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Tag: 2017 News

Subrogation Includes “All Benefits” Paid by Employer

In August 2012, Denise Michelle Duncan was acting within the course and scope of her employment with Acosta Inc. when she fell and injured herself on a Wal-Mart Stores, Inc. premises.

Hartford Accident & Indemnity Company was Acosta’s workers’ compensation insurer and paid Duncan more than $152,000 in benefits, including more than $115,000 in medical expenses and roughly $37,000 in temporary disability indemnity for Duncan’s lost wages.

Duncan sued Wal-Mart Stores, Inc. for personal injuries. The trial court entered judgment finding Wal-Mart liable for Duncan’s injuries.

Under Labor Code sections 3852 and 3856, appellant Hartford Accident & Indemnity Company applied for a lien on Duncan’s judgment to obtain reimbursement for the workers’ compensation benefits it paid Duncan, including medical expenses and temporary disability payments for lost wages.

Since the judgment she received did not include compensation for Duncan’s lost wages (because she did not seek those damages at trial), the trial court granted Hartford a lien on Duncan’s judgment, but reduced the lien amount to exclude the indemnity payments for lost wages.

Hartford appealed the trial court’s postjudgment order, arguing the court exceeded its authority by reducing the lien amount for any item other than reasonable attorney fees and costs. The court of appeal agreed in the unpublished case of Duncan v. Wal-Mart Stores.

The Labor Code permits an employer to recover workers’ compensation benefits it has become obligated to pay in three ways: (1) bringing an action directly against the tortfeasor (§ 3852), (2) joining as a party plaintiff or intervening in an action brought by the employee (§ 3853), or (3) allowing the employee to prosecute the action and then applying for a first lien against the resulting judgment or settlement. (§ 3856(b).)

“All benefits required to be paid by the employer, even though . . . in excess of those ordinarily enjoined by the Workmen’s Compensation Act, are deemed the ‘compensation’ and ‘special damages’ of section 3856[(b)] and are subject to the employer’s lien. Thus, continued salary paid the workman during disability as required by ordinance [citations], or municipal charter [citation], or statute [citations], is subject to the employer’s lien. Such salary, for which the employee renders no services, is deemed to be ‘compensation’ for which, under sections 3852 and 3856[(b)] the employer is given the right of reimbursement.” (Harvey v. Boysen (1975) 50 Cal.App.3d 756, 761 (Harvey).)”

The Labor Codes plain language and the case law applying it grant Hartford a first lien on the judgment in the amount it paid Duncan for worker’s compensation benefits. Duncan’s choice not to seek lost wages at trial does not diminish Hartford’s lien rights under the workers’ compensation statutory scheme.

Francis Stevens Case Headed Back to Court of Appeal

The Francis Stevens case is headed back to the Court of Appeal, after the WCAB ruled that a portion of the medical treatment guideline relied upon by the IMR process was “unlawful” and that the WCAB now has wide discretion to be involved in the IMR process.

In 2015 the Court of Appeal upheld the constitutionality of the IMR process in one of the most closely watched cases in California workers’ compensation. The published case of Stevens v WCAB involved Frances Stevens who tripped and broke her foot as she carried boxes of magazines. She was diagnosed with chronic or complex regional pain syndrome and claims to be mostly confined to a wheelchair and was awarded total permanent disability.

For several years she had the assistance of a home health aide. In late 2012, the aide was injured. This led the PTP to submit an RFA to SCIF for a replacement aide which was submitted to UR and denied. The request was also denied after the IMR process. Stevens appealed the IMR decision, but the WCJ found there was no provision for a reversal since the labor code provides only limited circumstances upon which IMR can be reversed.

Stevens challenged constitutionality of the IMR process. In response the WCJ said “section 3.5 of article III of the Constitution withholds from administrative agencies the power to determine the constitutional validity of any statute.” The WCAB denied reconsideration and agreed that it could not rule on the constitutional issue saying “In sum, for purposes of appeal to the WCAB it does not matter whether the reasons given for an IMR determination support the determination unless the appealing party proves one or more of five grounds for appeal listed by the Legislature in section 4610(h) by clear and convincing evidence. Applicant did not do that in this case.

