After the report yesterday of the passing of Retired Workers’ Compensation Judge Samuel L. Sosna Jr. we are saddened to learn of the passing of yet two additional members of our Southern California Workers’ Compensation community.

Jack Paul Koszdin, the founding partner of the applicant’s firm of Koszdin, Fields Sherry and Katz in Van Nuys California passed away on Sunday, August 24, 2014. There will be a memorial service this Wednesday, August 27, 2014 at 10:00 a.m. at Mt. Sinai Cemetery in the Chapel Tanach. The California State Bar website provides the following tribute to Jack.

Born in 1931, Jack Koszdin grew up in Chicago, a child of Russian Jewish immigrants. As a young man, he moved to California and attended UCLA for his undergraduate degree and his J.D. Admitted to the California State Bar in 1955, Jack Koszdin dedicated his professional life to securing the rights of injured workers throughout California, which he championed through the law, through the classroom and through broadcast media.

Jack strongly supported workers’ union rights, serving as a founding member of VELPEC. He was legal advisor to the Valley Labor Political Education Council and co-hosted the Union Voice radio program.

Jack’s passion for politics lead him to work on numerous political campaigns for democratic candidates throughout his career. He supported such notable leaders as Tom Bradley, Bill Lockyer, Hilda Solis, Loretta Sanchez, and Richard Katz, among many others.

Service to the community has always been a priority to Jack. He has served in leadership positions for such organizations as Red Cross, Child Guidance Clinic, and Valley Hillel. Jack lectured in law at UCLA, the University of West Los Angeles and L.A. Trade Tech. He was a partner in the firm of Levy, Koszdin and Woods before heading the firm of Koszdin and Siegel, which later became Koszdin, Fields, Sherry and Katz, where he remained senior partner until his recent retirement.

It is through the efforts of Jack P. Koszdin and the powerhouse attorneys like him, who over the years have zealously protected some of our state’s most important yet vulnerable members — the laborers — that such landmark cases as Zemke v. Workmen’s Comp. App. Bd. 68 Cal. 2d 794 and Franklin v. Workers’ Comp. Appeals Bd., supra, 79 Cal.App.3d at pp. 237-238 came to be. After almost 60 years in the field of workers’ compensation law, Jack cared deeply for the plight of the injured worker, whose rights and benefits need defending now more than ever.

While Jack’s professional achievements are many, his greatest pride comes in the successes of his children, Shelli, Kari, Kenton, David and Frank, who are all accomplished professionals in their own right. He lived in Burbank, California with his beloved wife of years, Helen Griffin.

We must also report that Workers Compensation Judge Dennis Stach from the Riverside WCAB Passed away on August 7, 2014 in Norco, CA.

Judge Stach graduated from Elmwood Park High School in 1962. He enlisted in the US Air Force where he served as a Pararescue Specialist during the Vietnam era. He went on to undergraduate studies at California State Polytechnic University and then law school at the University of La Verne and became an attorney in 1979 and later served as a Workers’ Compensation judge in Southern California. He retired in 2010 after 25 years of service.

Judge Stach is survived by his sister, Mary Ann Carr, from San Diego; and brother, William Stach, of Streamwood, IL.

The Southern California Workers’ Compensation community will surly miss both of these fine professionals who were well respected and well liked by colleagues.

A former San Mateo County files clerk caught on video working at restaurants she owned while collecting disability for a supposed back injury was sentenced Thursday to 120 days in jail, according to District Attorney Steve Wagstaffe. and the story in Insurance News Net.

But Superior Court Judge Craig Parsons recommended that sheriff’s officials instead confine and electronically monitor Sunita Sagar, 46, inside her home over that period. Parsons also placed Sagar on probation for three years, but defense attorney Lauren Kramer said the felony fraud charge will be reduced to a misdemeanor after 18 months if she behaves.

Sagar and her husband own multiple restaurant franchises in the Bay Area, including several Denny’s, a Baja Fresh and a Jack in the Box, although none in San Mateo County, Wagstaffe said. They also own a computer equipment store in Fremont.

According to prosecutors, Sagar collected disability benefits from 2008 to 2012 for a back injury she reportedly sustained while working. She convinced doctors she was “completely sedentary and could not conduct her daily activities,” and requested in-home care, according to Wagstaffe.

But insurance fraud investigators caught Sagar on hidden video “engaged in a very active lifestyle” that included working at her businesses, walking and bending without sign of discomfort, according to Wagstaffe. When her doctors were shown the video, they confirmed that Sagar had misrepresented her disability and was able to work, the district attorney said.

