Monday, September 30, 2013

The Love Hate Dichotomy of Comp

Business hates the cost of workers' compensation and there are continual attempts to hold down the expense by excluding conditions or refining qualifications for coverage.

That is until business gets sued civilly for employment conditions or injuries.

Then all of a sudden workers' compensation should be applicable.

In Louisiana the workers' compensation statutes had been interpreted for several years by two appellate level courts to exclude hearing loss from coverage - that is workers who have demonstrated injurious exposure resulting in a gradual degradation of their hearing over time could not receive workers' compensation benefits.

The underlying theory is that Louisiana law requires an injury to be "sudden" or "violent" to fall within the ambit of workers' compensation, though there is a catch all phrase permitting coverage where "the usefulness of a physical function is seriously permanently impaired."

In a case that's similar factually to those prior appellate holdings, Graphic Packaging International Inc. got sued, and lost, by six former employees alleging their hearing had been damaged gradually from years of workplace exposure. Each plaintiff was awarded $50,000.

There originally were 16 employees with separate lawsuits. One of the plaintiffs had been working at the plant since the 1950s.

The parties chose six claimants to represent the "first flight" of plaintiffs whose cases would be tried together.

The plaintiffs alleged that the plant was so noisy that people had to yell to be heard or read lips and use hand signals. They testified that their hearing had not been tested regularly and when they were tested, they weren't given the results. Their employer did not provide hearing protection until the late 1980s or early 1990s, the plaintiffs said.

The workers said that their hearing loss occurred gradually, and some were not aware of a problem until 2004, when their attorneys had their hearing tested. (In reading the cases and the news report, it seems there may be a cottage industry in Louisiana on hearing loss cases.)

Fortunately for Graphic the Louisiana 2nd Circuit Court of Appeal ruled that gradual hearing loss caused by years of workplace exposure is compensable as an occupational disease under the Louisiana Workers' Compensation Act.

Earlier opinions by the 3rd and 4th Circuit Court of Appeal have held that hearing loss does not meet the definition of accident in Louisiana.

The 2011opinion from the 4th Circuit in Becker v. Murphy Oil Corp. ruled "that gradual hearing loss resulting from occupational noise exposure over a period of many years simply cannot meet the definition of an 'accident' under any version of the LWCA."

If In Arrant v. Graphic Packaging International Inc. et al., 48,197-CA, 09/25/2013, goes up to the Supreme Court and Graphic wins, then the plaintiffs probably are out of luck because the statute of limitations has long run on filing for work comp benefits.

I'm not offering an opinion on Louisiana law, or even the court opinions.

All I'm pointing out is that workers' compensation is certainly convenient when it is more cost effective than doing without.

And that cottage legal industries will sprout whenever there is opportunity for exploitation.

Friday, September 27, 2013

Don't Be A Professional Athelete

Sitting on the desk of California Governor Jerry Brown, among other legislation sent his way this month, is the NFL Bill, AB 1309, by Assemblyman Henry Perea, D-Fresno.

I have come out against this bill since the beginning and I know that my rants here won't make a rat's arse difference to the Governor; he's going to sign it because my words are not as powerful as the NFL lobby.

But that won't preclude me from pointing out what a travesty this piece of thoughtless legislation is, and how it not only will deny professional athletes from rightly deserved workers' compensation, but likely will increase the cost of providing coverage because of the litigation that is going to follow.

The reason is that professional athletes move around a lot, and there is always going to be a debate about what happened when and where.

Not only that, but in order to preserve rights in California, athletes are going to file claims much earlier, and more frequently, to ensure they are protected against the new statute of limitations in the bill.

AB 1309 provides that an athlete who spent fewer than 20% of his "duty days" in California in the year preceding an on-the-field injury, must file a claim in his home state. Additionally, the bill says an athlete must spend at least 20% of his career duty days or two years for a California team, and spend fewer than seven years with an out-of-state team to file such an occupational disease or cumulative trauma claim in California.

Our report on the bill this morning includes vignettes of popular athletes that would create such litigation over these restrictions after a review of a database of professional athlete work comp claims in California published by the Los Angeles Times.

Basketball star Bill Walton would not have been allowed to file his two cumulative trauma claims that are included in the L.A. Times database. While in college at UCLA, Walton led the Bruins to two national championships. But because of injuries he saw limited action while on the roster for the San Diego / Los Angeles Clippers from 1979 to 1985, after playing or the Portland Trail Blazers from 1974 to 1978, and for the Boston Celtics from 1985 to 1987.

Walton's case would exceed the requirement to play fewer than seven years for an out-of-state team despite the fact that the end of his career was in California.

Walton has filed 14 claims for specific injuries reflected in the L.A. Times list of about 800 NBA players who have filed claims in California. Would Walton be excluded from those claims because of the "duty day" requirement?

Bo Jackson, the cross-sport wonder, played football for the Los Angeles Raiders and baseball for the Kansas City Royals. He dislocated his hip in 1990 during a playoff game in the Los Angeles Memorial Coliseum ending his professional football career after just four years.

At the time, he had played five seasons for the Royals and then went on to play three years for the Chicago White Sox and another season for the California Angels.

The L.A. Times database shows Jackson filed a cumulative trauma claim against the Chicago White Sox and another claim against the Los Angeles Angels.

Because Jackson played baseball for eight years for teams outside of California, Jackson would be prohibited from filing a claim in California, even though his last year in baseball was in California and even though his football career ended with his injury in Los Angeles.

The Los Angeles Times points out other absurd results under the bill because of the perception that professional athletes earn big money - that's not the case for most athletes covered by AB 1309.

For instance, hockey player David Cousineau, who skated for teams such as the Las Vegas Wranglers, Phoenix Roadrunners and Long Beach Ice Dogs, earned just $650 a week toward the end of his five-year career.

Though he never made the NHL, The LA Times database reflects a string of traumas to his head, shoulders, back and legs. In 2010, Cousineau settled claims against his last two teams for $68,000 by compromise and release thus agreeing to cover his own medical expenses for these injuries.

The professional sports franchises are banking that the general public doesn't know or care about the athletes; they want their entertainment and they want it fast, furious, competitive. The more damage the better.

The only way to make an impact against what I feel is not only poor legislation and a draconian law is for the player's unions to organize strikes and refuse to play. Whether the unions have the resources, and the support of their members, to do that is questionable.

Athletes generally tend to be in a state of denial with regard to injuries - that's built into their mentality through years of training while young, supple, and able to quickly recover.

I think it's a forgone conclusion that Brown will sign AB 1309. I also think it's foolish for anyone to be a professional athlete in football, baseball, basketball, hockey or soccer.

Thursday, September 26, 2013

Don't Blame; Wear the Shoes

The blame game is on with the California Independent Medical Review process.

August saw 15,731 IMR applications. The trend appears to be about the same number of requests for September.

But the company that secured a two-year no-bid contract to provide IMR services, Maximus Federal Services, allegedly is still working to clear requests from July when the company received about 3,000, according to the Division of Workers' Compensation.

Maximus wouldn't talk to WorkCompCentral reporter Greg Jones, instead deferring all questions to the DWC.

DWC has simply said that they think the numbers have peaked and that things will settle down, calling the back log of requests of up to two months a "slight delay."

California Applicants’ Attorneys Association consultant, Mark Gerlach, told Jones that the problems begin with Utilization Review - inadequate instruction, direction and control over the UR process that is causing an excess number of IMR requests.

Gerlach believes there are too many UR decisions made on faulty or incomplete information because UR is not required to review complete medical records pertaining to a treatment request and physicians aren't tasked or willing to provide more information with their work loads. He proposes that UR reviewers undertake more effort to communicate directly with physicians making the treatment requests.

“Physicians will often say if they get a chance to talk to the UR reviewer, they can work things out. But in case after case, when you look at the UR decision, it says, ‘I attempted to call the physician twice, was not able to get through, and therefore, I’m denying the treatment,'” Gerlach claims.

That may be, but I think the issue is deeper - too much UR in the first place.

It was excess UR that caused the IMR process to be conceived and delivered via SB 863. The complaint from the negotiators of that bill was that too many medical treatment decisions were taking up judicial resources.

Now too many medical treatment decisions are taking up administrative resources.

And the common denominator is UR, because an IMR can not occur without a UR decision denying treatment in the first place.

I don't know who is making all of the IMR requests. IMR can be requested by the injured worker, his or her representative or the treating physician. I'm not sure it matters - IMR doesn't begin unless there is a UR denial.

