The Office of Administrative Law (OAL) has approved the Division of Workers’ Compensation’s (DWC) final version of the Supplemental Job Displacement Benefit (SJDB) regulations. OAL approved the SJDB regulations on November 8. Two sections have been repealed (10133.51 and 10133.52, which required the Notice of Potential Right to SJDB Benefit), effective immediately. The modifications to the remaining sections are effective on January 1, 2014. The SJDB emergency regulations went into effect on January 1, 2013. The final version of the SJDB regulations includes the following changes from the emergency regulations.

• Section 10118, the word “Inclusive” was added to the title to clarify the exact time period. “Retraining and Return to Work Unit” was deleted from the heading as that Unit no longer exists within the Division of Workers’ Compensation (DWC). DWC’s address was added for filing a Request for Dispute Resolution. On page 3, the case number field was deleted because case numbers may not be assigned at the time offers are made.
• Section 10133.31, subdivision (f)(5) was amended to allow injured workers to submit a written invoice for computer equipment to be paid directly to the retailer. The claims administrator may also offer to provide the computer equipment directly to the employee. Subdivision (j) is amended to indicate that computer equipment must be provided to the employee within 45 days of receipt of the Request for Purchase of Computer Equipment.
• Section 10133.32, the form has been stricken out in its entirety and a new version of the form takes its place. The content on the first two pages of the form were moved to allow for all fillable parts of the form to be on the second page so that the injured worker does not have to photocopy the first page with submission of the second page to the claims administrator. A separate Request for Purchase of Computer Equipment was added to the form. Injured workers can submit either a written bid from a computer retailer or receipts of purchase. Following the purchase, receipts for the computer equipment must be submitted to the claims administrator.
• Section 10133.34, subdivision (b) was deleted so as not to be duplicative with Section 10133.31.
• Section 10133.35, “Retraining and Return to Work Unit” was deleted from the heading as the unit no longer exists within DWC. DWC’s address was added for filing a Request for Dispute Resolution. The format of the proof of service was amended.
• Section 10133.36, the form was amended to conform to the functional capacity assessment of the DWC Form PR-4 which primary treating physicians complete when declaring an injured worker permanent and stationary. A box was added to allow the physician to describe in what ways the impaired activities are limited.
• Section 10133.53, “Retraining and Return to Work Unit” was deleted from the heading as that Unit no longer exists within DWC. The word “Inclusive” was added to the title to clarify the exact time period. DWC’s address was added for filing a Request for Dispute Resolution.
• Section 10133.55, “Retraining and Return to Work Unit” was deleted from the heading as that Unit no longer exists within DWC. A reason for filing for dispute resolution on page 3 was clarified to encompass objections to job offers and a reason was deleted as the reimbursement program is no longer in existence. Instructions and a proof of service were added to the form.
• Section 10133.57, “Retraining and Return to Work Unit” was deleted from the heading as that Unit no longer exists within DWC. An instruction was corrected on page 2 because not all Training Providers have approval numbers and expiration dates. DWC’s address was added for filing a Request for Dispute Resolution. Information about Information and Assistance was added to the form.
• Section 10133.58, this section was amended to reflect changes to approval of eligible providers.
• Section 10133.60, subdivision (a)(1) was amended to correctly state the requirements for offers of work set forth in section 10133.34.

Angelotti Chiropractic, Mooney and Shamsbod Chiropractic, Christina-Arana and Associates, Joyce Altman Interpreters, Scandoc Imaging and Buena Vista Medical Services filed a lawsuit last July in the United States District Court contesting the constitutionality of certain provisions of SB 863, and seeking to avoid payment of millions of dollars in lien activation fees before the end of 2013. Last week a federal judge issued a preliminary injunction that restrains the DWC from imposing the activation fee not only on these named plaintiffs, but on all other lien claimants state wide.  The injunction will continue until further order of court or an order by a higher court as a result of a successful appeal. .

As a result of this inunction, the DWC has made this public announcement.

“In compliance with a ruling issued Tuesday by the U.S. District Court for the Central District of California in the matter of Angelotti Chiropractic, Inc., et al. v. Baker, et al., the Division of Workers’ Compensation will no longer collect lien activation fees as of November 19.

Lien claimants whose liens were subject to the activation fee requirement will not be required to pay the $100 fee in order to appear at a hearing or file a Declaration of Readiness to Proceed (DOR) regarding a lien.

DWC is reconfiguring its computer systems to facilitate the filing of DORs on lien claims. The fee for filing liens remains in effect. Only the lien activation fee is affected by U.S. Judge George H. Wu’s ruling.

