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Tag: 2022 News

Database of Hospitals Penalized By Medicare for Re-admissions

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Under programs set up by the Affordable Care Act, the federal government has cut payments to hospitals that have high rates of readmissions and those with the highest numbers of infections and patient injuries. . For the readmission penalties, Medicare cuts as much as 3 percent for each patient, although the average is generally much lower. The patient safety penalties cost hospitals 1 percent of Medicare payments over the federal fiscal year, which runs from October through September.

The Hospital Readmissions Reduction Program has been a mainstay of Medicare’s hospital payment system since it began in 2012. Created by the Affordable Care Act, the program evaluates the frequency with which Medicare patients at most hospitals return within 30 days and lowers future payments to hospitals that had a greater-than-expected rate of return. Hospitals can lose up to 3% of each Medicare payment for a year.

Section 1886(q) of the Social Security Act sets forth the statutory requirements for HRRP, which required the Secretary of the U.S. Department of Health and Human Services to reduce payments to subsection (d) hospitals for excess readmissions beginning October 1, 2012.

In addition, the 21st Century Cures Act directs CMS to assess a hospital’s performance relative to other hospitals with a similar proportion of patients who are dually eligible for Medicare and full Medicaid benefits beginning in FY 2019.

The legislation requires estimated payments under the peer grouping methodology (that is, FY 2019 and onward) equal payments under the non-peer grouping methodology (that is, FY 2013 to FY 2018) to maintain budget neutrality.

California Healthline has established a searchable database searchable by state or hospital name. It is available on their website, and is open to the public.

But the federal government has eased its annual punishments for hospitals with higher-than-expected readmission rates in an acknowledgment of the upheaval the COVID-19 pandemic has caused, resulting in the lightest penalties since 2014.

The pandemic threw hospitals into turmoil, inundating them with covid patients while forcing many to postpone elective surgeries for months. When the Centers for Medicare & Medicaid Services evaluated hospitals’ previous three years of readmissions, as it does annually, the government decided to exclude the first half of 2020 because of the chaos caused by the pandemic. CMS also excluded from its calculations Medicare patients who were readmitted with pneumonia across all three years because of the difficulty in distinguishing them from patients with covid.

Akin Demehin, senior director of quality and patient safety policy at the American Hospital Association, said the changes were warranted. “The covid pandemic did a lot of really unprecedented things to care patterns of hospitals,” he said.

After making those changes, CMS evaluated 2½ years of readmission cases for Medicare patients who’d had heart failure, heart attacks, chronic obstructive pulmonary disease, coronary artery bypass grafts, and knee and hip replacements. As a result of its analysis, CMS penalized 2,273 hospitals, the fewest since the fiscal year that ended in September 2014, a KHN analysis found.

To limit penalties, many hospitals in recent years have instituted new strategies to keep former patients from needing a return visit.

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Opposing Party Prejudice Not Required for Arbitration Waiver

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Shiekh Shoes, LLC hired Britani Davis as a sales associate in August 2018. As part of her “new hire” paperwork, Davis and Shiekh signed an agreement “to resolve any and all disputes or claims each may have against the other which relate in any manner whatsoever as to Employee’s employment . . . by binding arbitration” and to “waive their right to commence, be a party to, or class member of, any court action.”

Davis’s employment at Shiekh would prove to be short, however, as she resigned from the position a mere three months after being hired. According to Davis, she was subjected to ongoing, sexually explicit, and demeaning comments, unwanted touching, and indecent exposure from her co-worker, Danilo Ensuncho, as well as other harassing conduct from Shiekh customers.

On March 25, 2019, Davis filed a complaint against Shiekh and Ensuncho for various causes of action including sexual harassment. On July 8, Shiekh, represented by counsel, answered Davis’s complaint, asserting the arbitration agreement as an affirmative defense.

On July 30, Shiekh filed a case management statement, in which it requested a non-jury trial, estimated a trial between five to seven days, and noted that the case would be ready for trial “within 12 months of the date of the filing of the complaint.” Shiekh also anticipated conducting written discovery, depositions, and expert discovery, and filing motions. Additionally, Shiekh noted its willingness to participate in a settlement conference, neutral evaluation, or binding private arbitration.