And each IMR request costs the carrier (and ultimately the employer) $560 for a "standard review."

If what Gerlach says is true, that so many UR denials are based on failure to communicate, then there is a breakdown in the process as one file gets pushed off a desk to make way for the next file. The time burdens, the work load, the human factor, can not deal with the volume for whatever reason.

Workers' compensation has many areas of study and analysis. We look at lots of numbers to try and figure out what is happening, whether it is frequency and severity of injury, to volume of certain medical procedures or prescriptions - numbers are a big part of the workers' compensation analysis.

But one thing that we aren't very good at, and I think it's just because nobody has done it, is to follow the life cycle of a treatment request (or any other micro-process within the system).

This is called systems analysis - the study of sets of interacting entities to identify a better course of action and make a better decision than might otherwise have been made."

The truth is that we as an industry don't really know how this entire machine that has been constructed to process industrial injury claims really works. We have rules and procedures, laws and regulations, but the fact is that we don't have any real, foundational understanding as to how all of this impacts the momentum of a case.

When computers were first coming into the scene, Apple and Microsoft, and other top software vendors, spent tons of time and money actually sitting down with users to observe exactly how they interacted with the machines. Visual and auditory cues were observed, ergonomic tests were devised, users were interviewed, all in the attempt to completely understand the process by which someone interacts with a system to get the proposed work done, one step at a time.

This analysis allowed designers and engineers to skip redundant steps and build in better functionality and reliability.

Work comp is a Byzantine mess that has been compiled over the years to address concerns and desires of various special interest constituents without adequately studying how such changes would affect the actual life cycle of a claim file.

Assumptions were made based on anecdotal evidence often charged with emotional pleas that were not necessarily based on real, tested, validated data.

We can speculate, we can blame, but until we "walk a mile in [their] shoes" we really won't have any idea what to do.

Wednesday, September 25, 2013

Work Comp Steps Up to ACA

One of the big questions I have had since the Affordable Care Act became law was how the workers' compensation underwriting market would react since it seemed that there would be a broadening in the class of health care workers coming into the scene.

That question was given some evidence yesterday when ProAssurance, a writer of medical professional liability insurance based in Birmingham, Ala., announcedproposed acquisition of Pennsylvania-based workers' compensation writer Eastern Insurance Group for $205 million.

Eastern offers workers’ compensation to employers with generally 1,000 employees or less that traditionally pay an average premium per policy of $21,956, according to filings with Securities & Exchange Commission. Also, Eastern concentrates on low- to middle-hazard classes of businesses, primarily in the Mid-Atlantic, Southeast, and Midwest regions. In 2012, it reported workers comp premiums written of $182.9 million.

Among those employers Eastern counts as policy holders are small hospital systems, long-term care facilities, physician and dental practices and home health care providers. 

Approximately 20% of Eastern’s workers’ comp book is health-care-related risks according to company officials.
ProAssurance is the fourth-largest medical malpractice liability writer in the United States. Last year it wrote about $536 million in gross premiums.

When you think about the market that ProAssurance goes after it makes sense to have a workers' compensation component to its offerings.

The companies expect more independent physicians and small physician groups to align themselves with much larger hospitals and health care entities and consequently are going to need more than just malpractice insurance as more and more health care workers are required to deliver the mandates of the ACA.

In a conference call to investors yesterday,  ProAssurance’s chairman and Chief Executive Officer W. Stancil Starnes noted that the largest insurance expense for these physicians is workers' compensation.

"The notion that we can build out into the future an insurance platform that has the unique attributes needed by health care providers and these bigger health care facilities will provide us with much greater opportunities to take advantage of the changes that are coming in health care. ... it’s important that workers’ comp be part of that platform."

Eastern CEO Michael Boguski explained that four health care class codes are in the top ten that the company writes.

"We have a broad underwriting appetite within the health care segment,” Boguski said in the call.

The $205 million acquisition cost represents about 1.38-times the stated book value of Eastern and represents $24.50 per share. The transaction, which is expected to close by Jan.1, is subject to regulatory approvals in Pennsylvania, the Cayman Islands and a vote of Eastern’s shareholders.

The deal had been in the works for about a year.

Tuesday, September 24, 2013

IMR - The New Game In Town

Are you alarmed that Independent Medical Review requests in California work comp are 30 times higher than in group health?

It was reported this morning that Maximus had received 15,731 IMR requests in August alone.

According to the news, this is about 30 times the number of requests – 580 – Maximus received in the entire first six months of the year.

By comparison, the California Healthcare Foundation reported in January 2012 that there were only 11,954 group an private health care review requests made to Maximus between 2001 and 2010.

SB 863 made all requests for medical treatment regardless of date of injury subject to IMR as of July 1, 2013.

And while some are saying that the August number is just a spike as a consequence of the broad sweep of the IMR net in July, others are less optimistic, stating that this is an indication of things to come.

Is this evidence of yet another well intentioned protocol change that is just going to drive up costs to the benefit of third party vendors with no teeth in the game other than to derive a profit from system inadequacy?

That may be - and maybe Maximus stock (NYE - MMS) is a good buy (though currently trading near its 52 week high).

Or is the practice of medicine in the California workers' compensation system so pathetic that every request has to be independently reviewed?

Frank Neuhauser, with the University of California, Berkeley, said, “There’s something about the system that we are willing to tolerate that generates 100 times the number of disputes,” when asked about the staggering number of IMR requests compared to group health. “It has nothing to do with the IMR process. This has always been the case.”

Or is the novelty of IMR so alluring that everyone just has to use it?

Jerry Azevedo, a spokesman for the Workers’ Compensation Action Network, told WorkCompCentral the increase could be a “ramp-up” as more people are becoming familiar with how to use the process.

“The numbers may seem daunting when you consider the fact that employers are paying for each and every one of these," said Azevedo. Well, no, that's not accurate - carriers and administrators are paying for these up front and sure the cost eventually will migrate to employers - but are the carriers and administrators really conscious of this?

Or are the carriers and administrators anxious to deny as much treatment as possible?

Neuhauser notes that because workers' compensation medical is a fee-for-service system, doctors treat much more aggressively than they do in group health, which has different compensation models, and consequently there is a lot more push back from payers.

Perhaps the culture of California workers' compensation is so immutable that it survives regardless of attempts to reel in some of the troubling behavior?

Or is there something else driving this many requests so soon after the new process was implemented?

Maybe its just the way the law is written that forces people into IMR.

After all, there are time deadlines so if you want any other bite at the apple one must pursue the remedy.

I have to admit that when IMR was first proposed I had some optimism that a process was put in place that would minimize unsubstantiated treatment requests and expedite the approval of wholly legitimate, well documented, guideline-driven treatment.

I'm not sure what to think now.

As with many things in California workers' compensation, the devil isn't in the details because details open up whole new avenues of discord and manipulation. The more detailed one attempts to initiate in the name of controlling a process, the more opportunity there is for using those details against intended outcomes.

What I do know is that workers' compensation can not be compared with group health at all. The terms, the conditions, the incentives, the motivations - they are all different. What is done in group health can not be transferred to workers' compensation because there is no motivation for people to self-regulate other than internally driven morality and ethics.

There are two huge elements that drive behavior in workers' compensation that aren't found in group health, and unless these elements are changed anything that is intended to hold down costs will eventually fail.

These elements are: 1) workers' compensation is compulsory, and 2) the injured worker has no disincentive to seek as much medical treatment as possible.

The fact that work comp is compulsory drives behavior because there is no competition. Employers must carry it, employees must use it, and the third tier of the system, i.e. the process, has no escape valve for those who don't wish to participate.

And since there are no deductibles, no "plan" and no teeth in the game other than the fact of injury, employees (who in general lack any control over their treatment anyhow) have no reason to say "no."

The August numbers may be an aberration.

Or they may be a prognostication.

Or perhaps this is just one more new part of the complex puzzle that we will "reform" in seven to ten years.

Keep an eye on Maximus earnings...

Monday, September 23, 2013

Severing The Work Comp Claim: Approval Required

It still surprises me that people (lawyers included) who have no exposure to the practice of workers' compensation law continue to be shocked when a general release doesn't cover a workers' compensation claim when settling a civil employment dispute.

