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WCAB Clarifies Employer’s Right to Depose Roomates in COVID Claim

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Jason Labella claimed to have suffered injury in the form of COVID-19-related illness, as well as injury to the digestive, circulatory and nervous systems, while employed on December 6, 2021 as a pipe fitter by Marathon Petroleum.

The defendant filed petitions to compel the attendance at deposition of fact witnesses Briauna Hollingsworth, Marshall Mataalii, and Jenna Vasquez. They said that Labella and the fact witnesses lived at the same address, and that the depositions were necessary “to obtain details of Mr. LaBella’s possible exposure to COVID at home.”

The WCJ issued an order denying all three petitions to compel, stating, “this court is unaware of any basis or jurisdiction for compelling a non-party to appear for a deposition.”

The defendant’s Petition for Removal of the case was granted, and the WCAB rescinded the WCJ’s decision, and return this matter to the WCJ for further proceedings and decision in the case of Labella v Marathon Petroleum – ADJ15703855 (April 2023).

In his Petition, the defendant argued that pursuant to Labor Code section 5710, any party to a workers’ compensation proceeding may cause the deposition of witness.

Defendant cites to the WCAB panel decision in Terrones v. Remedy Temp (August 30, 2010, ADJ423557) [2010 Cal. Wrk. Comp. P.D. LEXIS 451] as authority for the proposition that the WCJ is empowered to compel to the deposition of a non-party witness. Defendant also claims a due process right to conduct discovery relevant to applicant’s claim of industrial injury, and that the WCJ’s order declining to compel the requested depositions results in a denial of that due process right.

The WCJ’s Report initially describes various procedural irregularities in the subpoenas issued by the defendant. The report then responds to defendant’s citation to the panel decision in Terrones v. Remedy Temp, supra, 2010 Cal. Wrk. Comp. P.D. LEXIS 451, observing that as a panel decision, the case is not mandatory authority.

The Report notes that Terrones involved nonparty employees of the defendant, as distinguished from the present matter in which the nonparty deponents are not employees of defendant, and are essentially strangers to the case. The WCJ observes that defendant has not established “good cause” for the deposition of the witnesses beyond their proximity in the same household as applicant, and that defendant may issue a subpoena for the witnesses to testify at trial.

The report concludes that “if defendant can show good service and ‘good cause ‘for taking the nonparties’ deposition…..this WCJ would consider whether or not an Order Compelling is appropriate.”

In response the WCAB panel noted that an adequate and complete record is necessary to understand the basis for the WCJ’s decision and the WCJ shall “…make and file findings upon all facts involved in the controversy[.]” (Lab. Code, § 5313; Hamilton v. Lockheed Corporation (2001) 66 Cal.Comp.Cases 473, 476 [2001 Cal.Wrk.Comp. LEXIS 4947] (Appeals Bd. en banc).

“Here, the WCJ’s Order does not substantively address any issue beyond stating that there is no basis or jurisdiction to compel a non-party’s appearance at deposition. The record does not frame the issues, contains no exhibits, testimony or summary of evidence, and does not adequately explicate the basis for the order, To the extent that the WCJ’s report describes multiple other considerations, including whether the underlying subpoenas were procedurally defective, whether appropriate notice to the deponents was effectuated, whether the defendant’s petitions establish good cause for an order compelling, and whether a protective order or other limitations on the scope of the depositions is appropriate, the record is silent on these issues.”

“Accordingly, and pursuant to Hamilton v. Lockheed Corporation, supra, 66 Cal.Comp.Cases 473, we will rescind the October 25, 2022 Order, and return this matter to the trial level for further proceedings and for the creation of an adequate record.”

The WCAB pointed out several applicable code sections that provide guidelines for the taking of depositions, and that labor code section 5710 provides that attendance of witnesses and the production of records may be required.”

“Thus, while the Appeals Board may cause the taking of a deposition of a witness who happens to be an employee of a party, as was the case in Terrones v. Remedy Temp, supra, 2010 Cal. Wrk. Comp. P.D. LEXIS 451, the jurisdiction of the Appeals Board in such nonparty cases is not limited to the employees of parties.”

