Today I am at the California Self-Insurers Association Conference in Oakland. If you see me, be sure to say hello. Your loyal author will be engrossed in the subject matter, so , sadly, no “live blogging” of the conference will follow.
If there are tickets still available, I can’t urge you enough to attend. I went to the conference last year and it was informative and interesting – you get to meet a lot of great people too.
I hope to see you there!
Fortunately for those of us practicing on the defense side of California’s Workers’ Compensation system, not everyone is willing to be complacent in blatant acts of fraud. Often enough, a co-worker or neighbor will report deception and cheating when they become aware of it.
Mia Rachel Brown of West Covina, has been arrested on charges of workers’ compensation fraud, according to this press release by Dave Jones, Insurance Commissioner.
Apparently, while she was receiving disability checks connected to her claimed injury, which (allegedly) occurred while working for Dean Foods, insured by Liberty Mutual Insurance Company, Mia Brown was working for the Department of Motor Vehicles. At a sworn deposition, she had testified she had not worked since November of 2009.
Although it seems unlikely that the Department of Insurance or Liberty Mutual will recover their costs of benefits paid or investigation and prosecution (thanks to Ms. Brown’s fraud), a plugged leak is a plugged leak, even if the plug is late in coming and pricey at that.
The California Workers’ Compensation Appeals Board has issued a new en banc opinion on the issue of timeliness of panel requests. In Messele v. Pitco Foods, Inc., the defendant objected to the treating physician’s report and proposed the use of an Agreed Medical Evaluator to applicant, setting up the requirements for a request for a panel in accordance with Labor Code § 4062.2(b).
Applicant responded with his own AME proposals and then requested a panel.
Defendant then filed its own request for a panel. The timeline was as follows:
Date of Injury———————————1/29/10
Defendant’s Objection ****************4/20/10
Applicant’s Panel Request *************5/01/10
Defendant’s Panel Request————-5/04/10
The Medical Unit, no longer resolving disputes, issued a panel in response to each request, with different specialties. The Workers’ Compensation Judge ruled that the 5-day “mailbox” rule of the Code of Civil Procedure (§ 1013(a)) applies, and that applicant’s panel request was untimely, so defendant’s panel stands.
For the folks keeping score at home, the first day the panel request could have been filed would have been May 6 (April 20 + 10 days is April 30; plus 5 days for mailing is May 5, so the first day a panel could be filed is May 6. In the WCJ’s report and recommendation on applicant’s petition for removal, the WCJ acknowledges this error and recommends that both panels be found premature.
On a petition for reconsideration, which the WCAB found should have been a petition for removal, applicant’s petition was granted and the WCJ’s order was rescinded. The WCAB found that CCP § 1013(a) and 8 CCR § 10507 require the application of the “mailbox” rule to the process of panel requests.
Applicant’s argument that the mailbox rule doesn’t apply and defendant’s argument that the controlling date is when the Medical Unit received the request, not when it was made, were both rejected. The rule applies and the controlling date is the date the request for a panel is made.
What does that mean for us in the industry? Once an objection to a primary treating physician’s report has been made by either side, fill out a panel request form dated for the sixteenth day after the date of the objection.
So if the objection was made on November 1, 2011, the counting begins on November 2, 2011, and the panel request form should be dated for November 17. As soon as November 17 comes around, the panel request should be in the mail, in order to be the first one in and thereby control the specialty.
As yet another aside, the rules clearly state that the specialty of the panel should be the same as that of the treating physician unless documentation is provided for a good reason to the contrary. But, in terms of practice, this rule of often enough ignored by the Medical Units and the WCJs alike, and it is much better to be the first to request a panel.
Governor Jerry Brown is facing an overflowing “in-box” of love-notes from the Legislature, each one hoping to bear his autograph and move from the overcrowded and often populated “bills” population group to the powerful elite of good (and bad, just horribly, unspeakably bad) ideas that have become law.
The Honorable Brown can make repetitive signing motions without fear, of course, as California’s Workers’ Compensation system will no doubt provide him with yet another retirement fund upon his leaving office if he should sustain a cumulative trauma to his wrists, sleep disorder, etc., as a result of his work.
But one bill in particular has employers and unions alike hoping for passage. That is, of course, Assembly Bill 378, which will strive to rein in the compound drugs industry sucking the last few drops of life’s blood out of California’s battered employers.
The problem of compound drugs was mentioned briefly in this post. California has a medical schedule which puts a cap on the amount doctors and medical equipment providers can charge for treatment, procedures, drugs, and equipment.
But this doesn’t apply to so-called compound drugs, which a doctor can both prescribe and make himself. Combining aspirin with some placebo, a doctor could make a pill that is nowhere to be found on the fee schedule.
In theory, the self-insured employer or insurer could analyze the pills and apply the fee schedule to its component parts, but this brings with it the cost of bill review and litigation, leaving the defense grasping a Pyrrhic Victory.
AB 378 will strive to change this by preventing self-dealing in pharmacy goods, which means no more prescriptions for drugs produced by the doctor or the doctor’s relatives. The bill also ties the cost of these compound drugs to the “lowest priced product of equivalent therapeutic effect.”
