Category: Daily News

Orange County rejected workers’ compensation claims from four sheriff’s deputies injured in the shooting, paving the way for a court battle that could force appellate judges to eventually decide an untested issue touching several counties and cities in Southern California.

Los Angeles County is considering whether to grant claims from two of its deputies shot Oct. 1 at the Route 91 Harvest festival. Officials acknowledged they have no policy on how to handle such requests and said they expect the issue will result in litigation.

Several other officers from Southern California law enforcement departments also plan to file claims in the near future, according to police unions, potentially forcing as many seven other municipalities – including San Bernardino and Riverside counties  -to soon consider similar questions.

If the claims are approved, it could put taxpayers on the hook for years of medical expenses, allow officers to retire early on disability and guarantee injured officers paid time off in the short term. If officers begin to claim injuries related to PTSD suffered during the shooting – as two deputies in Orange County did – it also could open the door for scores of additional filings.

In San Bernardino County, which employs 11 deputies who attended the festival, including Sgt. Brad Powers, who was shot in the leg in Las Vegas, the deputies’ union has initiated talks with the sheriff’s department to advocate that Powers be treated as an on-duty injury.

Steve Nyblom, a manager in Los Angeles County’s risk management branch, which is weighing claims from local two deputies shot in Las Vegas, said legislative intervention may be needed to clarify the labor code in light of the looming disputes. “There is that vague issue, subject to interpretation, and issues relating to legislative intent should be clarified by the legislature,” Nyblom said.

Had all those officers been shot and injured while responding to a mass-killing in California, they likely would be taken care of without dispute. But because they were shot in Nevada instead, their life-saving efforts could cost them dearly.

California’s labor code states that public agencies are required to pay benefits to off-duty police officers injured while engaging in “protection or preservation of life or property, or the preservation of the peace anywhere in this state,” even if the officer “is not at the time acting under the immediate direction of his employer.” Out-of-state events are not mentioned, spurring multiple interpretations of the law.

“The statute does not allow counties to cover off-duty conduct outside of states,” Orange County Supervisor Todd Spitzer said, expressing a view shared by county lawyers. “These police officers went into their instinctive training mode – and I don’t think they should be punished because they trusted their instincts. But it requires a legislative fix to the statute to extend workers’ benefits for out-of-state conduct.”

However, local workers’ compensation attorneys disagree with Orange County’s interpretation of state law. And the union representing Orange County’s sheriff’s deputies has said that if the county denied its members’ claims, the agency would be abandoning officers who were acting in accordance with their department’s training.

“The sheriff’s department has an expectation of its sworn members to take whatever actions are necessary to preserve life wherever they’re at,” said Tom Dominguez, president of the Association of Orange County Deputy Sheriffs. “If they deny the claims, then the message that they’re sending to their peace officers is not to take action when it is certainly warranted.” “Everybody’s watching what happens with these cases,” Dominguez added.

Frank Neuhauser from the University of California, Berkeley published a new study on Qualified Medical Evaluators discussing trends in evaluations, availability to meet panel requests, and other issues. He used extensive electronic administrative data made available by the DWC Medical Unit and Disability Evaluation Unit (DEU), supplemented with summary data from several sources.

The study covers the period from 2007 through 2017. This period covers much of the evolution after the 2004 reforms which introduced utilization and treatment guidelines, a new permanent disability rating schedule based on the AMA Guides, and changes to the manner parties in represented cases can select QMEs. The key findings in this study included the following general observations:

– The number of providers registered as QMEs continues to decline (17% since 2007), but less rapidly than it did prior to 2007.
– The number of requests for QME panels has increased rapidly, 87% since 2007.
– The decline in QMEs and increase in panel requests means that the number of requests per QME has doubled (+101%).
– Coupled with a continuing increase in the average paid amount for QME reports, the average QME earns 240% more from panel reports now than in 2007.
– All the increase in panel requests is from represented track cases, up 400% despite the elimination of panels for most medical treatment issues (replaced by the IMR process). This increase was equally driven by requests from both parties, applicant and defense.
– Panel requests for unrepresented cases declined 55%, entirely driven by a decline in requests from injured workers. The number of requests by claims administrators in unrepresented cases changed little.
– The DWC began collecting the reasons for panel requests on represented cases in 2015. Those data show that the primary reasons for panels are: (1) Compensability (42.5%), Permanent disability (21.4%), and Permanent & Stationary (P&S) status (11.4%).