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Newsom Signs New $150M Emergency Bill to Bail Out Failing Hospitals

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Governor Newsom just signed Assembly Bill 112 – The California Health Facilities Financing Authority Act – into law. This is an emergency bill providing up to $150 million in zero-interest loans to nonprofit and public hospitals in danger of closing in the aftermath of the pandemic.

Assembly Bill 112 passed the California Assembly with a vote of 77-0 and the California Senate with a vote of 38-0.

This law takes effect immediately now that it has been passed and signed. “This new program will help hospitals in extreme financial distress get the assistance they need as quickly as possible,” said Newsom after signing on Monday. “My administration has been working closely with hospitals across the state, and we will continue to do all we can to ensure communities can continue to access the care and services they need without disruption.”

According to the Times of San Diego report, legislators fast-tracked action following the closure of Madera Community Hospital at the start of this year, which left this San Joaquin Valley county of 160,000 people without a local emergency room.

Other hospitals in financial trouble include Kaweah Health Medical Center in Visalia, El Centro Regional Medical Center in Imperial County, MLK Jr. Community Hospital in Los Angeles, Hazel Hawkins Memorial Hospital in Hollister, Sierra View Medical Center in Porterville and Mad River Community Hospital in Humboldt County.

Some of the hospitals were struggling prior to the pandemic, and have had a difficult time managing cash flow after they stopped receiving federal COVID relief funds.

This new law creates the Distressed Hospital Loan Program, until January 1, 2032. The purpose is to provide loans to not-for-profit hospitals and public hospitals that are in in significant financial distress or to governmental entities representing a closed hospital to prevent the closure or facilitate the reopening of a closed hospital.

The law requires the Department of Health Care Access and Information to administer the program and requires the department to enter into an interagency agreement with the authority to implement the program.

The law requires the department, in collaboration with the State Department of Health Care Services, the Department of Managed Health Care, and the State Department of Public Health, to develop a methodology to evaluate an at-risk hospital’s potential eligibility for state assistance from the program.

This law also creates the Distressed Hospital Loan Program Fund, a continuously appropriated fund, for use by the department and the authority to administer the loan program. It would authorize both the authority and the department to recover administrative costs from the fund.

Republican Sen. Brian Jones of east San Diego County had urged Newsom to sign the legislation, saying, “The clock is ticking for distressed hospitals that are holding on by a financial shoestring.”

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Hotels & Restaurants Face Massive Litigation Over Tip Distribution

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In facilities such as large hotels and large restaurants where the employer is in the business of providing a banquet facility at which food and beverages are served, the employer often adds a mandatory, and substantial “service charge” to the contract for every banquet. Prior to 2019 California, courts long held that these mandatory charges cannot be considered gratuities under the labor code and thus not distributable to those who serve food and beverages at the banquet.

That view changed after the 2019 appellate case O’Grady vs. Merchant Exchange Productions Inc., 41 Cal.App.5th 771 (2019) 254 Cal.Rptr.3d 494. Plaintiff, Lauren O’Grady, was a banquet server and bartender at the Julia Morgan Ballroom in San Francisco, which is operated by Merchant Exchange Productions. Plaintiff brought this class action alleging that her and the other non-managerial service employees were entitled to the 21 percent “service charge” added to every banquet bill. Plaintiff alleged that the service charge constituted a gratuity that should be distributed to the non-managerial service employees pursuant to labor code section 351.

The employer took the position that two Court of Appeal opinions hold, as a matter of law that a service charge can never be a gratuity. The trial court agreed, and sustained the employer’s general demurrer without leave to amend. The issue presented on appeal was whether the “service charge” may be a “gratuity” that Labor Code section 351 requires to go only to the non managerial employees involved with the actual serving of the food and beverages.

The court of appeal reversed the trial court dismissal and concluded there is no categorical prohibition why what is called a service charge cannot also meet the statutory definition of a gratuity.

Tipping and service fees have been becoming a flashpoint in the restaurant and hospitality industries. Healthcare-related service fees began gradually popping up on diners’ bills in the last decade but became ubiquitous after the COVID-19 shutdowns. The tacked-on fees came amid a wave of empathy and gratitude for service workers at a moment when the future of restaurants seemed in doubt.

