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Tag: 2021 News

New WCAB Tool – “Commissioner’s Settlement Conference”

A WCJ awarded applicant, Jeffrey Molina, temporary and permanent disability compensation and further medical treatment against Hartford Fire Insurance Co., which had previously stipulated to have provided workers’ compensation insurance coverage to the employer Fred Loya Insurance, at the time of his injuries.

At some point, Hartford concluded that the correct carrier for this injury was Zurich American Insurance Company. Hartford petitioned to have Zurich joined as a party in order to have Zurich assume responsibility for the payment of the claim.

The WCJ declined to join Zurich, and to relieve Hartford of its stipulation to insurance coverage.

Hartford contended in its petition for reconsideration that the WCJ erred in not relieving Hartford of its stipulation.

The WCJ issued a report in which she recommended that reconsideration be denied.

Subsequently, at the request of the WCAB panel, applicant and Hartford participated in a “commissioners’ settlement conference.” Zurich also participated in the commissioners’ settlement conference even though it had never been joined as a party defendant in these cases.

The outcome of the commissioners’ settlement conference was that applicant, Hartford and Zurich agreed to resolve applicant’s claims in these cases and Hartford’s potential claim for contribution against Zurich by compromise and release.

The Compromise and Release provided that Hartford was to pay applicant $120,000, less permanent disability indemnity previously paid of $47,187.79, and less an attorneys’ fee of $18,000, leaving $54,812.21 payable to applicant in a lump sum.

Hartford agreed to adjust or litigate liens of record with jurisdiction reserved. In addition, Hartford and Zurich agreed that the latter will pay Hartford $30,000 in full satisfaction of any claim for reimbursement or contribution Hartford may have against Zurich.

The WCAB panel thus granted reconsideration, and rescinded the Findings and Award in the panel decision of Molina v Hartford Fire Insurance Co. (ADJ7922408 ADJ8924319 ADJ8924320) and approved the Compromise and Release.

The three member WCAB panel concluded with the comment “we commend the parties for engaging in good faith negotiations and successfully resolving this matter without the need for further litigation.”

Thus, the commissioners settlement conference may become an evolving tool in workers’ compensation litigation to resolve disputes.

Ninth Circuit to Decide Fate of DEA 49 Year Old Cannabis Ban

In a case that could make the federal government reconsider how it classifies marijuana, a lawyer urged a Ninth Circuit panel Thursday to make the U.S. Drug Enforcement Administration reassess its 49-year-old position that cannabis has no accepted medical use.  The Ninth Circuit includes California, thus this is a case of significance for the issue in workers’ compensation claims for our state.

“It’s a relic of a bygone era,” attorney Shane Pennington told a three-judge Ninth Circuit panel.

According to the report in Courthouse News, Pennington represents Dr. Suzanne Sisley, an Arizona-based medical marijuana researcher, and three veterans who claim they suffer ongoing harm from the federal government’s refusal to reclassify cannabis as a drug with medicinal benefits. Their Ninth Circuit petition highlights research Sisley has conducted using marijuana to treat veterans who suffer from post-traumatic stress disorder.

Despite the fact that medical marijuana is legal in 36 states, the DEA has classified cannabis as a Schedule I drug – the most restrictive category – since 1972. Congress empowered the DEA to decide how drugs should be classified in the Controlled Substances Act of 1970. That was around the same time former President Richard Nixon declared a “war on drugs.”

The petitioners argue a five-factor test the DEA established in 1992 to determine if a drug has any medical benefit is arbitrary, leads to absurd results and contradicts the will of Congress.

But most of the Ninth Circuit hearing focused not on the wisdom of the DEA’s decision or its criteria for categorizing drugs. Rather, it focused on whether the petitioners have standing to bring their challenge in federal court.

That’s because Sisley and the veterans are challenging the denial of a petition they never filed. The one-page, handwritten petition asking the DEA to reclassify marijuana was filed by Stephen Zyszkiewicz and Jeramy Bowers in January 2020. The DEA denied the petition four months later. Zyszkiewicz and Bowers have two separate lawsuits pending over the denial in the District of Columbia.

