Tag: 2015 News

A new ProPublica/NPR report summarized in an article in the Los Angeles Times, claims that , “over the past decade … state after state has slashed workers’ comp benefits, driven by calls from employers and insurers to lower costs. In fact, employers are now paying the lowest rates for workers’ comp than at any time since the 1970s. Nonetheless, dozens of legislatures have changed their workers’ comp laws, often citing the need to compete with neighboring states and be more attractive to business.”

The result, according to the report, is a grim “geographic lottery” in which compensation, including for lost limbs, varies depending on the state in which you were hurt. There are no federal benchmarks, and plenty of state-level political resistance to fix the problems. More broadly, erosion of protections across the states has had a devastating effect on families in which one of the wage-earners can no longer work, or work at full capacity, because of a serious injury on the job. The report claims “The loss of an arm, for example, is worth up to $48,840 in Alabama, $193,950 in Ohio and $439,858 in Illinois. The big toe ranges from $6,090 in California to $90,401.88 in Oregon.” …. “Given their profound impact on people’s lives, how much compensation workers get for traumatic injuries seems like it would be the product of years of study, combining medical wisdom and economic analysis. But in reality, the amounts are often the result of political expediency, sometimes based on bargains struck decades ago.”

A new report by the federal Department of Labor’s Occupational Safety and Health Administration argues that “changes in state based workers’ compensation insurance programs have made it increasingly difficult for injured workers to receive the full benefits (including adequate wage replacement payments and coverage for medical expenses) to which they are entitled. Employers now provide only a small percentage (about 20%) of the overall financial cost of workplace injuries and illnesses through workers’ compensation. This cost-shift has forced injured workers, their families and taxpayers to subsidize the vast majority of the lost income and medical care costs generated by these conditions.”

These criticisms have dated back for decades. The federal Occupational Safety and Health Act was enacted by Congress in 1970 and was signed by President Richard Nixon on December 29, 1970. The new law authorized the National Commission on State Workers Compensation Laws, a group appointed by President Nixon in 1971 to study workers compensation laws. It issued sweeping recommendations to upgrade state workers compensation laws, including higher disability benefits, compulsory coverage, and unlimited medical care and rehabilitation benefits. It recommended that all states pay totally disabled workers at least two-thirds of their salary up to a maximum of the state’s average weekly wage. Still, many states have not complied with the Commission’s recommended standard wage.

California responded to the Commission Report by adopting mandatory vocational rehabilitation. It was argued at the time that by embellishing the California system with this new benefit, the State would head off a threatened federal takeover of workers’ compensation systems adopted in the various states. Mandatory vocational rehabilitation was later proven to be a costly mistake, was modified and ultimately revoked by the California Legislature with little regret.

For some, the response to these studies would be based upon a famous quote from Ronald Regan. “There you go again” was a phrase spoken during the 1980 United States presidential election debate by presidential candidate Governor Ronald Reagan to his Democratic opponent, incumbent President Jimmy Carter. “There you go again” emerged as a single defining phrase of the 1980 presidential election.The phrase has endured in the political lexicon in news headlines, as a way to quickly refer to bringing certain issues up repeatedly.

The California Labor Commissioner’s Office last week cited car wash businesses in the Los Angeles area more than $1.3 million for wage theft following a two-day enforcement activity. The majority of the violations were found at 35 car wash businesses that failed to register with the Labor Commissioner’s Office, as required by law. The inspections uncovered numerous violations of state wage and hour laws affecting nearly 400 workers.

“These citations serve as a reminder that wage theft will not be tolerated. The Labor Commissioner’s office targets its enforcement efforts on employers who intentionally skirt the law,” said Christine Baker, Director of the Department of Industrial Relations (DIR), which oversees the Labor Commissioner’s Office.

The 35 unregistered car wash businesses reflect a significant drop in registration from 2013 to 2014.

“When car wash businesses fail to register, it is often an indicator of wage theft. We are also following up with some of the inspected car washes to conduct full wage audits,” said Labor Commissioner Julie A. Su. “We want to make sure car wash workers are paid what they are owed and that employers who follow the law know we are on their side.”