Now, according to a report by the San Francisco Chronicle the O’Grady ruling was tested as recently as April 19, 2023 when a San Francisco judge ruled in a nonjury trial that a Marriott hotel in downtown San Francisco must pay around $9 million in withheld service fees to staff who served food and drinks at banquets, and said he would decide later whether to add interest charges and attorneys’fees. .

The workers’ lawyer, Shannon Liss-Riordan, said this was the first case to go to trial since the O’Grady decision where she was also the plaintiff’s attorney. “Customers pay service charges – on top of hefty food and beverage bills – because they think they are tips for the waitresses.” Liss-Riordan said she has won similar cases in Massachusetts and Hawaii and has suits pending against other hotels in San Francisco and elsewhere in California..

Harvard Law School graduate Shannon Liss-Riordan of Lichten & Liss-Riordan has had a long career litigating discrimination, wage and hour, and traditional labor law matters, and has gone after some of the nation’s most prominent companies, including Whole Foods, Starbucks, Uber and Lyft, on behalf of workers.

And now according to a new story published this month in the Los Angeles Times, the Los Angeles city attorney is examining whether Ten Five Hospitality violated an ordinance for allegedly keeping the entirety of the 5% service fee they charged to customers instead of distributing it to workers,

A 5% service fee attached to customer restaurant bills is at the heart of this investigation launched by the Los Angeles city attorney’s office, and it involves some of the city’s most celebrated restaurants at the adjacent Thompson hotel, Tommie hotel and Citizen News building: Mother Wolf, Ka’teen, Mes Amis, Bar Lis and the Terrace.

The definition of “hotel” in the L.A. ordinance covers restaurants that are contracted or leased premises that are connected to or operated in hotels, such as the Terrace or Mother Wolf. L.A.’s ordinance states that service fees cannot be retained by a hotel employer but must be paid in their entirety to the hotel worker performing services for the customers from whom the service charges are collected. The ordinance also mandates that no part of these amounts may be paid to supervisory or managerial employees, and that the service fee must be paid to the hotel workers equitably.

According to an April 6 letter from Deputy City Atty. Joshua L. Crowell, City officials asked Ten Five Hospitality – the group that operated the five restaurants –  and the five restaurants, for a response and numerous documents, including any evidence that would demonstrate workers benefited from the fee.

The city attorney’s office is also investigating allegations that at least two workers at the Terrace were fired after speaking out about the service fee.

No Ten Five Hospitality executives were made available for comment.  But a spokesperson provided a prepared statement, which read: “The Wellness Fee, which is explained clearly on all customer bills, enables the company to provide an above-market employee package including a robust medical, dental & vision insurance program, 401(k) benefit offering and better working conditions for all employees.” The spokesperson declined to answer any other questions about the allegations in the city’s letter.

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2022 IMR Medical Dispute Resolution Requests Hit Record Low

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As state lawmakers debate legislation that revisits the California workers’ compensation medical dispute resolution process, a new California Workers’ Compensation Institute (CWCI) Report to the Industry finds that the number of independent medical reviews (IMRs) used to resolve medical disputes hit a record low in 2022, as prescription drug disputes continue to decline, and that a small subset of doctors continue to generate most of the disputed treatment requests that go through IMR.

California law requires every workers’ compensation claims administrator to have a Utilization Review (UR) program to assure that care provided to injured workers meets the evidence-based guidelines in the state’s Medical Treatment Utilization Schedule (MTUS).

Most treatment requests are approved by UR, but in 2012 state lawmakers adopted IMR to allow injured workers to get an independent medical opinion on requests that UR physicians modify or deny. IMR took effect for all claims in July 2013, and CWCI began tracking IMR activity in 2014.

In its new analysis, CWCI found that 127,215 IMR decision letters were issued in 2022 in response to applications submitted to the state, down 4.7% from 133,494 letters in 2021, and down 31.1% from the record 184,735 letters in 2018.

The latest data on outcomes show that after reviewing medical records and other information provided to support a disputed treatment request, IMR doctors upheld the UR physician’s modification or denial of the service in 91.1% of the 2022 IMRs, down slightly from the record 92.0% uphold rate in 2021.

Uphold rates among service categories ranged from 82.5% for psych services to 95.9% for injections. The high uphold rates demonstrate a high degree of agreement in assessing the quality of care and in challenging inappropriate or excessive treatment requests.