This is a really odd case,” Circuit Judge Willaim Fletcher, a Bill Clinton appointee, told lawyers challenging the DEA’s decision. “You appealed the denial of somebody else’s petition. I’ve never seen a case like this.”

But it’s not unprecedented, according to Matthew Zorn, another lawyer representing Sisley and the veterans.

To support his position, Zorn cited the seminal 2007 Supreme Court case, Massachusetts v. EPA, which forced the federal agency to start regulating greenhouse gas emissions to combat climate change. In that case, Massachusetts was challenging the denial of a petition filed by someone else.

“None of the judges at the D.C. Circuit or on the Supreme Court thought anything about it, that Massachusetts was filing a petition for review on another party’s petition,” Zorn said.

Drawing a distinction, Justice Department lawyer Daniel Aguilar told the panel that Massachusetts had standing in that case only because the Supreme Court found it deserved “special solicitude” as a “sovereign state.”

Responding to a question posed by Circuit Judge Daniel Collins, a Donald Trump appointee, Aguilar acknowledged the Massachusetts v. EPA court never squarely addressed the question of whether a party can challenge the denial of a petition it did not file. But he insisted that no case law exists to support that notion.

Fletcher indicated that he agrees with that position.

U.S. Circuit Judge Paul Watford, a Barack Obama appointee, suggested that allowing people to challenge decisions on petitions they didn’t file could lead to a flood of litigation. Potentially tens of millions of people allegedly harmed by the DEA’s decision could file their own challenges to the petition denial in separate circuit courts across the country, Watford said.

After 33 minutes of debate, the panel took the arguments under submission.

Cal/OSHA Abruptly Withdraws COVID Safety Standards Phase Out

On June 3rd, the Occupational Safety and Health Standards Board readopted Cal/OSHA’s revised COVID-19 prevention emergency temporary standards.

The changes adopted by the Board on June 3rd phased out physical distancing and make other adjustments to better align with the state’s June 15 goal to retire the Blueprint. Without these changes, the original standards, would be in place until at least October 2.

In a late night meeting on June 9, the Occupational Safety and Health Standards Board voted to withdraw the revisions to Cal/OSHA’s COVID-19 prevention emergency temporary standards that they had voted to approve on June 3, and that were sent to the Office of Administrative Law for review.

The vote was held during a special meeting on June 9 to consider the latest guidance regarding masking from the Centers for Disease Control and California Department of Public Health.

The meeting, attended by members of the public including workers, industry leaders, employers and other stakeholders shared their views on the matter in more than two and a half hours of public comment.

Those revised emergency standards were expected to go into effect no later than June 15 pending approval by the OAL within 10 calendar days after the Standards Board rulemaking package submission.

The Standards Board voted unanimously to withdraw the revisions approved on June 3 that are currently at OAL for review but have not yet become effective.

Cal/OSHA will review the new mask guidance and bring any recommended revisions to the board.

The Board could consider new revisions at a future meeting, perhaps as early as the regular meeting on June 17. In the meantime, the protections adopted in November of 2020 will remain in effect.

Consumer Interest in Telemedicine Increased From 11% to 76%

The Summer 2021 edition of RxInformer covers diverse topics such as the future of telemedicine and practical tips to make it effective in workers’ compensation.

Telemedicine use has increased in response to the COVID-19 pandemic and is gaining acceptance in workers’ comp. While some obstacles remain, telemedicine has the potential to expand care delivery options and speed recovery times.

According to a recent study by McKinsey, consumer interest in telemedicine rose from 11% to 76% during the pandemic, 57% of healthcare providers said they viewed telemedicine more favorably, and 64% of providers are comfortable using telemedicine. In the course of just a few months, telemedicine physician visits rose 50 – 175x, depending on geography and type of practice.

In workers’ comp, telemedicine also gained wider acceptance during the pandemic as many states relaxed restrictions regarding its use for injured worker patients. The types of changes made by the states (and CMS, which guides rules for some states) vary and include: allowing additional services to be delivered via tele technologies; relaxing provider licensing requirements; amending reimbursement rules (often reimbursing at the higher office visit rates to encourage telemedicine use); and allowing different modes of technology, such as audio-only calls.

