On January 1, 2026, the Centers for Medicare & Medicaid Services launched the Transforming Episode Accountability Model (TEAM) – a mandatory, five-year program that requires approximately 740 acute care hospitals to take financial responsibility for the entire episode of a patient’s surgical care, from the operating room through 30 days post-discharge. While this is a Medicare regulation, its effects are already influencing how orthopedic injuries are treated across all payer types, including workers’ compensation.

Three of the five surgical categories covered by TEAM are directly relevant to workplace injuries: lower extremity joint replacement (hip, knee, and ankle), surgical hip and femur fracture treatment, and spinal fusion. For each episode, CMS sets a risk-adjusted target price. Hospitals that come in under budget while meeting quality benchmarks earn bonuses; those that exceed the target owe money back. Unlike earlier voluntary bundled-payment experiments, there is no opt-out.

Outpatient joint replacement is becoming the norm. Same-day discharge for total hip and knee replacement is now routine for appropriately selected patients. Outpatient orthopedic volume was already 33 times higher than inpatient volume by late 2023, and TEAM’s episode-based pricing further incentivizes hospitals to move procedures to ambulatory surgery centers and send patients home the same day. Advances in regional anesthesia, minimally invasive techniques, and “prehabilitation” protocols have made this clinically safe for many patients.

Post-surgical rehabilitation is being compressed. Hospitals are now accountable for all costs in the 30-day post-discharge window – physical therapy, home health, imaging, and ER visits. Physical therapy often begins within hours of surgery, and remote monitoring and telehealth follow-ups are replacing some in-person visits.

Patient-reported outcomes now affect reimbursement. TEAM ties hospital payment to a Composite Quality Score that includes readmission rates, complications, and – notably – patient-reported outcome measures (PROMs). The patient’s own assessment of pain, function, and satisfaction directly affects the hospital’s bottom line.

Faster timelines will become the expectation. As same-day joint replacement becomes standard of care, carriers and utilization reviewers will increasingly expect injured workers to follow accelerated protocols. Defense counsel should recognize that same-day discharge now reflects mainstream practice – not corner-cutting. Claimant’s counsel should watch for cases where comorbidities or job demands make an accelerated timeline inappropriate.

Financial incentives may influence treatment decisions. TEAM creates pressure to reduce episode costs. While this often aligns with good care, attorneys should be alert to situations where cost-reduction incentives conflict with a worker’s needs – premature discharge, inadequate post-op rehab, or limited follow-up visits within the 30-day window.

Patient-reported outcome data may become discoverable. Hospitals are now collecting standardized, quantitative data on how patients perceive their own recovery before and after surgery. This data could become relevant in disputes over disability extent, surgical success, or maximum medical improvement.

Reimbursement pressures may affect provider availability. CMS simultaneously applied a −2.5% efficiency adjustment to orthopedic surgical work RVUs in 2026, on top of roughly 20% cumulative RVU reductions for hip and knee arthroplasty over the past decade. As Medicare margins tighten, some surgeons may become more selective about which payers they accept — potentially affecting the availability of specialists willing to treat comp patients.

CMS has stated its goal of placing 100% of Medicare recipients under alternative payment models by 2030. The trends TEAM is accelerating – outpatient surgery, compressed rehabilitation, data-driven outcome tracking, and cost-conscious episode management – will increasingly define how workplace musculoskeletal injuries are treated regardless of the payer. Practitioners should understand these dynamics now, because they will soon shape the medical evidence, treatment timelines, and expert opinions in your cases.

Keep in mind that the TEAM model applies to Medicare; workers’ compensation systems are governed by state law and may differ in their treatment and reimbursement frameworks.

Alexander Sorokunov worked for NetApp from 2016 through June 2019, earning an annual salary plus commissions governed by an individual Goal Sheet and the company’s Compensation Plan for fiscal year 2019. The Plan calculated commissions as a percentage of sales revenue achieved in the employee’s territory, but also contained a windfall provision that reserved NetApp’s right to limit commission payments when an employee’s goal attainment exceeded 200 percent.

