On Setting Up an Medical Provider Network (an Attorney’s Perspective)

Mark Walls, manager of the Work Comp Analysis Group on LinkedIn, has an interesting article out about the pros and cons of medical provider networks.  The MPN is a subject oft-touched on by your humble blogger, and generally in a fairly approving tone, as it can be a very effective tool to cut costs.  However, as Mr. Walls points out, there are dangers to a creeping increase in costs.

Often the story begins with a pitch.  A slick, sharply dressed salesman or woman from an MPN will make a presentation about all the money that can be saved by switching to his or her MPN.  The doctors are great, efficient, and honest – they will not let sympathy or prejudice influence their medical opinions.  The MPN cuts costs like a civil war surgeon, hacking and slashing.  And how is this possible, the pitch continues… because the volume of “patients” allows less to be charged for each visit, treatment, etc.  So everybody wins!  The employee gets fast, effective treatment and the insurance company or self-insured employer gets a smaller bill.

But there are other costs that need to be weighed.  Mr. Walls points out that some MPNs tend to increase the frequency of visits, trying to make their money back in a different type of volume of business.  But there is another, larger cost as well.  Litigation.

As pointed on this blog again and again, the MPN must be done right, or not at all.  If the MPN is not properly set up and properly defended, then the applicant will run up a medical bill outside of the network and the defense will be end up writing larger and larger checks.  The MPN must include enough treating physicians of every type in every area an employee is likely to be (this includes chiropractors, unfortunately.)

The MPN must also have proper notices to the employee – multiple languages, regular updates, notice at hiring, injury, etc.  If your MPN salesman doesn’t know these rules or can’t detail how the MPN will provide these services, then perhaps more investigation is necessary.

Here is a suggestion – whether you have in-house workers’ compensation counsel, a panel of defense attorneys to pick from, or an outside firm that handles all your workers’ compensation matters, pick a veteran attorney who knows MPNs through and through, and have him or her sit in on the sales pitch, taking notes and asking questions.  After all, the odds are high that two years down the line, this lawyer will be fighting off non-MPN lien claimants or driving back the applicant’s attorney insisting that a shoulder surgeon in Washington is reasonable for an employee living in San Francisco.

Time and again, the lien claimants and the applicant’s attorney have tried to knock the MPN wall down, and with a few exceptions, it stands still (at least in California).  I would say it’s absolutely worth having an MPN if you can have one set up, I would just suggest having a workers’ compensation defense attorney you trust help from the start.

Court of Appeal Rules on Sudden and Extraordinary Case

Your humble blogger was at his post yesterday, diligently fighting off claims and liens, when he suddenly received an alert of extraordinary nature.  The Court of Appeal, in an opinion posted only yesterday afternoon, has rendered its decision in the case of State Compensation Insurance Fund v. Workers’ Compensation Appeals Board, granting the relief sought by the defense.

In short, falling from a tree or ladder, while sudden for everyone and extraordinary for some professions, is not an extraordinary event for fruit pickers (avocados are fruit, right?)

Applicant Rigoberto Garcia had been working for his employer picking avocados from 35-foot-high avocado trees, using 24-foot ladders for roughly two months, when he suddenly fell from a ladder, sustaining various injuries, including an injury to the head. All aspects of his claim were admitted… except for the psyche claim.  The defendant raised the Labor Code section 3208.3(d) defense to psyche injuries claimed by employees with a less-than 6-month tenure.  This defense has been explored a time or two on this blog as well.

Applicant offered his own testimony at trial on the issue of the defense, claiming that he had never seen any other workers fall from a ladder with this employer, and was not warned at any time that this risk was common.  Defendant offered no evidence.

The workers’ compensation Judge found the injury was sudden and extraordinary, and the defendant filed for reconsideration.  The question that went before the WCAB was whether falling from a 24-foot ladder was a common risk to 35-foot avocado tree pickers, much like burning one’s hand while working as a drycleaner.

A split panel denied reconsideration, with the majority taking issue with defendant’s failure to present any evidence at trial as to the common occurrence of such falls.  In all fairness, the defense failed to carry its burden of proving the existence of gravity – the lawyers no doubt cursed themselves for failing to invest in apple orchards.

But, as all things that go up must come down (and there is nothing extraordinary about that), so, too, with applicant’s luck in the courts.  Defendant petitioned the Court of Appeal for a writ of review, arguing, again, that applicant failed to carry his burden in proving that the mechanism of injury was extraordinary.

The Court of Appeal, having watched the biography of Isaac Newton just the night before, granted defendant’s petition and reversed the WCAB.  The reasoning was, primarily, that common sense dictates that the injury-causing-event experienced by applicant was the exact type of injury one would expect would happen in applicant’s line of work.  Had applicant been attacked by a bear, the “extraordinary” element would have been much easier to prove.

So, the defense is now back to bearing the burden of proving common sense – what kind of injury can we expect from the following job duties…

Is a Hairstylist an Independent Contractor? WCAB Says “Yes.”

Yesterday’s post covered proposed legislation to amend the definition of an independent contractor, repealing current Labor Code section 3353 and providing, instead, a list of factors to consider in determining whether a worker is an independent contractor or an employee (determining, also, if the principal must provide workers’ compensation insurance).

A recent writ denied case addressed this very issue.  In Margarita Aparicio v. Workers’ Compensation Appeals Board (2012), the WCAB had denied applicant’s petition for reconsideration of the workers’ compensation Judge’s ruling that she was an independent contractor and not an employee.  Applicant worked as a hairstylist at Unisex Barber, and claimed she had sustained a plethora of injuries during her 20 months as a hairstylist with defendant.