On August 14, the court scheduled a jury trial for July 20, 2020. On January 13, 2020, Shiekh filed a substitution of attorney, listing itself as its new attorney. On June 30, Davis sought to continue the trial date, Shiekh filed no opposition. The court granted the motion and continued the trial date to September 28, 2020.

On August 24, seven months after being unrepresented by counsel, Shiekh filed a substitution of attorney designating its new attorney. On October 5, 2020 – about 17 months after Shiekh was served with the complaint and seven months before the new trial date – Shiekh moved to compel arbitration and to stay the action pursuant to both the Federal Arbitration Act (FAA) (9 U.S.C. § 1 et seq.) and California Arbitration Act (CAA) (Code Civ. Proc., § 1280 et seq.).

The court, denied the motion. The Court of Appeal affirmed in the published case of Davis v. Shiekh Shoes, LLC – A161961 (October 2022).

After the parties completed briefing, the United States Supreme Court issued its decision in Morgan v. Sundance, Inc. (2022) 142 S.Ct. 1708 (Morgan), holding that under the FAA, courts may not condition a determination of waiver on prejudice. In light of this, we directed the parties to submit supplemental briefs on the applicability of the FAA and Morgan, if any, to the issues raised in the appeal. Both parties submitted briefs accordingly.

Courts have recognized that where the FAA applies, whether a party has waived a right to arbitrate is a matter of federal, not state, law. The Supreme Court in Morgan remarked that “outside the arbitration context, a federal court assessing waiver does not generally ask about prejudice,” and generally, that “court[s] focus[ ] on the actions of the person who held the right,” rather than the “effects of those actions on the opposing party.”

The California Supreme Court has not yet addressed Morgan. Thus, it has not spoken on whether prejudice remains a “critical” consideration in the waiver inquiry under California law, as it held prior to Morgan.

Even if the trial court may have improperly conditioned its waiver determination on a showing of prejudice, its decision may still be affirmed so long as any other correct legal reason exists to sustain it.

Shiekh’s lengthy delay in moving to compel arbitration cannot be squared with an intent to arbitrate. By the time Shiekh filed its motion, 17 months had elapsed since it was served with the complaint. This length of time, in the court’s view, was significant, as reflected in its comments at the hearing on Shiekh’s motion: “[T]his issue of waiver comes up at least once a month in this calendar. And I gotta tell you . . . [¶] . . . [¶] . . . I’ve never seen [a delay] that’s as long as seventeen months . . . .”

The Court of Appeal concluded by noting “In light of Shiekh’s nearly one-and-a-half-year delay in moving to compel arbitration, request for trial, active participation in discovery, acquiescence to the trial and discovery schedule, and court appearances, the trial court had ample evidence from which to conclude Shiekh’s actions were inconsistent with an intent to arbitrate.”

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DWC Publishes 2021 Audit Report of Audit of 40 Entities

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The Administrative Director of the Division of Workers’ Compensation submitted the thirty-second annual workers’ compensation report summarizing the results of audits conducted by the DWC Audit & Enforcement Unit for 2021.

Congratulations to the 31 entities who met or exceeded the Profile Audit Review (PAR) standard, and the following were in the top five positions with the best audio scores.

1. Warner Bros. Studio Facilities – Burbank
2. Schools Insurance Authority – Sacramento
3. RICA & RICC – San Francisco
4. Zenith Insurance Co. – Los Angeles
5. Cherokee Insurance Company – Sterling Heights, MI

Labor Code sections 129 and 129.5 provide the framework for oversight and enforcement of the regulations of the Administrative Director for the prompt and accurate provision of workers’ compensation benefits.

The performance of any insurer, self-insurer, or third-party administrator is rated for action in specific areas of benefit provision. Of foremost importance is the payment of all indemnity owed to the injured worker for an industrial injury. The timeliness of all initial and subsequent indemnity payments and compliance with the regulations of the Administrative Director for provision of notice for a qualified or agreed medical evaluation are also measurable performance factors.

