Tag: 2013 News

The nation’s 20 state-run workers compensation funds showed strong growth for the second straight year, according to a new A.M. Best report. The article in Property Casualty 360 says that state funds accounted for 44 percent of total net premiums written in 2012. Net premiums written increased 7.1 percent in 2011 and 13.5 percent in 2012, reaching $6.9 billion last year–the highest level since 2008. The report says the increases are an outgrowth of a hardening market as the economy returns to a growth mode. Rate increases accounted for some of the increase in NPW, but overall premium growth was only slightly higher than the 6.8 percent and 13.1 percent respective increases in the A.M. Best workers’ comp composite for 2012 and 2011. Premium income rose for state funds in both years despite a precipitous decline in the California state fund.

Excluding State Compensation Insurance Fund of California (SCIFCA) premiums, the premium increase of the 19 other competitive state funds rose a 18.3 percent in 2012, compared to 11.7 percent in 2011–an indication state funds may be fulfilling their role as residual market providers to a greater degree as workers’ comp markets harden.

The report notes one emerging concern: the Internal Revenue Service’s Exempt Orga­nizations division is reviewing the tax-exempt status afforded state funds. “While still in a preliminary and exploratory phase, any eventual IRS rulings in this regard could have significant impacts on affected state funds’ markets, business strategies and operations,” the report said.

One factor in premium growth is most of the funds predominately serve residual markets–small businesses, for example–while also competing with the private market. Typically during hardening markets, some businesses find it more difficult to afford or secure coverage in the voluntary market and turn to state funds. The report noted that each fund tends to develop its own, unique characteristics, largely depending on its business profile and growth initiatives.

The report said some state funds maintain a steadfast role in the residual market and often contend with political pressure that can affect surplus and rate levels. Others have undergone transformations toward becoming private, mutual insurers. Some funds have taken to writing business beyond their state borders, the report said.

The term “state funds” is used for the 20 U.S. competitive state compensation funds, the report said. It does not include the monopolistic funds operating in North Dakota, Ohio, Puerto Rico, Washington or Wyoming.

The Independent Medical Review (IMR) program is part of an important essential overhaul of the California Workers’ Compensation System that was created pursuant to Senate Bill (SB) 863.

The IMR program provides an expedient method to resolve medical necessity treatment disputes for work-related injuries occurring on or after Jan. 1, 2013. On July 1, 2013, IMR became available to resolve medical necessity treatment disputes for all dates of work-related injury as long as the requested treatment was denied, delayed, or modified following utilization review after Jan. 1, 2013.

The DWC has contracted with Maximus Federal Services, an independent medical review organization (IMRO), until December 31, 2014 to conduct IMR on its behalf. Maximus contracts with medical professionals to perform the review. The names of the professionals are confidential in communications outside the organization.

All IMR decisions are posted on the DWC website with redacted information. While each IMR request is assigned a number when it is received, the posted IMR decisions are not numbered sequentially because some requests are withdrawn and others determined to be ineligible. Further, some applications have not been assigned yet because DWC is awaiting additional information requested from the parties.

Thus far and informal review of the information posted by the DWC shows that the Maximus professional reviewer sustained the utilization review physicians’ determinations to deny the requested treatment more times than they overturned the UR decisions thus favoring the employer’s point of view.

An analysis of some of these decisions by the California Society of Industrial Medicine and Surgery said that “some Maximus professional reviewers are better than others. In some cases, the professional reviewers performed a thorough review and provided a clear and cogent rationale for their decision. Unfortunately, in other cases, the professional reviewers cited no authority whatsoever to support their decisions.”

A workers’ compensation bill that’s provoked a high-stakes lobbying fight between professional sports teams and players unions has passed a key hurdle in the California legislature. According to a report in the Los Angeles Times, the deal strikes a strong balance “between protecting California’s employees and closing what we believe is a very egregious loophole that allows out-of-state claims to be filed here in California.” says Ed Lamb, the Chief Financial Officer of the NBA’s Los Angeles Clippers.

The amended AB 1309 by Assemblyman Henry T. Perea (D-Fresno) was approved Wednesday by the Senate Labor and Industrial Relations Committee. “This bill was strengthened to ensure out-of-state non-specific injury claims have no business being filed in California, while we safeguard the rights of injured workers who are substantially employed here,” Perea said. The bill would also close the loophole that allows out-of-state athletes to place 100% of the cumulative trauma liability on California-based teams even if they played a small amount of time for that team and most of their career out of state. “The amended bill strikes a fair and equitable balance between protecting California’s employees and closing an egregious loophole that allows out-of-state claims to be filed in California,” said Ed Lamb, chief financial officer for the Los Angeles Clippers.

But critics say they still can’t support the measure. “We don’t understand why professional athletes are being singled out for disparate treatment as opposed to that for any other employee in the state of California,” says NFL Players Association Associate General Counsel Ned Ehrlich.

Senate President Pro Tem Darrell Steinberg (D-Sacramento) said the proposal would allow claims for cumulative trauma suffered over the course of a career as long as an athlete played at least two seasons for a professional team based in California. “The essence of the agreement is to limit the ability of athletes who have never played for a California team to use the cumulative trauma portion of the workers’ compensation law” to file a claim, Steinberg told reporters.The Times reported in February that California has paid millions of dollars in workers’ compensation claims to professional athletes, including some that played only a handful of games in the Golden State but spent their careers on out-of-state teams.

The bill must still be approved by the full Senate.

