to light its viability and function in supporting the continuity of medical treatment.. From a workers’ compensation perspective, Sedgwick saw an increase from less than 1% prior to the pandemic to a height of 17% for initial or subsequent physician visits. Although this has stabilized over the most recent 12 months, it maintains an average of roughly 10% of all initial visits.

Healthcare monitoring by mobile/ wearable devices continues to grow, with a greater percentage of consumers expecting these devices to be incorporated into their overall healthcare.

But the pandemic did not enthrall society with confidence and/or support for health-related institutions. The Robert Wood Johnson Foundation, in conjunction with the Harvard TH Chan School of Public Health, published a survey in May 2021 on the public’s perspective of the United States health system. Two points that were noted:

– – Positive ratings of the public health system declined, from 42% in 2009 to 34% in 2021.
– – The public currently trusts nurses, healthcare workers and doctors more than public health institutions and agencies.

With regard to claims administration, technology is driving the evolution of many long-established workers’ compensation claims handling models.

– – Auto-triage systems that evaluate early claim data elements and combine the data with historical patterns to accurately place a claim into a particular “bucket” for processing
– – Auto-adjudication systems that allow for “simple” claims to be processed without human intervention
– – Predictive modeling using historical data patterns to predict the future
– – Consumer self-service tools designed to eliminate the frustrations often associated with workers’ compensation claims due to lack of understanding and expectations of the process

Integrating workers’ compensation and disability/sick leave has been a topic of consideration for several years. Some employers have found ways to seamlessly integrate these benefits for their employees, yet this approach has not gained significant traction as a standard throughout the industry.

Lead plaintiff Amanda Frlekin sued Apple Inc., the Cupertino-based technology giant in 2013, claiming it illegally withheld pay from workers who had to spend five to 20 minutes on average waiting for managers and security officers to search their bags and verify their Apple devices before they could leave for lunch breaks or at the end of shifts.

In 2015, Senior U.S. District Judge William Alsup granted summary judgment in favor of Apple, finding that because store employees chose to bring bags and Apple devices to work, they could not prove the bag checks were mandatory. He found Apple could have imposed an even stricter policy by banning workers from bringing bags or personal Apple devices to stores. This ruling gave rise to the decision by the California Supreme Court, and subsequent reversal of the summary judgment by the 9th Circuit in September 2020.

In a unanimous February 13, 2020 decision, the California Supreme Court in the case of Frlekin v. Apple Inc., held that the time spent by employees waiting for and undergoing security checks of bags and other personal items is compensable time under California law, even when the policy only applies to employees who choose to bring personal items to work.

This month a California district court approved a $30.4 million settlement agreement between Apple and the class of workers who were required to undergo off-the-clock bag searches. The settlement, approved by U.S. District Judge William Alsup on August 13th, ends the California employment law legal battle that began nearly a decade ago.

From the gross settlement amount, the court approved Individual Class Payments in the aggregate amount of Twenty Million Five Hundred Two Thousand Five Hundred Ninety-Nine Dollars and three cents ($20,502,599.03) as fair, reasonable, and adequate.

This payment will be made to the 14,678 members of the class action, resulting in an approximate net payment per class member of $1,328, according to the Motion for Final Approval of Class Action Settlement. .

The remaining $10 million will be used to pay for attorneys’ fees, litigation costs and other payments.

Over the last several years, the question of whether the time employees spent having their bags checked at work is compensable has arisen in several different contexts, in California and across the country:

In late 2014, the U.S. Supreme Court in Integrity Staffing Solutions, Inc. v. Busk (135 S. Ct. 513, 574 US 27, 190 L. Ed. 2d 410) held that security checks are not compensable time under federal law because they are not part of the actual workday.

However in California, employees in most industries must be paid for the time they are subject to the control of their employer, not just the time spent doing work. This is so because, since 1947, California has specifically departed from federal law and has provided greater protection to working employees.

The Los Angeles City Council approved a new healthcare worker minimum wage ordinance, increasing the minimum wage for healthcare workers at private healthcare facilities in Los Angeles to $25.00 per hour. Similarly, the Downey City Council approved its own citywide healthcare worker minimum wage ordinance.  The Los Angeles ordinance would have gone into effect on August 13, 2022, and the Downey ordinance would have become effective on August 11, 2022.