Violations cited included the failure to pay workers minimum wage and overtime, which resulted in $412,200 in penalties and $308,584 in liquidated damages. An additional 17 violations with citations totaling $218,000 were issued to employers who did not carry workers’ compensation insurance coverage.

The Labor Commissioner’s Office, formally known as the Division of Labor Standards Enforcement, inspects workplaces for wage and hour violations, adjudicates wage claims, enforces prevailing wage rates and apprenticeship standards in public works projects, investigates retaliation and whistleblower complaints, issues licenses and registrations for businesses, and educates the public on labor laws. Updated information on California labor laws is available online.

The Wage Theft is a Crime public awareness campaign, launched last year by DIR and its Labor Commissioner’s Office, has helped inform workers of their rights. The campaign includes multilingual print and outdoor advertising as well as radio commercials on ethnic stations in English, Spanish, Chinese, Vietnamese, Hmong and Tagalog.

Employees with work-related questions or complaints may call the toll-free California Workers’ Information Line at (866) 924-9757 for recorded information in Spanish and English on a variety of work-related topics.

A Bay Area mechanical designer suffering from carpal tunnel syndrome said she had her workers’ compensation reduced for a reason that has caught the attention of women’s groups and lawmakers: She was postmenopausal. And she says she is not alone in having her permanent disability claim reduced for factors that Sue Borg, her San Mateo attorney, said are clear examples of gender bias in the handling of workers’ compensation claims. Borg said she frequently sees cases where women injured in the workplace are “penalized” for gender-related factors like pregnancies and menopause.

According to the story published in SF Gate, Assemblywoman Lorena Gonzalez, D-San Diego, will introduce a bill she said would ensure that being female is not treated as a pre-existing condition by prohibiting a woman’s workers’ compensation from being reduced based on pregnancies, breast cancer, menopause, osteoporosis or sexual harassment. “It seems like it should be obvious that we shouldn’t see this, but it happens in insidious ways all the time,” Borg said.

The state workers’ compensation system of apportioning responsibility for an injury underwent major reforms under Gov. Arnold Schwarzenegger in 2004 in order to reduce the soaring costs of insurance premiums paid by employers across the state. “Before that, an employer was on the hook for the entire disability no matter the cause or whether it was successive injuries at different employers,” says Jerry Azevedo, spokesman for the California-based Workers Compensation Action Network, which works to reduce job-related injury costs to employers. “The concept of apportionment is the employer pays their fair share for the injury.”

Azevedo said that despite those reforms, a study last year found that California employers pay the highest workers’ compensation costs in the nation. “Most states have seen their workers’ compensation claims go down,” Azevedo said. “California has been going up. We get more claims, more complicated claims and more permanent disability claims. This bill is a decade-old attack on apportionment.”

The bill’s supporters say the issue of gender bias in workers’ compensation is real, despite laws prohibiting gender discrimination. The issue is especially evident in the way breast cancer is treated among firefighters and police officers, supporters say.

The California Applicants’ Attorneys Association, a lawyers’ group that is sponsoring the legislation, said a police officer who undergoes a double mastectomy for breast cancer linked to hazardous materials she encounters on the job would be considered zero to 5 percent disabled depending on her age, while a male officer with prostate cancer linked to hazardous materials exposure would be considered 16 percent disabled and would be paid for the injury. That was the case for one San Francisco firefighter, who was denied any permanent disability compensation after undergoing a double mastectomy, according to a list of several examples provided by the attorneys association.

In another case outlined by the attorneys association, an Orange County hotel housekeeper who was injured moving a bed was told that although she was 100 percent disabled, her employer was liable for 2 percent of the injury based on health conditions “related to childbirth, obesity, age and naturally occurring events.”

“I’ve had a child, and if now being a mother is a pre-existing condition in California, I find that unacceptable,” said Christine Pelosi, chair of the California Democratic Party’s women’s caucus and daughter of House Minority Leader Nancy Pelosi.

