The health of the workers’ compensation system in California and statewide economic trends likely to impact the system in the future were among the topics discussed at this months Annual WCIRB Workers’ Compensation Conference in San Francisco. The Conference is an opportunity for WCIRB members and other industry stakeholders to discuss issues of common concern and to hear from leading voices in the California workers’ compensation system.

WCIRB President and CEO Bill Mudge opened the Conference with a “health checkup” on the State’s 101 year old workers’ compensation system from the perspective of injured workers, employers and insurers. Based on Mr. Mudge’s observations, “vital signs” for the California system are mixed.

1) For injured workers, fewer injuries and timely access to care and benefits are balanced by concerns over the level of wage replacement, the problems associated with high rates of long-term opioid use and delays getting back to work.
2) For employers, fewer injuries, numerous insurance choices and a charged rate level that remains approximately 50% below what it was a decade ago are balanced against a litigious, costly and complex workers’ compensation system.
3) For insurers, the size of the workers’ compensation market, pricing flexibility and competition are balanced against volatile insurer results, unpredictable outcomes, and a complex benefit delivery system.

Overall there has been an 83% reduction in claim frequency in the past 50 years. 85% of injured workers who responded to a survey were satisfied with the medical care they received. Yet California has 47% of lost time claims with permanent disability. This ranks as the seventh highest state. California is among the top ten states with longer term opiate use.

A multi-agency task force led by the California Department of Insurance, consisting of more than 100 detectives and investigators focused on curbing California’s underground economy, conducted a sweep across major metropolitan areas statewide issuing more than 60 citations for various violations and six work stop-orders. Investigators also took the opportunity to educate homeowners about their responsibility to verify contractors have a license and workers’ compensation insurance before they hire them.

Homeowners who hire contractors or vendors that do not have proper licenses or workers’ compensation insurance may risk their home and assets if someone is injured on their property or shoddy work results in damage to their home. Many homeowner policies have a criminal activity clause that means the insurance company may not cover damage caused by shoddy work performed by an unlicensed contractor or liability coverage if a worker is injured and the contractor does not have workers’ compensation insurance.

“Homeowners must be aware of their obligation to verify that contractors they hire have proper licenses and valid workers’ compensation insurance,” said Insurance Commissioner Dave Jones. “It is not worth risking your home or other assets because you hired an unlicensed contractor or didn’t take the time to verify their license and insurance coverage. A few minutes spent ensuring your contractor or vendor is following the law is a small investment to protect yourself and your assets.”

At a private home in the Los Angele area investigators found a sub-contractor working on the job site without workers’ compensation insurance. According to detectives, the homeowner was surprised to learn he was responsible for verifying not only the general contractor’s workers’ compensation insurance, which he had done, but also for all sub-contractors. Other violations found among the nearly 100 businesses contacted included no workers’ compensation insurance, no valid contractor’s license, serious safety violations cited by the Division of Occupational Safety and Health, including one with an estimated $20,000 regulatory fine. The Contractors State License Board found six violations, ranging from advertising to safety issues. The Employment Development Department identified 15 possible administrative violations.

“California’s underground economy results in a multi-billion dollar hit to California’s economy,” said Insurance Commissioner Dave Jones. “This fraudulent activity hurts legitimate businesses that play by the rules. The coordinated effort of this multi-agency task force is an ongoing effort to level the playing field by putting a stop to the illegal activities of business owners that cheat the system at the expense of law abiding businesses and consumers.”

Roque Neri Hernandez filed a claim against Geneva Staffing, Inc.as a result of a severe crush injury to his right dominant hand on July 11, 2011 During his initial hospitalization, applicant had three surgeries on his hand. Once he was home, he developed a serious infection in his hand, which necessitated a fourth surgery on September 19, 2011. Then, on December 20, 2011, he had a fifth surgery. Further surgery on applicant’s right hand has been recommended.

Applicant was cared for at his home by his spouse. A handwritten note on St. Mary’s Medical Center letterhead stated “This is to notify that Neri Hernandez Roque has been under the care of Dr. Charles K. Lee for severe injury to his right hand since 7-11-11 at which time he has needed constant care from his wife Adrianna Bayona. Mr. Neri Hernandez will need continuous care as his ongoing treatment goes on. [sic]” What appears to be a signature for Dr. Lee is scrawled on the bottom of the letter.

In his November 5, 2012 report, Dr. Gordon opined that: “As far as the second question which relates to an attendant, I do feel that it is reasonable for the patient to have support, transportation, and attendant care at the rate of six hours per day. There does not appear to be any particular need for skilled nursing as at this time there are no bandages or unusual care that is needed, and this would be at the unskilled level.”

Applicant sought an order for home health care services provided by his spouse; an award “for retroactive payment . . . to the date of injury payable to the applicant as a medical benefit;” and attorney’s fees. Applicant contended that his spouse’s testimony was an adequate basis to determine the hourly rate of reimbursement. Defendant contended that the November 11, 2011 report by Dr. Lee was not a valid prescription for home health care services as it did not specify the type of care or number of hours of care required; that neither Dr. Lee’s nor Dr. Gordon’s report was sufficient to determine the type of care required; and that Senate Bill [SB] 863 controlled.

