Friday, January 30, 2015

Comp + Immigration = SCOTUS

The immigration policy of this country has routinely been found by the United States Supreme Court to be a federal issue, even as states attempt to frame it within the context of laws that have nothing to do with immigration.

Florida's Supreme Court recently refused to disturb lower appellate court holdings that a workers' compensation statute could be more broadly interpreted to criminalize the lack of legal residency even if there had been no claim for workers' compensation benefits.

It appears that the U.S. Supreme Court, again, won't stand for a state trying to legislate and adjudicate immigration issues.

The court on Wednesday announced that Brock v. State of Florida has been distributed to the justices for conference on Feb. 20.

This doesn't mean that the court is going to accept the case for hearing. But it is a very good indication that the court is interested in the case so the probability that it will actually hear it is good.

Francisco Brock – also known as Armando Lopez-Bock – was arrested after a raid at Waste Pro USA, and charged with violating Florida Statutes Section 440.105(4)(b)9.

Section 440.105(4)(b)9 of Florida statutes makes it unlawful for a person to present "any false, fraudulent, or misleading oral or written statement to any person as evidence of identity for the purpose of obtaining employment or filing or supporting a claim for workers’ compensation benefits."

Brock's coworker, Hector Jordan – also known as Jordan Hector – was also arrested and prosecuted under the same statute.

Violation of Section 40.105(4)(b)9 is a third-degree felony, punishable by up to five years in prison.

Brock and Jordan went to trial in a consolidated proceeding. They moved to dismiss the charge against them on the basis that neither could have committed comp fraud when neither had ever filed a comp claim.

The judge granted their motion, finding the state was "required to prove that they obtained employment for the purpose of workers' compensation benefits" to establish a violation of Section 40.105(4)(b)9.

But the 4th District Court of Appeal reversed the judge last April.

The 4th DCA said Section 40.105(4)(b)9's use of the word "or" indicated that it could be violated in two ways – by the presentation of false information for the purpose of obtaining employment, and by the presentation of false information for the purpose of obtaining workers' compensation benefits.

Based on its reading of the statute, the 4th DCA found the Legislature "specifically intended to make it a felony for a person to knowingly present any false or misleading identification for the purpose of obtaining employment, irrespective of the existence of any workers' compensation claim."
Brock and Jordan both appealed to the Florida Supreme Court citing a conflict of laws in that the 1st DCA in an earlier case known as "Matrix," which held that a worker who presents a false Social Security card for the purpose of obtaining employment is still entitled to workers' compensation benefits, was in conflict.

The Florida Supreme Court wasn't interested.

In the past the U.S. Supreme Court has recognized the Immigration Reform and Control Act of 1986 as the federal government's assertion of control over the regulation of the employment of undocumented workers.

Part of the "immigration problem" this country has is that there is a disconcerted voice on immigration policy because states, particularly border states, seem to have their own agenda on immigration.

But immigrants, legal or not (and the vast majority of us are descendents of illegal immigrants), have a place in this country, have established important cultural roots in this country, provide a source of economic activity (don't get me started that they are a drain on the economy - there are study after study that say the exact opposite), and, bottom line, they are human beings deserving of what this country stands for: life, liberty and the pursuit of happiness.

I'm thrilled that the U.S. Supreme Court is giving the Brock case consideration, and hope that it hears the issues.

After all, its not often that workers' compensation makes its way to the very highest court of the land.

Thursday, January 29, 2015

The Memory Crisis

Usually the debate in workers' compensation about the aging work force concerns employment risks of orthopedic based injuries or other associated, easily identifiable, age-related maladies.

But there's a larger issue looming that affects more than just the aged worker: Alzheimer's and dementia. The diseases are related, but different.

And these diseases can be lurking in any worker, are not relegated to just elderly people, and frankly create both risk, and opportunity.

I think I've become more numb to the possibilities of Alzheimer's and dementia affecting the work place because of Mom's placement in a memory care facility nearly a year ago. Visiting twice a week or so, I've come to know many of the residents, and their primary-care family members.

There's Richard #1. Richard #1 is about my age, maybe a little younger. He's in his own little world. Most of the time his face is blank, eyes are opaque. It doesn't seem there's much going on there. He's about six feet tall, so he can be imposing, but most of the time he is hunched over.

In his former life he was an executive, and volunteered for an outdoor rescue department in the mountains - an "occupation" he loved and pursued whenever he could get away from the desk, his attentive wife, Grace, tells me.

Grace lives nearby, so she visits nearly every day at the lunch hour to help feed Richard #1, walk him about, and give him unbelievably loving care.

Richard #2 has nearly an impressive resume - an engineer in the past, he too is nearly six feet tall, but can't walk by himself. #2 carries the same blank face, same distant eyes, same vacant demeanor. Marsha, his wife, is there every day to feed him, provide some comfort, walk him around for some exercise.

Richard #2 is about the same age as #1.