The Connecticut Supreme Court reiterated that concept in Leonetti v. MacDermid Inc., No. 19085 where it ruled that an employer and employee could not waive their rights and obligations under the state Workers' Compensation Act without the approval of the Workers' Compensation Commission, and so a general settlement agreement between them upon termination of the employment relationship was not enforceable.

Leonetti had been a mid-level managerial employee with MacDermid – a developer and marketer of chemicals for metal plating and printing in Waterbury, Conn.

He alleged that he hurt his back lifting a barrel of chemicals in 2004, and he filed a claim for workers' compensation benefits. While his claim was pending, MacDermid informed Leonetti that he was being fired.

The company presented Leonetti with a termination agreement for his review and signature, but he objected to its terms.

The agreement required that Leonetti "release, remise, and forever discharge the Respondent-Employer from any and all claims, including workers' compensation claims, that (he) had or might have against (MacDermid)."

Leonetti said the severance payment was too low, considering he had spent 28 years with the company. The severance pay was equal to 27 weeks of pay at his base salary, but he said another employee who left the company after 28 years had gotten twice as much.

He said he also didn't want to have to release his workers' compensation claim, and that his workers' compensation attorney advised him not to sign the agreement.

Leonetti's attorney contacted MacDermid's general counsel and asked to have the language pertaining to Leonetti's workers' compensation claim be removed, but MacDermid responded that Leonetti could get the $70,228.51 only if he accepted the termination agreement as it was written.

Leonetti then signed the agreement, and after MacDermid paid Leonetti $70,228.51, it brought the agreement to the Workers' Compensation Commission for approval though a representative of its workers' compensation carrier.

At the hearing before the commission on the enforceability of the agreement, Leonetti testified that he had signed the agreement because he didn't want to lose the severance pay, and he had never intended to stop pursuing his comp claim.

MacDermid countered that the terms of the agreement required Leonetti to release his comp claim, and that the $70,228.51 payment was his benefit of the bargain. The company also contended that the course of its dealing with Leonetti's attorney also evinced that the dismissal of the comp claim was the central point of the agreement.

Leonetti, however, said he thought that the payment of $70,228.51 was based on the number of years he had worked for MacDermid and was not being paid toward his workers’ compensation claim.

The Workers' Compensation Commissioner noted that the $70,228.51 only reflected enough money for severance, found Leonetti credible and determined that the agreement did not release any work comp liability because it was not supported by the payment of separate consideration for the work injury.

The matter went through the appellate process, with the employer alleging they had been defrauded and Leonetti claiming that there was no additional consideration for his work injury.

Regardless of whether the agreement entered into by the parties might have been enforceable at common law, the court said, the fact of the matter is that no stipulation in a workers' compensation case is binding until it has been approved by the Workers' Compensation Commission.

"Thus, in the present case, the agreement signed by the parties had no effect on the claimant's workers' compensation claim unless and until the commissioner approved the agreement."

The court said MacDermid was free to seek a civil remedy against Leonetti based on his allegedly deceitful and fraudulent conduct.

The employer feels cheated, and I certainly understand that. The employee, from reading the case, may or may not have been playing games with the system, but I can also understand what appears to be buyer's regret.

I had seen this scenario many, many times when I was a defense attorney, particularly during the recessionary days of the 1980s when plant closings seemed to occur weekly.

But the rule is fairly standard in most workers' compensation jurisdictions and there are certain things that need to be covered when dealing with a global settlement - it comes down to proof. The waiver of workers' compensation rights on both sides is a difficult proposition without demonstrating that whatever is being paid in the settlement is adequate based on medical evidence.

And the Connecticut court affirmed this view stating, "the only evidence that the [employer] offered on this issue was that of its attorney, who confessed that he was not aware of how the claimant's severance pay was calculated. Furthermore, the attorney was not aware of the value of the claimant's preexisting workers' compensation claim."

This general rule reflects the underlying purpose of workers' compensation law.

The employer in such an exchange gets a guarantee that it won't be sued later for claimed work injuries. The employee gets a guarantee that he is being dealt with fairly based on what medical experts say about his condition.

That's part of the "grand bargain" that we always talk about in the work comp field.

(As a sort of post script afterthought, I can't help to speculate how this is going to play out in Oklahoma's new opt out system where an employer can opt out of participating in the workers' compensation system by providing civilly the same or better benefits that would be available to an employee in the system.)

Friday, September 20, 2013

OH Justices For Procedure

Just yesterday I ranted about procedure over substance taking over California workers' compensation.

California isn't alone.

The Ohio Supreme Court on Wednesday upheld the denial of scheduled-loss benefits to the estate of a quadriplegic worker for 14 of the 16 years he survived in a near-vegetative state after an industrial accident on the basis of a Catch-22 procedural issue.

Chief Justice Maureen O'Connor wrote a blistering dissent, in much more eloquent prose, essentially paraphrasing my sentiments of yesterday.

In Estate of Sziraki v. Bureau of Workers' Compensation, No. 2011-0799, Dean Sziranski, while driving from one job site to another to conduct company business, lost control of his car and crashed.

He was ejected through the windshield, suffering major brain injuries and severing his spinal cord. He would spend the rest of his life in a coma.

After his accident, Dean's mother – his only next of kin – filed a claim for permanent total disability benefits. 

The Bureau of Workers' Compensation told Marilyn Sziraki that her son was eligible for a PTD award, but it refused to pay an award to her unless she got a court order placing her in charge of her son's financial affairs. If she didn't do so, the agency said it would ask the Attorney General to appoint a guardian for Dean.

Marilyn tried to get an order from a probate court judge to serve as the administrator of Dean's assets, but the judge wouldn't issue the order unless Dean was going to have some money coming to him. So Marilyn was stuck, as the Bureau wouldn't pay her any money without the probate court order, and the probate court order wouldn't be forthcoming without a payment of money. 

Finally, in December 2006, "the probate court blinked" and issued the order, but Dean died just a few weeks later, in January 2007, at the age of 49.  

Marilyn then became the executrix of his estate and she hired an attorney, Kurt M. Young of Toledo.

With Young's assistance, Marilyn received a payment for her son's funeral expenses and the accrued PTD benefits that had been payable to him. 

Young contended however that Dean's estate should also have received an award for his permanent loss of use of his arms and legs pursuant to Ohio Revised Code Section 4123.57(B).

Section 4123.57(B) provides that a worker may apply for an award of benefits based upon the loss of use of certain body parts no sooner than 26 weeks after the date of injury. The statute states that a worker will be entitled to an award representing 66 and 1/3 percent of an injured worker's average weekly wage for 225 weeks if a worker has lost use of an arm, and for 200 weeks if a worker has lost use of a leg. 

A district hearing officer, however, determined that the estate could only receive 104 weeks of benefits because of Section 4123.52. The statute provides that the state Industrial Commission cannot make an award of compensation for a back period in excess of two years of the date on which an application for such compensation was filed. 

Since no application for loss of use benefits was filed during Dean's lifetime, the district hearing officer treated the date of Dean's death as if that were the date that an application was filed, and the district hearing officer awarded Dean's estate $44,512 as compensation for the loss of his arms and legs he experienced for the two years before he died. 

A staff hearing officer upheld this award, as did the 10th District Court of Appeals. 

A majority of the Supreme Court agreed and denied the claim for 4123.57(B) benefits, which Young contends was worth $363,000 (850 week cumulatively) because there was loss of use of both arms and legs.

Chief Justice O'Connor blasted the BWC for luring Marilyn into the rodent trap, stating that the Bureau unquestionably knew that Dean was medically eligible for the scheduled-loss award, and that he was unable to seek benefits for himself or to ask for help for that purpose, and that he had no guardian or other representative acting for him. 

"Given the bureau's authority to act in the absence of an application, its full knowledge that Dean was too disabled to seek benefits on his own, and its assertion that it would refer the case to the attorney general's office for a suggestion of incompetency if Marilyn did not act, I would hold that the bureau had a clear legal duty to act by either exercising its discretion to confer benefits in the absence of an application or to pursue the referral to the attorney general's office so that a proper guardian could be appointed to act on Dean's behalf."

Sometimes I'm a liberal, and sometimes I'm a conservative. A lot of us moderately disposed people have this sort of schizophrenic political/social personality.

In this case I'm decidedly liberal. In my mind this is clearly a case where procedure trumped substance. Yeah, I know, the procedure is in place to ensure that there is some order to the system and to defeat unmeritorious claims (which by the way never really seems to happen - if you're a thief, procedure has never been an obstacle and sometimes actually facilitates the criminal deed).