The First District Court of appeal concluded “that her state constitutional challenges fail because the Legislature has plenary powers over the workers’ compensation system under article XIV, section 4 of the state Constitution (Section 4). And we conclude that her federal due process challenge fails because California’s scheme for evaluating workers’ treatment requests is fundamentally fair and affords workers sufficient opportunities to present evidence and be heard.”

Although Stevens may have lost the battle, she may not have lost the war since she was given a second chance to prove her case on the merits. The Court of Appeal stated “we also conclude that the Workers’ Compensation Appeals Board (the Board) misunderstood its statutory authority in one respect when it reviewed Stevens’s appeal. The Board concluded that it was unable to review the portion of the IMR determination that found, “Medical treatment does not include . . . personal care given by home health aides . . . when this is the only care needed.” Under the 2013 reforms, however, the Board is empowered to review an IMR decision to consider whether care was denied without authority because the care is authorized under the MTUS. (§ 4610.6, subd. (h)(1) & (5).) We therefore remand this matter to the Board to consider whether Stevens’s request for a home health aide was denied without authority.”

And indeed the WCAB recently ruled in its Opinion and Decision After Remittitur “that the 2009 Guideline is unlawful and invalid since it fails to address the medical treatment in the form of personal home care services sought by Ms. Stevens.”

In arriving at this conclusion the WCAB interpreted the language of the Court of Appeal in the published decision as authorizing the WCAB to have “considerable” authority over IMR. “Thus, the Court held that the Appeals Board has considerable authority to review both factual and legal questions in its determination of whether an IMR determination was adopted without authority or based on a plainly erroneous fact not subject to expert opinions. We conclude that the 2009 Guideline is contrary to California law and the IMR determination that relied on it was therefore adopted without authority.”

The State Fund responded by filing a petition for writ of review with the Court of Appeal in August. By September a number of stakeholders were involved as amicus parties. And on October 25 the Court of Appeal issued a writ of review, which means that the entire dispute will now be heard, again, in that tribunal. However the outcome is many months, if not years away.

DWC Suspends 12 More Providers

The Division of Workers’ Compensation (DWC) has suspended 12 more medical providers from participating in California’s workers’ compensation system, bringing the total number of providers suspended this year to 85. Nine providers were suspended for fraud or criminal actions and three for administrative reasons.

DWC Administrative Director George Parisotto issued suspension orders against the following providers:

– Paul Richard Randall of Orange, health care marketer and owner of Summit Medical Group, pled guilty in federal court on April 16, 2012 for his role in a spinal surgery kickback scheme. The scheme involved recruiting chiropractors and doctors to refer patients in exchange for illegal kickbacks involving nearly $600 million in fraudulent claims.

– Harold “Harry” Persaud, Westlake, Ohio physician, was found guilty on October 2, 2015 in federal court for health care fraud and money laundering. The charges stem from Persaud’s practice of performing unnecessary catheterizations, tests, and stent insertions and causing unnecessary coronary artery bypass surgeries as part of a scheme to overbill Medicare and private insurers approximately $7.2 million. Persaud was sentenced to 20 years in federal prison. His certificate was also revoked by the Medical Board of California on September 1.

– Jeremy Goodwin, Mt. Shasta physician, had his license revoked on September 8 following violation of the terms of his 2014 probation from a prior disciplinary action by the Medical Board of California. Goodwin was charged with gross negligence for his treatment of a patient who died one day after receiving an excessive dosage of the opiate drug fentanyl.

– Christopher Dean Owens, San Francisco physician, had his license revoked on July 21 on findings that include self-administering illicit drugs.

– Guven Uzun, Marina Del Rey physician, had his certificate revoked by the Medical Board of California on July 19 after violating the terms of his 2011 probation due to charges of negligence and falsifying medical records

– Farhad Hafezi, Covina physician, was found guilty of felony charges of sexual assault involving a minor. He is a registered sex offender. His medical license was revoked by the Medical Board of California in 2014.

– Troy Ericsen Palmer, Chino physician, surrendered his license to the Osteopathic Medical Board of California on April 4 after pleading guilty to possessing child pornography.

– Keith Robert Deorio, Santa Monica physician, had his license revoked by the Medical Board of California on July 21 after repeated violations of the Medical Practice Act.