Tommy (TJ) retired as a Marine Master Sergeant. Then he went to the Secret Service where he was assigned personal protection duties to, ironically, President Ronald Reagan. There's a great photo of TJ and President Reagan shaking hands as TJ received a commemorative from the president.

Mom's roommate, Bente, is a widow; her husband was a Danish diplomate. Bente has traveled the world socializing with heads of states from countless countries.

Some of the residents don't seem like they belong there ... until you talk to them.

Jimmy retired from the Santa Ana Fire Department a few years ago. I don't know his age, but he can't be much older, if at all, than me (55). He's got a gut! And he always, always, wears a San Diego Chargers ball cap. He seems lucid, can carry on a conversation, and can remember some details.

But then, every few minutes, he'll say something that you know isn't correct, you know doesn't make sense, and just seems to be a thought out of left field.

JoAnne and her husband Lloyd seem like regular folks. They are both residents, are always smiling, always quick to engage in conversation. And then they start talking about "coming down stairs" (the facility is a single story building) and "going out to the restaurant", etc., there's an understanding of why they are both living in memory care. JoAnne and Lloyd are in their eighties.

I thought Peggy was a caregiver or other worker at the facility. Peggy seems perfectly normal. She dresses appropriately, walks fine and without assistance, seems to engage socially. I would guess her age as around 60 - she's not old and in fact I could imagine her still at work.

But, again, when you converse with her, Peggy will communicate a thought that is not of this world, or perhaps any world other than what's going on in her head.

Alzheimer's and dementia are insidious. They sneak up on the victim. We all tend to forget things as we get older, but these diseases aren't about forgetfulness; they cause disruptions in the thought processes, both autonomous or dependent thinking.

And while these diseases are more commonly associated with the elderly (Mom's first indication of dementia was probably about 10 years ago at age 80), these diseases can afflict those still working: it is estimated that one in nine people age 65 and older (11 percent of the population!) has something going on associated with Alzheimers and dementia.

Since these diseases are so insidious, the Alzheimers Association estimates that nearly half of the estimated 5.2 million Americans go undiagnosed.

Women are at greater risk than men, the diseases are more commonly associated with less education (though the folks where Mom is at defy that - but that may be because the facility is "high end" and expensive, so those of less education may not have the means).

According to the Alzheimers Association, there is a wave of victims about to be afflicted and by 2025 the number of Alzheimer and dementia patients is estimated to be 7.1 million - a 40% increase from the approximate 5 million today.

There are two huge impacts: those still working while the disease progresses, and those caring for the people who have been diagnosed.

Workers' compensation certainly isn't going to be called upon to pay for the care of those with Alzheimers or dementia in the work place, except for those with a connection to brain trauma such as football players or workers who sustain a head injury - but the liability of unrealized self-harm (falling, tripping, picking up something hot, fighting, etc.) is real. Is that person just forgetful today? Or is there something more going on?

And what about apportionment to some pre-existing disease process or co-morbidity? Certainly fodder for litigation...

There are caregivers that are paid, such as at Mom's facility, but there is a huge population that is not paid, and for whom caregiving is a second occupation. This affects the work place behavior and performance.

Paid caregivers face obvious risks: lifting, being hit or physically assaulted, and other such dangers. There's the emotional toll too - being in the memory care environment all of the time gets depressing, and caregivers become attached to their wards.

I don't have an answer - heck, I'm not even sure what the question is! It seems to me, though, that one of the exit legacies of the baby boom generation is a very large population that will place a much different burden on work place risks and, ergo, workers' compensation.

At best, all I can say is that I think there's a huge impending issue that we're not ready to address.

Wednesday, January 28, 2015

Early Work Comp Politics

It seems like the entire workers' compensation industry is under attack by legislators and regulators.

Of course it's not, but this morning's headlines certainly lead to that impression:
Some of this activity is the product of previously passed legislation. The California story arises out of a mandate in SB 863 that the Division of Workers' Compensation adopt a fee schedule for home health care by July 2013 - but there were a lot of time deadline mandates in that bill that could not realistically be met with all of the other work necessitated by the new law.
Bowzer wants YOUR vote

Research group, RAND Corporation, was tasked with figuring out how to compensate home health care providers. Looking to Medicare's fee schedule, RAND recommends using what is already in place, and by reference, that would eliminate reimbursement to family members.

Payments under Medicare are limited to services provided by home health agencies that are certified by the U.S. Centers for Medicare and Medicaid Services and can be provided only to individuals whom a physician has certified as homebound and in need of skilled care on a part-time or intermittent basis.

The issue with the limitation is that some family members can't be trusted to provide appropriate care, let alone abuse the position and take advantage of the opportunity to cheat the system.

Other activity arises out of issues with a couple of folks that don't know how to control themselves, so the state has to step in to level the playing field to curb abuses by people who don't like to play fair, which, to a large extent is why we end up with fee schedules.