In the common law there is the doctrine of detrimental reliance - where someone relies upon the representations of another to their detriment.

This is basically what Justice O'Connor is saying - Marilyn relied upon BWC's representations regarding the attorney general's office, but that referral never happened.

And the state (remember that Ohio is one of the last remaining monopolistic states) interfered with an orderly process by denying for years her attempt to get an order from the probate court.

What this case really tells the public is that workers' compensation is so complex that you really do need an attorney to deal with it.

That's not right.

And neither is this case.

Young told our reporter that he is going to ask for a rehearing. I hope he does and I hope he convinces the majority of the court of the errors in its opinion.

Post script - Marilyn has since died, and the Sziranski business has debts to resolve before liquidation.

Thursday, September 19, 2013

Too Much Procedure to Talk

"Bottom line, we have gotten away from talking to each other and communicating."

That's what former California Workers' Compensation Judge and current mediator Frank Russo told me the other day.

Russo emailed me in response to one of my blog posts critical of the lack of claim management cooperation inherent in today's workers' compensation dispute resolution systems (YOU Created The QME Problem).

I was attracted to workers' compensation law as a young lawyer because case duration in general matched my short attention span and it was a collegial profession - everyone knew each other which facilitated communication and prompt case resolution.

So much of this has changed over the years. Litigated cases now drag out as long, or longer, than most civil cases. Trial by procedure rather than by substance seems to be how law is now practiced. And collegiality has taken a back seat to litigation tactics.

In other words, people don't seem to talk anymore. Folks may talk relative to their special interest, but in the global "we can solve this" communication standard there isn't a whole lot conversation going on.

Litigation minded attorneys don't seem to be comfortable with the process of trying to reach an agreement "Quaker style." Adjusters have huge case loads and get "too busy" to look up from their desk and when they do it is typically under some duress or pressure because of compounding problems.

Some are protective of their billings, some are protective of their litigation tactics.

Some companies just don't care because of their compensation schemes, some are penny wise and pound foolish. Some have bean counters focused on short term financial reports.

Some are just too close to the situation to see the bigger picture.

One of the remedies I proposed to the California QME "crisis" was to just settle cases - so some are overpaid, some are underpaid; in the grand scheme of things this all washes out.

But currently we as a system are very good at making victims out of work injuries and fostering that condition.

We take control away from the injured worker and from the employer and in the name of liberty, justice and freedom for all, tell these people what they will do, when they will do it, and for how much.

It's not about delivering what the law says is due, and it's not about protecting an employer's financial interests.

I dare say we are more about absconding with the very little dignity an injured worker has when entering the system and delivering the rotten fruits of our failed attempts to the employer at the end.

Yeah, I know, not all claims are like this - in fact most aren't. Those are the undisputed medical only claims that comprise the bulk of claims and cost the least amount of money.

But the ones that end up in litigation for one reason or another create the greatest expense and drag down systems the most.

So why don't more and more litigated cases go to mediation? What happened to TALKING to each other with the assistance of a trained professional who understands the law, understands the issues, and has no interest in the matter other than delivering a case closed status?

Russo, of course, can't understand why more claims aren't mediated and points to Florida to demonstrate the successes of mediation.

Florida just released its latest report on mediation in its workers' compensation system and the numbers are impressive, particularly if the ratios were translated to California's dispute resolution totals.

Out of 58,041 Petitions For Benefits (the functional equivalent of an Application in California), 15,850 went to mediation. Of that, only 25.1% resulted in an impasse, meaning that nearly 75% obtained some settlement status.

Another 11,738 mediations were scheduled during the year, but were "resolved prior." This means that some claimed benefit was provided or authorized in 11,738 instances. Some of these would have resolved anyway, but some resolved because the scheduled mediation provides a deadline and we are all focused on deadlines.

Another 10,712 mediations were scheduled, but the pending PFB was "dismissed." These are most likely those where the benefit was obviously due, but there had been some oversight and so the benefit was provided before fee/cost entitlement attached, or they were claims for benefits which evidence was not adduced to support, and they were dismissed.

Both of these (11,738 and 10,712) are likely situations in which mediation played a "silent" role as that deadline focused attention on the issues and with that focus came cancellation or dismissal.

Another 5,462 scheduled mediations were reset for private mediation. These are likely the more involved situations in which the parties think they will need more significant time to work through differences such as multi-party claims.

In my mind pretty impressive stuff.

The key difference between California and Florida besides 3500 miles and my personal opinion that California grows better oranges (particularly in Ventura County), is that in Florida mediation is mandatory in most cases (Fla. Stat. 440.25(1)) within 130 days after a PFB is filed.

If a state mediator can not accommodate that time frame then the matter is assigned to private mediation at the employer's expense.

So what do you think California?

I'll tell you what I think (you knew that was coming): mediation won't work in California; certainly not voluntary mediation and probably not mandatory mediation.

Right now the workers' compensation system in California favors disputes, NOT dispute resolution. Procedural defense, and for that matter offense, takes precedence over claim substance.

Not until California strips the workers' compensation dispute resolution process of all of the redundant, unnecessary, self-serving, billable, arcane, illogical, inane, confusing and ridiculous procedural steps necessary to get to a settlement will mediation ever work.

If you doubt any of my characterization of the current process, then please, study my California Workers' Compensation Flowchart and you'll understand the madness. When I started the Flowchart in 1995 it fit on a single 11 x 8.5 sheet of paper. Now you need an entire wall.

Systems collapse on themselves when procedure trumps substance, and if this is the future of workers' compensation it is not sustainable.

If you truly believe that workers' compensation does good, then talk to each other, and if necessary, use the assistance of a mediator. Otherwise wallow in procedure but don't complain after the system drowns itself.

Wednesday, September 18, 2013

Medical Transparency: Resistance is Futile

John Green, one of the vlogbrothers, posted a video blog on YouTube that so far has racked up over 2 million views, entitled "Why Are American Health Care Costs So High?"

The bottom line take-away from this manic, though entertaining (and I assume accurate) review of the United States health care system is the reason why costs are so much higher in the US compared to the rest of the world is ...

Because they can...

John argues that there is no central pricing control like other countries, that consumers will pay whatever they are charged because, basically, they don't know any better, and there is no transparency in health care pricing.

Maybe that's true. I don't know, I'm no expert on health care costs, or health care for that matter - hell, I'm no expert on anything.

But it does make sense that health care pricing should be a factor in most medical care decision situations where there is time to make an informed judgment about a procedure - which is most of the time.

Some medical businesses are starting to advertise their prices and it's causing some debate in medical circles.

The Surgery Center of Oklahoma, owned by its roughly 40 surgeons and anesthesiologists, drew national interest and sparked a bidding war as several other medical facilities in Oklahoma posted their prices according to media reports.

Pricing transparency is gaining momentum.

North Carolina passed a law requiring hospitals to provide prices on 140 common medical procedures and services.

In May, the federal government published the billed charges – the equivalent of a hospital sticker price – for the 100 most-common inpatient procedures.

The debate goes beyond pricing and for workers' compensation medical issues price alone is meaningless without knowing the quality of the care provided, i.e. outcomes.

One assumption made by those engaged in the debate is that the patient would be concerned with this value analysis - and I think that's an erroneous assumption.

In workers' compensation most of the decision making is taken away from the patient/injured worker. Decisions are made for that person by the physicians, the insurance company/administrator, attorney (if involved), the state, etc. While the patient/injured worker may ultimately decide whether to undergo any particular procedure, the who, how, when and cost of undergoing the procedure(s) is made by others.

Still, in my mind there is no reason for the patient/injured worker not to know how much someone is charging for a service or product before buying. Nearly everything is subject to the shopper's discrimination when it comes to pricing.

But not medical care.

Even with fee schedules, capitations, and other artificial controls on prices we never really know what is being charged until the bill arrives, and in workers' compensation cases even that's not the end as the carrier/administrator may negotiate even further down which has the perverse effect of inflating the initial charge because the provider builds in the post-bill discount factor.

Does the ultimate consumer of services and goods, i.e. patient/injured worker, even care about pricing and quality?

Probably not about pricing - not his/her money.

I'm sure there's quite a bit of concern about quality though - after all it IS his/her body.

Educating the patient/injured worker about cost will make no immediate difference in workers' compensation cases - again, not his/her money. Educating about quality would likely make a difference, if the data were easily available and interpreted, and if there were choice in providers - which in most work comp systems with networks in place, there isn't.