– Christopher Allen Scott, Palm Springs vocational nurse, had his license revoked by the California Board of Vocational Nursing and Psychiatric Technicians in January following findings that include the alleged use of controlled substances.

– John Thomas Moranville, Lafayette physician, had his license revoked by the Medical Board of California on August 18 following an evaluation finding that he suffers from an illness that impairs his ability to practice medicine safely.

– Joseph Struzzo, Cathedral City physician, had his certificate revoked by the Medical Board of California on August 4 following an evaluation finding that he suffers from an illness that impairs his ability to practice medicine safely.

– Adly Ayad Azab, West Covina physician, had his license revoked by the Medical Board of California on August 23 following an evaluation finding that he suffers from an illness that impairs his ability to practice medicine safely.

AB 1244 (Gray and Daly), which went into effect January 1, introduced new changes to the workers’ compensation system and requires the division’s Administrative Director to suspend any medical provider, physician or practitioner from participating in the workers’ compensation system in cases such as noted above.


Helping a New PTP Understand Workers’ Compensation

All to often a claims administrator may encounter a new PTP who has happened upon an injured worker for treatment, despite the fact that they may not know much if anything about workers’ compensation concepts, rating, or reporting. This imposes a burden upon the administrator to hand hold the PTP every step of the way, a tedious, and time consuming task.

Now there are online resources that can get the job of teaching the PTP claim fundamentals to help with the task of bringing a new PTP up to speed.

The Division of Workers’ Compensation launched its second free online physician education course. This course is highly recommended for California’s Qualified Medical Evaluators (QMEs). It is also available to the public and may be useful for attorneys, claims administrators and medical providers participating in the California workers’ compensation system.

“Evaluating California’s Injured Workers: Qualified Medical Evaluators (QME)” is the second in a planned series of educational modules developed for medical doctors, chiropractors and nurses. QMEs play a critical role in resolving disputes within the workers’ compensation system.

The online education will cover:

– How to prepare for an evaluation and outline the components of a quality report
– How to properly identify and apply the complexity factors in the medical-legal fee schedule to ensure accurate billing
– Administrative regulations to stay in compliance as a QME
This activity has been approved for AMA PRA Category 1 Credit – as well as 1 hour of QME continuing education credit.

Access to the physician education module can be found on the DWC website and will be available by mobile app soon. The first education module, “Caring for California’s Injured Workers: Using California’s Medical Treatment Utilization Schedule (MTUS),” is also available on the website.

This activity has been planned and implemented in accordance with the accreditation requirements and policies of the Institute for Medical Quality/California Medical Association (IMQ/CMA) through the joint providership of the Center for Occupational and Environmental Health (COEH) and State of California Department of Industrial Relations, Division of Workers’ Compensation.

The Center for Occupational and Environmental Health is accredited by the IMQ/CMA to provide continuing medical education for physicians.

The Center for Occupational and Environmental Health designates this enduring material for a maximum of 1 AMA PRA Category 1 Credit(s)™. Physicians should claim only the credit commensurate with the extent of their participation in the activity.

Post Injury Accommodations Must Relate to a Disability

Anthony White worked as a custodian for Los Angeles World Airports, a department of the City of Los Angeles. In November 2005, while off duty, he sustained several gunshot wounds to his left leg. He was briefly hospitalized and took several medical leaves of absence to recover from his injury. He returned to work in May 2006 and was assigned to perform light duty tasks in a warehouse.

At the end of August 2006, White took another medical leave of absence which lasted for approximately two years. According to one of White’s physicians, White was suffering from “Post Traumatic Stress Disorder and Intractable Pain secondary to gunshot wound in 2005.”

In May 2008, during his leave, White was arrested in Arizona and was apparently charged with nine felony counts relating to identity theft and fraud. When White returned to work in 2008, his prior position (day shift custodial supervisor) was not available and the airport placed him in an available position at the same level on the graveyard shift.

White did not like working the night shift and requested a transfer to the day shift as a reasonable accommodation for disabilities related to his 2005 injury. However, because White failed to provide the airport with any viable explanation why working the day shift rather than the night shift would impact his disability, the airport denied his reasonable accommodation request.

White resigned from his position in 2010 on the same day he began serving a sentence on two felony charges in Arizona. He subsequently filed the present lawsuit against the airport, the City, and others, in which he alleges a variety of disability related employment claims under the Fair Employment and Housing Act (FEHA).