Many of the legal and regulatory changes regarding telemedicine are temporary, and it remains to be seen which will become permanent and where. Workers’ comp stakeholders had hopes of cost reduction through telemedicine, both indirectly by speeding recovery times with better access to care, and directly through lower provider fees for virtual visits. To encourage the use of telemedicine during the pandemic, many states have allowed in-office reimbursement rates for virtual visits, which eliminates the direct savings incentive and makes the reimbursement question an important one going forward.

Exactly which medical services can be effectively delivered through telemedicine is also yet to be determined. Currently, fewer than 100 medical services are approved for telemedicine by CMS, which is a small fraction of the 8,000+ services covered by Medicare and Medicaid. The number of medical services we commonly see in workers’ comp are much fewer and, while some services will always require that the provider and patient be physically together, a significant portion of injured worker care could potentially be delivered virtually.

Telemedicine is not appropriate for all medical services. Serious injuries and illness demand in-person attention, and most diagnostic tests and all surgeries require physical contact with the patient. In addition to these obvious exceptions, some patients may feel that they are not getting proper care with a telemedicine visit and prefer to see their healthcare provider in person. There are also important privacy concerns and fear of fraud in both general healthcare and workers’ comp.

Jury Convicts Chiropractor for $2.2M Health Insurance Fraud

A former Orange County chiropractor was found guilty by a jury of federal criminal charges accusing her of defrauding health insurers by submitting $2.2 million in charges for chiropractic services never provided, bogus medical diagnoses, office visits that never occurred, and medical devices falsely prescribed.

56 year old Susan H. Poon, who lives in Dana Point, was found guilty of five counts of health care fraud, three counts of making false statements relating to health care matters, and one count of aggravated identity theft in the first criminal jury trial to occur in the Central District of California since March 2020.

According to the evidence presented at her five-day trial, from January 2015 to April 2018, Poon, whose office was located in Rancho Santa Margarita, schemed to defraud Anthem and Aetna by submitting false reimbursement claims for services that never occurred, false diagnoses and chiropractic services that were never performed.

Poon also submitted fraudulent prescriptions containing fabricated medical diagnoses of individuals that she had never met, including children, causing a medical device manufacturer to submit false claims for reimbursement to Blue Shield of California.

The patient-victims that Poon claimed to have met with and treated were dependents – such as the spouses and children – of Costco Wholesale Corp. and United Parcel Service Inc. employees, dependents whose personal identification information Poon unlawfully took and used in her reimbursement requests and prescriptions. Poon obtained the personal information of employee-dependents by attending health fairs at various UPS warehouses and Costco locations, and soliciting such information from employees.

In total, Poon billed approximately $2.2 million through her scheme.

Poon’s chiropractic license was revoked in July 2019, according to the California Department of Consumer Affairs.

An August 30 sentencing hearing has been scheduled, and Poon will face a statutory maximum sentence of 67 years in federal prison.

The following agencies investigated this matter: Amtrak – Office of the Inspector General, California Department of Insurance, U.S. Department of Labor – Employee Benefits Security Administration, U.S. Department of Labor – Office of the Inspector General, the FBI, and Office of Personnel Management – Office of the Inspector General.

Merck’s COVID-19 Treatment in Phase 3 Trials

Merck announced it has entered into a procurement agreement with the United States government for molnupiravir (MK-4482). Molnupiravir is currently being evaluated in a Phase 3 clinical trial, the MOVe-OUT study, for the treatment of non-hospitalized patients with laboratory-confirmed COVID-19 and at least one risk factor associated with poor disease outcomes. Merck is developing molnupiravir in collaboration with Ridgeback Biotherapeutics.