In response to the earlier study, SB 863 placed limits on the number of locations (10) at which QMEs can be registered. This has had the effect of distributing QME panels more evenly and widely among registered providers.

– Very-high-volume QMEs (with 11-100+ registered locations) have been eliminated.
– However, a high proportion of panel assignments (55%-60%) are still assigned to the busiest 10% of QMEs, nearly all of whom have exactly 10 offices and are in orthopedic specialties.
– Unlike the very-high-volume QMEs studied earlier, the top 10% and 5% of QMEs by number of panels in the current system produce reports that show less bias. Even the top 5% of QMEs by volume rate only slightly more conservatively than average.

Access to QMEs does not appear to be an important current problem, but there are signs that delays in getting an evaluation may be developing.

The DWC has made an effort to eliminate from the workers’ compensation system providers who are accused or convicted of fraudulent activity or violations of professional standards. This study examined the activity of these doctors in the QME process and how their suspension may impact QME evaluations. The study found:

– Of providers suspended or restricted under Labor Code sections 139.21 & 4615, 41 were registered as QMEs at least one year between 2007 and 2016.
– They represented a small minority of all QMEs (1.6%) and were assigned to a minority of all 3-doctor panels (4.6%).
– While these percentages are small overall, there were some areas where problem providers appear to be concentrated and represent a special issue. The “Pain” specialties (PAP, MAA, & MPP), stood out, with 40% -50% of QME panels including at least one restricted or suspended provider.
– The more general “pain” category (MPA) that is more commonly used now, as well as the Physical Medicine and Rehabilitation (MPR) and Internal Medicine–Hematology (MMH) had 15% – 17% of panels include a restricted or suspended provider.
– Overall, the restricted and suspended doctors gave much more generous evaluations to injured workers than the average QME: higher ratings, less frequent use of apportionment and more frequent “Almaraz” ratings.

The federal courtroom battle over the survival of the new automatic stay law governing liens filed by indicted medical providers reached a milestone last week as Judge Wu issued his decision, one that is unlikely to provide the plaintiffs any substantial benefit for their efforts.

The lien claimants argued that the new law violated due process requirements among other complaints. The DIR sought to demonstrate ample opportunities for due process mostly articulated by a declaration by Chief Judge Paige Levy. Her declaration did not completely convince the federal court.

Judge Wu commented that “nothing in Judge Levy’s declaration demonstrates that WCALJs are uniformly adjudicating challenges to Section 4615 in the manner she endorses, or that any Court precedent requires them to do so. Nonetheless, Defendants argue that Judge Levy’s testimony proves the merit of Defendants’ initial legal argument in opposition to Plaintiffs’ procedural due process claim: pre-existing regulations afford claimants sufficient due process.”

“That being said, Judge Levy’s testimony still informs the Court’s interpretation of Section 4615 as well as the constitutionality of its current implementation. This is because established principles of interpretation permit the Court to look to extrinsic evidence to further discern the meaning of the statute if the statute is ambiguous on its face, including the statute’s legislative history, and its administrative implementation.”

Judge Wu then concluded “this Court finds that Section 4615, as currently implemented, does not provide the sufficient procedural due process before or after it deprives certain  lien claimants of a protectable interest. Because the 14th Amendment requires basic notice and hearing rights that Defendants are currently denying certain Plaintiffs, the Court would GRANT Plaintiffs’ Motion for a Preliminary Injunction, but only to a limited extent.”

“After reviewing both parties’ second and third round of supplemental briefing, considering the relevant portions of AB 1422, and for the reasons stated below, the Court finds that Section 4615, even as amended, does not provide all affected lien claimants with a meaningful opportunity to be heard to challenge an erroneous application of Section 4615. See T.R. at 25-26. As such, the Court would find that Section 4615 as currently implemented fails to provide a specific group of affected claimants, namely those not listed on the DWC website, with the fair process the Constitution requires. The Court would also find that this deficiency is not solved even if it assumes what Defendants claim AB 1422 confirms, that the text of Section 4615 implicitly provides those lien holders the opportunity to utilize pre-existing procedures.”