And even then, the doctor/patient relationship may sway the patient/injured worker's decision.

It's a sticky issue, but I think in the grand scheme of things, whatever transparency is available is good for the ultimate health of the medical industry and workers' compensation.

One step at a time. As consumers get used to seeing pricing before making important procedure choices, the more that pricing will become a factor in choice.

And ultimately those competing on price are going to start publishing outcomes and other quality metrics and there will then be competition based on outcomes.

It's a cultural thing and culture is very difficult to change - it happens in small increments.

I'm glad that Surgery Center of Oklahoma and other similar health care businesses are being bold and are publishing fees. That's one small step towards a cultural revolution that will change health care and change workers' compensation.

So while the ultimate consumer may not care right now about price, transparency in pricing will eventually lead to more information about quality and outcomes - the evolution of market competition will cause this to happen.

This won't happen over night, and of course there will be resistance - but that's like trying to resist Borg assimilation: "resistance is futile."

Tuesday, September 17, 2013

How Work Comp Works In A Legislature

It's always interesting to me how reactionary politics is.

And how powerful government employee unions are in many states.

In Connecticut state Sen. Catherine Osten, D-Sprague, plans to file a new version of Senate Bill 823 in February that would provide benefits for workers who suffer mental trauma after witnessing the death or maiming of a human being during a work-related event.

The bill is in direct response to the Dec. 14, 2012, shootings at Sandy Hook Elementary School in Newtown, Conn. Adam Lanza shot and killed 20 students and six school staff members before turning the gun on himself.

Osten originally filed the bill during the 2013 session of the Connecticut General Assembly.

News reports say that Osten is being prodded by the Newtown Federation of Teachers and the American Federation of Teachers Connecticut because of lower-than-expected contributions to the Sandy Hook Workers' Assistance Fund. State lawmakers created the fund last session to funnel private donations to responders and school staffers who suffered mental trauma as a result of the slayings.

Gov. Dannel Malloy signed legislation creating the fund into law on March 8. As of Monday, the fund had received $215,000 in donations and paid out $67,400 in benefits for medical treatment and wage replacement, according to the Connecticut Office of Victim Services.

The Connecticut Conference of Municipalities is of course against the bill because it greatly expands potential liability well beyond what happened at Sandy Hook.

Osten's original bill had the backing of the Connecticut AFL-CIO, the Connecticut State Police Union, the Uniformed Professional Firefighters Association and the Connecticut State Firefighters Association. Though it cleared the Labor and Public Employees Committee and the General Assembly's Appropriations Committee last session it died on the Senate calendar when the General Assembly adjourned on June 5, 2013.

Connecticut law currently limits mental/mental claims to police officers who use deadly force or are subjected to deadly force in the line of duty and to firefighters who witness the death of another firefighter while engaged in the line of duty.

All other "mental-mental" types of claims were taken off the books in 1993 because employer groups said the law was being abused and taken advantage of.

I'm not sure, if Sandy Hook really is the catalyst for Osten's bill, why it doesn't just provide for Sandy Hook claimant compensation via supplementing the Workers' Assistance Fund. The expectation was that the fund would have $1 million to work from, according to Matthew O'Connor, communications director for AFT Connecticut as reported by the Journal Inquirer.

Which is why it's bad policy to create reactionary law. Sure, the intent may be to compensate fairly the victims and families of Sandy Hook and to have something in place for future events, as unlikely as they may be - but a more sound approach is to deal with such situations on a case by case basis.

The downside of course is that some cases may not get such empathy from the community and may not result in "just compensation," but that is the risk we take in living - not everything works out the way we would like them to.

Connecticut House Speaker J. Brendan Sharkey, D-Hamden, told the Journal Inquirer:

"I am open to looking at it, but I also want to be very careful about not opening the door to a whole number of claims. The obvious concern from an employer’s standpoint − the ones who actually pay for this fund − is that anytime you open up the potential to claims from employees it can have a huge burden."

Sharkey sees the issue correctly. But politics isn't about correct - it's about taking advantage of opportunities.

Connecticut's SB 823 is a good example of how workers' compensation really works in a legislature. We'll follow this one next year...

Monday, September 16, 2013

YOU Created The QME Problem

I'm back on the California Qualified Medical Examiner issue.

Everybody, from the administration to attorneys and doctors in the system, have a different idea of why the QME process takes so long and fails to meet statutory time obligations, in addition to unnecessarily extending claim resolution.

Suzanne Honor-Vangerov, the managing attorney of the lien unit for Floyd, Skeren & Kelly − who prior to becoming an attorney served as manager of the Division of Workers' Compensation medical unit for seven years − in my opinion hit the proverbial nail on the head.

She said it's not fair to blame the DWC for "enforcing a policy that the Legislature has put forth," so "if people want to make it more simple, they should go to Sacramento and ask the Legislature to simplify the process."

I don't know what more to say.

The interests that created this process have unnecessarily instilled complexity in what used to be a very simple process - getting a medical opinion.

If we go back to the origins of why there is even a QME process, it was because certain interests got tired of competing docs, and awards just splitting the middle.

This stemmed from irritation arising from the perception that some claimants were getting more than they deserved and others getting less because the process wasn't "accurate."

So the cure that was devised was originally to force the parties to agree to an examiner and if that didn't work then to request a panel of examiners from an approved list kept by the DWC.

This created some frustration with litigating parties because of the mandate that they first attempt to agree, and document that attempt, on a medical evaluation (Agreed Medical Evaluation).

Various code sections and regulatory implementations conspired to create a serpentine process, but after a while folks figured it out, played the game, made up their own strategies to get what they wanted and the system sort of proceeded acceptably until the DWC got serious about enforcing the law.

When that happened things slowed down considerably because, as Honor-Vangerov put it"a human being has to type in every panel, and a human being has to look at every piece of mail."

Here's a couple of solutions that people can put into place right now, that won't cost any more money, and will expedite claims resolution by 6 months to a year:

1) Just settle the damned case. Hey, I know that sounds too easy to think it could work, but I'm willing to bet that most claims that go to a QME are within a pretty small range of settlement value. There may be a disparity of 10 percent on PD, maybe a couple months of TD - hey, just pay it and/or accept it. Poof, claim gone, delay gone, ex-mod minimally impacted, claimant moves on, attorneys close files for the next one. Applicant attorneys - don't be so obstinate. Your obligation is to zealously represent your client's best interests - but how are those interests defined? By the most amount of money obtained even to the point of bickering about a couple thousand dollars versus closing the case and letting the claimant move on?

2) Fine - you REALLY need to get some opinion either because of some business rule in the claims house, because you really, really think you're right, because your gut says there's not enough money on the table, or for whatever reason - just get some physician to do the evaluation. This is what's called an AME. Oh yeah, AME - but isn't that going to result in "splitting the baby"? Wah ... if you REALLY want to get the case closed then what do you care? Oh yeah, AMEs are scheduling a year out - well, only the AMEs YOU want to use. There are plenty of doctors, and if you're really interested in closing a case, who performs the work isn't going to matter.

3) Stop whining - the law was created because Sacramento interests perceived that constituents felt they were getting the raw end of the deal for whatever reason. Employer, carrier, administrator, applicant attorney - you wanted this, you got it. Work with it. Volunteer at the DWC medical unit to help process the paperwork. Maybe then you can observe first hand what goes on behind those walls and maybe then you'll be more careful with your paperwork.

Will these solutions satisfy people? Probably not - contention seems to be a theme in this "no fault" system. But when we look at what the real cost drivers are in workers' compensation claims, we need look no further than friction costs, i.e. the inability to get things done smoothly.

You may not like the result. You may take issue with an opinion. You may be disgusted by paying too much or accepting too little.

But YOU can get that claim resolved RIGHT NOW.

So let's get on with it. Stop blaming DWC for doing its job. YOU all created the problem, and it's up to YOU all to get out of it.

Friday, September 13, 2013

The Cost Tolerance Threshold

My wife has her personal definition of value and it is governed, in order, by the concepts of price, quality and convenience.

She was enamored with a retail clothing website, the name of which I forget at the moment, which does a remarkable job of data analytics to deliver nearly exactly what she wants - almost like reading her mind.

That is nothing special but what got her attention was ... price. The prices for their fashions were nearly 80% less than retail and much less than any other source.

The quality of the clothing was top notch too - great brands, good looking fashions... everything a style conscious girl could want.