“Merck is pleased to collaborate with the U.S. government on this new agreement that will provide Americans with COVID-19 access to molnupiravir – an investigational oral therapy being studied for outpatient use early in the course of disease – if it is authorized or approved,’ said Rob Davis, president, Merck. ‘In addition to this agreement with the U.S. government, we are actively engaged in numerous efforts to make molnupiravir available globally to fulfill Merck’s commitment to widespread access.’

Through the agreement, if molnupiravir receives Emergency Use Authorization (EUA) or approval by the U.S. Food and Drug Administration (FDA), Merck will receive approximately $1.2 billion to supply approximately 1.7 million courses of molnupiravir to the United States government. Merck has been investing at risk to support development and scale-up production of molnupiravir and expects to have more than 10 million courses of therapy available by the end of 2021.

Merck also plans to submit applications for emergency use or approval to regulatory bodies outside of the U.S. and is currently in discussions with other countries interested in advance purchase agreements for molnupiravir. Merck is committed to providing timely access to molnupiravir globally and intends to implement a tiered pricing approach based on World Bank data that recognizes countries’ relative ability to finance their public health response to the pandemic.

As part of its access strategy, Merck has also entered into non-exclusive voluntary licensing agreements for molnupiravir with established generic manufacturers to accelerate availability of molnupiravir in 104 low- and middle-income countries following approvals or emergency authorization by local regulatory agencies.

In addition to developing molnupiravir, Merck is contributing to the pandemic response by collaborating with Johnson & Johnson to support the manufacture of its COVID-19 vaccine.

This procurement of molnupiravir will be supported in whole or in part with federal funds from the Department of Health and Human Services; Office of the Assistant Secretary for Preparedness and Response; Biomedical Advanced Research and Development Authority, in collaboration with the DOD Joint Program Executive Office for Chemical, Biological, Radiological and Nuclear Defense.

Psyche Symptoms Before Award Does Not Preclude Reopening

Maureen Ford suffered injuries while employed by Communication Action Board of Santa Cruz.

On April 22, 2014, the parties filed joint Stipulations with Request for Award, for injury to “upper extremity” and “hand” on 8/19/11 (ADJ8177678) and for cumulative injury ending 9/26/11, to “upper extremity,” “hand,” “neck” and “back” (ADJ8177385), while employed as a landscape worker by Community Action Board, insured by State Compensation Insurance Fund.

Applicant reported psychological symptoms to her doctors prior to entering into the 2014 Stipulations with Request for Award. Neither physician expressed an opinion on causation of the psychological symptoms or whether they caused disability.

On 9/10/15, applicant filed a Petition to Reopen in both cases, alleging a change of condition, increase in PD, need for further medical treatment and different vocational factors. On 10/2/17, an Amended Application for Adjudication was filed in ADJ8177385, adding “psyche” as an additional injured body part. The cases went to trial on the issues of injury to the psyche, good cause to reopen per applicant’s 9/13/15 Petition.

A 2018 report concluded, for the first time, that applicant met the requirements of Labor Code Sec. 3208.3, because she had a mental disorder per the DSM that was predominantly caused by the industrial injury in August of 2011.

The WCJ found psychiatric injury and good cause to reopen. The employer’s Petition for Reconsideration was denied in the panel decision of Maureen Ford v Communication Action Board of Santa Cruz, ADJ8177678-ADJ8177385.

The sole issue raised by defendant on reconsideration is that the WCJ erred in finding good cause to reopen the Award in Case No. ADJ8177385 for new and further psychiatric injury and disability where there was evidence of psychiatric injury at the time of the original Findings and Award. Defendant argues that, because the medical record documents that applicant expressed psychiatric symptoms prior to the April 22, 2014 Findings and Award, the psychiatric injury and disability found by the WCJ now is not “new and further.”

In this case, there are only brief mentions of psychiatric symptoms in the medical record. There is no evidence of any psychiatric condition causing either disability or a need for treatment nor is there evidence of a formal diagnosis. Therefore, there is no substantial medical evidence establishing industrial causation for the psychiatric injury pursuant to section 3208.3(a).

The Board concluded that a psychiatric injury does not fall within the ambit of the workers’ compensation system until it causes either disability or a need for medical treatment and it is diagnosed using the terminology and criteria of the American Psychiatric Association’s Diagnostic and Statistical Manual of Mental Disorders.