The Audit & Unit completed 40 audits, of which 37 were routinely selected for routine Profile Audit Review (PAR). In addition, another 3 audits were selected as target audits based on the failure of a prior audit. The PAR audit subjects consisted of 13 insurance companies, 4 self-administered/self-insured employers, 18 third-party administrators (TPA), and 5 insurance companies/third-party administrators that combined claims-adjusting locations. The Audit & Enforcement Civil Penalty Unit completed 1 Utilization Review Investigation based on a credible referral and complaint.

The Statewide 2021 Audit Ranking Report (Exhibit 4) ranks all insurers, self-insured employers, and TPA audited during 2021 according to their performance measured by the PAR and FCA performance standards. Low performance rating numbers reflect good claims-handling performance, and high performance rating numbers reflect poor performance. Rankings on Exhibit 4 are from the best to the worst performers.

The complete report for this audit shows the remaining scores of the audit participants for 2021.

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Epic Failure of $370M Fraud Detection Tech System in California & 7 States

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Deloitte is the largest professional services network by revenue and number of professionals in the world and is considered one of the Big Four accounting firms along with EY (Ernest & Young), KPMG and PricewaterhouseCoopers (PWC). The company secured multi-million dollar deals in California and seven other states, based on promises of powerful anti-fraud technology and secure, scalable telecoms infrastructure.

In a presentation to the Kansas Department of Labor, in which it claimed to have prevented $100 billion in pandemic unemployment fraud, Deloitte touted “advanced AI-driven fraud detection,” as well as “identity proofing” to help “prevent unauthorized activity,” technologies that had been deployed across U.S. states for over a decade.

With its claims of being able to modernize and secure unemployment systems, according to the follow up report by Forbes, Deloitte was seen as the obvious choice to help states with the incoming tidal wave of Covid benefits applications for the $650 billion pot of pandemic welfare funds. “Deloitte was the only company that had a production-ready PUA system available,” said Kimberly Hall, director of the Ohio Department of Job and Family Services, in written testimony in May 2020.

For contracts in California, Colorado, Illinois, New Mexico, New York, Ohio,Virginia and Wisconsin, Deloitte either deployed tailored uFACTS systems or upgraded legacy infrastructure, and built up attached teleservices centers.

Those deals – worth at least a combined $370 million – contributed to Deloitte’s record $50 billion and $60 billion yearly revenues in 2021 and 2022. According to local government data, in states where Deloitte was either asked to help prevent fraud or ran the benefits system, there was as much as $21.2 billion in fraud. uFACTS systems alone saw up to $3.2 billion.

But in Ohio, as the price of the Deloitte contract spiraled, according to Forbes, so did the cost of the fraud. Starting at an initial $10 million in 2020, the Deloitte deal jumped to $122 million as of October 2022. Meanwhile, at least $166 million in fraudulent applications was paid out through the Deloitte system in the state fiscal year between July 2020 and June 2021, according to figures the state auditor provided to Forbes. But this data is incomplete: It does not take into account figures from the 2022 fiscal year, which are still being tallied, nor the $1.2 billion in benefits payments that have been flagged as potentially fraudulent and are still being adjudicated.

Despite Deloitte’s claims of advanced anti-fraud detection, the breach of the uFACTS system in Ohio was rudimentary and brazen, according to the search warrant reviewed by Forbes. One of the accused’s customers, in an interview with a Labor Department investigator, said the suspect was advertising her ability to remove fraud flags on Instagram, the warrant said. The suspect also successfully claimed unemployment under her own name, even though she was working for both the Ohio Department of Job and Family Services and the U.S. Postal Service at the time. Deloitte and its subcontractor Randstad, which was the direct employer of the suspect, did not detect her alleged crimes, which were first reported by an anonymous tipster.

In October last year, Brandi Hawkins, a teleservices representative with access to the Michigan unemployment system, was convicted of approving hundreds of fraudulent claims that led to the loss of $3.8 million in government funds. Deloitte noted in its report that Hawkins was able to remove fraud flags on the Michigan benefits database for weeks after her termination.