Despite her client’s no-contest plea, Kramer said the videos don’t prove Sagar was working. The allegations “weren’t ever tested,” she added, because the case didn’t go to trial. “Obviously we have a very different perspective,” Kramer said in a phone interview Thursday. “She indisputably spent time at the restaurants they owned, but she was not involved in the day- to-day operations.”

Sagar received approximately $22,000 in undeserved benefits, according to the district attorney’s office. On Thursday, she was also ordered to pay restitution to the county totaling $54,773, which include the costs of the investigation, according to Wagstaffe.

The U. S. Drug Enforcement Administration (DEA) published in the Federal Register the new Final Rule moving hydrocodone combination products (HCPs) from Schedule III to the more-restrictive Schedule II, as recommended by the Assistant Secretary for Health of the U.S. Department of Health and Human Services (HHS) and as supported by the DEA’s own evaluation of relevant data. The Federal Register has made the Final Rule available for preview on its website today at http://go.usa.gov/mc8d. This Final Rule imposes the regulatory controls and sanctions applicable to Schedule II substances on those who handle or propose to handle HCPs. It goes into effect in 45 days.

The Controlled Substances Act (CSA) places substances with accepted medical uses into one of four schedules, with the substances with the highest potential for harm and abuse being placed in Schedule II, and substances with progressively less potential for harm and abuse being placed in Schedules III through V. (Schedule I is reserved for those controlled substances with no currently accepted medical use and lack of accepted safety for use.) HCPs are drugs that contain both hydrocodone, which by itself is a Schedule II drug, and specified amounts of other substances, such as acetaminophen or aspirin.

“Almost seven million Americans abuse controlled-substance prescription medications, including opioid painkillers, resulting in more deaths from prescription drug overdoses than auto accidents,” said DEA Administrator Michele Leonhart, “Today’s action recognizes that these products are some of the most addictive and potentially dangerous prescription medications available.”

When Congress passed the CSA in 1970, it placed HCPs in Schedule III even though it had placed hydrocodone itself in Schedule II. The current analysis of HCPs by HHS and the DEA shows they have a high potential for abuse, and abuse may lead to severe psychological or physical dependence. Adding nonnarcotic substances like acetaminophen to hydrocodone does not diminish its abuse potential. The many findings by the DEA and HHS and the data that support these findings are presented in detail in the Final Rule on the website. Data and surveys from multiple federal and non-federal agencies show the extent of abuse of HCPs. For example, Monitoring the Future surveys of 8th, 10th, and 12th graders from 2002 to 2011 found that twice as many high school seniors used Vicodin®, an HCP, nonmedically as used OxyContin®, a Schedule II substance, which is more tightly controlled.

In general, substances placed under the control of the CSA since it was passed by Congress in 1970 are scheduled or rescheduled by the DEA, as required by the CSA and its implementing regulations, found in Title 21 of the Code of Federal Regulations. Scheduling or rescheduling of a substance can be initiated by the DEA, by the HHS Assistant Secretary of Health, or on the petition of any interested party. (Detailed information on the scheduling and rescheduling process can be found beginning on page 8 of Drugs of Abuse on the DEA’s website at http://www.justice.gov/dea/pr/multimedia-library/publications/drug_of_abuse.pdf.)

The rescheduling of HCPs was initiated by a petition from a physician in 1999. The DEA submitted a request to HHS for a scientific and medical evaluation of HCPs and a scheduling recommendation. In 2013, the U. S. Food and Drug Administration held a public Advisory Committee meeting on the matter, and the committee voted to recommend rescheduling HCPs from Schedule III to Schedule II by a vote of 19 to 10. Consistent with the outcome of that vote, in December of 2013 HHS sent such a recommendation to the DEA. Two months later, on February 27, the DEA informed Americans of its intent to move HCPs from Schedule III to Schedule II by publishing a Notice of Proposed Rulemaking in the Federal Register, outlining its rationale and the proposed changes in detail and soliciting public comments on the proposal, of which almost 600 were received. A small majority of the commenters supported the proposed change.

Jeff Sinclair worked for Praxair Inc. collecting and testing soil, water, and air samples from potentially contaminated sites. During his employment, he underwent annual physical examinations. Several of his annual physical examinations after 1993 showed he had high blood urea nitrogen and creatinine levels and the examiner noted he should follow up with his own physician. Although Sinclair received copies of all of his annual examination results, he never reviewed them and, therefore, never complied with the recommendation to follow up with his personal physician. Nonetheless, his personal physician diagnosed him with renal disease in 1994 and he admittedly knew of the diagnosis at least since 1996. At the time, his physician attributed his renal disease to gout.