In this case, the decision was said to be consistent the the outcomes in a number of Appeals Board panel decisions.

Traffic Stop Leads to Arrest of 24 Year Old for $600K EDD Fraud

On February 2, 2021, the Sacramento Police Department North Gang Enforcement Team conducted a traffic stop on 24-year-old Adrian Sykes and found him to be in possession of a fully automatic Glock handgun.

Officers conducted a probation search of his residence and seized drugs, body armor and five additional firearms. Those firearms included a loaded Masterpiece Arms Mac-9 with no serial number, an Anderson Manufacturing AR-15, and an unregistered loaded ABC Rifle AR-Pistol.

Officers also found six Employment Development Department (EDD) debit cards. At that time, Sykes was charged with six counts of being a felon in possession of a firearm, one count of possessing drugs with a firearm, and one count of being a felon in possession of ammunition. Sykes posted bail on these offenses and was released from custody.

The Sacramento County District Attorney’s Office, Sacramento Police Department, and EDD conducted a joint investigation into the six EDD cards that were located.

They found that Sykes and his girlfriend, 26-year-old Brittney Murchison, had filed multiple fraudulent EDD claims. In total, 35 different fraudulent claims were filed using the personal identifying information of victims from across the country and over $600,000 was illegally obtained.

The Sacramento Police Department North Gang Enforcement Team arrested Brittney Murchison on May 27, 2021 for committing EDD fraud. Murchison was charged with 16 counts of EDD fraud and one count of identity theft.

Sykes was located and arrested in Las Vegas, Nevada on June 7, 2021 by agents of the Las Vegas Metro Police Department and agents from the Federal Bureau of Alcohol Tobacco and Firearms. Sykes is currently in custody in Las Vegas pending extradition to Sacramento, California where he will face an additional 35 counts of EDD fraud and one count of identity theft.

According to District Attorney Anne Marie Schubert, “Law enforcement across the state has witnessed staggering EDD fraud committed by criminals and their accomplices. At the same time, we have witnessed an alarming increase of illegal firearms in our communities. This dangerous combination undoubtedly has fueled a dramatic increase in violent crime throughout the state. Sacramento’s law enforcement agencies will continue to partner together to investigate EDD fraud and the additional havoc it brings to our community.”

Cal/OSHA Phases Out COVID Safety Standards

On June 3rd, the Occupational Safety and Health Standards Board readopted Cal/OSHA’s revised COVID-19 prevention emergency temporary standards.

Last year, the Board adopted health and safety standards to protect workers from COVID-19. The standards did not consider vaccinations and required testing, quarantining, masking and more to protect workers from COVID-19.

The changes adopted by the Board phase out physical distancing and make other adjustments to better align with the state’s June 15 goal to retire the Blueprint. Without these changes, the original standards, would be in place until at least October 2. These restrictions are no longer required given today’s record low case rates and the fact that we’ve administered 37 million vaccines. The revised emergency standards are expected to go into effect no later than June 15 if approved by the Office of Administrative Law in the next 10 calendar days. Some provisions go into effect starting on July 31, 2021.

The revised standards are the first update to Cal/OSHA’s temporary COVID-19 prevention requirements adopted in November 2020.

The Board may further refine the regulations in the coming weeks to take into account changes in circumstances, especially as related to the availability of vaccines and low case rates across the state.

The standards apply to most workers in California not covered by Cal/OSHA’s Aerosol Transmissible Diseases standard. Notable revisions include:

– – Face Coverings: Fully vaccinated workers without COVID-19 symptoms do not need to wear face coverings in a room where everyone else is fully vaccinated and not showing symptoms. Fully vaccinated and unvaccinated workers without symptoms do not need to wear face coverings outdoors except when working at “outdoor mega events” with over 10,000 attendees, which may include events or theme parks. Indoors, all workers – regardless of vaccination status – will continue to be required to wear a face covering.
– – Physical Distancing: When the revised standards take effect, employers can eliminate physical distancing and partitions/barriers for employees working indoors and at outdoor mega events if they provide respirators, such as N95s, to unvaccinated employees for voluntary use. After July 31, physical distancing and barriers are no longer required (except during outbreaks), but employers must provide all unvaccinated employees with N95s for voluntary use. – – Prevention Program: Employers are still required to maintain a written COVID-19 Prevention Program but there are some key changes to requirements:
– – – – Employers must review the California Department of Public Health’s Interim guidance for Ventilation, Filtration, and Air Quality in Indoor Environments.
– – – – COVID-19 prevention training must now include information on how the vaccine is effective at preventing COVID-19 and protecting against both transmission and serious illness or death.
– – Exclusion from the Workplace: Fully vaccinated workers who do not have COVID-19 symptoms no longer need to be excluded from the workplace after a close contact. – – Special Protections for Housing and Transportation: Special COVID-19 prevention measures that apply to employer-provided housing and transportation no longer apply if all occupants are fully vaccinated.

The Standards Board will file the readoption rulemaking package with the Office of Administrative Law, which has 10 calendar days to review and approve the temporary workplace safety standards enforced by Cal/OSHA. Once approved and published, the full text of the revised emergency standards will appear in the Title 8 sections 3205 (COVID-19 Prevention), 3205.1 (Multiple COVID-19 Infections and COVID-19 Outbreaks), 3205.2 (Major COVID-19 Outbreaks) 3205.3 (COVID-19 Prevention in Employer-Provided Housing) and 3205.4 (COVID-19 Prevention in Employer-Provided Transportation) of the California Code of Regulations. Pursuant to the state’s emergency rulemaking process, this is the first of two opportunities to readopt the temporary standards after the initial effective period.

The Standards Board also convened a representative subcommittee to work with Cal/OSHA on a proposal for further updates to the standard, as part of the emergency rulemaking process. It is anticipated this newest proposal, once developed, will be heard at an upcoming Board meeting. The subcommittee will provide regular updates at the Standards Board monthly meetings.

Waiver Signed Injured Worker on Volunteer Job Limits Liability

In December 2015, Carolyn Mattson incurred a work-related injury that left her unable to perform the normal duties of her regular employment.

During her period of recovery, she was assigned by her employer to work as a volunteer at a food bank warehouse operated by Feeding America Riverside San Bernardino Counties, Inc. as part of a transitional work program. While there, Mattson incurred a second injury when she tripped over a wooden pallet on the floor of Feeding America’s warehouse.

Mattson filed a complaint against Feeding America that sought compensation for her injury based upon the theories of negligence and premises liability.

Among other things, defendant alleged as an affirmative defense that prior to participating in any activities with defendant, plaintiff had executed a written agreement entitled, “Waiver and Release of Liability,” which voluntarily released defendant from liability for any future personal injuries arising from defendant’s negligence.

The trial court granted summary judgment in favor of Feeding America based upon the affirmative defense of waiver due to a release executed by plaintiff prior to beginning her work, but denied summary judgment with respect to the workers’compensation exclusivity defense. The court of appeal affirmed in the unpublished case of Mattson v. Feeding America Riverside San Bernardino Counties.

The court of appeal deem the separate defense of workers’compensation exclusivity waived on appeal, and summarized only the evidence and law pertaining to the issue of waiver.

An exculpatory contract releasing a party from liability for future ordinary negligence is valid unless it is prohibited by statute or impairs the public interest. However, a release of liability for future ordinary negligence may be invalidated when the court determines that a particular release concerns a service that transcends a purely private agreement and affects the public interest. Additionally, a release of liability for future gross negligence . . . generally is unenforceable as a matter of public policy. There was no allegation in the complaint of gross negligence, thus the issue on appeal was essentially “public interest.”

In Tunkl v. Regents of University of Cal. (1963) 60 Cal.2d 92, the California Supreme Court set forth six factors used to determine if a contract affects the public interest.

None of the public interest factors are present in this case, the trial court did not err when it declined to hold the release per se unenforceable as a matter of public policy.