Minnesota's system has apparently tired from disputes arising out of how much to pay for what services rendered by in-patient providers.

Workers’ Compensation Commissioner Ken Peterson told WorkCompCentral that the present cap on payments has “led to an awful lot of litigation over the years, and a lot of delays and fights.”

“The payers come in with one set of numbers (as to) what the 85% should be, and the hospitals have another set of numbers,” Peterson said. “So you end up using a lot of bill-review services, just leading to broader disagreements over what the bills should be, and higher-cost services.”

Some action is follow up or re-introduction of previously attempted legislative work that never made it to vote, such as New York's mandatory premium audit proposal.

New York Assembly Insurance Committee Chairman Kevin Cahill, D-Kingston, filed Assembly 2199 on Jan. 15, at the request of the New York Insurance Association, seeking a mandatory payroll audit on construction companies annually, and every other business biennially.

Similar legislation filed by Senate Insurance Committee Chairman James Seward, R-Milford, passed the Senate by voice vote on June 20, 2013, but died in the Assembly Rules Committee last year.

And of course law makers have a soft spot in their voting hearts for first responders and public safety workers.

North Dakota state lawmakers have introduced House Bill 1317 by Rep. Amerman, D-Forman, that would provide workers' comp benefits to full-time paid firefighters, law enforcement officers and emergency medical personnel who have been diagnosed with Post Traumatic Stress Disorder stemming from an event that occurred on the job. State Sen. George Sinner, D-Fargo, has introduced a companion measure, Senate Bill 2256.

It's early in the legislative season. Surely there will be more states with more proposed law changes as one special interest or another seeks some particular advantage, or tries to stem actual or perceived abuse.

One thing that doesn't change in workers' compensation: it's a political creation, and a political solution, that doesn't always translate well once put into real world practice.

Tuesday, January 27, 2015

Probability vs. Possibility

As Tennessee gets ready to start debating about offering a non-subscription option, a recent Texas award against a "bare" employer is a reminder that a part of workers' compensation is about risk mitigation.

Tennessee Sen. Mark Green plans to introduce legislation that would allow self-insured businesses the option of foregoing the state’s workers’ comp scheme.

Details are lacking at the moment and those in the know would not divulge any to WorkCompCentral's Joey Berlin.

According to the story, the Association of Responsible Alternatives to Workers’ Compensation provided Green the assistance to build the plan.

Green’s only public pronouncements about the bill at this time are what was contained in his list of legislative priorities released last week. That release said Green’s proposal would call for a “workers’ compensation ‘opt-out’ program for businesses that self-fund” tailored to Tennessee, and intended to drive down costs and create more competition, ostensibly to ultimately benefit the state's consumers.

The state just recently went through a reform in 2013, transitioning its workers’ comp scheme to a fully administrative system for all claims on or after last July 1.

Texas law allows employers to forego workers’ compensation coverage completely; they can provide employees with an alternative benefit plan if they choose. Oklahoma, which recently reformed its system, allows qualified employers to opt out of the state scheme, but only if they offer an alternative plan with equivalent benefits.

A big difference between Texas and Tennessee, though, is that Tennessee caps personal injury damages.
Bowzer ponders the risks...

The Tennessee Civil Justice Act, signed by Gov. Bill Haslam in 2011, caps noneconomic damages at $750,000 for each injured plaintiff, or $1 million for an injury deemed to be catastrophic.

A recent Texas case shows how that cap on damages might appeal to Tennessee employers wanting to exit the state's workers' compensation system.

On April 23, 2007, Charles Robison, a flat bed truck driver with 30 years experience, was attempting to pull a 150-pound tarp over an uneven load stacked on his trailer.

His employer, West Star Transportation, had to borrow a fork lift from a neighboring business to lift the tarp to the top of the load. Robison attempted to pull the tarp down to cover his cargo without safety equipment and without help from coworkers when he fell 13 feet.
Robinson sustained a severe head injury, among other injuries and is no longer able to work, care for himself or live independently. He will require extensive medical treatment for the rest of his life.

The non-subscribing, "bare," employer argued it had no duty to warn Robison about the unsafe conditions because of his long experience as a truck driver.

The jury at trial didn't buy that argument, and awarded Robison $1 million for physical pain, physical impairment and mental anguish; $411,724 for loss of earnings capacity; $3,716,575 for past and future medical expenses; and $400,000 for loss of consortium.

The appellate court wasn't impressed with West Star's arguments either.

"Although an employer is not an insurer of his employee's safety at work, every employer owes its employees a primary, continuing, and nondelegable duty to use ordinary care in providing a reasonably safe work place," the 7th District panel said, in an opinion written by Justice Patrick A. Pirtle [West Star Transportation v. Robison, 07-13-00109-CV, 01/23/2015]. "Accordingly, an employer may not place an employee in an unreasonably dangerous work environment without taking appropriate precautions."

And while Robison got a big jury award, he still has the burden of collecting - some eight years after his injury.