The bill appears to have support from both Labor and Employer groups, and hopefully will bear the governor’s signature before too long. Naturally, the physicians and pharmaceutical interests will have some objections to AB 378 becoming law and to its application by the courts.
In other words, there are some fun times ahead.
Lien claimants can not recover if there is no underlying industrial injury, right? After all, the employer is not liable for treatment, temporary disability, or permanent disability in cases where the injured worker can not prove an injury occurred or that it arouse out of employment/caused by employment (AOE/COE).
It follows, then, that if there is no recovery, there is nothing to place a lien upon, and a lien claimant who can not prove injury and causation can not recover… WRONG. Unfortunately, that is not the case in California Workers’ Compensation Procedure.
In the recent case of Herrera v. Civil Demand Associates, the Workers’ Compensation Judge ruled that the lien claimant Bell community was entitled to reimbursement for a medical-legal evaluation in a case where the employer denied injury.
The WCJ recognized, and the Workers’ Compensation Appeals Board reasoned (in adopting and incorporating the WCJ’s report), that the costs of a comprehensive report must be borne by the defendant when a lien claimant seeks to prove injury to collect on its lien, otherwise the lien claimant would be barred from contested claims.
Lien claimants already make ready use of scorched-Earth tactics, pestering the defense into paying for treatment or procedures not “reasonably required” or sometimes not performed at all. Now lien claimants can further drive up the threshold for nuisance value settlements, threatening to invoke medical legal costs on top of the expense of discovery, appearances and trial.
The Court of Appeal had the opportunity to correct this mistake, but denied defendant’s petition for a writ of review. (13 ABR 13,237)
Hopefully, this will not be a case that is followed by other WCJs, and the hordes of reserves-eating lien claimants will remain checked by Thomas clauses.
Would you shoot yourself in the chest for a few days off from work?
Jeffrey Stenroos, a Los Angeles school police officer, has been convicted of several felonies and misdemeanors following his claim that he had been shot by a car burglar. It appears that Stenroos shot himself in the chest (protected snugly by his vest), and then claimed that the armed gunman had fled.
What followed was the deployment of over 550 police officers and the lockdown of the surrounding neighborhood for over 10 hours. The city is seeking $350,000 in restitution for the costs of the manhunt and Los Angeles Unified School District will try to recover the $58,000 paid for medical costs.
If the idea of shooting yourself and then filing a false report sounds familiar, it might be because you watched the HBO series “The Wire” and remember one particular police officer.
The damage this fraud does to the police officers actually injured in the line of duty is immeasurable.
It is often difficult to expose frauds in workers’ compensation – there are doctors that facilitate the fraud and applicant’s attorneys that turn a blind eye. Everyone, after all, wins out except … the employer, the insurance company and California’s economy.
But fraud must be investigated and punished as often as possible. The upfront costs seem prohibitive, and the long-term benefits are not measurable. But the effect is there, fraud investigation and prosecution deters fraud and discourages it. Police officers in California who had the same idea as Mr. Stenroos will hopefully think twice about cheating the system for some days off and extra money.
In the last two posts, we discussed the difficulties in facing an unrepresented applicant who has not filed an application, and covered responses such as withholding benefits until an application is filed or simply paying all benefits.
The most common course of action in such cases is for the defendant to file an application for the unrepresented employee, and thereby become liable for applicant’s attorney’s fees. There is a chance, of course, that applicant will eventually settle without ever hiring an attorney, making § 4064 inapplicable. But the potential consequences should be weighed before deciding on the plan of attack.
Filing an application for an unrepresented applicant to be able to perform discovery (as per 8 CCR § 10403) will likely make defendant liable for applicant’s attorney’s fees; filing an application for the purposes of settlement approval will likely not (8 CCR § 10400(b)). But what about other petitions a defendant might file?
Let’s say the employee is injured at work but some third party is at fault, such as the driver in a car accident or the manufacturer of a faulty ladder. The injured worker is entitled to workers’ compensation benefits, but the employer is entitled to credit under Labor Code § 3861.
Often enough, these cases are not contested by the employer, and benefits are paid and treatment is provided on an industrial basis. If the injured worker has not retained a workers’ compensation attorney and has not filed an application, how does the employer go about getting an order of credit?
Labor Code § 5500.5 tells us that a workers’ compensation case is commenced with the filing of an application, and California Code of Regulation § 10878 states that “[t]he filing of a compromise and release agreement or stipulations with request for award shall constitute the filing of an application.”
Generally, no Board file will be opened or started for the purposes of filing a Petition for Credit without an application being filed first. The case law appears to be silent as to the question of whether an application filed on the sole issue of defendant’s petition for credit will trigger § 4064(c). But speaking from policy, legislative intent and common sense (admittedly weak medicine for defendants to use in the world of California’s Workers’ Compensation practice), merely filing an application on the sole issue of third party recovery credit should NOT trigger liability for applicant’s attorney’s fees.
Having to pay the applicant’s attorney’s fees can make an expensive case 15% more burdensome. So tread lightly and avoid the landmines that activate this additional liability.