Leopoldo Benavides worked as a roofer. On February 7, 2005 he lost his footing and fell a distance of about 12 feet. The fall fractured his right ankle and injured his back. Benavides and his employer’s workers’ compensation insurance carrier agreed to a July 23, 2008, a stipulated award reflecting that Benavides’s injury had left him 51 percent permanently disabled. The stipulation was based upon the evaluations of the AME, orthopedic surgeon Roger S. Sohn, M.D.

After the stipulated award, Dr. Sohn examined Benavides again on December 28, 2010, and issued a new report increasing Benavides’s whole person impairment rating for the spine. This time, Dr. Sohn opined that Benavides had impairment secondary to the fractured femur and “increasing impairment” of the spine. In a subsequent deposition, Dr. Sohn explained that he changed his opinion based on the May 9, 2008 EMG finding, which he stated “automatically boost[ed]” Benavides’s DRE to a category V under the American Medical Association guidelines. Under further questioning, Dr. Sohn acknowledged that the EMG finding confirmed the decline in Benavides’s condition had occurred before the stipulated award was entered on July 23, 2008.

On February 8, 2010, Benavides filed a petition to reopen, alleging his condition had worsened and that his disability exceeded the rating provided by the July 23, 2008 stipulated award.  The WCJ initially denied the petition, concluding that Benavides had not sustained a new and further disability following that award. The WCJ vacated his initial finding and decision, after Benavides filed a petition for reconsideration. In his new findings and decision, the WCJ explained that Dr. Sohn now rated Benavides as more disabled than the July 23, 2008 stipulated award reflected, and Benavides should therefore be rated as 72 percent permanently disabled.

On reconsideration, a two-to-one majority of the appeals board disagreed. The majority found that Benavides had not sustained a “new and further disability” as required under Labor Code section 5410, because the decline in Benavides’s condition occurred before entry of the award. The majority also concluded that “good cause” to reopen the case under section 5803 was not established, because there was nothing “in the record to suggest that [Benavides] was unable to send the EMG study to Dr. Sohn before the award was issued.” In that regard, the majority noted that Benavides had not shown why the new evidence could not have been discovered and produced at a hearing held prior to the July 23, 2008 award.

In the unpublished decision of Benavides v WCAB, the Court of Appeal reversed and concluded there was good cause to reopen the case and annulled the decision of the appeals board and remand with directions to reinstate the WCJ’s award of a 72 percent disability rating.

Labor Code section 5803 accords the appeals board continuing jurisdiction to rescind or revise its awards, “upon good cause shown.” Such cause may consist of newly discovered evidence previously unavailable, a change in the law, or “any factor or circumstance unknown at the time the original award or order was made which renders the previous findings and award ‘inequitable.’ ” (LeBoeuf v. Workers’ Comp. Appeals Bd. (1983) 34 Cal.3d 234, 242) More specifically, an award based upon a stipulation may be reopened or rescinded if the “stipulation has been ‘entered into through inadvertence, excusable neglect, fraud, mistake of fact or law, . . . or where special circumstances exist rendering it unjust to enforce the stipulation.’ ” (Huston v. Workers’ Comp. Appeals Bd. (1979) 95 Cal.App.3d 856, 865-866)

Dr. Sohn issued a pre-award report rating Benavidas’s impairment without first requesting and reviewing an EMG, and the WCJ approved the parties’ stipulation, unaware of the fact that an existing EMG demonstrated Benavidas’s spinal condition was significantly worse than reflected in Dr. Sohn’s report. Whether the stipulation was the result of inadvertence, excusable neglect, or mistake of fact, the error justifies reopening the resulting award. “Indeed, when Benavides brought his petition to reopen, the evidence clearly established that the stipulated award was inequitable.”

Xerox announced a definitive agreement to acquire ISG Holdings, Inc. for $225 million, creating a comprehensive workers’ compensation suite of offerings for clients in the property and casualty insurance industry. In addition to Xerox’s current workers’ compensation business offered through CompIQ, Xerox will add the following ISG subsidiaries and their offerings to its portfolio:

— StrataCare, based in Irvine, Calif., provides comprehensive web-based medical bill review software, workflow and outsourcing solutions.
— Bunch CareSolutions, based in Lakeland, Fla., provides medical management solutions with real-time integration between medical bill review and nurse case management.

StrataCare provides web-based medical bill management software. It has more than 350 employees across its operations here and a regional office in Amarillo, Texas.

The acquisition of ISG expands Xerox’s services to property and casualty insurance carriers, third-party administrators, managed care services providers, governments and self-administered employers who require comprehensive reviews of medical bills and implementation of care management plans stemming from workers’ compensation claims. This acquisition complements Xerox’s current support of the top 20 U.S. property, casualty and commercial health insurance companies, touching nearly two-thirds of the nation’s insured population.

“The workers’ compensation industry generates $60 billion in medical payments each year – that equates to approximately 75 million bills in need of financial validation,” said Bob Zapfel, president, Xerox Services. “This acquisition demonstrates our commitment to the property and casualty sector and makes us an industry leader in workers’ compensation bill review software and care management services.”

ISG’s secure and compliant SaaS (Software as a Service) cloud delivery platform, care management services and analytics blended with Xerox’s world-class transactional expertise will allow clients to benefit from a true end-to-end solution. “Xerox provides a solid, secure foundation to continue to enhance our software and technology based services,” Paul Glover, ISG’s chairman and CEO. “The depth and breadth of Xerox’s services and resources provide ISG’s customers confidence in our ability to meet and exceed their needs into the future.”