There's no indication that Tennessee will allow employers to completely opt-out, but rather will implement something akin to what was passed in Oklahoma, allowing employers to provide alternative work injury protection.

Robinson vs. West Star Transportation is testament to the philosophy that even the slightest probability of risk must be weighed against the possibility of catastrophe, which is why some form of work injury protection requirement will likely be a part of Sen. Green's plan.

Monday, January 26, 2015

What The Doctors [Don't] Know

I was honored to be on The Great Debate panel at the California Applicants' Attorneys Association Winter Convention in San Diego on Friday afternoon.

Presenting with me were:
  • Christine Bouma, a member of the California Commission on Health Safety and Workers' Compensation;
  • Dan Bagan, a member of the California Commission on Health Safety and Workers' Compensation;
  • Jamie Berenson, a partner in the applicant law firm of Glauber/Berenson; and
  • Barry Pearlman, founding partner in the defense law firm of Pearlman, Borska & Wax
Adam Dombchik, a partner in the applicant law firm, Gordon, Edelstein, Krepack, Grant, Felton & Goldstein, LLP, moderated (and input his opinion on occasion).

The Great Debate was, as you would expect, about SB 863, whether it's meeting expectations, how it has impacted employers, workers, and the industry, and observations as to its efficacy.

As one would expect with such a diverse selection of experience, opinions diverged on some issues, and interestingly, converged on more issues that I expected.

But one part of the presentation really caught my attention and points to a significant problem with California workers' compensation, and perhaps many other states: doctors don't know how to interface with the system, and the more complex the requirements on physician participation, the less likely they are to understand their roles, the expectations and the rules.

And this means failure in compliance, less effective treatment, increased disability, failed outcomes and increased expense.

Pearlman raised this issue with an anecdote about a recent presentation he gave to a large Medical Provider Network group of physicians.

Pearlman said that there were about 150 doctors in the audience, and he asked them several questions that drew complete blank stares: what is an MPN, are you in an MPN (remember this was a presentation TO an MPN!), what is the Medical Treatment Utilization Schedule, what is ACOEM, etc.

Blank stares. None of these physicians had any clue about workers' compensation regulation of their professional activity.

No wonder Utilization Review and Independent Medical Review are such road blocks - the physicians that are supposed to be complying with various standards don't even know a) that there are standards, or b) how to comply.


Remember that this is an anecdote and is not necessarily representative of all physicians that become involved in industrial medicine.

But it is a troubling anecdote nevertheless.

I don't think it's just a matter of education. I think it's a matter of motivation - what is the motivation to learn all this complexity if there is no financial or other incentive? The practice of medicine, in the end, is a business and that means that there are income and expense columns that get interpreted to profit.

If profit is not a positive number then either the expense column needs to be trimmed, or the income column needs to be bolstered.

Trimming the expense column is easier than bolstering the income column - nearly anyone that runs a business will tell you that. The amount of resources necessary to capture new revenue increases exponentially compared to retention of existing business.

Part of the expense column is education. There is the direct expense of acquiring the education, but there are also all of the indirect expenses, including intrusion into personal time.

And the more complicated a system is (as can be evidenced by the number of acronyms in any given system), the more expensive it becomes to become and stay educated, and deploy that education into practice.

This doesn't portend well for workers' compensation because part of the Grand Bargain is delivery of medical benefits: treatment and the reporting necessary for the legal/indemnity end to work.

Without doctors in the system able to do what the system asks of them means the system will fail.

There's a difficult balance between regulating the behavior of the professionals that make the system run in an efficient manner, and regulation to the point of stifling participation. If what Pearlman described is more that just a passing anecdote then we're on the wrong side of the fulcrum.

*************edited 01/27/2015*************

Steve Cattolica, Director of Government Relations for the California Society of Industrial Medicine and Surgery, provided this response to the above post - it was too long for a comment so I have included it as part of this original post:

David, while I agree with you for the most part, having heard the “Debate” panel, Barry Pearlman’s revelation absent any detail, may have led listeners to draw errant conclusions or diverted them from a clear picture of a much different and pervasive source of the problem he seemed to want to convey.

Regarding physician education and expertise; motivation to learn is important and that certainly tracks to some degree with reimbursement. However, one must keep in mind that some providers’ reimbursement comes in the form of a salary check or a contracted percentage based on production. Therefore, in what could be a surprisingly high number of instances, the profit motive lies with the network itself, with a leased sub-network or with another corporate entity, rather than the provider.

To this attendee, this segment of the “Debate” seemed to lay the blame for poor results on the ignorance of physicians. Notwithstanding your statement that it was, “not necessarily representative of all physicians that become involved in industrial medicine,” I believe it is an extreme disservice to providers to lay that ignorance or their motivation to learn about the comp system, solely at the feet of their own reimbursement.