Unlike Hawkins, an unnamed suspect in an Ohio case also claimed to be able to get fraudulent applications approved in other states where she didn’t have direct access to the system, investigators said. According to the government, she was particularly successful in California, where Deloitte had deals worth a total of $88 million with the Employment Development Department (EDD) for Covid-19 benefits. In late 2020, the suspect’s customers had fraudulent applications approved in California, totalling over $50,000 in payouts from the West Coast state, Labor Department officers claimed. The same customers had already had fraud flags on applications in Ohio removed and been given a payout, according to the warrant, showing it was possible to file claims in multiple states under the same name and receive insurance checks.

Along with complaints that millions of calls to Deloitte-supported centers in California were going unanswered, assemblyman David Chiu told local media in March 2021, “Deloitte has continued to underperform.” The call centers, he added, were a “mess.”  In January 2021, in an assessment of the EDD’s work on Covid-19 benefits, the state auditor slammed the agency for failing to act promptly to prevent as much as $10.4 billion in potentially fraudulent unemployment payments. It highlighted an estimated $810 million paid out to incarcerated individuals who were ineligible for payouts. By October last year, the EDD’s own estimate for total lost to fraud stood at $20 billion.

Other states weren’t even able to put a figure on the amount of fraud perpetrated through their systems. In a similar deployment to Ohio, Illinois spent $14.3 million for a uFACTS setup and another $42.7 million to prop up attached call centers, according to government contract records. But the deployment was “inadequate” as it didn’t collect accurate data on PUA claims, according to state auditor Frank Mautino. He told Forbes, “We know that there was a large amount of fraud,” but it will have to wait until next year’s audit to get the requisite data to put a dollar amount on the criminal activity.

Deloitte’s woes with its Covid benefits contracts go right back to the early days of the pandemic. In May 2020, a mistake by Deloitte led to personal information of as many as 240,000 unemployment insurance applicants in Colorado, Illinois and Ohio leaking on government benefits websites. The company settled a class action suit over the breach for $4.95 million in 2021.

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L.C. 432.6 Nullifies Employer’s Postlitigation Proposed Arbitration Agreement

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This is an unpublished decision, and therefore not controlling on any lower court. And there is no new or novel case law discussed by the court. The case is however valuable as an illustration of how difficult it might be to create and implement a binding arbitration agreement with employees, and in this case how missteps in the implementation can badly effect the outcome of litigation.

In this case John Schwenk began working for Bristol Farms in 2009. In September 2020, he filed a class action complaint based on wage and hour claims.

Seven months after he filed his case in the trial court, Bristol Farms distributed to its employees an arbitration agreement to include a broad range of claims, including those involved in this litigation. The agreement contained an opt-out procedure for employees to follow if they did not want to be bound by the agreement.

It was undisputed that one day after Schwenk signed and submitted the acknowledgment page of the arbitration agreement, he asked for it back, and shredded it. He crossed out his signature on the receipt tracking list in the presence of a Bristol Farms administrator who then initialed and confirmed the change on the form.

Seventy days after Schwenk shredded the arbitration agreement and crossed out his signature on Bristol Farms’s receipt tracking list, counsel for both Bristol Farms and Schwenk met and discussed the agreement. Meanwhile, between the shredding of the agreement, and the discussion between counsel, Schwenk’s lawsuit had moved forward with Schwenk’s counsel propounding two sets of initial discovery requests to Bristol Farms, and the parties filing a second joint case management statement with the trial court without mentioning the arbitration agreement or that either party would seek arbitration.

Thirty days after the respective parties’ counsel discussed the arbitration agreement, Bristol Farms filed a motion to compel arbitration. Bristol Farms contended that Schwenk impliedly assented to the proposed agreement to arbitrate. The trial court rejected the contention because it found Schwenk did not assent to the agreement, and denied the motion. The court of appeal agreed and affirmed the trial court in the unpublished case of Schwenk v Bristol Farms – G060731 (October 2022).

Bristol Farms argues it is entitled to a reversal as a matter of law based on a two-part argument: (1) Schwenk agreed to Bristol Farms’s arbitration agreement by continuing employment; and so (2) Schwenk’s failure to comply with the “opt out” procedure in the arbitration agreement constituted his consent to be bound by the arbitration agreement’s terms.