Disputes over prescription drug requests represented a third of the 2022 determinations, well ahead of physical therapy (13.3%) and injections (11.9%), though that percentage is down from nearly half of all IMR disputes prior to the state’s adoption of Opioid and Chronic Pain Treatment Guidelines at the end of 2017 and the implementation of the MTUS Prescription Drug Formulary in January 2018.

A closer look at the prescription drug disputes shows that even with those guidelines and the formulary, opioids still accounted for nearly a quarter of the 2022 pharmaceutical IMRs, more than any other type of drug, though that percentage is down from 32.1% in 2018.

Not all UR challenges submitted for IMR involve treatment denials. Since 2016, 1 out of 7 IMRs have involved modifications of treatment requests, most often because the volume of services requested exceeded the MTUS-recommended level.

For example, IMRs are often submitted after a UR physician approves the treatment on a modified basis, allowing fewer pills in a prescription or fewer physical therapy (PT) visits than were requested in order to meet the evidence-based guideline. This can lead to a dispute, even though additional pills or PT visits can be requested later if the treatment proves successful.

Since 2017, 57.1% of all modification disputes resolved by IMR have involved prescription drugs, and 17.1% have involved PT, though with the adoption of the Pain Management and Opioid Guidelines and the implementation of the MTUS Formulary, disputes over prescription drug requests declined from 62.9% of the modification disputes in 2017 to 40.6% in 2022, while disputes over PT modifications increased from 15.0% to 21.9%. Overall, since 2017, UR physician modifications have been upheld 91.5% of the time they have gone reviewed by IMR, with uphold rates ranging from 90.8% of the pharmaceutical modifications to 94.9% of the modifications to acupuncture requests.

CWCI has issued its analysis as a free Report to the Industry, “Resolving Medical Disputes: Factors that Drive IMR Volume and Outcomes in the California Workers’ Compensation System.”

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LAUSD Prevails in Injured Worker Failure to Accommodate Claim

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Tyra Montgomery is employed by Los Angeles Unified School District as a special education assistant in an elementary school classroom. She injured her neck, back, and shoulders at work in 2017 while intervening in an incident involving a student exhibiting aggressive behavior.

She filed a workers’ compensation claim and went on medical leave from December 2017 to August 2019. Her doctor then returned her to work with restrictions of (1) no lifting objects over 40 pounds; (2) no standing or walking for longer than one hour without at least ten minutes of sitting; and (3) no repetitive squatting, crouching, crawling, or kneeling.

In September 2019, the school principal received complaints from the drivers of the school bus transporting students with special needs. They informed her that the students were engaging in disruptive and dangerous behavior on the bus, including getting out of their harnesses, crawling around on the floor of the bus, and fighting with one another.

School administrators decided to have an additional person to ride along on the bus, and assigned the role to Ericka Johnson, a special education assistant who supports one of the bus’s students in the classroom.

A few days after Johnson began riding on the bus, Montgomery expressed interest in working the assignment on a bi-weekly rotation with Johnson.  LAUSD asked her to provide a clearance from her doctor that is specific to the activities she would be doing on the bus.” Montgomery ultimately did not provide the school administrators with the information requested.

In subsequent conversations with her about her request for this position, she was advised that she would be required to fully lift the students and put them back in their seats if they got up while the bus was in motion. And if she got her forty-pound lifting restriction removed, then she would put on the bus as she requested.

Montgomery sued LAUSD under FEHA, and alleged claims for disability discrimination (first cause of action), failure to accommodate (second cause of action), and failure to engage in the interactive process (third cause of action).

LAUSD moved for summary judgment which was granted by the trial judge. The Court of Appeal affirmed the trial court in the unpublished case of Montgomery v LAUSD -B316697 (May 2023).

Montgomery contended the trial court erred by concluding her disability discrimination claim fails as a matter of law because “there were disputable issues of fact . . . as to whether [she] could perform the essential functions of the [desired] position.”

The evidence provided by LAUSD established that an essential function of a special education assistant working as a bus aide is to lift students as required to meet their various needs. Each of the students on the bus weighed more than forty pounds.