A Findings and Award, found that applicant was entitled to medical treatment in the form of home health care services beginning on August 3, 2011 and continuing and awarded applicant payment for self-procured home health care services. He awarded services for 24 hours per day, 7 days per week from August 3, 2011 to November 4, 2012, and for 6 hours per day, 7 days per week from November 5, 2012 and continuing. He awarded payment based on applicant’s spouse’s regular hourly rate of pay at the day care center where she worked. Defendant sought reconsideration and contended that newly enacted Labor Code sections 4600(h) and 4603.2(b)(1) applied.

The WCAB reversed in the en banc decision of Hernandez v Geneva Staffing. With regard to the SB 863 additions and amendments to the Labor Code regarding home health care services, which became effective January 1, 2013, the Appeals Board held:

1) Sections 4600(h), 4603.2(b)(1), and 5307.8 apply to requests for home health care services in all cases which are not final regardless of date of injury or dates of service.
2) The prescription required by section 4600(h) is either an oral referral, recommendation or order for home health care services for an injured worker communicated directly by a physician to an employer and/or its agent; or, a signed and dated written referral, recommendation or order by a physician for home health care services for an injured worker.
3) Under section 4600(h) home health care services are subject to either section 5307.1 or section 5307.8; section 5307.1 applies where an official medical fee schedule or Medicare schedule covers the type of home health care services sought; and otherwise, section 5307.8 applies.

Section 4600(h) makes clear that home health care services are included in the definition of “medical treatment,” but it also limits an employer’s duty to provide that treatment by imposing two additional conditions which are part of an injured worker’s burden of proof. The first condition requires that home health care services be prescribed by a physician, and an employer may become liable for home health care services provided 14 days prior to receipt of a prescription. The second condition requires that an employer’s liability for home health care services is subject to either section 5307.1 or section 5307.8. Section 5307.1 applies where an official medical fee schedule or Medicare schedule covers the type of home health care services sought. When the type of services sought is not covered by an official medical fee schedule or Medicare schedule, section 5307.8 applies.

The WCAB concluded that the note written by Dr. Lee “is a prescription for home health care services within the meaning of section 4600(h).” But the WCAB went to on conclude “It may be that defendant received medical records from the hospital from before November 11, 2011 containing a referral or recommendation for home health care services or providing notice of applicant’s need for home health care services. Applicant’s spouse’s testimony suggests that Dr. Lee may have communicated with defendant about applicant’s need for home health services and at a minimum, raises an inference that defendant may have received notice of the need for home health care services such that it should have investigated. Thus, we are unable to determine based on the evidence in the record before us whether the liability period may have begun at an earlier time.” Thus “we rescind the Findings and Award and return the matter to the WCJ for further development of the record consistent with this opinion and a new decision.”

An article in Reuters Health notes that patients given ice packs for the first 24 hours after major abdominal surgeries reported less pain and needed fewer narcotic painkillers, according to a new U.S. study. “We aren’t talking about saying to a patient, here is some ice and then cut off all their pain medication. The ice was only meant to increase the patient care,” Dr. Viraj Master told Reuters Health. Master, a urologist and professor at Emory University in Atlanta, Georgia, led the study. He said post-operative pain is an unavoidable consequence of major surgery. Although you can make it better with pain medication, those drugs are not without side effects like constipation, drowsiness and even dependence. “The idea was to keep patients out of pain but not have them suffer from using too many narcotics,” he said. “The physician could give the patient any medication he wanted, we just added the ice.”

Using ice as a treatment for surgical wounds, known as cryotherapy, is not new, Master said. The cold reduces pain by reducing inflammation and swelling, which lets more oxygen flow to cells, he said. At the same time, it slows down the metabolism of a cell so that less oxygen is needed. It also makes the nerve endings less sensitive to the pain. Cryotherapy is commonly used after orthopedic and hernia procedures, Master and his coauthors write in the Journal of the American College of Surgeons. They wanted to see if it could help patients after major surgeries too.

The researchers recruited 55 patients scheduled for major abdominal operations, mostly to remove cancers of the liver, pancreas, colon and other organs, then randomly assigned them to two groups. The 27 patients in the cryotherapy group would get ice for their wounds after their procedure while the 28 assigned to the comparison group would get no ice. Immediately after surgery, members of the cryotherapy group were given their ice pack to wear over their wound for a full 24 hours. Nurses kept the patients supplied with fresh ice packs during that time. After the first 24 hours, the patients could use the ice packs only when they wanted to.

For the three days following their surgeries, the patients rated their pain level twice a day on a scale of 0 to 10. Zero meant no pain, and 10 meant the worst pain imaginable. Their use of narcotic painkillers was also recorded during that period.

There was no significant difference in how long patients from either group stayed in the hospital, and one hour after their procedures, pain levels were not different in the two patient groups. But after the first hour and at all points during days one through three, patients in the cryotherapy group had lower pain scores than in the comparison group. On the first morning after surgery, for example, patients using ice packs rated their pain at 3 while those in the comparison group rated theirs at a 5. The researchers also saw a significant difference in pain on the evening of day three when the ice-treatment patients had an average pain score of less than 2 and the non-ice patients had scores that averaged almost 4.