Further updates on changes will be posted on the DWC SB 863 pages.”

The California Supreme Court agreed with the Court of Appeal, and upheld the admissibility of the reports of non-MPN physicians in support of an applicant’s claim in the controversial case of Elayne Valdez v WCAB, and Warehouse Demo Services.

After Elayne Valdez filed a claim for industrial injury, the employer admitted her claim to most of the alleged body parts injured and she was sent for medical treatment to the employer’s MPN, where she was seen by Dr. Nagamoto, who treated her from approximately October 9, 2009 to October 31, 2009. Applicant then began treating with Dr. Nario, a non-MPN physician, upon referral from her attorney.

The WCAB in a split en banc decision ruled that non MPN physician reports are not admissible when the employer has properly complied with MPN regulations. The WCAB reasoned that Labor Code 4616.6 provides: “No additional examinations shall be ordered by the appeals board and no other reports shall be admissible to resolve any controversy arising out of this article” and thus precludes the admissibility of non-MPN medical reports with respect to disputed treatment and diagnosis issues, i.e., “any controversy arising out of this article.”

The Court of Appeal reversed and remanded in an unpublished opinion. In ruling that non MPN reports are indeed admissible, the Court of Appeal reasoned that “It does not makes sense, however, to construe section 4616.6 as a general rule of exclusion, barring any use of medical reports other than those generated by MPN physicians. Section 4616.6 states nothing of the sort. If the Legislature intended to exclude all non-MPN medical reports, the Legislature could have said so; it did not.”

Before the decision by the California Supreme Court, recently enacted S.B. 863 partially addressed this outcome. Effective 1/1/2013 LC 4605 provides that “Any report prepared by consulting or attending physicians pursuant to this section shall not be the sole basis of an award of compensation. A qualified medical evaluator or authorized treating physician shall address any report procured pursuant to this section and shall indicate whether he or she agrees or disagrees with the findings or opinions stated in the report, and shall identify the bases for this opinion.”

The California Supreme Court decision is now the final word on this controversy. It concluded that the “Court of Appeal sensibly limited the scope of section 4616.6 to matters arising during the independent medical review process set out in article 2.3. Reading section 4616.6 broadly to apply to all compensation proceedings is a manifest distortion. As the Court of Appeal noted, the comprehensive medical evaluation process set out in section 4060 et seq. for the purpose of resolving disputes over compensability does not limit the admissibility of medical reports. Section 4062.3, subdivision (a) permits any party to provide the evaluator with ‘[m]edical and nonmedical records relevant to determination of the medical issue.’ Under section 4064, subdivision (d), ‘no party is prohibited from obtaining any medical evaluation or consultation at the party’s own expense,’ and ‘[a]ll comprehensive medical evaluations obtained by any party shall be admissible in any proceeding before the appeals board,’ except as provided in specified statutes. The Board is, in general, broadly authorized to consider ‘[r]eports of attending or examining physicians.’ (§ 5703, subd. (a).) These provisions do not suggest an overarching legislative intent to limit the Board’s consideration of medical evidence.”

It remains unclear how much of a Pandora’s box this case has opened. In 2004, as a result of SB 899, medical disputes moved to a resolution system requiring the selection of an evaluator off of a panel of three names provided by the DWC. Prior to the panel QME system, employers complained about the costs of duplicative, redundant and unnecessary medical legal evaluations which could easily reach over $10,000 per claim. The panel QME system reduced the number of medical legal evaluations and some of the gamesmanship that took place in the selection of evaluators.

A literal parsing of the Supreme Court’s language in Valdez may have opened the door for the return of the old – select who you want – QME evaluation system, or indeed even the use of non QMEs to evaluate a case whenever an attorney deems it expedient to do so. It is not clear if one side, or if both sides may do so, and it is unclear if done by an applicant, would the employer be required to pay for the evaluation as a medical legal charge even though the employer need not pay for out of network treatment.

It is unlikely that the applicant attorneys will not make as much use of the Valdez decision as possible.

The Division of Workers’ Compensation has issued a notice of public hearing to revise the recently adopted resource – based relative value scale (RBRVS) based physician fee schedule. The public hearing has been scheduled for 10 a.m., December 12 , in Room 1 of the Elihu Harris Building, 1515 Clay Street, Oakland, CA 94612. Members of the public may also submit written comment on the regulations until 5 p.m. that day.