Montgomery, however, cannot lift more than forty pounds, and therefore cannot perform the lifting function necessary to meet student needs. Thus LAUSD has carried its burden of showing Montgomery cannot satisfy the second element of a prima face case for disability discrimination. The burden therefore shifted to Montgomery to show a triable issue of material fact exists. (Code Civ. Proc., § 437c subd. (p)(2).)

Montgomery has not shown there are any triable issues of fact, thus, the trial court correctly determined her first cause of action fails as a matter of law, as LAUSD produced uncontroverted evidence showing she cannot satisfy the second element of a prima facie case for disability discrimination.

The showing required to satisfy the second element of a reasonable accommodation claim is “identical to that required” for the second element of a prima facie case for disability discrimination. Accordingly, as a matter of law, Montgomery’s second cause of action fails for the same reason her first cause of action fails.

To prevail on her third cause of action, the employee must identify a reasonable accommodation that would have been available at the time the interactive process occurred [or should have occurred].  

For purposes of the bus aide assignment, school district employees established that no reasonable accommodation was available for a special education assistant who cannot lift the students on the bus. Based on this evidence, LAUSD has satisfied its burden of showing Montgomery cannot establish an essential element of her interactive process claim. The burden therefore shifted to Montgomery.

In her appellate briefs, however, Montgomery has not cited any evidence in the record showing the existence of a reasonable accommodation that would have allowed her to perform the essential functions of the bus aide assignment with her work restrictions.

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Employer Agrees to Resolution of $1.7M Premium Fraud & $437K Wage Theft

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The California Insurance Commissioner announced the resolution of criminal charges filed against Golden Food, Inc (GFI). a chicken processing business located in South El Monte.

It entered into a plea agreement after an investigation by the California Department of Insurance (CDI) and the California Labor Commissioner’s Office (LCO).

CDI received a referral from SCIF, who suspected the business of fraud after comparing the payroll reported during annual audits with the payroll reported to the Employment Development Department.

CDI obtained a search warrant for GFI’s building and was able to obtain true payroll records from the employer’s computer, as well as fake tax reporting forms that it used to perpetrate its fraud. The investigation led to 43 felony counts of insurance fraud, grand theft, and conspiracy against Lam and Wu.

The business, owned by Feng Wen Lam and operated by her husband Wei Wu, was accused of underreporting its payroll to its workers’ compensation insurance carriers by $4,489,390.55 between 2015 and 2021.

This resulted in a loss of $1,681,138.80 in unpaid insurance premiums to four insurance companies, including the State Compensation Insurance Fund (SCIF).

The LCO’s parallel investigation uncovered significant wage theft over many years. The company admitted to a litany of labor violations, which includes over $437,000 in stolen wages to be paid back to more than 30 California workers.

Employees were forced to clock out for breaks and continue to work, were not paid overtime pay for work in excess of 40 weekly hours, and their pay stubs were falsified. Wu routinely deducted work hours from employees and falsely counted that pay as a bonus. An audit by LCO found that Lam and Wu failed to pay at least $437,542.56 in labor to their 34 employees based on the minimum legal market value.

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May 8, 2023 – News Podcast

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Rene Thomas Folse, JD, Ph.D. is the host for this edition which reports on the following news stories: CorVel Announces AI Powered Claim Processing Initiative. Google AI Technology Passes US Medical License Exam. WCAB Finds Rule 10133.31(c) is “Antithesis of Substantial Justice”. Court Reinstates Billing Class Action Against Modesto Hospital. 187 Tow Truck Employees Recover $2.9M in Wage Theft. Beverly Hills Surgeon Resolves Fraud Claims for $24 Million. Merced Family Charged in $2.1M Payroll Fraud Schemes. NFL Faces CA/NY Attorney Generals Hostile Workplace Investigation. OSHA Announces Program to Reduce, Prevent Workplace Falls. AMA and 100 Provider Groups Fight Cigna Fee Schedule.

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California Man Convicted for $28M Health Care Kickback Conspiracy

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A Temecula, California, man has been found guilty of federal violations related to a health care kickback scheme.

Steven Donofrio, 49, was found guilty by a jury on May 5, 2023, following a two-week trial before U.S. District Judge Robert W. Schroeder, III.