The researchers standardized the pain medications used by patients into units of morphine equivalents and found that on days one and three, patients in the cryotherapy group used less medication. On day one after surgery, patients with ice packs used about 14 morphine equivalents’ worth of pain medication, compared to 17 in the group without ice. Use of the narcotics shot up on the second day in the cryotherapy group, but then fell again on day three, when they used about 11 morphine equivalents compared to 15 in the non-ice group. Because ice works locally and only for a short time, it was not surprising that the effect on narcotic use only lasted while patients used 24-hour ice packs, the authors write.

Some patients did continue using ice packs after the first day and said that it helped their pain. Eighty-one percent of the cryotherapy group said the ice brought them some relief, and 76 percent said they would use ice packs if they had another surgery.

Master noted that safety was a very important part of the experiment. “There was no wound breakdown caused by the ice and we conducted the treatment on a variety of surgical patients,” he said.

At $2 per ice pack, the treatment is cost-effective, the researchers point out in their report. They also say that cryotherapy should be complementary to other pain management strategies because it is easy, affordable, well-received by patients and has minimal to no toxicity.

Martha Salgado was injured at work when four fingers of her right hand were severed by a cutting blade in a meat-packing machine. Under the worker’s compensation exclusivity rule (Lab. Code, § 3600, subd. (a)), and under the power press exception to that rule (§ 4558), she cannot recover against her employer, Modern Meat, Inc. unless she can show that she was hurt while working on a power press that was lacking a point of operation guard.

Salgado worked for Modern Meat as the operator of a labeling machine at their meat packaging facility in San Bernardino. On the day of her injury, she was working at a VA-430 meat packaging machine. The VA-430 is roughly 20 feet long and three feet wide. It creates individual sealed packages through a four-step process. In the third step, a second sheet of plastic is heated and sealed to the first sheet by heat and pressure, and a cross-hatch or diamond pattern is embossed into the plastic from the sealing frame. Salgado contends that the imposition of the pattern into the plastic is a “stamping” operation. The purpose of the pattern is unclear. Modern Meat speculated the embossed cross-hatch pattern is decorative, improves grip on the package, or creates a better seal; Salgado’s expert could only propose that it would allow quality assurance to confirm that there is a seal between the upper and lower sheets.

The packages are separated at the last station by means of a 16-inch serrated blade and a series of circular-shaped knives. Salgado was injured in this step of the process when she cleared a jam from the machine. Salgado suffered partial amputation of four fingers on her right hand. A safety guard that would likely have prevented her injury had been removed by a line supervisor.

In her civil lawsuit against the employer, the trial court granted summary judgment to Modern Meat, finding that the VA-43 was not a power press within the meaning of section 4558. Salgado appealed. The Court of Appeal affirmed the dismissal in the unpublished case of Saldago v Modern Meat Inc.

Section 4558, subdivision (a)(4) defines a “power press” in the following terms: “‘Power press’ means any material-forming machine that utilizes a die which is designed for use in the manufacture of other products.” Title eight, section 4214, of the California Code of Regulations contains Article 55, subtitled “Power Operated Presses.” That article applies only to those mechanically or hydraulically powered machines that shear, punch, form, or assemble metal or other material by means of tools or dies attached to slides, commonly referred to as power operated presses. The trial court found that the VA-430 was not a power press. In announcing its decision, the trial court stated that the VA-430 was a “vacuum forming machine,” noting the absence of a “powerful pressing or shaping motion which can cause a serious crushing injury.” The trial court also found that the machine did not employ a die. There is little clear guidance in case law for the application of the power press exception.

Salgado’s counsel argues that the trial court’s ruling improperly included a requirement that the pressure applied by the machine must be powerful and that the finding that the VA-430 did not employ a die was factually incorrect. If there is a requirement that a “power press” apply powerful pressure, Salgado argues, it is Modern Meat’s burden on summary judgment to establish the VA-430’s lack of such pressure as an undisputed fact. Salgado argued that the sealing station’s cross-hatch impression is made by pressure, and also proposes on appeal that the sealing station utilizes pressure to hold the heated plastic against the pull of the vacuum pump. Salgado has presented evidence that the VA-430 employs both a die and pressure in its operation of those stations.

The Court of Appeal concluded that “although the cross-hatching or forming processes could inflict a serious crushing or pinching injury to an unprotected operator, the fact that a device can inflict a similar injury to those caused by a power press does not allow us to rewrite the statute to include the machine that caused Salgado’s injury…. It is an unreasonable construction of the statute to apply the power press exemption to any machine where there is an incidental application of pressure; a machine that applies labels to wrappers or icing to cupcakes employs pressure, but to equate it to metal-stamping presses would make the exception swallow the whole of the workmen’s compensation system. Although the VA-430 may have the characteristics of a power press, reason and precedent require us to give a narrow construction to the exception that places the VA-430 outside of its coverage.”