Pearlman did not choose to tell the audience to which MPN he was speaking. I can understand at least one reason why – as I outline below, the MPN might become open to unwanted (if not deserved) scrutiny.

He also left out the background of his physician audience – were they specialists or primary care? Were they solo or small group practitioners? Were they independent contractors to a large health insurer’s medical group or employees? Did they even know that they were contracted with the MPN in the first place? All of these facts matter, when for lack of them the speaker leaves the audience to draw an over-generalized conclusion regarding the training, competency and motivation of the provider community at large.

Often employee physicians, even in specialized work comp clinic chains, have little idea how the work comp system actually functions. They are trained in their employer’s operating system and someone else takes care of the rest. In this context, the chain’s corporate decision how to “train” its physicians could be based upon the notion that rote compliance with policies and procedures equals the lowest cost (and highest margins).

More importantly, he did not mention how his audience came to be contracted to the MPN in the first place. He may not have known that information. As I queried above, did these providers even know they were providing services in a work comp network? Were these providers part of a leased network? How did they get in? Who is watching the store?

He also did not offer to explain the reason why a work comp network would contract with these providers in the first place. I suspect he did not know this information either. What was the network thinking when it presented these physicians to its workers’ compensation clients and prospects as being part of an MPN? Did the network bother to tell the client or prospect about the providers’ lack of knowledge or expertise about the comp system? Did the network even know this information itself? What kind of an informed buying decision could any carrier, TPA or employer make when the baseline expertise of the contracted providers is unknown or its disclosure may be withheld? Caveat emptor doesn’t really do justice to this situation. From this point of view, Barry’s education program appears to have been motivated by the network’s or its customer’s need for damage control rather than quality healthcare.

We have long maintained that direct contracting between providers and employers is the best and least expensive relationship available to assure the highest quality healthcare for injured workers. That’s motivation.

Friday, January 23, 2015

Crossing The Line

Earlier this month I wrote about crossing the line - the "premises line."

The Hartford, the workers' compensation carrier for defense contractor JT3 on Edwards Airforce Base, lost an appeal before the 2nd District Court of Appeals, which concluded that the undisputed facts in Schultz v. WCAB, No. B255678, demonstrated that "the premises line rule, rather than the going and coming rule, applies" to the the case of Craig Schultz.

Schultz was severely injured on the base en route to his actual office when he had a diabetic attack and lost control of his vehicle.

The court found:

1) It was undisputed that he and other employees of JT3 would perform work at multiple locations on the base.

2) The base "is a secure location," and JT3 controlled Schultz’s access to the base since it was responsible for getting him a security pass.

3) It was undisputed that Schultz's crash happened one mile inside the North Gate of the base, which meant his accident "occurred on JT3’s premises, and not while Schultz was commuting."

4) "[R]egardless of his means of travel to Building No. 1440, Schultz would have been on the secure premises of Edwards owing only to his status as a JT3 employee."

The Hartford is asking for a rehearing on the case (the WorkCompCentral story notes that the request does not indicate whether it is The Hartford, or JT3 requesting the rehearing, but there is no motivation for JT3 to do so - I'm secure in stating it's The Hartford, and if I'm wrong then please correct me).

At the California Applicants' Attorneys Association Winter Convention yesterday in San Diego, I heard story after story of issues dealing with insurance company claims departments, less about third party administrators acting on behalf of self-insured employers and even less about self-insured/self-administered employers.

There's an inverse relationship in claims management between employer control and claim outcome: the more removed the employer from the claim, the more contentious the relationship is with the claimant.

The insurance contract, supported by state law, essentially takes claim control away from the insured employer, leaving in general claim management subject solely to the financial motivation of the insurance carrier, which in turn is a factor of the carrier's primary duty to its shareholders: profit.

Someone recently opined in a response to one of my blog posts that an insurance company is in the business of managing risk for a profit. Part of managing risk is getting someone else to pay.

The Schultz case is a classic example, because Schultz' medical bills likely are sizable, let alone the disability tab. So The Hartford's continued attempts to defer or shift liability is understandable: the company and its attorneys are merely doing their job to minimize expense and maximize profit.

I get it.

That doesn't make it right.

I've said before that there is an inherent conflict in workers' compensation (and in many insurance settings, but seems to be more acute in work comp) - the business realities of making money collide with the social responsibility of taking care of the claim.

There are distinct roles for each cast of characters in the work comp scheme.

Insurance companies collect money in the way of premiums. Those premiums finance the carrier's operations, and a bit of it is set aside to finance the claims that are presented. Anything left over at the end of the fiscal measuring period is returned to shareholders in the form of dividends, and sometimes to employers depending on the carrier's structure and state laws.

The employer pays the premiums, and passes that cost along to the consumer in the price of its goods or services.

The government is supposed to make sure that everyone does their job.

I know this is a gross simplification of the scheme, but when you strip away all of the wall decorations, workers' compensation really is that simple.