According to information presented in court, Donofrio conspired with others to pay and receive kickbacks in exchange for the referral of, and arranging for, health care business, specifically pharmacogenetic (PGx) tests. Pharmacogenetic testing, also known as pharmacogenomic testing, is a type of genetic testing that identifies genetic variations that affect how an individual patient metabolizes certain drugs.  

The illegal arrangement concerned the referral of PGx tests to clinical laboratories in Fountain Valley, California; Irvine, California; and San Diego, California. More than $28 million in illegal kickback payments were exchanged by those involved in the conspiracy.

In December 2019, twelve individuals from three states were charged for their roles in the kickback conspiracy. A federal grand jury in the Eastern District of Texas returned an indictment against Philip Lamb, 48, of Eagle, Colorado; Nicolas Arroyo, 41, of Tempe, Arizona; Vincent Marchetti, Jr., 58, of Coronado, California; William Flowers, 58, of Houston, Texas; Steven Donofrio; James J. Walker, Jr. a/k/a Jimmy Walker, 49, of Frisco, Texas; Timothy Armstrong, deceased, formerly of Frisco, Texas; Virginia Blake Herrin, 57, of Frisco, Texas; Patrick Ridgeway, 53, of Jackson, Mississippi; Chismere Mallard, 42, of McAllen, Texas; Dr. Ray W. Ng, 65, of Dallas, Texas; and Ashley Kretzschmar, 37, of Aledo, Texas; for conspiring to commit illegal remunerations in violation of the Anti-Kickback Statute.

Philip Lamb, Nicolas Arroyo, Jimmy Walker, Timothy Armstrong, Virginia Blake Herrin, Patrick Ridgeway, Chismere Mallard, and Ashley Kretzschmar pleaded guilty prior to trial.  Kimberly Willette, 61, of Friendswood, Texas, and Edwin Chad Isbell, 50, of Atascocita, Texas also pleaded guilty to related charges.

Vincent Marchetti, Jr., was found guilty by a jury on December 16, 2021, following a month-long trial.  He was sentenced to 48 months in federal prison on August 30, 2022.

On April 25, 2022, Nicolas Arroyo was sentenced to 21 months in federal prison.  On August 23, 2022, Kimberly Willette was sentenced to one year and one day in federal prison, and Patrick Ridgeway was sentenced to a three-year term of probation and ordered to pay a $100,000 fine.

The Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving remunerations in exchange for the referral of or arranging for or recommending the ordering of items or services payable under federal health care programs.  Under federal statutes, violations of the Anti-Kickback statute are punishable by up to five years in federal prison.

This case was investigated by the U.S. Department of Health and Human Services, Office of Inspector General, and the FBI Dallas – Frisco Resident Agency. It was prosecuted by Assistant U.S. Attorneys Nathaniel C. Kummerfeld, Lucas Machicek, and Adrian Garcia, with assistance from Assistant U.S. Attorneys Stephan E. Oestreicher, Jr., Brent Andrus, and L. Frank Coan, Jr., and Special Assistant U.S. Attorney Laurel E.P. Simmons.

“This is the last of many defendants in this case who abused our healthcare system for the sake of stealing taxpayer dollars and in the process caused unnecessary medical procedures,” said U.S. Attorney Damien M. Diggs.  “Protecting citizens from physical and financial harm is always a top priority for law enforcement and parasites like Donofrio, who prey on vulnerable citizens, will be brought to justice.”

“The reach of HHS/OIG is far and wide. Our agents and law enforcement partners will not be deterred by the scope of a healthcare fraud investigation or the location of its defendants,” said Jason E. Meadows, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General, Dallas Region. “Donofrio and others stole millions from American taxpayers for medically unnecessary services and all to line the pockets of greedy individuals across the country.  HHS/OIG and our partners remain laser-focused in our pursuit of those who use the Medicare trust fund as their own personal piggy bank.”

“Illegal kickback schemes corrupt the healthcare system by causing billions of dollars in losses each year. They also directly affect patients who expect to receive quality care and to be billed for legitimate services from their health care providers,” said FBI Dallas Special Agent in Charge Chad Yarbrough. “We will continue to work tirelessly with our law enforcement partners to hold those who commit healthcare fraud accountable and seek justice for the patients that are harmed as a result of these schemes.”

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WCIRB Releases Fourth Quarter 2022 Experience Report

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The Workers’ Compensation Insurance Rating Bureau of California has released its Quarterly Experience Report. This report is an update on California statewide insurer experience valued as of December 31, 2022.