Once the acquisition is complete, the brands will go to market as StrataCare, A Xerox Company and Bunch CareSolutions, A Xerox Company. The operations of StrataCare and Bunch CareSolutions and its 700 employees in Irvine, Calif., Lakeland, Fla., and Amarillo, TX, will continue to be led by Glover, who will report to Connie Harvey, chief operating officer of Xerox’s commercial healthcare and insurance business.  The two units, which will be branded as Xerox companies, are expected to have about 700 employees overall when the transaction is completed.

The Insurance Journal just published a special report that highlights 10 current workers’ compensation challenges ahead for the industry. One of the 10 that stands out deals with innovation and technology.

According to the report, when it comes to technological innovations, the health care industry’s advancements dwarf anything that’s developed in the workers’ comp industry for years, says Thomas Lynch, founder and CEO of Lynch Ryan and Associates Inc., a management consulting firm for workers’ compensation cost control based in Wellesley, Mass., and publisher of the blog WorkersCompInsider.com. “The P/C insurance industry is very slow to innovate and is lagging behind other industries, as well as other parts of the insurance industry, in adoption and rapid movement to technology usage and innovation,” he says.

In Lynch’s view, the workers’ comp industry is way behind and it must catch up.

“For example, there’s a huge move now in the Veterans Administration called the Blue Button Project, where if you’re a patient you have a portal. You can go in and you can see all your medical records. You can communicate with your doctors. It’s a great back and forth system.” There’s nothing quite like it the workers’ comp industry, he says. “That kind of patient back and forth could really be a benefit in, wellness programs, in claims administration.”

The workers’ comp industry also lags in providing mobile claims reporting technology.”Even now, today, the usual way is that when you have a claim, you’ll go online and file a report online or you’ll make a phone call. Why couldn’t you take out your smartphone, have a voice activated app that could allow you to report directly into your carrier’s system which would, in real time, display for a claims adjuster?” he says. “Why can’t you, at the same time, take a picture of the incident on your smartphone and include that with the report ” the whole claim reported and done in five minutes. We can’t do that now and yet we can do it in other areas.”

“Workers’ comp and the rest of P/C has to get its act together, has to rededicate itself to delighting the customer, to having a dynamic relationship with the customer, and understanding that the customer is the most important thing in its universe,” Lynch says.

The Division of Workers’ Compensation (DWC) has posted a third 15-day notice of modification to the proposed medical provider networks (MPN) regulations to the DWC website. Members of the public are invited to present written comments regarding the proposed modifications to dwcrules@dir.ca.gov until 5 p.m. on Monday, May 19. The proposed modifications include:

1) Clarification of the definition of an Entity that Provides Physician Network Services.
2) Requirement for an Entity that Provides Physician Network services to provide an affirmation that they contract with physicians and other medical providers or contract with physician networks in their MPN application.
3) Specifies a 90-day time frame from the effective date of these regulations for DWC to assign a unique MPN Identification Number to existing MPNs.
4) Clarification of the instructions to submit an MPN application or MPN modification.
5) Deletion of the requirement to indicate if a physician is not currently taking new workers’ compensation patients in the MPN’s internet website posting of its roster of all treating physicians.
6) Added Civil Code sections 1633.1 et seq. governs electronically signed documents between private parties when obtaining physician acknowledgments.

The notice, text of the regulations, and forms can be found on the proposed regulations page.

The Department of Industrial Relations (DIR) has released a 102 page report “Ambulatory Surgical Services Provided Under California Workers’ Compensation: An Assessment of the Feasibility and Advisability of Expanding Coverage.”

Senate Bill 863, which was signed into law in 2012, requires DIR to study the feasibility of establishing a facility fee for Medicare’s “inpatient only” procedures performed in Ambulatory Surgery Centers (ASCs) and report its finding to the legislative committees. At present, Medicare does not have a fee schedule for these procedures when performed in outpatient settings.

The study’s key recommendations are to retain current OMFS policies with regard to “inpatient only” procedures performed in an ambulatory setting; and strengthen patient protections when procedures are performed in an ambulatory setting..

1) ASCs that are currently eligible for an Official Medical Fee Schedule (OMFS) facility fee are likely to be equipped to provide services that do not require a one-night stay. However, Medicare has several requirements for patient protection that are not found in the minimum accreditation requirements for physician-owned facilities that are not Medicare certified. These include accepting only patients who are likely to require less than a 24-hour stay, assuring appropriate post-discharge arrangements are made, and providing the patient with written disclosure of any financial interests between the ASC and the physician.

2) Data analyses and review of the literature do not provide strong support for removing any procedures from the “inpatient only” list with the possible exception of procedures related to anterior cervical spinal fusions.

3) Few “inpatient only” procedures are currently being performed in an ASC on either workers’ compensation or privately insured patients ages 18-64, with the exception of spinal instrumentation.

4) Current OMFS policies of prior authorization process for performing an “inpatient only” procedure in an ASC setting, which allows for individual consideration of the anticipated services, other procedures that will be performed during the same encounter, and post-discharge services, before the services are provided are preferable to an across-the-board pricing methodology.

Under current OMFS policies, “inpatient only” procedures are covered as an exception that permits a payer to authorize payment for an “inpatient only” service in an ambulatory setting at an agreed-upon rate when medically appropriate. If any services are to be removed from the “inpatient only” list for WC patients, an OMFS allowance is needed for those services. In this regard, Section 74 of SB 863 requires DIR to consider a fee set at 85 percent of the Medicare fee schedule amount for the service when performed on an inpatient basis.

RAND examined two basic policy alternatives for paying for these procedures in an ambulatory setting. Consistent with SB 863, the first option would be to pay for the ambulatory surgery based on a multiple of the Medicare inpatient rate for the procedures. The second option would be to base the rate on the amounts paid for comparable services under the hospital prospective payment system. It concluded that the less problematic approach would be to build on the current OMFS for outpatient services. The “inpatient only” procedures could be assigned to the most comparable APC.