The case was tried to a jury. The court granted the airport’s nonsuit motion on several claims; the jury found in favor of the airport on White’s remaining claims. The outcome was affirmed in the unpublished case of White v City of Los Angeles.

White’s primary contention on appeal is that the trial court erred in denying his motion for new trial. He argues the evidence does not support either the jury’s verdict or the court’s nonsuit.

The court of appeal held that the “evidence – when properly viewed in the light most favorable to the judgment – does not support White’s assertion that the airport refused to consider any accommodation absent a showing of a “permanent restriction.” During the discussions with White about his request for an accommodation, the airport focused mainly on whether White had any limitations due to his disability and, if so, how working during the day rather than at night might impact those limitations. Given that White said he could perform his job without any accommodation and the City’s medical office cleared White to return to work without any restrictions, the airport’s request for some additional information regarding his request for accommodation was not unreasonable.”

Experts Say “Amazon Effect” Threatens Drug Prices

German drugmaker Bayer has hired the head of Nestle’s baby food business to help it reverse a drop in revenue from consumer health brands, which often fail to appeal to buyers on Amazon and other online platforms.  Bayer has appointed Nestle’s Heiko Schipper, 48, to run the Consumer Health division as a group board member from March 1 next year, replacing Erica Mann.

Bayer was caught off guard by the speed of U.S. consumers switching to online stores at the expense of established drugstores. Major over-the-counter (OTC) drug rival GlaxoSmithKline has also struggled with the transition.

The shake-up in the segment is a harbinger of what could be in store for the much larger prescription drug sector when Amazon moves into that market and uses its purchasing power to squeeze prices, as is widely anticipated.

Moves such as drug distributor McKesson’s purchase of a CVS Health Corp unit that provides services to pharma firms as well as CVS Health’s planned push into next-day delivery are seen as pre-empting Amazon’s potential entry into prescription drug sales.

Bernstein analysts said in a note earlier this month they expect Amazon to “cause long-term margin compression through the drug supply chain”.

In the market for non-prescription treatments, consumers are more easily comparing prices on the Internet, with Bayer’s premium brands such as sunscreen Coppertone or allergy remedy Claritin often falling by the wayside.

“The U.S. is the market that is facing tremendous structural changes,” outgoing executive Erica Mann said in an analyst call discussing third-quarter results this month. “We also noted in the U.S. market significant channel shifts, such as an acceleration towards e-commerce and, in particular, I can call it the Amazon effect… Consumer behaviors are shifting and they’re really moving towards e-commerce channels as well as searching for value.”

Both Pfizer and Germany’s Merck KGaA are making preparations to sell their respective OTC businesses.

Bayer’s OTC drugs unit, boosted by a $14 billion acquisition of brands from U.S. rival Merck & Co in 2014, reported a 7.4 percent fall in third-quarter sales, down 2.9 percent adjusted for currency fluctuations and portfolio changes.

U.S. drugstore chains have merged in response to the online threat, wielding increased purchasing power to squeeze procurement prices.

Technology Tackles Medication Compliance Problems

In medicine, compliance describes the degree to which a patient correctly follows medical advice. Most commonly, it refers to medication or drug compliance, but it can also apply to other situations such as medical device use, self care, self-directed exercises, or therapy sessions.

Poor compliance with drug regimens is a common problem in many disease areas, especially when patients suffer from chronic conditions. In particular, low rates of adherence to therapies for asthma, diabetes, and hypertension are thought to contribute substantially to the human and economic burden of those conditions. Estimates from the World Health Organization indicate that only about 50% of patients with chronic diseases living in developed countries follow treatment recommendations.

But new technology may help improve compliance statistics. The FDA has approved the first digital pill with an embedded sensor to track if patients are taking their medication properly, marking a significant step forward in the convergence of healthcare and technology.

The medicine is a version of Otsuka Pharmaceutical Co Ltd’s established drug Abilify for schizophrenia, bipolar disorder and depression, containing a tracking device developed by California based Proteus Digital Health.

The system offers doctors an objective way to measure if patients are swallowing their pills on schedule, opening up a new avenue for monitoring medicine compliance that could be applied in other therapeutic areas.