We can talk all day long about mistrust, about communication, about equity, fairness, return to work, etc. ad nauseum. None of that really matters.

The Hartford is doing what a big corporation is going to do in its own interests. That's understandable. It's not doing anything wrong in terms of the law, or with regard to its shareholders.

But the conflict with social responsibility probably means that Schultz, the subject of all this activity, hasn't been in a good place in life since his accident.

We need some form of social protection in place for the people that produce the goods and services we consume - it's a critical component to a modern, healthy economy.

But maybe the way we have gone about it for the past 100 years no longer is adequate. Perhaps there are too many alternatives to which liability can be deflected or deferred. Perhaps the management of work injury risk in the modern economy needs to be examined in light of all of these alternatives.

Neither the injured worker, nor the insurance company, should have to think or worry about whether or not one had crossed the premises line.

Thursday, January 22, 2015

In San Diego

The weather for San Diego tomorrow through the weekend is forecast to persuade nearly everyone from attending the Annual California Applicants' Attorneys Association Winter Conference today through Sunday:

Of course I'll take my bicycle - after all San Diego is where I got started cycling in college, so it's almost a homecoming for me, pedaling Mission Boulevard out to La Jolla and up Pacific Coast Highway.

I am on a panel presentation at the CAAA conference. Fortunately my panel is really late in the afternoon so I can enjoy some of that great weather on two wheels.

The flip side is that the panel is the last presentation on Friday, starting at 5:05 p.m. and ending into my cocktail hour at 6:20. But I think that attendees will remain awake for the "Great Debate" because not only are we going to tackle some very interesting, timely issues, but the panel is a first, I believe, for CAAA with employer and defense representation.

On the panel with me are:
  • Christine Bouma, a member of the California Commission on Health Safety and Workers' Compensation;
  • Dan Bagan, a member of the California Commission on Health Safety and Workers' Compensation;
  • Jeremy Merz, a Policy Advocate for the California Chamber of Commerce;
  • Jamie Berenson, a partner in the applicant law firm of Glauber/Berenson; and
  • Barry Pearlman, founding partner in the defense law firm of Pearlman, Borska & Wax
The session will be moderated by Adam Dombchik, partner of the applicant law firm Gordon, Edelstein, Krepack, Grant, Felton & Goldstein, LLP

Of course you know that we'll be debating SB 863 and whether or not that landmark reform bill is meeting expectations, the impact on various affected groups including the primary stakeholders of employers and injured workers, and what we would do differently if we were the work comp czars.

All one need do to get my perspective is what you're doing now - read my blog. You know that in my opinion, so far, SB 863 has not delivered on its promises to insured employers.

Self insured employers, however, seem to have reaped great benefit. Nearly two-thirds of SB 863 "reformed" self insurance to make it easier to comply and maintain, and the reports I'm hearing so far is that self-insureds are very happy with those provisions.

But the story is different for other segments.

Injured workers got a pay increase, but even more red tape getting medical treatment.

Physicians and other medical vendors thus far are encountering an equal amount of red tape, and the anecdotal evidence is that the physicians who really do good work are exiting, leaving room for the more profit minded docs for whom the Hippocratic Oath was merely a recitation.

More money is going into cost containment services, or at least more of it is being reported as diverted to those services.

There are still many provisions of the bill that are still pending regulatory implementation - but the changes instituted by SB 863 were so broad and vast that it stretched the resources of the Division of Workers' Compensation despite an increase in funding and staffing.

Copy services, interpreters, and injured workers with decreased earnings still don't know what the final word is on elements that affect them, impinging cash flows.

Vendors that relied on the old system of filing liens to preserve reimbursement claims have had to come up with alternative methods of collections - and this has greatly reduced the expense of adjudicating those claims.

Employer rates have still gone up, and so have premiums. Carriers are still making money and the California market remains near a quarter of the entire nation's written premium.

It's easy to say that SB 863 hasn't delivered on its promises - promises that should have saved the California system a half billion dollars in the first year but didn't.

It's also easy to say that we still need to wait and see, as participants adjust to Independent Medical Review and other provisions that shocked the system.

And what if I were czar? What would I do?

1. Return to 1992 and the Minimum Rate Law - I think that Open Rating was the worst thing that could have ever been invoked on the California work comp insurance market. 

2. Restructure Audit Unit regulations so the Unit can actually fine and collect from carriers and Third Party Administrators that fail to meet standards; right now the Audit Unit is laughably impotent.

There you have it.

Come to the session so you can hear what the other 5 on the panel have to say. Or just read WorkCompCentral and/or this blog tomorrow morning (and Monday too).

Wednesday, January 21, 2015

Pharmaceutical Conundrum

Drugs and workers' compensation seem to go together.

And it seems, generally not for the purpose of ensuring the injured worker gets better.

2 stories in WorkCompCentral this morning highlight the creep of prescriptions into work comp and demonstrate how these become issues later down the road.