In fiscal year 2019, Sorokunov and roughly 300 other employees exceeded the 200 percent threshold. In May 2019, NetApp invoked the windfall provision, informing employees that further commissions above that level would not be paid. NetApp attributed the widespread over-attainment to forecasting errors. Sorokunov’s final paycheck for the fiscal year was reduced by $31,402.42 as a result. He resigned the following month.

Sorokunov then filed a PAGA notice with the Labor and Workforce Development Agency and NetApp, and in January 2020 filed a First Amended Complaint. He alleged that the Plan violated Labor Code section 2751(a) by failing to set forth the method by which commissions would be computed and paid; that NetApp violated section 221 by collecting wages already paid; and that NetApp violated section 223 by secretly paying less than the contractual wage scale. He also asserted claims for unfair competition under Business and Professions Code section 17200 et seq., breach of contract, and PAGA penalties, along with an individual claim under Labor Code section 202(a) for failure to pay earned commissions upon resignation.

In December 2020, the trial court granted NetApp’s petition to compel arbitration of Sorokunov’s individual non-PAGA claims. In May 2024, the court denied Sorokunov’s motion for summary adjudication of his PAGA claim regarding section 2751(a), finding he had not shown the Plan was subject to the statute and that triable issues of fact remained.

In July 2024, the arbitrator ruled in NetApp’s favor on every individual claim, finding no breach of contract, no violation of sections 221, 223, or 2751, and no merit to the wage fraud claims. The trial court confirmed the arbitration award in September 2024 and then granted NetApp’s motion for judgment on the pleadings on the PAGA cause of action, concluding that Sorokunov lacked standing as an aggrieved employee based on the arbitrator’s findings.

The Court of Appeal affirmed the judgment in its entirety in the published case of Sorokunov v. NetApp, Inc., Case No. A171964 (March 2026)..

Sorokunov argued that NetApp’s power to unilaterally amend, suspend, or terminate the Plan rendered its promise to arbitrate illusory, relying on Peleg v. Neiman Marcus Group, Inc. (2012) 204 Cal.App.4th 1425. The court distinguished Peleg because NetApp’s modification clause required that any changes be “consistent with and to the extent permitted by applicable law.” Under the implied covenant of good faith and fair dealing, as recognized in 24 Hour Fitness, Inc. v. Superior Court (1998) 66 Cal.App.4th 1199, 1214, and Casas v. Carmax Auto Superstores California LLC (2014) 224 Cal.App.4th 1233, this language prevented NetApp from applying modifications to claims that were known but not yet filed, rendering the arbitration agreement enforceable.

Sorokunov also framed his appeal as a pure question of statutory interpretation, but failed to challenge in his opening brief the trial court’s alternative finding that triable issues existed as to whether his compensation qualified as “commissions” under section 2751. Citing People v. JTH Tax, Inc. (2013) 212 Cal.App.4th 1219, 1232, the court held this forfeiture alone supported affirmance. On the merits, the court agreed that section 2751(a) requires only that the method of computing commissions be set forth in writing, not that the method be purely mechanical, and that NetApp’s Plan met that standard.

Applying the standard from Richey v. AutoNation, Inc. (2015) 60 Cal.4th 909, 916–918, the court reviewed the award for clear legal error affecting unwaivable statutory rights and found none. On section 221, the court cited Prachasaisoradej v. Ralphs Grocery Co., Inc. (2007) 42 Cal.4th 217, 239, for the principle that wage-protection statutes do not prohibit systems where final compensation remains contingent on post-performance events. On section 223, the court agreed the windfall provision was not secret, as it was plainly disclosed in the Plan.