The system works by sending a message from the pill’s sensor to a wearable patch, which then transmits the information to a mobile application so that patients can track the ingestion of the medication on their smartphone. The underlying technology is Proteus Discover which is comprised of ingestible sensors, a small wearable sensor patch, an application on a mobile device and a provider portal.

About the size of a grain of salt, the sensor has no battery or antenna and is activated when it gets wet from stomach juices. That completes a circuit between coatings of copper and magnesium on either side, generating a tiny electric charge.

In the longer term, such digital pills could also be used to manage patients with other complicated medicine routines, such as those suffering from diabetes or heart conditions.

Proteus has been working on the pill tracking system for many years and the sensor used in Abilify MyCite was first cleared for use by the FDA in 2012.

The California company has attracted investments from several large healthcare companies, including Novartis AG, Medtronic Inc and St. Jude Medical Inc, as well as Otsuka.

California Comp Medical Costs Continue to Decline

Medical payments per workers’ compensation claim with more than seven days lost time in California have decreased steadily since the enactment of reform legislation in 2013, according to a recent study by the Workers Compensation Research Institute (WCRI).

The study, CompScope Medical Benchmarks for California, 18th Edition, examined medical payments, prices, and utilization in California and compared them with 17 other states over a period from 2010 through 2015.

“We continue to monitor the impact of California reform legislation on medical payments, prices, and utilization,” said Ramona Tanabe, WCRI’s executive vice president and counsel, referring to Senate Bill (SB) 863, a comprehensive reform bill that affected many aspects of the California system since Jan. 1, 2013. “The decrease in medical payments per claim in California likely reflects the impact of SB 863 provisions.”

The following are among the study’s other findings:

1) Prices paid for primary care services increased while prices for specialty care decreased following the transition to the resource-based relative value scale (RBRVS) based fee schedule beginning in 2014.

2) The average payment per claim for using ambulatory surgery center (ASC) facilities decreased after a decrease in fee schedule rates for ASCs.

3) Prescription payments per claim with prescriptions decreased after 2012, perhaps reflecting, in part, the impact of an independent medical review process implemented by SB 863.

3) The percentage of claims with hospital services decreased from 2010 to 2015, part of a general trend seen in many states. In California, hospital payments per claim remained fairly stable.

In all, medical payments per claim in California were close to the median of the 18 study states for post-reform 2013 claims with experience through 2016. Pre-reform, California had higher medical payments per claim among the study states.

WCRI studied medical payments, prices, and utilization in 18 states, including California, and looked at claim experience through 2016 on injuries that occurred mainly from 2010 to2015. WCRI’s CompScope Medical Benchmarks studies compare payments from state to state and across time.

Ask a Veteran – Is a “Catastrophic Injury” Always That Disabling?

In workers’ compensation claims, it is not uncommon for claim administrators to encounter claimants who assert that they are profoundly disabled from the effects of what seems like a trivial injury. A minor hand injury can end up a multi-body part claim of disability basically from head to toe.

But not everyone succumbs to the effects of injury, even a catastrophic injury. The events of this Veteran’s day weekend offered a good example.

Ask Rob Jones. He braved the cold weather on Veterans Day to complete his mission: running 31 marathons in 31 days. This challenge was after losing both his legs to an improvised explosive device in Afghanistan in 2010, Jones has shown endurance that few can rival and certainly would not be seen by many as “disabled.”

“I’m pretty sore, but overall I am feeling pretty good,” Jones told Stars and Stripes as the sun rose over the Lincoln Memorial. Jones’ final run was on the National Mall in Washington, where he ran 26.2 miles to support his fellow veterans and raise money for charity.

Jones was laid out on a couch before setting out for his final run shortly after 7 a.m., bandages being taken of his back after falling during a race in Atlanta. He sat up, his artificial legs off, and clearly thought about this last race while he spoke.

Jones began his quest Oct. 12 in London, then flew to the States to race in Philadelphia, New York and Boston. He has raced in nearly every major city since then, running the equivalent of a marathon each day.

There was an air of exhaustion and pain about him, but he seemed determined. “I’m feeling good. I’m excited about this last one. It is going to be painful,” he said.

Or ask Brian Shul. He flew 212 combat missions in Vietnam and was shot down near the Cambodian border in an AT-28 Air Force jet near the end of the war. He was so badly burned that he was given next to no chance to live.