Deborah Berger, co-president of the California Nurses Association, said she regularly hears of nurses injured – including while lifting patients – having their workers’ compensation reduced due to osteopenia or osteoporosis, diseases found mostly in women that weaken the bones. “That’s extremely troubling to us,” Berger said.

While workers’ compensation pharmacy benefit managers have been utilizing drug formularies for a long time, only Washington, Texas, Ohio and Oklahoma have state-regulated drug formularies in place. Several more states are considering their use as a way to reduce drug costs and curtail inappropriate treatment that may hinder an injured worker’s ability to return to work

According to the report in the Claims Journal, the way drug formularies work varies by state. Mark Pew, senior vice president of Prium, a workers’ compensation medical intervention company, says that ‘we’ve got 50 different systems. Every state has different political realities, has different ways of addressing treatment guidelines, ways of addressing dispute resolution processes. All of that contributes to what kind of formulary is implemented,’ said Pew. According to Jennifer Kaburick, senior vice president of Workers’ Compensation Product Management and Strategic Initiatives for Express Scripts, state formularies are intended to be a guide and have different objectives than a standard health plan formulary. The primary goal in workers’ compensation, she said, is to make sure that a person’s treatment is related to their work-related injury.

California, Montana, Tennessee and Maine, are currently considering drug formularies, said Kaburick. Louisiana is researching the idea and Arkansas’ drug formulary is set to launch in July 2015, Pew said.

Besides being more cost effective, state-regulated drug formularies have other benefits, experts said. “I think the biggest benefit is really enforcing or forcing, if you will, prescribing behavior changes. If you think about it in terms of what’s best for the injured worker in returning to function and returning to work as quickly, and efficaciously as possible,” said Pew. Kaburick said in addition to cost savings, there is the likelihood of better utilization. “It does appear that they’re saving money for payors….controlling prescription costs in the system for that particular state, but also while ensuring injured workers maintain access to the medications that they need for their effective recovery,” said Kaburick.

Pew also noted better utilization as a benefit too. “By changing prescribing behavior, and what I call the hassle factor they make it more difficult for doctors to automatically write a script for a drug,” Pew said. He cited Texas as an example, where for all new claims on or after September 1st, 2011, the state requires compliance with the formulary. “The use of Soma (a muscle relaxant) dropped by 90 percent on day one, because there are other muscle relaxants,” Pew said. “There were other options besides Soma, but doctors had gotten used to writing a script for Soma along with a cocktail of the other drugs. By incorporating a hassle factor and forcing them to go through a preauthorization process before they can write and dispense the Soma, doctors figured out another way to handle it.”

A potential indirect effect is less addiction to prescription drugs. “Certainly, what we’ve seen, with the advent of all the opioids, the benzodiazepines, like Xanax and Valium, people can get highly dependent. We use the term ‘addiction’ a lot, and sometimes it’s not appropriate,” Pew said. “The vast majority of people that are on these drugs are dependent, which means they don’t necessarily move heaven and earth to get their drugs, but if you withhold the drugs from them, they’re going to go through some significant withdrawal symptoms. Chances are, they’re going to continue the drugs because they don’t want to go through the withdrawal. What we have done by creating this is we’ve created a lot of people that are highly dependent, and/or addicted on these drugs.” Ohio reported a 27 percent reduction in the use of opioids, and a 73 percent reduction in the use of skeletal muscle relaxants, he said.

A study released last year by the Workers Compensation Research Institute (WCRI) examined how a Texas-like drug formulary might affect the use and costs of drugs in 23 other state workers’ compensation systems that don’t currently have a drug formulary in place. According to the study, Impact of a Texas-Like Formulary in Other States, if physicians in the 23 other study states were to change their prescribing patterns like physicians in Texas, they could reduce total prescription costs by to 29 percent.