First, the Federal Drug Administration has been studying whether to reclassify marijuana out of the current Schedule 1 classification. The FDA has been looking at this since 2013.

Doing so would essentially be an admission by that administration that there are some legitimate medical and therapeutical value to pot.

Though New Mexico courts have ruled, twice now, that workers' compensation insurance companies must pay for medicinal marijuana as part of their medical liability, other states have not gone that far, and most payers are not authorizing payment for pot because it is still a Schedule 1 drug.

And the state trend to legalize marijuana, both for medicinal and recreational use, continues, exacerbating the friction between the federal law, state law, and medical research (which, for the most part sanctifies marijuana for very limited medical purposes, and generally no conditions that are typically the provence of workers' compensation cases).

States are also encouraged by the probability of increased tax revenue from pot, looking at pioneer Colorado's tax income as evidence. That state saw $45 million in pot tax revenue as of the third quarter in 2014 according to the Washington Post - revenue that otherwise would not be realized at all when the drug was solely under ground.

Some observers say that the introduction of marijuana into the work comp system as a recognized treatment option may affect the employment of injured workers because employers are going to be reticent to have pot users return to work to, for instance, operate machinery, until they can demonstrate lack of THC in their system.
Bowzer confronts the Conundrum

Of course, the likelihood is that the folks that are using pot now are probably working with it in their systems now - employers just don't know it for sure even though they may suspect it.

Combine the marijuana issue with physician dispensing compound medications, and we have a new, powerful trend to deal with.

The practice of medicine is, after stripping away the Hippocratic Oath, after all a business, which means there's a profit motive.

There are a few in the medical field for whom "In God We Trust" is more compelling than "Do No Harm." But these few disgrace the rest of the profession, and provoke undue burden on doctors who take The Oath seriously.

The Workers Compensation Research Institute issued a report the past week that physician dispensers had found a way around price controls adopted by both Illinois and California: The doctors dispense drugs in unusual dosages, such as 7.5 mg, which allows repackagers to adopt a unique National Drug Code number instead of using the NDC assigned by the drugs' original manufacturers.

WCRI found that physicians were dispensing a 7.5 mg strength formulation of the muscle relaxant cyclobenzaprine, a 150 mg extended release version of the painkiller tramadol, and a generic formulation of Vicodin containing 2.5 mg of hydrocodone and 325 mg of acetaminophen. Because there had been no corresponding increase in those novel dosages dispensed by pharmacies, WCRI concluded, "it is likely that financial incentives drove some physicians to choose the strength for their patients."

What WorkCompCentral reporters found was that the FDA database shows just 19 suppliers of the drug formulations highlighted in the WCRI report. Seven of them provided all three of the formulations, three that supply hydrocodone and cyclobenzaprine, five that only provide cyclobenzaprine and one that only provides hydrocodone.

Several of the companies had been fined or warned by the federal government for engaging in unsafe practices, while another paid $12 million to resolve allegations that it paid kickbacks to doctors to prescribe its products.

One company highlighted in the story markets itself an industry leader in "prepackaged pharmaceuticals." It offers physicians drug-dispensing software that will fill clinics with "healthy patients and healthy profits."

So while states are going to tackle with physician dispensed compound drugs, and just may eliminate all physician dispensing (which in my opinion is the only way to deal with removing the inherent conflict of interest, except in emergency or special circumstances), the new "mole" will arise: legitimization of marijuana and a whole new revenue stream.

Tuesday, January 20, 2015

Communication Effort

Coventry Workers’ Compensation Services published a white paper this month that makes a completely obvious recommendation that nearly no one will follow: increase communication with the injured worker.

The conclusion of the paper, that simply increasing the level of communication between injured workers and claims managers and doctors can help claimants recover more quickly and fully, is, frankly, a no brainer. All one need do is go talk to an injured worker or three who have been through the process to make that determination.

“Trust is intimately related to belief. If the employee does not trust the employer, it means that the employee disbelieves the information that comes from the human resources department, the (adjuster) and quite possibly the doctors,” the white paper reads. “This lack of belief is based on a gut feeling that the source of the information is either lying or incompetent.”

Where have we read that before? Perhaps this blog!

The Coventry paper, though stating the obvious, is at least a reminder to the people in this industry that their most basic job is to communicate: with the injured worker, and with each other. Unfortunately nearly no one is actually trained to communicate.

Talk to someone who has been through the workers' compensation claims process and you will find out that while you, as a professional, THINK you are communicating, the reality is that you probably aren't - at least not at the level to stave off mistrust.

And it's mistrust that drives poor outcomes and increased expense in the system.

At each stage of the process, more often than not, there is a failure to communicate.
What we got here is... failure to communicate.

But it's not for wanting; it's because we're not understanding what the communication needs are.

Coventry's paper does make some general suggestions - frankly all the same propositions that are repeated over and over and over again like a meditation mantra. These go a long way, but are not what is really needed.