In response, Schwenk notes the Legislature’s enactment of Labor Code section 432.6. in 2019. The statute provides in relevant part that no person may require an “employee to waive any right, forum, or procedure for a violation of [the Labor Code], including the right to file and pursue a civil action or a complaint with, or otherwise notify, any state agency, other public prosecutor, law enforcement agency, or any court.”

Labor Code section 432.6, subdivision (c), includes in its definition of prohibited dealings any “agreement that requires an employee to opt out of a waiver or take any affirmative action in order to preserve their rights.”

Thus the court of appeal wrote “Applied facially, Labor Code section 432.6, subdivisions (a) and (c), are fatal to Bristol Farms’s argument that its opt out procedure shows Schwenk consented to the arbitration agreement.”

And the court of appeal concluded that the “trial court correctly decided Bristol Farms had not shown mutual consent in this case based on undisputed facts. Substantial evidence supports the court’s finding that Schwenk ‘never agreed to arbitrate his claims against Bristol Farms’ because Schwenk’s undisputed outward manifestations of conduct would lead a reasonable person to believe his consent did not exist.”

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Science May Support Apportionment of Musculoskeletal Disability to Smoking

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RxInformer just published an article “The Triple Threat of Tobacco Use on Employer, Clinical, and Medication Complexity“ which shows the effects tobacco use has on skeletal injuries, and thus may potentially be an avenue to explore apportionment of permanent disability, since California Labor Code section 4663 mandates that apportionment of permanent disability shall be based on causation. The report is well documented with references to academic and scientific literature.

Recognized as a patient risk factor within workers’ compensation healthcare, tobacco use, including cigarette smoking, has specific impacts on employee and injured worker patient populations.

– – Smoking has detrimental impacts to worker productivity, including both absenteeism and presenteeism factors.
– – Rates of tobacco use are higher among blue collar occupations, with the highest prevalence of cigarette smoking in construction, mining and manufacturing.
– – The average additional cost associated with employing a smoker are estimated at more than $7000 annually.
– – Tobacco use increases fracture risk, slows healing, and is linked to increased risk for post-surgical complications that increase morbidity, mortality, and healthcare interventions.
– – Tobacco smoke can negatively interact with a number of medications prescribed in workers’ compensation.

Tobacco use deteriorates the health and function of all major body systems and is linked to multiple clinical detriments relevant to injury and recovery. Cigarette smoking is known to delay wound healing due to the damage it inflicts on blood vessels, blood flowing to wounds, and decreased oxygen levels in blood.

Smoking also erodes the entire musculoskeletal system, degrading bone density and leaving individuals at higher risk for fractures, slower healing, and nonunion. The authors cite Hernigou J & Schuind F. Tobacco and bone fractures. Bone Joint Res. 2019;8:255-65 as authority for this claim.

Notable is the established connection between tobacco use and post-surgical complications. The trauma of surgical intervention triggers a natural inflammatory response in the body that enables tissue recovery and helps to fight infection. The negative impacts of tobacco on cardiovascular function, pulmonary function and tissue healing are shown to interfere with this process, lending itself to higher rates of significant postsurgical complications. Here the authors cite Sorensen LT. Wound healing and infection in surgery. The clinical impact of smoking and smoking cessation: a systematic review and meta-analysis. Arch Surg. 2012;147(4):373-83 and Turan A, Mascha EJ, Roberman D, et al. Smoking and perioperative outcomes. Anesthesiology. 2011;114(4):837-46 as medical literature on this issue.

Tobacco smoke can negatively interact with certain medications by impacting how the body absorbs, metabolizes, distributes and excretes them. This can mean reducing or, in rare cases, enhancing the effectiveness of the medication. It can also mean increasing the risk of adverse effects.

Some of the potentially impacted prescribed within workers’ compensation include, but are not limited to Benzodiazepines, Opioids, Tricyclic antidepressants, Alprazolam, Cyclobenzaprine, Naproxen and others. See the publication by the American Academy of Family Physicians. Drug interactions with tobacco smoke for a more complete list.