The WCIRB proposed a modest overall increase of 0.3% in advisory pure premium rates in its September 1, 2023 Pure Premium Rate Filing.

Highlights of the report include:

– – California written premium in 2022 is 14 percent above that for 2021, driven by higher employee wage levels and the economic recovery.
– – The average charged rate for 2022 is 7 percent below that for 2021 and the lowest in decades.
– – After four consecutive increases,the projected loss ratio, including the cost of COVID-19 claims, dropped 4 points in accident year 2022.
– – The projected combined ratio for 2022, including COVID-19 claims, is 5 points lower than in 2021.
– – The lower combined ratio in 2022 is driven by a significant increase in premium due to higher payrolls and very modest changes in claim frequency and severity.
– – Average claim closing rates are beginning to increase in 2022 but remain below the pre-pandemic high.
– – Claim frequency for 2022 is comparable to 2021 and consistent with the pre-pandemic trend.
– – The 2022 average severity is the highest in more than a decade since prior to the SB 863 reforms.
– – The projected medical severity for 2022 is 1% lower than 2021 and 9% higher than 2017.
– – Average medical service costs paid per claim in 2022 is consistent with 2021, as higher payments per transaction were offset by fewer transactions per claim.

The full report is in the Research section of the WCIRB website.

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Proposed Amendments to QME Regulations in Final Stages

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The Division of Workers’ Compensation has issued a notice of public comment period beginning on May 12, 2023, for modifying the text of proposed amendments to the Qualified Medical Evaluator (QME) Regulations. The affected regulations are Title 8, California Code of Regulations Sections 1, 11, 11.5, 14, 33, 35, 35.5, 50, 51, 52, 54, 55, 56, 57, 63, 10133.54 & 10133.55. (QME Process Regulations).

The proposed changes are necessary to bring existing regulations into compliance with amendments to the Labor Code and to clarify the Administrative Director’s authority with respect to the process related to appointment and reappointment of QMEs, which is granted by relevant statutory authority.

On March 13, 2023, DWC held a public hearing and received public comments on the amendments to the QME Process Regulations.Based on the comments received, DWC proposes to update the text of the proposed amendments of the regulation to:

– – ;Provide a definition of “current” for California Workers Compensation Evaluation certificates.
– – Change the position of certain subdivisions within proposed regulation section 11.5 and make clear that virtual learning environments can be used for in-person instruction.
– – Clarify the number of hours required as in-person or on-site learning for chiropractic certification.
– – Conform days for scheduling initial QME appointments cited in regulation section 33 to amendments in regulation section 31.3(e).
– – Delete all references to the defunct designation of “Agreed Panel QME”.
– – Establish additional grounds for discipline pursuant to Labor Code section 139.21.
– – Correct typographical errors.

§ 51. Reappointment and Denial of Reappointment which appears on page 27 of the Proposed Regulations contain significant provisions for the denial of reappointment. One example is “(2) Failure to comply with the evaluation time frames in sections 34 or 38 on at least three occasions during the calendar year.”

Or “(6) Three or more instances during the most recent period of appointment of billing or charging for medical-legal evaluations, reports or testimony in violation of the Medical-Legal Fee Schedule as set forth in sections 9793-9795 of Article 5.6 in this title.”

Or “(12) Participating in three or more instances of activity during the most recent period of appointment that constitute a failure to communicate with the injured worker in a respectful, courteous and professional manner,” to cite a few interesting examples that litigants and parties might be interested in using.

DWC will consider all public comments. The 15-day notice of modification to the text of the proposed regulations and the text of the regulations can be found on DWC’s rulemaking page.

  Written comments should be addressed to:
  Maureen Gray, regulations coordinator
  Department of Industrial Relations
  Division of Workers’ Compensation
  1515 Clay Street, 18th floor
  Oakland, CA 94612

The Division’s contact person must receive all written comments concerning the proposed modification to the regulations no later than May 30, 2023. Written comments may be submitted by facsimile transmission (FAX), addressed to the contact person at (510) 286-0687. Written comments may also be sent electronically (via e-mail), using the following e-mail address: dwcrules@dir.ca.gov.

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