Defendant denied the claim on the grounds that applicant was an independent contractor:  she was not supervised, set her own hours, and provided her own tools.  Apparently, at the time that the professional relationship began between applicant and defendant, which applicant no-doubt, at least for the purposes of her claim, considered the “time of hire,” applicant had told defendant that she had a cosmetology license, although one was never actually produced.

Applicant failed to appear at a hearing and the WCJ issued a finding and award, finding that applicant was an independent contractor.  The fact that some supplies were provided to applicant during her work and that defendant had insured some of its employees did not seem to sway to the WCJ to a finding in the non-appearing applicant’s favor.

The testimony from the defendant at the hearing showed a typical hairstylist-hair salon relationship.  In some arrangements a barber or hairstylist will pay rent and pocket all the money paid by his/her clients, while in this case the hairstylist kept a portion of the money paid by her clients and was provided with a place to work and some supplies.

Under AB2373, perhaps the analysis would have been different?  After all, some of the factors in AB2373 would have worked in applicant’s favor:  she (at least by the time of her claim) believed she had entered into an employee-employer relationship, the services were integrated into the principal’s business operations, and several other factors might make it harder for a workers’ compensation Judge to find for the defense.

A written agreement may be of some use in such cases, to avoid future misunderstanding.  Perhaps requiring the contractor to purchase workers’ compensation insurance for him or herself would not be a bad idea either.

New Legislation to Define “independent contractor”?

What is an independent contractor?  Presently, Labor Code section 3353 defines an independent contractor as “any person who renders service for a specified recompense for a specified result, under the control of his principal as to the result of his work only and not as to the means by which result is accomplished.”  Independent contractors are a different animal than employees – and workers’ compensation insurance isn’t necessary for independent contractors.

Assembly member Chris Norby (R-72^nd Assembly District) introduced Assembly Bill 2373, which would provide a detailed list of factors to consider in determining if a person is an independent contractor or an employee.

Here is the list of factors currently proposed:

“(a)  The extent to which the principal controls and directs the manner and means of rendering the service.

(b)  The extent to which the principal provides training to the person rendering the service.

(c)  Whether the service rendered is integrated into the principal’s business operations.

(d)  The method by which the principal provides recompense.

(e)  Whether a continuing relationship exists between the principal and person rendering the service.

(f)  Whether the principal established the hours of work of the person rendering the service.

(g)  The amount of time required for the person to rendered (sic) the service.

(h) Whether the principal or person rendering the service provides the instrumentalities and facilities necessary for rendering the service.

(i)  The extend (sic) to which the person rendering the service is required to report to the principal.

(j)  The extent to which the person rendering the service has unreimbursed business expenses or investments in the business of the principal.

(k)  Whether the person rendering the service is engaged in a separate occupation or business or makes his or her service available to the general public.

(l)  Whether this kind of service is usually rendered under the direction of the principal without supervision.

(m)  Whether the parties believe they are establishing an employer-employee relationship.

(n)  The length of time for rendering the service.

(o) The extent to which the service pertains to the regular business of the principal.

(p)  The skill required to render the service.

(q) Whether the principal or person rendering the service have a right to terminate their relationship.”

This bill would provide a lot more for attorneys to work with when the question of worker status comes to litigation.  Perhaps the question of workers’ compensation should factor in as well – does the worker have insurance for him or herself?  Does the principal cover the worker?

One thing is certain – clear guidelines are very necessary in this regard.  One could hire a “contractor” to do work, and suddenly the contractor is an employee and the principal is suddenly in breach of the law by failing to insure his or her “employee.”

Tommy Jenkins Returns – and Files a Lien

Do you remember Tommy Jenkins?  He was that annoying fifth-grade friend of yours.  He was that kid that was always the center of the world – everyone was just out to get him.  No matter what happened, it was all part of some effort by someone who “hated” him, especially the teacher (she was out to get him, you see).  As you know, Tommy grew up and became a lien representative in California’s workers’ compensation system.

In the case of Paul Allgood v. County of Los Angeles, the lien claimants, represented by Green Lien Collections, filed a petition to have the workers’ compensation Judge disqualified for bias.

At this point, your ever-realistic blogger must point out that everyone has a bias against lien claimants, including WCJs.  After all, lien claimants and WCJs are naturally enemies, just like lien claimants and applicant’s attorney, or lien claimants and defense lawyers, or lien claimants and other lien claimants.  If your garden variety bias served to disqualify WCJs, there would be no WCJs left to adjudicate these cases, and we would have to resort to picking champions and settling things via duels.

Basically, the matter was set for trial, and the WCJ ordered the matter continued and also ordered the doctor performing the services that were the basis of the lien to appear and testify at the continued trial.  The lien claimant petitioned for removal of the order and the order removal was granted.  The parties then returned for trial but the WCJ fell ill, so the trial was continued again.

The lien claimant was not fooled – he knows bias when he sees it!  The so-called “illness” was certainly a clever ploy to prejudice the lien claimant, because everyone knows that WCJs are impervious to injury and, having already waited for the case-in-chief to resolve, any further delay to lien claimant results in total destruction of its interests – lien claimant really needs that “355989” to keep the doors open.  (Apparently the lien is unclear as to whether the amount in question is $355,989.00 or $3,559.89.)

REAL bias is not a couple of continuances, as was the case here – the WCJ fell ill on the day of trial, what are you going to do?  In any case, the lien claimant’s efforts to have the judge disqualified only further delayed the matter by necessitating that the continued trial be cancelled and await resolution of the petition to disqualify.

Lien claimants are already establishing the image of actors pursuing frivolous actions or abusing process to shake down a settlement – now they are setting themselves up as cry-babies as well.  Say hello to Tommy Jenkins for me.