Barely surviving 2 months of intensive care, he was flown to the Institute of Surgical Research at Fort Sam Houston, Texas in 1974. During the following year, he underwent 15 major operations. During this time he was told by physicians that he’d never fly again and was lucky to be alive.

Months of physical therapy followed, enabling Shul to eventually pass a flight physical and return to active flight duty. Two days after being released from the hospital, Shul was back flying Air Force fighter jet aircraft. He flew the the A10, A7 and the F5. As a final assignment in his career, Shul volunteered for and was selected to fly the SR-71. This assignment required an astronaut type physical just to qualify, and Shul passed with no waivers.

Shul said after the rigorous physical “I did very well, passed the physical. The guy said, ‘wow, you’ve got one of the highest scores we’ve ever seen.’ I was very strong internally, even if I looked like hell on the outside.” He became a member of a small, select group of men who had the privilege of flying the SR-71.

He ended up flying the SR-71 Blackbird for four years. The SR-71 was the world’s fastest and highest-flying operational manned aircraft throughout its career. It broke an “absolute altitude record” of 85,069 feet. That same day it set an absolute speed record of 2,193.2 mph approximately Mach 3.3. It has flown from Los Angeles to Washington, D.C., at an average speed 2,144.8 miles per hour with an elapsed time of 64 minutes 20 seconds to cross the continent.

Shul’s comeback story from lying near dead in the jungle of Southeast Asia, to later flying the world’s fastest, highest flying jet, seems to suggest that the will to overcome “disability” is a major component to the healing process after what would otherwise be a catastrophic injury.

He spoke at the Lawrence Livermore National Laboratory last December, and this  YouTube video of his return to the flight line is humorous, inspiring, and perhaps a way to see a much different outcome to having had a so called “catastrophic Injury.”

Shul just refused to see himself as disabled, despite what dozens of doctors had to say about his prospects of recovery.

Ford Tests Non-Powered Exoskeleton to Reduce Injuries

Working with California based exoskeleton maker Ekso Bionics, Ford has been piloting the use of a non-powered exoskeleton called EksoVest in two of their manufacturing plants in the U.S. The exoskeleton is designed to reduce fatigue from high-frequency activities.

Designed to fit workers from five feet to six feet four inches tall, the EksoVest adds 5 to 15 pounds of adjustable lift assistance to each arm. This exoskeleton is also comfortable enough to wear while providing free arm movement thanks to its lightweight construction.

The device is suited for real-world environments like factories, construction sites and distribution centers. The non-powered vest offers protection and support against fatigue and injury by reducing the stress and strain of high-frequency, long-duration activities that can take a toll on the body over time.

“Collaboratively working with Ford enabled us to test and refine early prototypes of the EksoVest based on insights directly from their production line workers,” Ekso Bionics co-founder and CTO Russ Angold said in a Ford press release. “The end result is a wearable tool that reduces the strain on a worker’s body, reducing the likelihood of injury, and helping them feel better at the end of the day – increasing both productivity and morale.”

Exoskeletons are already being used to help paraplegics walk, and applications for these technologies are even being expanded to provide support and enhancement for soldiers.

EksoVest is the latest example of advanced technology Ford is using to reduce the physical toll on employees during the vehicle assembly process. Between 2005 and 2016, the most recent full year of data, the company saw an 83 percent decrease in the number of incidents that resulted in days away, work restrictions or job transfers – to an all-time low of 1.55 incidents per 100 full-time North American employees.

To date, Ford ergonomists have worked on more than 100 new vehicle launches globally using ergonomic technology tools, including most recently the 2018 Ford Mustang, 2018 Ford F-150, and the all-new 2018 Ford Expedition and 2018 Lincoln Navigator.

Through significant investments in the program, not only has Ford achieved a reduction in employee incident rates, it has seen a 90 percent decrease in such ergonomic issues as overextended movements, difficult hand clearance and tasks involving hard-to-install parts.

“We refer to our assembly line employees as ‘industrial athletes’, due to the physical nature of the job,” said Allison Stephens, technical leader for assembly ergonomics at Ford. “We have made data-driven decisions through ergonomics testing that has led to safer vehicle production processes and resulted in greater protection for our employees.”