The court followed Rocha v. U-Haul Co. of California (2023) 88 Cal.App.5th 65 and Rodriguez v. Lawrence Equipment, Inc. (2024) 106 Cal.App.5th 645, holding that the arbitrator’s determination that no Labor Code violations occurred against Sorokunov precluded him from claiming aggrieved-employee status under PAGA. The court noted that the California Supreme Court endorsed this approach in Adolph v. Uber Technologies, Inc. (2023) 14 Cal.5th 1104, 1124, and Stone v. Alameda Health System (2024) 16 Cal.5th 1040, 1076–1077. The court declined to follow Gavriiloglou v. Prime Healthcare Management, Inc. (2022) 83 Cal.App.5th 595, which had reached the opposite conclusion, and distinguished Prime Healthcare Management, Inc. v. Superior Court (2025) 117 Cal.App.5th 127 on its facts. The court rejected Sorokunov’s policy objection by noting that the judgment had no preclusive effect on the LWDA, which remained free to bring its own enforcement action.

John Sarviss worked as a helicopter pilot for the City of Los Angeles Department of Water and Power. He filed a workers’ compensation claim alleging cumulative trauma injuries to his back and bilateral lower extremities during the period from July 21, 2008 to July 9, 2012. In May 2013, the parties entered a stipulation in which the employer accepted the claim as an industrial injury, with all further issues – including the nature and extent of disability – to be determined by medical evaluators.

The case was complicated by serious credibility problems that emerged over the course of multiple medical evaluations. Dr. Steven Silbart, an Agreed Medical Evaluator, issued a supplemental report in March 2022 after reviewing Sarviss’s deposition transcript and full medical file. Dr. Silbart identified significant credibility concerns. Sarviss had completely failed to disclose to a prior medical examiner a nonindustrial incident in 2011 involving a herniated disc that required surgery. Additionally, Sarviss had testified that his treating physician linked his herniated disc to something other than lifting a heavy object, when in fact the physician’s own reports attributed the injury specifically to lifting a heavy cabinet. Sarviss also recanted a prior history he had given of injuring his low back in a service-connected helicopter crash in the Army in 1971.

A second evaluator, Dr. Kenneth Sabbag, was appointed under Labor Code section 5701 after the parties lost confidence in Dr. Silbart and other prior evaluators. Dr. Sabbag examined Sarviss in August 2023 and encountered similar problems. He could not reconcile multiple discrepancies in the applicant’s account – including conflicting stories about the 2011 injury, the absence of any documented work-related injury before July 2012, and the fact that Sarviss claimed he needed a cane but did not bring one to the exam, offering the false explanation that TSA prohibits canes on airplanes. Dr. Sabbag also noted that Sarviss had an extensive prior career as a freelance helicopter pilot for the film industry involving physically arduous work, yet denied any prior injuries. Dr. Sabbag deferred the credibility question to the trier of fact but acknowledged in his March 2024 deposition that conflicting data existed and he had been unable to resolve it.

At trial on September 15, 2025, Sarviss testified under oath – three separate times – that he was never injured before working for the Department of Water and Power, despite extensive medical records documenting a 1993 helicopter crash causing a severe thoracic compression fracture and lower extremity injuries requiring approximately 20 reconstructive surgeries.

The workers’ compensation administrative law judge issued Findings of Fact and an Order on November 24, 2025. While the WCJ found, based on the parties’ stipulations, that Sarviss did sustain industrial injury to his lumbar spine, cervical spine, and lower extremities, the WCJ concluded there was no substantial evidence to establish periods of temporary disability, permanent disability, the nature and extent of the injuries, or any need for further medical treatment. The WCJ reasoned that because Sarviss had never provided a complete and honest medical history to any of the evaluating physicians, none of their medical reports constituted substantial medical evidence. As a result, the WCJ found Sarviss failed to meet his burden of proof and ordered the matter off calendar with no award of benefits or attorney fees.