Since passage, coalitions sponsored by the California Association of Hospitals and Health Systems have sought to repeal the ordinances.

According to a report in the National Law Review, on August 10, 2022, two separate referendum petitions were filed with the City of Los Angeles and the City of Downey, respectively. Supported by the “No on the Unequal Pay Measures” group, the petitions seek to stay the ordinances and have the issue decided by voters in their respective cities. The proponents of the petitions stated that they gathered twice as many signatures required to suspend the minimum wage ordinances to hold a public vote on the new minimum wage hikes.

Thus, the minimum wage increases are frozen while the respective city clerk offices verify that the petitions contain the required number of valid signatures, which is 40,717 in Los Angeles. Assuming the requisite number of signatures are verified, the issue would be put to a public vote. In Los Angeles, however, if it is determined that there are not enough signatures as required, the ordinance will go into effect upon the city clerk issuing a certificate of insufficiency. In Downey, the ordinance has been automatically stayed pending review of the petition, and the Downey City Council will issue a decision once this process is done.

Should an election be authorized, it would probably not take place until 2024. While it is too late to include the referendums in this year’s fall elections, the “No on the Unequal Pay Measures” campaign stated that pushing for a special election in 2023 would be too costly.

Two other California cities, Monterey Park and Long Beach, approved a $25.00 per hour minimum wage for private-sector healthcare workers in early August. In Monterey Park, the ordinance will become effective 30 days after the city attorney processes the ordinance. In Long Beach, the Long Beach City Council voted unanimously in favor of an ordinance increasing the minimum wage for healthcare workers on August 2, 2022. The first reading of the ordinance by the City Council was on August 9, 2022, and the second reading took place on August 16, 2022. The Long Beach City Council approved the ordinance on August 16, 2022, and, absent a similar citizen referendum petition being filed, the ordinance will become effective on September 16, 2022.

These ordinances are part of a concerted effort of the Service Employees International Union (SEIU). SEIU is currently pushing to pass or put similar ordinances on the ballot throughout California, including in Anaheim, Baldwin Park, Culver City, Duarte, Inglewood, and Lynwood.

Ventura County’s organized health system and three medical care providers have agreed to pay a total of $70.7 million to settle allegations that they broke federal and state laws by submitting or causing the submission of false claims to Medi-Cal related to Medicaid Adult Expansion under the Patient Protection and Affordable Care Act (ACA), the Justice Department announced today.

The parties that entered into the three separate settlement agreements are:

– – Ventura County Medi-Cal Managed Care Commission which does business as Gold Coast Health Plan, a county-organized health system (COHS) that contracts to arrange for the provision of health care services under California’s Medicaid program (Medi-Cal) in Ventura County;
– – Ventura County, which owns and operates Ventura County Medical Center, an integrated health care system that provides hospital, clinic, and specialty services;
– – Dignity Health, a San Francisco-based not-for-profit hospital system that operates two acute care hospitals in Ventura County; and
– – Clinicas del Camino Real, Inc. (Clinicas), a non-profit healthcare organization headquartered in Camarillo.

Pursuant to the ACA, beginning in January 2014, Medi-Cal was expanded to cover the previously uninsured “Adult Expansion” population – adults between the ages of 19 and 64 without dependent children with annual incomes up to 133 percent of the federal poverty level. The federal government fully funded the expansion coverage for the first three years of the program.

Pursuant to contracts with California’s Department of Health Care Services (DHCS), if a California COHS did not spend at least 85 percent of the funds it received for the Adult Expansion population on “allowed medical expenses,” the COHS was required to pay back to the state the difference between 85 percent and what it actually spent. California, in turn, was required to return that amount to the federal government.

The three settlements resolve allegations that Gold Coast, Ventura County, Dignity, and Clinicas knowingly submitted or caused the submission of false claims to Medi-Cal for “Additional Services” provided to Adult Expansion Medi-Cal members between January 1, 2014, and May 31, 2015. The United States and California alleged that the payments were not “allowed medical expenses” under Gold Coast’s contract with DHCS, were pre-determined amounts that did not reflect the fair market value of any Additional Services provided, and/or the Additional Services were duplicative of services already required to be rendered. The United States and California further alleged that the payments were unlawful gifts of public funds in violation of Article IV, Section 17 of the Constitution of California.