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EEOC Releases Updated “Know Your Rights” Mandated Poster

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The U.S. Equal Employment Opportunity Commission (EEOC) released the ‘Know Your Rights’ poster, which updates and replaces the previous “EEO is the Law” poster. The new poster was released on Oct. 19, 2022, and indicates that it is “(Revised 10/20/2022),”

These posters should be placed in a conspicuous location in the workplace where notices to applicants and employees are customarily posted. In addition to physically posting, covered employers are encouraged to post the notice digitally on their web sites in a conspicuous location. In most cases, electronic posting supplements the physical posting requirement. In some situations (for example, for employers without a physical location or for employees who telework or work remotely and do not visit the employer’s workplace on a regular basis), it may be the only posting.

The poster also includes a QR code for applicants or employees to link directly to instructions forhow to file a charge of workplace discrimination with the EEOC.

The poster includes these changes:

– – Uses straightforward language and formatting;
– – Notes that harassment is a prohibited form of discrimination;
– – Clarifies that sex discrimination includes discrimination based on pregnancy and related conditions, sexual orientation, or gender identity;
– – Adds a QR code for fast digital access to the how to file a charge webpage;
– – Provides information about equal pay discrimination for federal contractors.

The poster is available in English and Spanish and will be available in additional languages at a later date.

Printed notices should also be made available in an accessible format, as needed, to persons with disabilities that limit the ability to see or read. Notices can be recorded on an audio file, provided in an electronic format that can be utilized by screen-reading technology or read to applicants or employees with disabilities that limit seeing or reading ability.

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San Jose Father and Son Arrested for $12M Premium Fraud

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Edgardo Cabrales Sr., 61, and his son, Edgar Cabrales Jr., 36, both of San Jose, are charged with five felony counts each of insurance fraud after a Department of Insurance investigation found they allegedly underreported $12 million in employee wages and payroll to save on workers’ compensation insurance premiums.

The Cabrales own two commercial cleaning companies in San Jose: Pine Building Maintenance (PBM) and Network Facility Management (NFM).

An investigation by the Department began after the State Compensation Insurance Fraud (SCIF) suspected the businesses of fraud.

The investigation discovered that since 2016 the Cabrales had only secured insurance coverage for a fraction of their PBM employees and they had never secured a workers’ compensation insurance policy to insure their NFM employees, even though the majority of their business was operated through NFM.

The father and son accomplices failed to report approximately $12 million in wages to SCIF in order to save money on insurance, resulting in $4.2 million in lost premiums.

In this case, Cabrales’ underreporting significantly lowered the premiums owed. Businesses that fraudulently lower their premiums benefit from an unfair market advantage, giving them the ability to charge less in labor costs, and thereby underbid businesses who pay the appropriate premiums.

Cabrales Jr. self-surrendered yesterday and his father, Cabrales Sr., was arrested on October 23, 2022, at the San Francisco International Airport. The Santa Clara County District Attorney’s Office is prosecuting this case.

Employers are required to maintain workers’ compensation insurance to cover their employees in the event of an accidental on-the-job injury. To ensure proper coverage, employers are required to accurately report the number of employees, job classifications, and the amount of payroll expended. One of the common ways in which employers avoid paying insurance premiums is to underreport a business’s payroll by providing false payroll reports to their insurance company.

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U.S. DOL Recovers $202K From SoCal Car Wash for Wage Theft

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A federal investigation has recovered $202,192 in back wages and liquidated damages for 13 workers at a Southern California car wash, whose employer shortchanged them, tried to conceal their wrongdoing, and committed other violations of federal law.

Investigators with the U.S. Department of Labor’s Wage and Hour Division found that MG Petroleum Inc., operator of Rancho Carwash – a gas station, mini market and car wash – in Rancho Cucamonga, attempted to hide its illegal actions giving workers two paychecks: one for the first 40 hours worked, and a second for overtime hours paid at straight-time rates, without legally required overtime premium.

The division also determined MG Petroleum required workers to take lunch breaks as customer demand dictated. While this practice left employees unable to take uninterrupted one-hour lunch breaks, the employer still deducted an average of 4 hours per week for lunch breaks. The employer’s led to violations of the Fair Labor Standards Act.