The risk was convenience, which was traded for price.

The catch to this particular website is that the fashions were all one off, or of very limited quantity, over stock items and the purchase is FINAL - no returns, no warranty, no nothing. You buy it you own it period.

In addition, there is no prompt item delivery. The promise is that the item will get to you, eventually. Not next day, not next week, but in due course according to their fulfillment schedule, not your desired schedule.

It's obvious how the price is so, so low.

When the order finally arrived, my wife was not as excited as I thought she would be and she remarked that she would not buy from the website again.

The price was fantastic she recounted. So good that even if the dress didn't fit she didn't mind because she could gift it or donate it - the cost of the item was so low that she wasn't concerned about the money.

The quality was fantastic -- in this case the dress fit and was beautiful. The fabric was light and colorful, the manufacturing was top notch. Quality of the merchandise was not where the objection came from.

The objection came from convenience. To her the low price wasn't worth the nearly month long wait for the merchandise, or the time she spent on the site going through all of the one-off items in her decision making process to satisfy her assessment on fit.

In other words, my wife's purchase decision was still subject to what I call Cost Tolerance Threshold.

Everyone has a Cost Tolerance Threshold. I define the CTT as that point in the purchase decision making process where no matter the cost, other factors overcome the desire to purchase. In other words, other factors override price in a purchase consideration.

Some CTTs are quantitative in nature - the numbers don't add up to a positive purchase decision. Sometimes CTTs are qualitative in nature, like my wife's experience. Her dissatisfaction had nothing to do with any quantitative measure - she just was impatient and felt a need to get the goods faster than they deliver.

Workers' compensation is full of CTTs. Some are quantitative and some are qualitative.

The employer's CTT is usually quantitative, and is muted by the fact that generally workers' compensation is, through most employer's eyes, a commodity governed by price (we know differently!).

The injured worker's CTT is more often qualitative, governed by how well the IW feels she is being treated and recovering.

In between these two extremes is where we operate in the professional workers' compensation world. Much of claims management is governed by price, but at some point in time other factors override price and this may include availability of service, quantity of product, measure against a guideline, etc.

For instance, the recent trend across the nation to constrict physician dispensing has occurred because our CTT has been violated - there has been no demonstrable benefit to physician dispensing to justify the very much higher prices being charged for the same drugs that can be purchased at a pharmacy.

Sometimes our personal CTT may cloud the decision making process and inhibit good claim management because some value component does not ameliorate the CTT.

CTT is part of the value proposition and much of the friction I see in workers' compensation arguments is tied to one person's CTT not aligning with another's CTT. Some are liberal, some are conservative, some are in the middle, but everyone has their own, personal CTT.

We do this subconsciously - there is always some line in the sand that we mentally can not cross because some factor affects our perception of value.

Awareness of one's own personal CTT in any given situation won't fix the world but it may bring pause to consider the elements that one deems to be part of the value returned for the money or energy expended.

The next time you make a decision affecting a claim think about your CTT and whether that limit is interfering with rational processes.

Ultimately my wife's sense of value, the overriding consideration being price, got the best of her and she returned to that web site to order more fashions at ridiculously low prices, delivery be damned!

Thursday, September 12, 2013

CA's New Rate Filing Reflects Uncertainty

The political grandstanding that is typical this time of year when the California Workers' Compensation Insurance Rating Bureau publishes is pure premium rate request should be boisterous.

The WCIRB's Governing Committee yesterday voted unanimously to approve a 2014 advisory pure premium rate of $2.70 per $100 of payroll.

This is 3% more than the $2.62 rate the committee approved in August and is 6.9% higher than the average insurer filed rate of $2.53.

And even then rates may be inadequate to cover loss developments according to members.

The combined ratio remains well north of 100%.

Much of the uncertainty stems from the pending conversion to the Resource Based Relative Value Scale for physician reimbursement.

Estimates on the impact of the conversion range from no impact to an increase of up to several hundred million dollars.

The reason for the vagueness is that there are codes in the current system that have not yet been "cross talked" to the RVRBS.

Adding to the complexity is that for unknown reasons claim frequency has been climbing.

Increased frequency and medical loss-cost development that was observed in data collected through the end of June accounts for more than two-thirds of the proposed rate increase. (About 2% of the increase for 2014 is attributed to higher permanent disability benefits.)

Some suspect this is due to resolution of complex older claims that had been languishing because of Medicare set-aside requirements as well as the nature of the injuries.

Since complex claims mostly involve medical issues it’s possible that the increased settlement rates on older claims could be driving up the medical loss development from previous years.

But old complex claims doesn't account for all of the increase.

Claim filings spiked throughout the country in 2010. But claims have decreased in other states. In California though, 2011 was flat, and increased about 3% in 2012. The Rating Bureau is currently projecting a 6% increase in claim frequency for 2013.

Executive vice president and chief operating officer for the WCIRB, Dave Bellusci, called the 6% projection "a little bit alarming.”

I think that's an understatement.

Frequency drivers are going to be the subject of further study.

The WCIRB plans to submit the 2014 rate recommendation to the state Department of Insurance by the end of the week. And I'm sure Insurance Commissioner Dave Jones will thunder from the pulpit about excess rates. We've been down this road many times.

There are so many variables in play right now in California that the ability of the actuaries to come up with any projection amazes me. Lien litigation, RVRBS, frequency drivers, permanent disability changes, supplemental fund, clean up legislation, pro sport exemptions - the list goes on and on.

And of course the WCIRB rate is only a recommendation. The California market continues to be very competitive. There is no shortage of capacity in the market right now.

With a growing economy, albeit slowly, payroll expansion is going to move premium faster than rate increases.

Still, the temptation will be to make some changes and this temptation needs to be resisted. It's time for the system to settle down. The last 10 years have been tumultuous for employers trying to pin down their workers' compensation budgets. It's been damned near impossible.

SB 899, legal challenges, regulatory moves, SB 863, more regulatory moves and legal challenges - and in the meantime the employer community is trying to figure out whether or not more people can be hired or where automation and technology can be implemented to minimize risk and fluctuation.

I pointed out yesterday how complex just getting a medical-legal evaluation is in California, prompting the Division of Workers' Compensation to publish an educational webinar on the topic in a few weeks.

Complex systems take time to mature - people need to adjust their own routines and systems for efficient operations. In time, assuming no more changes, we can have a baseline operating standard and then true efficiency can be measured.

So while comparing rate per payroll is a measure of employer cost year over year, those comparisons aren't particularly useful to the financial officer writing the premium check at the employer's offices.

The challenge over time will be to resist the temptation to make changes and let the past 10 years settle into a routine.

But workers' compensation is historically a political football. New people come into town without adequate perspective of the past and their own ideas on how to make things work.

If California wants a stable workers' compensation market and system, things need to be left alone for a while - even in the face of adverse (depending on perspective of course) judicial rulings ... which will surely occur over time.

So ignore the political grandstanding that is quite likely to occur. Carriers are writing, there's good competition, and let the claims experience settle down a bit.

Wednesday, September 11, 2013

We Don't Need Education, We Need Simplification

Something is horribly wrong with a system where professional participants fail a prescribed procedure up to 90% of the time.

The California Division of Workers' Compensation is holding training for claims administrators, attorneys and others to learn how to request a qualified medical evaluator panel.

The reason, according to their press release, is because since the start of 2013, i.e. the start of the changes implemented by SB 863, up to 90% of panel QME requests in represented cases have been improperly submitted, DWC says.

Are we professionals in work comp really THAT stupid?

Or is the system ridiculously overbearing, complex, and silly?

Honestly - why does getting some random doctor have to be so confusingly difficult that it is done incorrectly up to 90% of the time compelling the DWC to educate the professional population?

And, probably related, why is this system still manual?

Here's what's supposed to happen:

1) parties have a dispute about disability and some other medically related issues (though not treatment - now that is the purview of Utilization Review and Independent Medical Review); so

2) one of the parties sends a request for a Qualified Medical Examination; and

3) within 10 days (though experience from what I have heard, and which DWC admits, is longer due to back log) three random names are sent to the parties; then

4) each party strikes a name and the QME is selected.

Why is this so difficult?

I'm sure there's various reasons which is what DWC seeks to address in this education.

My point is that it SHOULDN'T be this difficult!