But, Judge Wu also said the “relief granted would be narrow and targeted to solve the specific procedural due process defects identified above.”

“As to notice, the Court would require Defendants to include the name of any lien holder affected by Section 4615 on the “division’s [public] Internet Web site” as directed by statute. The Court would also prohibit Defendants from staying the processing of any lien pursuant to Section 4615 unless the lien holder is provided notice via the DWC Site, and given the opportunity to be heard as to whether that lienholder falls within the statute at a lien conference and/or lien trial. As stated above, the sole purpose of such hearing is to prevent the erroneous application of Section 4615, by its own terms, not the propriety of the underlying criminal charges, or whether or not a given lien arises from fraud.”

The Court has asked Plaintiffs to submit a proposed order that comports with the scope of relief the Court has described. It would seem that the plaintiffs, Vanguard Medical Management Billing, Inc., and Eduardo Anguizola M.D. would not ultimately be removed from the automatic stay requirements as they had hoped. The DIR need only provide them proper notice on its website, if they have not already, and once this is accomplished there are no other limits to the new law imposed by this ruling. One might say their effort was more or less like trying to eat soup with a fork.

Transcripts of the public hearings in this case have been requested, signalling that this case is headed to the 9th Circuit Court of Appeals. One can assume we have not heard the last of the arguments in this case.

The California Workers’ Compensation Institute this week released a report on a list of bills that will affect the workers’ comp system.

The bills were recently signed into law at the end of the Legislative session by Gov. Jerry Brown. Here is the CWCI’s recap of those bills as reported by the Insurance Journal:

Physician Access to CURES (AB 40, Santiago): Enables medical providers to use third-party software to access information about a patient’s prescription drug history from the state’s prescription drug monitoring program (CURES). Currently, providers can only access this information through the CURES website, but AB 40 will simplify the process by allowing them to link their systems directly to CURES, eliminating the need to log on to the website and perform a manual search.

Advocacy Services for Workers Injured by Terrorist Acts (AB 44, Reyes): Requires employers to provide immediately available advocacy services for workers injured by acts of domestic terrorism. Advocates (nurse case managers) will be responsible for helping these injured workers obtain medical treatment and helping their medical providers obtain treatment authorizations and payments. The bill was introduced in response to medical treatment issues that arose on claims filed by workers following the December 2015 terrorist attack at the Inland Regional Center in San Bernardino.

Liens Filed by Suspended Providers (AB 1422, Daly): Extends the automatic stay on liens filed by medical providers charged with criminal fraud so that it runs from the time the criminal charges are filed all the way through the suspension hearing. The bill closes a loophole in existing law that gave providers an opportunity to pursue liens for payment between the time they were convicted of fraud and the point at which they were suspended. AB 1422 further clarifies that these rules also apply to entities controlled by individuals charged with criminal fraud.

Drug Transparency (SB 17, Hernandez): Requires pharmaceutical companies to notify health insurers and government health plans at least 60 days before scheduled prescription dnrg price hikes that would exceed 16 percent over a two-year period and to explain the reasons behind those increases.

Limits on Assistance to Immigration Enforcement Agents (SB 54, DeLeon): Requires the state attorney general to draft model policies for state agencies, including the Department of Workers’ Compensation, “limiting assistance with immigration enforcement to the fullest extent possible consistent with federal and state law.” The model policies are to cover state buildings, including those used by the DIR, the DWC, and the WCAB. The bill requires the attorney general to adopt the model policies by Oct. 1, 2018.

Workers’ Comp Exemptions for Officers and Directors (SB 189, Bradford): Allows corporate officers and directors who own at least 10 percent of a business to opt out of workers’ comp coverage for themselves if they sign a waiver stating that they are covered by a health insurance plan. The 10 percent threshold is a reduction from the 15 percent threshold established by AB 2883 in 2016. This bill also includes a conclusive presumption that a person who executes a waiver is not covered by workers’ compensation.

New State Compensation Insurance Fund Executive Positions (SB 272, Mendoza): Enables the State Compensation Insurance Fund Board to appoint a chief underwriter, chief information security officer, senior vice president of insurance services, executive vice president of corporate claims, executive vice president of strategic planning, and a pricing actuary. Each of these are executive positions, exempt from civil service protections.