The investigation led to the recovery of $101,096 in back wages and an equal amount of $101,096 in liquidated damages for the affected workers.

“Federal law requires that employers pay workers all their hard-earned wages, including overtime pay for hours employees work over 40 in a workweek,” said Wage and Hour Division Assistant District Director Gayane Aleksanian in West Covina, California.

“Rancho Carwash’s operator denied workers their overtime pay and then attempted to hide their illegal pay practices. The costly consequences for their violations and their attempt to evade the law are now clear.”

In fiscal year 2021, the Wage and Hour Division recovered more than $138 million in unpaid overtime wages for more than 145,000 workers.

“As employers continue to struggle to find the people they need to operate their businesses, those who respect workers’ rights to be paid their full wages and avoid violations are more likely to succeed in retaining and  recruiting employees,” Aleksanian added.

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WCAB Rules on Procedure for County to Recover L.C 4850.4 Advances

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Rebecca Gage sustained injury to the lumbar spine through September 14, 2011 while employed as a deputy sheriff by the County of Sacramento. She requested advanced disability pension payments pursuant to Labor Code section 4850.4.

The employer made payments, but the payments were unreasonably delayed and she was awarded LC. 5814 penalties. The WCAB granted reconsideration and reversed the penalty order. It found that because advance disability retirement payments were not equivalent to regular workers’ compensation benefits, and that these benefits were not subject to a section 5814 penalty. The Court of Appeal reversed in the 2016 published case of Gage v WCAB. ( 6 Cal.App.5th 1128 [81 Cal.Comp.Cases 1127].) and concluded that the WCAB does indeed have jurisdiction to impose penalties under Labor Code section 5814. Subsequently the parties resolved all penalties.

Gage received advanced disability pension payments from May 8, 2015 through October 17, 2018 for a total of $120,144.03. Her disability retirement application was denied on October 17, 2018. The employer designated mediation as its independent level of resolution to recover these payments and scheduled a mediation with a retired judge for April 27, 2020. Gage did not attend. The matter proceeded to a status conference to compel her to attend. The WCJ denied the request finding no jurisdiction to do so, despite the Court of Appeal decision.

The WCAB again granted reconsideration on August 9, 2021, finding that the order was issued without creation of a record, and the case was remanded for further proceedings which occurred on December 13, 2021. The sole issue at trial was “[j]urisdiction to enforce Labor Code, section 4850.4.”

The WCJ concluded that initial jurisdiction over a plan to repay advanced disability retirement benefits vests solely with the local agency who issued payment. And that the Appeals Board has non-exclusive jurisdiction over litigation of any repayment plan or applicant may seek a writ of mandate with the Superior Court, but jurisdiction with the Appeals Board only exists after the parties have completed the first two steps outlined in the statute. And the WCJ found that the parties are expected to meet and confer to reach an agreement on a repayment plan per Labor Code section 4850.4(f). Both parties filed a petition for reconsideration which was granted in the newest WCAB panel decision of Gage v County of Sacramento ADJ8010054 (September 2022).

The employer contends that the Appeals Board has jurisdiction over repayment of applicant’s advanced disability pension payments since the Court of Appeal held that the Appeals Board has jurisdiction to “enforce payment” of advances. The panel responded by saying this “construction of the Court’s holding improperly conflates jurisdiction over section 5814 penalties with jurisdiction over section 4850.4 payments” because these payments are “compensation: under section 3207.

The last sentence of section 4850.4(f) permits the local agency to “take reasonable steps, including litigation” to recover the advanced payments “[i]f repayment is not made according to the repayment plan.” At this juncture, there is no repayment plan in place. Defendant may not pursue litigation to recover the advanced payments it made until applicant has failed to make payments per a repayment plan adopted either by an agreement between the parties or following submission of the issue to defendant’s administrative appeals remedy. It is thus premature to address whether “litigation” as that term is used in the statute entails proceedings before the Appeals Board or in civil court, or both.“

The Order was rescinded, and the case taken off calendar with the WCAB concluding that “The Appeals Board does not have jurisdiction to force applicant’s participation to agree on a repayment plan or in the local agency’s administrative appeals remedy.”

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