Here's the reality though, as explained by attorney Michael Sullivan in his Sullivan On Comp treatise:

***********Sullivan On Comp section 14.29***********

If a party wishes to request a panel, the request must be submitted on QME form 106 (request for QME panel under LC 4062.2 — represented). A copy of the form may be obtained at the DWC website: The party requesting a QME panel must:
  • Attach a written objection indicating the identity of the primary treating physician, the date of the primary treating physician's report that is the subject of the objection and a description of the medical dispute that requires a comprehensive medical-legal report to resolve.
  • Designate a specialty for the QME panel requested.
  • State the specialty preferred by the opposing party, if known.
  • State the specialty of the treating physician (CCR 30(b)).
QME form 106 specifically requests this information. Page three of the form also contains codes for the various specialties. The completed form must be mailed to the Medical Unit address that is on QME form 106 by first-class mail delivered by the U.S. Postal Service. The Medical Unit will not accept panel requests in represented cases that are delivered in person by a party, the party's attorney, any other person or by other commercial courier or delivery services (CCR 30(g)).

Also, the form specifically requests whether the examination is requested under LC 4060, LC 4061, LC 4062 or LC 4061 and LC 4062. In one case, however, the appeals board held that an applicant's clerical error in requesting a panel QME evaluation under LC 4061 and LC 4062, instead of LC 4060, did not render the assigned panel invalid because the form also stated that the claim was denied. Furthermore, the defendant was sanctioned under LC 5813 for objecting to the evaluation solely on the grounds of this clerical error, and informing the selected panel QME that her report would be inadmissible.[9]

If the request form is incomplete or improperly completed so that a QME panel selection cannot properly be made, the request form will be returned to the requesting party with an explanation of why the QME panel selection could not be made. The medical director also may delay issuing a QME panel, if necessary, until the receipt of additional, reasonable information requested from one or both parties that is needed to resolve the panel request. Reasonable information includes, but is not limited to, whether a QME panel previously issued to the injured worker was used (CCR 30(c)). If the medical director asks a party for additional information needed to resolve the panel request, the periods for selecting an evaluator from a QME panel and for scheduling an appointment will be tolled and will remain tolled until the date the medical director issues either a new QME panel or a decision on the panel request (CCR 30(h)).

If the request form is submitted and the employee no longer resides within California, the geographic area of the QME panel selection within the state will be determined by agreement between the parties. If the parties cannot reach an agreement, the geographic area of the QME panel selection will be determined by the office of the employee's attorney for a represented employee (CCR 30(e)).
***********END Sullivan On Comp section 14.29***********


Though I haven't talked to him in some time, Bryan Nix who used to be Nevada's Chief Administrative Hearing Officer in charge of all administrative adjudicatory bodies, including that state's Workers' Compensation Board, demonstrated how parties are able to get hearings quickly and without undue paperwork or hassle.

The hearing request procedure at the main office in Las Vegas when I last met with him was simply to submit a hearing request on paper - the Nevada WCB didn't require any specific forms; any piece of paper with the case number and request legibly written would generate a hearing.

Why can't we do that in California? Why do we need all of these legal references, all of this redundant information, all of the unnecessary procedure?

No wonder DWC has a back log of QME requests and can not process them timely - it's own staff has to sort through and discriminate requests on the basis of illogical mandates for information.

Please - we don't need education, we need simplification. THAT will solve the QME "problem."

Tuesday, September 10, 2013

Rare Agreement in Comp

It seems that SB 863 and its aftermath is doing a bit more to bring the interests of injured workers and their employers closer together than previously thought.

The issue upon which there seems to be agreement concerns the certification of interpreters for medical appointments and the immediate effective date of regulations implementing the requirement - because the Division of Workers' Compensation had already completed the formal rule making process by its certificate of compliance filed with the Office of Administrative Law, the rules took effect immediately despite a request by DWC to delay the effective date to October.

Though interpreters could get "provisional certification" with agreement of the claims administrator, adjusters aren't always available to grant status and there isn't sufficient time to get formal certification from the two commissions authorized by the rules to provide certification.

The Certification Commission for Healthcare Interpreters says on its website that it can take 11 to 19 weeks from the time an interpreter applies to take its exam until the interpreter has the results of the test. The National Board of Certification for Medical Interpreters says it can take 12 to 18 weeks to complete the process.

So Assemblyman Roger Hernandez, D-West Covina, amended AB 1376 to say the DWC interpreter certification rules will take effect on March 1, 2014. Hernandez also declared his bill an emergency measure and added language saying, “In order to avoid jeopardizing injured workers’ access to medically necessary services, it is necessary that this bill take effect immediately.”

The bill as introduced would have transferred the authority for creating and maintaining the list of certified interpreters for administrative hearings from the Department of Human Resources to the Division of Workers’ Compensation beginning in 2018, which makes some sense in my mind since the interpreters will be providing services under the workers' compensation laws.

Gilbert Calhoun, president of the California Workers’ Compensation Interpreters Association, told WorkCompCentral he thinks the bill amendments are good.

Jesse Ceniceros, president of Voters Injured at Work, said he sponsored the amendments to the bill to head off the possibility that injured workers would be cut off from treatment because an interpreter wasn’t available.

Jason Schmelzer, a lobbyist for the California Coalition on Workers’ Compensation, told WorkCompCentral employers “gave the green light” after reviewing proposed amendment language before it was added to AB 1376.

And the California Chamber of Commerce lobbyist Jeremy Merz said the Chamber is aligned with CCWC.

Finally carriers seem on board too - Mark Sektnan, president of the Association of California Insurance Companies, agreed the amendments are necessary to give interpreters time to comply with the rules.

Imagine that - everyone on board for a change that seems to be in the best interests of injured workers with limited English skills; probably the single greatest sub-population that needs workers' compensation treatment and services.

AB 1376 is up for a third and final vote in the Senate, which can act on the bill at any time this week.

If the Senate passes the bill, it will go back to the Assembly, which must concur with the Senate amendments before the measure could be presented to Gov. Jerry Brown.

There are four days left to get this done as the Legislature adjourns Friday.

Monday, September 9, 2013

An Angel Down Below

It is not typical that I have a tough time writing about workers' compensation issues. Since a youngster in grammar school I have always had an ability to at least buffalo my way through an essay assignment even if I didn't know what to write.

But I woke up this morning with vapidity between the ears. Nothing was touching me. Nothing in the news seemed to matter.

It's all the same old stuff: some employer wrongfully denies a case and gets slapped by a court; rates go up, rates go down; doctors don't get paid; someone collects benefit checks illegally and gets jailed; regulators are accused of rewriting statutory mandates, etc.

It just gets so uninspiring at times.

When I am at the keyboard musing potential topics with no clear direction, like I am right now, I wonder where the good is in workers' compensation.

Everywhere I turn it just seems to be bad news.

Maybe this is just journalism in general. Bad news. Bombings, chemical warfare, political strife, murders, kidnappings, rapes, burglaries, shootings.


I know deep in my heart that workers' compensation can do some remarkable things when it is allowed to work as intended - someone gets hurt, they get treatment, a little cash for the inconvenience, and they're back to work.

Such cases aren't reported because, perhaps, these are the norms.

What does get reported are the outliers - the cases that attract attention because they are not routine. Something happens along the way in such cases that caused a deviation from the median.

I don't know what the exact statistics are, but it is is well known that the vast majority of expense in workers' compensation comes from a very minute minority of claims. These get our attention because they are not normal - and we wonder how can we bring such situations back into the mainstream, to match the median.

So I decided after typing away at the first paragraphs above to focus on some good news about good people doing good things.

One of these people is in Australia. Australia has workers' compensation that is similar to what is in the United States, though not 50 different sets of laws...

And probably the most unsung hero in workers' compensation lives and works, gratuitously I might add, in Australia helping injured workers get through the system, regain some composure in life and return to as normal of a productive working life as possible.

This person is Rosemary McKenzie-Ferguson.

I know her only through the Internet - primarily through LinkedIn, but we have communicated via other Internet means as well.

She is a former injured worker who went through the mill, experienced its pitfalls, but also saw its benefits. After her case was done she felt that there were others similarly situated who could use some assistance, and her philosophy, mind-set and drive has, in my opinion, made her a thought leader in workers' compensation.

For reasons that I don't understand, and perhaps it is better that way, Rosemary (hyphenated last names are too much for me to type...) has been able to eliminate the chafe in workers' compensation by working with the only two stakeholders that really matter: the injured worker and the employer:

"The outcome needs to be balanced for the two important parties, they being the employer and the injured worker," she posted. "It would be very easy to demand gold plated outcomes for injured workers, however I also know that the levies paid by the employers increase when claims get stuck."