As a result of the settlements, Gold Coast will pay $17.2 million to the United States; Ventura County will pay $29 million to the United States; Dignity will pay $10.8 million to the United States and $1.2 million to the State of California; and Clinicas will pay $11.25 million to the United States and $1.25 million to the State of California.

Contemporaneous with the False Claims Act settlement, the U.S. Department of Health and Human Services agreed to release its right to exclude Gold Coast and Ventura County in exchange for their agreements to enter into 5-year Corporate Integrity Agreements (CIAs). The CIAs require, among other things, that Gold Coast and Ventura County each implement centralized risk assessment programs as part of their compliance programs and each hire an Independent Review Organization to complete annual reviews. Gold Coast’s annual reviews will focus on its calculation and reporting of Medical Loss Ratio (MLR) data under Medi-Cal, while Ventura County’s annual reviews will target hospital claims submitted to Medicare and Medicaid, including claims submitted to Medicaid managed care organizations.

The civil settlements include the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by Atul Maithel, Gold Coast’s former controller, and Andre Galvan, Gold Coast’s former director of member services. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. The whistleblowers also alleged claims under the California False Claims Act. The qui tam case is captioned United States of America, et al. ex rel. Maithel, et al. v. Ventura Co. Medi-Cal Managed Care Commission d/b/a Gold Coast Health Plan, et al., No. 15-7760AB TJH (JEMx) (C.D. Cal.).

Construction is one of the most dangerous industries in the United States, due in part to the presence of major work-related hazards such as falls – the leading cause of death among construction workers.

Despite ongoing efforts to improve awareness and use of fall protection and fall prevention solutions, 353 workers died from falls to a lower level in 2020 alone, and fall protection in construction remained the most frequently cited OSHA standard for violations across all industries for the ninth consecutive fiscal year.

To better understand why serious falls from heights continue to occur with such frequency despite being preventable, CPWR – The Center for Construction Research and Training – conducted a survey of persons who experienced, witnessed, or investigated a workplace fall incident.

The survey was developed and fielded with support from the American National Standards Institute (ANSI)/American Society of Safety Professionals (ASSP) Z359 National Work at Heights Task Force, the National Occupational Research Agenda (NORA) Construction Sector Council Falls Workgroup, and other organizers of the National Campaign to Prevent Falls in Construction and the National Safety Stand-Down.

A new preliminary report of this survey provides key findings from the survey as follows:

– – Respondents believe that lack of adequate planning is a key underlying cause of falls. Insufficient or ineffective planning was the most selected primary cause for falls (27.4%).
– – Lack of planning is associated with a lower likelihood of using fall protection. The odds of using fall protection were 71% lower for individuals whose employer or competent person did not do any planning compared to those whose employer or competent person did do planning or they were not sure.
– – Nearly half (48.8%) of respondents said that no fall protection was being used at the time of the fall.
– – Employee beliefs about their company’s fall protection policy are strongly associated with the use of fall protection. Respondents who believed fall protection was required by their employer were 8 times more likely to use fall protection compared to those who did not believe fall protection was required.
– – Rescue training may help reduce fall-related deaths. The odds of a fall being fatal were 76% lower for those who had self-rescue training compared to those who did not have this training.
– – Workers employed by subcontractors face an elevated risk of dying from falls. Individuals who worked for a subcontractor at the time of the fall incident were 2.7 times more likely to die from the fall compared to those who worked for a general contractor.

In terms of the severity of the fall incident, respondents indicated that 26.9% of fall incidents they had been involved in, witnessed, or investigated were fatal Most (63.9%) said 911/ emergency services were required at the time of the fall incident, and 34.9% said they were not required. In addition, medical care was required in 79.1% of fall incidents.

Several factors were found to be significantly associated with whether a fall was fatal.The higher the height of the fall, the greater the likelihood the fall would be fatal. Individuals who fell from a height of 21-30 feet were 8 times more likely to die from the fall compared to those who fell from a height of less than 6 feet.

Almost half (48.8%) of respondents said that no fall protection was being used at the time of the fall. When fall protection was being used, 31.3% used a personal fall arrest system (PFAS) and 16.1% used guardrails.

The most common consequences an employer experienced because of the fall incident were no consequences (31.7%), an OSHA citation/penalty (25.5%), and higher insurance premiums (19.5%).