In 2009, after another annual examination, he was diagnosed with stage IV renal failure and became disabled from work. A worker’s compensation qualified medical examiner determined 85 percent of the cause of his renal disease was from work-related chemical exposures.

The Sinclairs subsequently sued Praxair for intentional conduct violating public policy, intentional infliction of emotional distress, and loss of consortium. Their complaint principally alleged Praxair intentionally concealed that workplace chemical exposures both caused and aggravated Sinclair’s renal disease. Praxair moved for summary judgment, arguing the Sinclairs could not establish their claims fell within the fraudulent concealment exception to the workers’ compensation exclusivity doctrine because, among other reasons, Sinclair knew he had renal disease. The superior court agreed and granted summary judgment to Praxair.

The Court of Appeal affirmed in the unpublished case of Sinclair v Praxair Inc.

An employee injured during the course of employment is generally limited to remedies available under the Workers’ Compensation Act. Labor Code section 3602(b)(2) provides a narrow exception to this exclusivity rule and allows a civil suit ‘[w]here the employee’s injury is aggravated by the employer’s fraudulent concealment of the existence of the injury and its connection with the employment, in which case the employer’s liability shall be limited to those damages proximately caused by the aggravation . . . .’ This provision was enacted in 1982 and codifies the common law fraudulent concealment exception that was enunciated by the Supreme Court in Johns-Manville Products Corp. v. Superior Court (1980) 27 Cal.3d 465.

Three conditions are necessary for the fraudulent concealment exception to apply: (1) the employer must have concealed the existence of the injury; (2) the employer must have concealed the connection between the injury and the employment; and (3) the injury must have been aggravated following the concealment. If any one of these conditions is lacking, the exception does not apply and the employer is entitled to judgment in its favor.

Here, the undisputed evidence shows Sinclair was diagnosed with renal disease in 1994 and he knew of the diagnosis as early as 1996. Consequently, the Sinclairs cannot establish the first element of the fraudulent concealment exception, that Praxair concealed the existence of his injury from him.

The Commission on Health and Safety and Workers’ Compensation (CHSWC) has released on its website the 214 page study, “Examination of the California Public Sector Self-Insured Workers’ Compensation Program” for public comment. This study was part of Senate Bill (SB) 863 Reforms, required by Labor Code Section 3702.4, to examine the public sector self-insured workers’ compensation program and to make recommendations to improve the administration and performance of the program. CHSWC contracted with Bickmore to assist with this requirement.

Recent municipal bankruptcies have drawn attention to public entity employers and the adequacy of the resources they possess to meet their workers’ compensation obligations. It is unclear what the impact to employees and taxpayers would be in the event that large or multiple public entities become unable to provide for their workers’ compensation liabilities.The purpose of this study is to identify variances in the performance of public employers’ self insured workers’ compensation and to recommend areas for improvement. In addition, the study is to provide information that facilitates benchmarking public self-insured workers’ compensation programs.

The study found that a self-insurer’s region has a significant impact on the claims costs. Self-insurers in southern California have experienced higher claim frequency, higher average claim size, and higher overall cost per $100 of payroll. Over the past several years this disparity between southern California and the rest of the State has increased. In addition, claims of southern California self-insurers tend to stay open longer in comparison to those in the rest of the State. The analysis of insurance company data by the California Workers’ Compensation Insurance Rating Bureau (WCIRB) has also pointed to disparities between claim frequencies and costs between different regions of the State. The current analysis confirms that these disparities also exist for public self-insurers. Since one of the goals of the workers’ compensation system to have equal treatment of and benefits for injured workers, the authors believe it is worth exploring the root causes of this disparity.

The type of agency has a major impact on the loss rates, claims sizes, and claims frequencies. Municipalities tend to have the highest costs, whereas educational entities (schools, colleges, and universities) have the lowest. Over the past several years the cost of municipal claims has risen at a faster pace than that of counties or educational entities. This is primarily due to increases in the average claim size. Also, claims of education self-insurers tend to close faster in comparison to those of counties and cities.

In general, JPAs have experienced lower costs per $100 of payroll than individual self-insurers. However, JPA costs have been increasing at a faster rate than those of individual self-insurers over the past several years.

The study found almost no difference in loss rates between self-insurers that utilize a TPA versus those that self-administer. Those that self-administer tend to have a higher claim frequency, but this is offset by a lower average claim size. In addition, loss rates have been increasing at a slower pace for those that self-administer than for those that utilize a TPA.