In one post she commented on how she attended a case conference that included all of the usual players, but she advocated for BOTH the employer and the employee. She said "it made for a very short and most interesting case conference." 

I bet it did! Imagine, someone stepping in to make mediate where others simply have no interest in getting the right thing done.

She says, "I am not angry - anger is a wasted emotion - I carry no malice."

That is the most profound statement anyone could make when dealing with claims. 

She continues, "I am frustrated because I know what is possible and I know how very easy it is to remove the obstacles that the workers' compensation system has created in order to feed itself."

How true Rosemary. Workers' compensation has so many obstacles that seem to be in place now just to feed itself.

That Rosemary continues to do the work that she does, with the limited resources she has, is amazing to me. She has tons of success stories, and frankly few failures.

So there you have it - I got through my writer's block by thinking of good things.

You should think good things too - Rosemary is a shining example of someone who puts the best interests of those who actually need the support first, and she does it with little to no money.

Which brings me to my closing - contact Rosemary via LinkedIn and find out how YOU can help too. Whether it is donating money to her non-profit organization so she can continue to do the good work, or getting trained to further her good will through out the workers' compensation world, Rosemary is a gem and shines brightly in this otherwise very rough and dirty world.

Friday, September 6, 2013

SC Case Highlights Culture Differences

South Carolina (where I'll be presenting in October at the state's educational conference in Myrtle Beach) takes a hard line on causation and a recent Court of Appeals ruling in that state provides a clear example just how strictly the "COE" part of the equation is construed there and highlights some important lessons.

Carolyn Nicholson worked for the South Carolina Department of Social Services as a supervisor in the investigations department. Part of her job responsibilities were to attend weekly audit meetings to review and update case files.

On Feb. 26, 2009, while heading to an audit meeting, Nicholson tripped and fell in the carpeted hallway of the DSS office. 

Nicholson had been carrying a stack of files with her, but she testified that the files did not cause her to trip. She also asserted that her leg did not give way, and she had no health problems that would cause her to fall.

There also was no defect in the carpet or floor of the hallway, as Nicholson recalled. It was a normal, level, carpeted hallway, and there was no debris on the floor either. 

She said that her shoe had scuffed against the carpet, and "the friction from the carpet just grabbed me" and that's what made her fall. 

Nicholson sustained injuries to her neck, back, and left shoulder that kept her out of work for two months. She sought temporary total disability benefits and payment for her medical treatments.

Her employer and its insurance carrier, the State Accident Fund, admitted that Nicholson fell at work but denied she sustained compensable injuries by an accident arising out of her employment.

The hearing officer agreed with State Accident Fund because "there was nothing peculiar about the floor at (the DSS) building that caused her to fall," and her fall "would have carried the same consequences had she fallen on a carpeted floor outside" the DSS building.

The hearing officer was overturned by the Workers' Compensation Commission because the conditions of her workplace had posed the risk that caused her injury.

The Court of Appeals reversed the WCC citing a 1955 Supreme Court case, Bagwell v. Ernest Burwell Inc., which requires that a worker must be able to show a causal connection between the conditions under which she performs her work and her injury to compensable.

Consequently the Court of Appeals reasoned that a level carpeted floor with no defect did not present any sort of unusual risk to Nicholson.

There was also nothing about the presence of the carpet that was "peculiar to the work" that Nicholson did, the court said. In fact, "the only fact connecting Nicholson's fall to her employment is that her injuries occurred while she was working in a carpeted area of DSS's building."

I'm not sure I like or dislike this ruling.

I like that South Carolina hasn't expanded workers' compensation into the realm of fuzzy injury claims. Here's a state with workers' compensation laws that are interpreted in light of a time when claims were real, physical, and indisputably part of the employment risk.

On the other hand the employment risk has changed since South Carolina adopted workers' compensation, and since 1955 - so this ruling shifts the cost of the employment risk over to the general health and public benefit systems which I don't think is right.

But what is most interesting about this ruling is that it highlights the disparity in how workers' compensation operates from one state to the next, and how complicated things can get for the injured and the providers trying to figure out what system to be in for services, benefits, and payments.

And also why certain measures of system performance comparing one state to another can't be reliable because they are not an apples to apples comparison - what would be an accepted injury in one state is denied in another, simply as a matter of application of law.

Thursday, September 5, 2013

So THIS Is What Non-Subscription Is About?!

I've been made aware of a stinging rebuke to a non-subscriber's motion to compel arbitration of a work injury in Texas where the judge lambasted the employer for attempting to buy a result.

Yvonne Cardwell was a part time dishwasher at Whataburger (what they call a "Team Member") and was paid $7.40 per hour for generally 17 hours per week, making $125.80 per week, or $6,541.60 per year. (The company describes this as a "competitive weekly salary" with "flexible scheduling.")

She lives in a shelter for homeless women.

Whataburger owns and/or operates over 700 restaurants in ten states and has a nice family owned business that's been in operation since the 1950s.

Cardwell alleged a serious work injury that occurred 12/23/2012 and since her employer was a non-subscriber she sued in civil court. Whataburger filed a motion to dismiss the suit and to compel arbitration arguing that Cardwell acquiesced to arbitration by signing an agreement to arbitrate and that arbitration is more efficient and less expensive.

Judge Spieczny was not impressed. Actually, as you will read, the good judge was patently offended that the company would make such claims.

When Cardwell went to work for Whataburger she was required to sign an arbitration agreement as a condition of employment. That agreement is a dense 16 paragraphs contained within a 50 page employee handbook.

As noted by the judge, "the policy was created by Whataburger and not one single word of it was proposed by Plaintiff or negotiated with Plaintiff."

Judge Spieczny also notes that Whataburger's policy manual states that the company may modify, revoke, change or delete the arbitration agreement under some circumstances, but that employees have no such powers.

The judge goes on to note the great disparity in fees associated with filing in El Paso County civil court ($305.00) versus private arbitration (somewhere between $975.00 up to $75,500.00, depending on whether it is fixed or flexible schedule and the amount in controversy) in addition to arbitrator expenses and American Arbitration Association administrative fees.

In this case the judge speculates that the fee would have been about $20,000.

From the statement of facts, it seems Judge Spieczny was less than impressed with Whataburger's attempt to control liability:

"The Court asked counsel for Whataburger if there was any conceivable reason to pay unnecessary fees other than to 'buy' a decider who would be very well paid by Whataburger, supplied by an Association which would be very well paid by Whataburger, in the hope and expectation that the decider would be biased in Whataburger's favor."

Ouch. You know counsel for Whataburger was not having a good day with that test.

Heh, heh - in fact the judge notes that counsel for Whataburger said that arbitration would be more efficient, but when the judge offered to provide a quick trial date said counsel deferred.

"Therefore, even though Whataburger can have a non-jury trial before a duly elected judge of this court promptly without paying a penny in forum fees, they instead want to pay approximately $20,000 for an AAA airbtrator to set a later hearing. There is no conceivable reason for that request other than Whataburger's belief that it will fare much better, and Ms. Cardwell will fare much worse, before an arbitatrator."

Ouch, again.

In denying Whataburger's motion to compel arbitration, Judge Spieczny says, "It is hard for this Court to think of anything more repulsive than perpetuating a system that lets large corporations lavishly buy their way out of judicial accountability and into a system more favorable to their side."

"Paying approximately $20,000.00 to purchase a more favorable fact finder and lying to employees about why you are doing it is all the unconscionability this Court needs."

Bravo to Judge Spieczny for standing up for justice.

Shame on Whataburger for frankly abusive practices wielded against impoverished employees living in a homeless shelter.

A couple of days ago I wrote about the industry's responsibility for claimant fraud.

Whataburger's employment practices are likewise just as dishonest when it tells its employees, and then tries to buffalo the court, by claiming that "Arbitration has the advantages of being less formal and getting the dispute resolved more quickly and at less expense," though in fact the opposite proved true as pointed out by the judge.

Or, as Judge Spieczny says, "Affirmatively lying about [the benefits of arbitration] in the policy is unconscionable."

Whataburger claims that they stick to the principals that got them to such business success, including "being proud of everything we do."

That includes fraud?

Management should reexamine its principals in light of this case and that maxim.

If this is what non-subscription is, I can't buy into it. And neither should you.

Here's the actual opinion and order.

The court docket to search for the case is here.