The California Workers’ Compensation Institute issued a report in October 2014 discussing whether formularies could sufficiently control inappropriate utilization and costs.The research looked at formularies used in both Texas and Washington and found that drug costs could be reduced between 12 and 42 percent – that’s $124 to $420 million in savings annually, the report’s authors concluded. The report also found that a formulary could reduce administrative costs related to medical dispute resolution.

In 1996 Kathleen Murphy, while employed as a cashier for Petsmart in 1992, sustained industrial injury to her right fool and psyche causing the need for further medical treatment. The case was resolved in 2001 by a Compromise and Release for $20.000 with the exception that the defendant remained liable for reasonable medical care related to the industrial injury.

In May and June of 2012, applicant’s treating physician, oral surgeon William W. Evans, D.M.D., M.D.,filed a request for authorization for treatment, including notice that payment was expected at the time of surgery and implant placement. He went on to explain that because of the amount of implants he will need a payment before he can proceed completely with patient’s treatment. Dr. Evans sought an advanced payment of $25,600.00. The treatment plan submitted to UR stated, “Surgical Fee and Payment: Payment is expected at the time of surgery.”

Dr. Evans’ s request for oral surgery and implant placement was forwarded to the utilization review process. On July 19, 2012, defendant issued a utilization review decision authorizing the requested care. The utilization review approval letter did not expressly approve payment of any particular sum of money to Dr. Evans, nor did it expressly mention any agreement to pay Dr. Evans in advance for his services.

Later, the defendant agreed to authorize the surgery but declined to make an advanced payment as requested stating “that advanced payment is not usual and customary for treatment provided in workers’ compensation matters.” In addition, the doctor was advised that payment would be made according to a fee schedule. The physician replied “As stated in your letter it is not usual and customary to collect up front for workers comp cases. It is however usual and customary to collect up front for Implant cases due to the overhead involved. For the extractions the payment within 60 days is acceptable. We are not agreeable to except [sic] fee schedule amounts without those amounts being disclosed. As of yet we have not received any information regarding the allowed fees. Once this information is received we will he able to inform you a to whether we are in agreement.”

Ultimately on February 4, 2013, defendant issued a check in the amount of $25,510.00 to Dr. Evans as pre-payment for the dental services originally requested in June of 2012. Despite the payment, the parties went to trial on the issue of a Labor Code section 5814 penalty. The WCJ found defendant liable for a penalty, stating that: “This Judge finds no medical or legal basis for said delay and on that basis finds that defendant did unreasonably delay payment to Dr. Evans.” The WCJ thus assessed a Labor Code section 5814 penalty in the amount of$6,377.50, which was calculated as 25% of the dental treatment unreasonably delayed by the defendant..”

The defendant Petitioned for Reconsideration which was granted, and the penalty was reversed in the split panel decision of Murphy v Petsmart.

In reversing, the majority concluded that “defendant did not act unreasonably because it had no obligation to pay for applicant’s dental treatment in advance. Labor Code section 4603.2 makes clear that a defendant has no obligation to provide payment for medical services until 45 days after medical services have been “provided.”

“Although we do not wish to belabor the point, “provided” in this context is the past participle of “provide,” and thus indicates an action which has already been completed. Despite Dr. Evans’s office insistence that defendant pay for treatment in advance, there is thus no obligation for the defendant to pay for medical or dental services before they have been provided.”

Commissioner Sweeny dissented from the Opinion noting that the defendant was “clearly notified that payment in advance was required for treatment due to the high up-front cost required for this type of treatment. Defendant approved the treatment even in the face of the requirement for pre-payment, and after authorization did nothing to retract or clarify this authorization for months, until after applicant filed a Declaration of Readiness to Proceed (DOR) seeking WCAB intervention on the issue of medical treatment.” Any “confusion in this case was engendered by defendant’s approval of the suggested treatment without communicating that it did not agree to payment in advance until almost five months later. Under the specific factual scenario of this case, I would affirm the WCJ’s decision that defendant in effect agreed to the treatment and billing terms. and that failure to promptly clarify the matter deprived the applicant of necessary medical treatment for many months.”