Carrier Gets Lesson When TD is NOT TD

Occasionally you will see me rant here over what I consider illogical claims handling decisions. This is one of those rants where a case went all the way to an appellate court over $64.71 - and of course the carrier lost.

The case is Meeks Building Center et al. v. WCAB (Najjar), No. C065944, 06/26/2012, published.

Salem Najjar sustained a cumulative injury to his low back, neck and left shoulder in June 2007, while he was employed as a paint sales associate at Meeks Building Center. Najjar continued to work unrestricted at his usual job activities despite his injury.

The carrier, Zurich American Insurance Co., asked Najjar to undergo a qualified medical evaluation with Dr. Anthony Bellomo on Sept. 11, 2007. Zurich paid Najjar $64.71 to reimburse him for wages he lost to attend this evaluation, in accordance with Labor Code Section 4600(e)(1).

4600(e)(1) states:

When at the request of the employer, the employer's insurer, the administrative director, the appeals board, or a workers' compensation administrative law judge, the employee submits to examination by a physician, he or she shall be entitled to receive, in addition to all other benefits herein provided, all reasonable expenses of transportation, meals, and lodging incident to reporting for the examination, together with one day of temporary disability indemnity for each day of wages lost in submitting to the examination.

In March 2009, Najjar began collecting temporary disability benefits. Zurich stopped making these payments in September 2009, based on the 104-week limitation period in Section 4656(c)(1).

4656(c)(1) states:

Aggregate disability payments for a single injury occurring on or after April 19, 2004, causing temporary disability shall not extend for more than 104 compensable weeks within a period of two years from the date of commencement of temporary disability payment.

Zurich argued that the 104-week period began in September 2007, when it paid Najjar the $64.71 for going to the medical evaluation.

A workers' compensation administrative law judge actually agreed with Zurich (kudos to the defense attorney arguing before the WCJ), and Najjar petitioned for reconsideration.

The Workers' Compensation Appeals Board ruled that the payment mandated by Section 4600(e)(1) was not a payment of temporary disability within the meaning of Section 4656(c)(1) and did not begin the 104-week limitation period.

The 3rd District Court of Appeal upheld the WCAB's ruling, noting what I thought was obvious - there is a distinct difference between the underlying purpose of 4600 and 4656. 4600 is all about medical examinations. 4656 is all about temporary disability.

A contrary conclusion, the court said, "would seriously disadvantage a worker in a case such as this one, where the injured worker continues to work through injury and does not suffer an incapacity to work until much later in the process." It would also "permit the employer or insurer to artificially trigger the cap period on temporary disability benefits by setting a medical-legal evaluation," which, the court surmised, "cannot have been the Legislature's purpose."

It was a good attempt by Zurich, but illogical nevertheless. Apparently relying on case law where a different result was obtained, Zurich failed to note a significant difference which was pointed out by the 3rd DCA.

In the two cases cited by Zurich (Mt. Diablo Unified School District v. WCAB and in Brooks v. WCAB), the court noted, the applicants were off work due to their injuries and receiving wage replacement benefits under the Government and Education Codes. Because these benefits served the same purpose as temporary disability benefits under the Labor Code, they were deemed to have triggered the 104-week limitation period of Section 4656(c)(1).

In the zeal to contain costs the carrier once again reinforces a negative public perception of insurance.