Noe Morales claims he sustained an injury on March 23, 2011 while employed by FMF Racing. Applicant testified that he hurt his elbow at work when he was working with a hammer and missed hitting a part, but the hammer kept going and he felt his elbow pop. Though he acknowledged that he was aware of the company policy to report injuries immediately, he did not report his injury at work that day. Because his arm hurt and was swollen, he did not go to work the following day. However, he did not seek medical treatment, testifying that he was waiting for his employer to check it out and send him to a clinic. He testified that he called into work the next morning and left a message on an answering machine to report that he hurt his elbow and was not coming into work. The employer denies knowledge any such phone call.

He returned to work around 6:00 am on the third day, still having pain in his right elbow. Though he testified that he did not seek medical treatment the previous day because he was waiting to inform his employer and be sent to a medical clinic, he did not tell his supervisor, Mr. Raul Ruiz, that he had injured his elbow on March 23, 2011. He did not tell anyone at the company why he missed work the day before, because he had already left the message. He did not confirm with anyone whether the message he left the day before had been received. He worked until 2:30 in the afternoon, when he was called into the office for a meeting with Mr. Beck, the Human Resource Manager, who told him that he was being terminated because he did not come into work the day before. Applicant testified that he offered to show them his cell phone to show that he had called in on March 24, but they did not want to see it. Applicant acknowledged that he had been repeatedly written up for being tardy or absent. He was given warnings and placed on probation in 2006, 2008 and 2010. He was suspended from work for one week on December 27, 2010, for chronic absenteeism. According to Mr. Beck, applicant begged for his job back. and when told he could not have it back, applicant reported the injury to his right elbow.

The essential question in this case is whether the evidence demonstrates that the employer had knowledge of applicant’s claim of injury prior to, or subsequent to, applicant’s notice of termination. While initially concluding in a Findings and Order issued July 30, 2012, that applicant’s claim is barred, the WCJ reversed himself and issued the instant determination in which he found the prior notice requirement was satisfied by the injured worker’s report of his injury contemporaneously with the notice of termination. The employer filed a petition for reconsideration which was granted, and the WCAB reversed the finding in the panel decision of Noe Morales v FMF Racing and Westland Insurance.

Labor Code section 3600(a)(10) provides that no compensation shall be paid for an injury that occurs prior to a notice of termination unless applicant establishes that the employer received notice of the injury prior to the notice of termination, or there are medical records that contain evidence of the injury prior to the notice of termination. Here, in contrast to Dover v. Fresh Start Bakeries, Inc. (2006) Cal.Wkr. Comp. P.D. LEXIS 53, wherein the bar of Section 3600(a)(IO) was held inapplicable where the injured worker gave notice of his injury at his first opportunity, which was contemporaneous with his notice of termination, applicant’s delay in notifying his supervisor of his injury was not caused by his supervisor’s absence from work. There is no evidence that applicant was incapable of reporting his injury on March 23, 201. In fact, he testified that he was aware of his employer’s policy that he should report his injury immediately. Applicant has offered no reason for his failure to comply with this policy on March 23, 2011.

On these facts, the WCAB found that the employer’s affirmative defense of a post-termination claim should be sustained. Accordingly, the Panel granted defendant’s petition for reconsideration and amended the Joint Findings and Award to find applicant’s claim of injury on March 23, 2011 is barred under Labor Code 19 section 3600(a)(l0).

The National Football League and thousands of former football players who have sued the league for allegedly hiding the dangers of brain injury while profiting from the sport’s violence have been ordered to try to resolve the case in mediation. U.S. District Judge Anita Brody in Philadelphia federal court, who is overseeing the litigation, on Monday ordered both sides to meet with mediator Layn Phillips, a retired federal judge, in an effort to settle the dispute. In the brief order, Brody said she would hold off on ruling on the NFL’s motion to dismiss the case until September 3 to give the two sides an opportunity to make progress. Many of these former players also have claims pending before the California WCAB.

More than 4,000 players have accused the league of glorifying football’s ferocity while concealing the risks of concussions and long-term brain damage as a result of repeated hits to the head. The league has said it disclosed what information it had regarding research into brain trauma. It has also argued that the lawsuit is inappropriate because the issue of player safety is governed by the collective bargaining agreements negotiated between the league and the players’ union.

Phillips, currently a partner in the California law firm Irell and Manella, served four years as a federal judge in Oklahoma City. The case is In re National Football League Players’ Concussion Injury Litigation, U.S. District Court for the Eastern District of Pennsylvania, No. 12-2323.

And Bloomberg News reports that former National Football League players Courtney Anderson, Larry Centers and others settled a dispute with the organization over an arbitration decision that bars them from seeking workers compensation in California. Dozens of players sued in federal court in San Francisco seeking to overturn the arbitration order. The “cases fully settled as to all plaintiffs except for plaintiff Sean Berton,” according to a filing after a 45-minute settlement conference. The document didn’t provide details.

The players were required under a December arbitration award to withdraw claims in California and banned from claiming they are entitled to the benefits, according to the complaint filed by Centers in February.

Greg Aiello, an NFL spokesman, had no immediate comment. Margaret Prinzing and Roy LaFrancis, attorneys for the ex-players, didn’t immediately respond to an e-mail message seeking comment on today’s filing. The cases are Centers v. National Football League Management Council, 13-00882, and Anderson v. National Football League Management Council, 12-06386, U.S. District Court, Northern District of California (San Francisco).