The RBRVS base d physician fee schedule regulations (Title 8, Code of Regulations, Sections 9789.12.1, et seq.) were adopted by the Acting Administrative Director, and filed with the Secretary of State on September 24, 2013, and will be effective January 1, 2014. The proposed amendment to the RBRVS based physician fee schedule regulations eliminates use of the Federal Office of Workers’ Compensation Program relative value units set forth in Sections 9789.12.3 and 9789.19.

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

Resource-based relative value scale (RBRVS) is a schema used to determine how much money medical providers should be paid. It is partially used by Medicare in the United States and by nearly all Health maintenance organizations (HMOs). RBRVS assigns procedures performed by a physician or other medical provider a relative value which is adjusted by geographic region (so a procedure performed in Manhattan is worth more than a procedure performed in Dallas). This value is then multiplied by a fixed conversion factor, which changes annually, to determine the amount of payment. RBRVS determines prices based on three separate factors: physician work (54%), practice expense (41%), and malpractice expense (5%). RBRVS was created at Harvard University in their national RBRVS study from December 1985 and published on September 29, 1988.

Physicians bill their services using procedure codes developed by a seventeen member committee known as the CPT Editorial Panel. The AMA nominates eleven of the members while the remaining seats are nominated by the Blue Cross and Blue Shield Association, the Health Insurance Association of America, CMS, and the American Hospital Association. The CPT Committee issues new codes twice each year.

A separate committee, the Specialty Society Relative Value Scale Update Committee (RUC),meets three times a year to set new values, determines the Relative Value Units (RVUs) for each new code, and revalues all existing codes at least once every five years. The RUC has 29 members, 23 of whom are appointed by major national medical societies. The six remaining seats are held by the Chair (an AMA appointee), an AMA representative, a representative from the CPT Editorial Panel, a representative from the American Osteopathic Association, a representative from the Health Care Professions Advisory Committee and a representative from the Practice Expense Review Committee. Anyone who attends its meetings must sign a confidentiality agreement.

Johnson and Johnson will pay more than $4 billion to settle thousands of lawsuits over its recalled defective hip implants. The tentative plan, which must win court approval, represents one of the largest payouts for product liability claims involving a medical device.The agreement will include those patients who have already been forced to have the device, known as the Articular Surface Replacement, or A.S.R., removed and replaced with another artificial hip, said the lawyers who spoke about the agreement only on the condition of anonymity.

According to the story in the New York Times, each patient would receive about $350,000 on average in compensation, though that figure will vary depending on factors like a patient’s age and medical condition.The precise value of the settlement is unclear because lawyers for patients are still trying to estimate how many of the 12,000 related lawsuits involve patients who had a replacement. Lawyers believe that number may be 7,000 to 8,000 cases.The final cost of the deal to Johnson and Johnson could rise, depending on how many claimants who received the device undergo replacement operations in the future, the lawyers said. Under the plan, patients who have not had a replacement would not receive compensation, the lawyers said.

The A.S.R. hip was sold by DePuy until mid-2010, when the company recalled it amid sharply rising early failure rates. The device, which had a metal ball and a metal cup, sheds metallic debris as it wears, generating particles that have damaged tissue in some patients or caused crippling injuries. DePuy officials have long insisted that they acted appropriately in recalling the device when they did. However, internal company documents disclosed during the trial of a patient lawsuit this year showed that DePuy officials were long aware that the hip had a flawed design and was failing prematurely at a high rate.

Many artificial hips last 15 years or more before they wear out and need to be replaced. But by 2008, data from orthopedic databases outside the United States also showed that the A.S.R. was failing at high rates in patients after just a few years. Internal DePuy projections estimate that it will fail in 40 percent of those patients in five years, a rate eight times higher than for many other hip devices.

The hip was first sold by DePuy in 2003 outside the United States for use in an alternative hip replacement procedure called resurfacing. Two years later, DePuy started selling another version for use here in standard hip replacements that used the same cup component as the resurfacing device. Only the standard version was sold in the United States; both were sold outside the country.About 93,000 patients received an A.S.R., about one-third of them in the United States.

Problems with the design first came to light in Australia and England just a few years after its marketing began. But DePuy officials insisted for years to surgeons who complained about that device that patient problems reflected their surgical technique rather than the implant’s design.

Last year, The New York Times reported that DePuy executives decided in 2009 to phase out the A.S.R. and sell existing inventories weeks after the Food and Drug Administration asked the company for more safety data about the implant.

There remains some potential for claims administrators to seek credit for recoveries received by claimants who received these defective hip replacements as a result of an admitted industrial injury. However, few claim files reflect the product details of surgical implants used in surgeries. This lack of information poses a significant problem for the task of identifying appropriate claims.