The Workers’ Compensation Appeals Board denied Sarviss’s Petition for Reconsideration, affirming the WCJ’s decision in full in the panel decision of Sarviss v City of Los Angeles Department of Water and Power. -ADJ8666280 (February 2026)

The WCAB grounded its analysis in the well-established principle that all decisions must be supported by substantial evidence. Citing Lamb v. Workmen’s Comp. Appeals Bd. (1974) 11 Cal.3d 274 [39 Cal.Comp.Cases 310], Garza v. Workmen’s Comp. Appeals Bd. (1970) 3 Cal.3d 312 [35 Cal.Comp.Cases 500], and LeVesque v. Workmen’s Comp. Appeals Bd. (1970) 1 Cal.3d 627 [35 Cal.Comp.Cases 16], the Board reaffirmed that substantial evidence requires more than speculation or conjecture. Relying on Escobedo v. Marshalls (2005) 70 Cal.Comp.Cases 604 (Appeals Board en banc), the Board noted that a medical opinion must be based on pertinent facts, an adequate examination and history, and must set forth its reasoning. The Board further cited Hegglin v. Workmen’s Comp. Appeals Bd. (1971) 4 Cal.3d 162 [36 Cal.Comp.Cases 93] for the proposition that medical opinions based on inadequate histories fail to constitute substantial evidence.

Applying these standards, the Board agreed with the WCJ that every medical report in the record was undermined by Sarviss’s failure to provide a complete and truthful history. Because none of the medical evaluations rested on an accurate factual foundation, none could serve as substantial evidence to support an award of benefits.

The Board also rejected Sarviss’s argument that the 2013 stipulation accepting his injury as industrial entitled him to ongoing benefits. Citing Labor Code section 4909, the Board noted that payments made during a disputed period do not constitute an admission of liability, and the stipulation itself reserved all further issues for medical determination – the very determination that could not be made due to the incomplete histories.

Finally, the Board gave great weight to the WCJ’s credibility findings, citing Garza v. Workmen’s Comp. Appeals Bd. (1970) 3 Cal.3d 312, 318–319 [35 Cal.Comp.Cases 500], which holds that a trial judge who observes a witness’s demeanor is entitled to deference on credibility unless there is evidence of considerable substantiality to the contrary. The Board found no such contrary evidence and concluded that Sarviss had failed to meet his burden of proof on all issues.

A Los Angeles police officer was charged with two counts of felony insurance fraud for allegedly exaggerating an on-duty injury to collect disability benefits while participating in recreational skydiving and other physical activity.

Christopher Brandon Carnahan (dob 6/30/82) of Norwalk is charged in case 26CJCF01236 with two counts of felony insurance fraud. His arraignment will be scheduled for a later date. He is being held on $100,000 bail. If convicted as charged, Carnahan faces up to six years state prison to be served in county jail.

He’s a 43-year-old LAPD veteran with 18 years of service, residing in Norwalk, California. He holds the rank of Police Officer II and is assigned to the 77th Division, with serial number 39135 and badge number 20710.

On May 22, 2023, Officer Carnahan purportedly injured his left elbow while on duty and was subsequently placed on Temporary Totally Disabled (TTD) status. Officers with this status are entitled to receive 100% of their base salary tax-free for up to one year, and then two-thirds thereafter if the injury persists.

Prosecutors allege that while on TTD status, Carnahan completed many skydives at Skydive Elsinore in Lake Elsinore, California and worked out at a fitness center, contrary to his claims of being temporarily totally disabled. The DA’s office released photos showing what appears to be Carnahan skydiving and exercising, including one image dated May 23, 2024, showing him holding dumbbells

The case is being prosecuted by Deputy District Attorney Arunas Sodonis of the Healthcare Fraud Division and investigated by the Los Angeles Police Department.

“This case is about honesty and accountability,” Los Angeles County District Attorney Nathan J. Hochman said. “Claiming to be temporarily totally disabled and collecting disability benefits intended for injured workers while engaging in physically demanding activities like skydiving is a crime. This is an officer who knows the law and understands the standards he is sworn to uphold.”