Retaliation Complaint Investigations and Awards (SB 306, Hertzberg): Expands the Labor Commissioner’s ability to investigate complaints by employees that their employer retaliated or discriminated against them in response to protected conduct (which may include filing or testifying on behalf of a coworker in a workers’ compensation claim, repealing safety violations, etc.). SB 306 allows the commissioner to initiate investigations of such claims without having to go to court to obtain an enforcement order, and to obtain an award for attorney’s fees and costs when it successfully prosecutes a retaliation claim through the courts.

CIGA Reinsurance (SB 430, Senate Committee on Insurance): Enables the California Insurance Guarantee Association (CIGA), upon the approval Of the Insurance Commissioner, to purchase reinsurance for its workers’ compensation fund from any reinsurer licensed in California. This removes the current restriction that has only allowed CIGA to purchase reinsurance from its member companies even though most re-insurers in the state are not CIGA members.

Emergency Room Physician Bills (SB 489, Bradford): Extends the deadline for emergency room physicians to submit their bills to workers’ compensation claims administrators from 30 days to 180 days, for treatment provided under SB 1160’s pass-through provisions for certain treatment provided during the first 30 days following injury.

This year, AB 570 was the only substantial workers’ compensation related proposed law on the horizon.

AB 570 in the broad analysis was an attempted rollback of permanent disability apportionment rules. The purpose of the bill was to eliminate elements of what the author believes is gender bias in the workers’ compensation system.

According to the author, women can receive disproportionately low compensation amounts for work-related permanent disability because of the gender-specific conditions of pregnancy and childbirth. The author points to specific examples where the evaluating physician has pointed to pre-existing conditions that have involved pregnancy or childbirth in apportioning the causation of subsequent industrial injuries, and argues that this constitutes an inappropriate discrimination, since male injured workers can never have their disability apportioned in this manner.

This bill would have prohibited apportionment in the case of a physical injury occurring on or after January 1, 2018, based on pregnancy, childbirth, or other medical conditions related to pregnancy or childbirth. It is similar to AB 1643 (Gonzalez) of 2016 which would have prohibited apportionment in cases of physical injury based on pregnancy, menopause, osteoporosis, and carpal tunnel syndrome. AB 1643 passed the legislature last year but was vetoed by the Governor.

AB 570 was passed by the legislature by the end of session this year, but was vetoed by the Governor as he has done in the past. His signing message said the following.

“I am returning Assembly Bill 570 without my signature.”

“This bill would prohibit apportionment of permanent disability, in the case of a physical injury occurring on or after January 1, 2018, from being based on pregnancy, childbirth, or other medical conditions related to pregnancy or childbirth. I am vetoing this bill for the same reasons that I vetoed similar measures Assembly Bill 1643 in 2016 and Assembly Bill 305 in 2015.”

“The California Constitution provides that the Legislature shall create a complete system of Workers’ Compensation so that employers compensate employees for injuries sustained in the course of their employment. To that end, Labor Code Section 4663 provides that the employer shall only be liable for the percentage of permanent disability directly caused by the injury. AB 570 is in direct contradiction to this Constitutional mandate and legislative scheme because it requires employers to be liable for non-work related injuries. This measure would extend the scope of the workers’ compensation system well beyond what it is meant to do: compensate injured workers who suffer a work related injury.”

“I agree with the Author that there is no place for gender discrimination in the workers’ compensation system. However, it is not discrimination to have a gender-neutral system in which only permanent disability that results directly from work injuries is compensable. The creation of a broad exception to the apportionment statutes for medical conditions that affect only women would create a gender-based classification and would not be likely to withstand constitutional challenge.”

“I am committed to ensuring that California’s workers’ compensation policy treats all injured workers fairly and that every worker, regardless of gender, is adequately compensated for their injury. I encourage proponents of this bill to support continuing efforts to educate medical evaluators on current laws prohibiting gender bias.”

The California Applicant Attorneys Association (CAAA) responded to the Governor’s letter with a brutal spoof “Father Knows Best” on its website. This issue will likely be raised again next year.