What injured workers REALLY need to know is, what is the next step, what the choices are if any, WHO will be contacting them and why, etc. In other words, managing expectations is probably the primary job in the work injury communication process.

We can all feel empathy, and we can all try to smooth over the bumps in the process, but when it comes down to the fundamentals, what really matters is understanding the fears, which are generated by the unknown, and then eliminating as much as possible those unknowns.

Sure, the adjuster is trained to contact the injured worker immediately as part of the three point contact process when a claim is received. Sure, the employer is encouraged to "touch" the injured worker to let him or her know that they matter. And the physicians try, with the limited time for which they are paid, to have a positive talk with the patient.

All of that misses the opportunity to provide the injured worker with the information needed to establish trust.

Because what happens after the claims adjuster "talks to" the injured worker a stack of papers arrives in the mail with dire warnings about time limits that may affect receipt of benefits (though you don't need a lawyer on your claim!).

And then someone shows up at the door step with a brief case full of papers to take the injured workers' statement with documentation that may call into question credibility.

Then the doctor may refer the injured worker to another doctor that the insurance company doesn't want to pay - which is not communicated to the injured worker until AFTER the appointment...

We could go on and on about the what, when, who, how, and why of communication.

But it won't matter. Because communication requires effort - a lot of effort - to be effective. And the effort to engage in this style of communication, i.e. listening, isn't rewarded.

There's a post going around Facebook recently that reads, "The biggest communication problem is that we do not listen to understand. We listen to reply."

That's what workers' compensation does - we listen, but we do so to reply rather than understand.

That's what drives claim costs and interferes with positive outcomes.

Monday, January 19, 2015

Unfair and Inequitable

Rating a permanent disability in the California system prior to SB 863 included a function known as the Diminished Future Earnings Capacity modifier.

The DFEC element in the rating string was meant to compensate for disparity in pre-injury income, and the affect a disability has on the earning capacity post injury.

It's a noble sentiment and is based on research that demonstrated significant disparities in the earnings of workers of various occupations.

The problem with the DFEC is that it is another element of the California workers' compensation system that opens up debate, argument, disagreement, and ultimately litigation.

And we know from many studies that litigation is a huge cost driver, directly and indirectly.

Which is why SB 863 eliminated that portion of the rating string and substituted a flat modifier of 1.3 to all ratings regardless of occupation and alleged impact of disability on a worker in that category.

So while the First District Court of Appeals for California is finally going to render a decision in Contra Costa County v. WCAB (Dahl), No. A141046, having assigned responsive dates for the Workers' Compensation Appeals Board to deliver the case record, the case itself will have very limited application.

Doreen Dahl suffered a cumulative trauma industrial injury to her neck and shoulder in 2005, while working for Contra Costa County as a medical records technician.

Based on the agreed medical examiner's evaluation of Dahl's whole-person impairment and the 2005 Permanent Disability Rating Schedule, the Workers' Compensation Judge issued Dahl a 59% permanent disability rating.

The WCJ rejected Dahl's argument that her permanent disability should have been awarded at a higher rate because her decreased future earning capacity was greater than that reflected in the rating schedule.
59% rating

Dahl based her argument on a 1983 California Supreme Court case called LeBoeuf v. WCAB.

In LeBoeuf, the California Supreme Court allowed a worker to establish a permanent total disability based on vocational rehabilitation testimony showing his injury effectively rendered him unable to compete for jobs in the open labor market.

The WCJ ruled that LeBoeuf was inapplicable to Dahl.

Following the 1st DCA's 2011 decision in Ogilvie v. City and County of San Francisco, the WCJ concluded that an injured worker could not rebut the rating schedule's diminished future earnings capacity adjustment through vocational rehabilitation testimony unless her injury caused a total loss of future earning capacity and a 100% permanent disability.

The WCAB in a panel decision reversed the WCJ.
79% rating

"Ogilvie does not preclude a finding of permanent disability that takes into account the injury's impairment of rehabilitation and its effect upon the worker's (decreased future earning capacity)," Commissioner Frank M. Brass wrote in his decision for the panel.

After the case was sent back to the trial level, the WCJ determined that Dahl had a 79% permanent disability, based on her vocational rehabilitation expert's testimony that Dahl had suffered a loss of future earnings that was greater than what was reflected by the PDRS.

A WCAB panel upheld Miller's decision last January. Contra Costa County petitioned for judicial review last February.

And that's the reason why DFEC was eliminated from the PDRS by SB 863.

Because this case is representative of another friction point in the workers' compensation process - a delay on the case of untold years. Dahl's injury was in 2005, and the court may finally hear arguments some 10 years later, on whether Dahl is entitled to a few more thousand dollars. Maybe the court will issue an opinion within a year.


I'm all for trying as hard a possible to make a system fair and equitable.

But there are limitations built into the workers' compensation system; it can not be everything for everybody.

And there lies the issue: by design workers' compensation is NOT fair and equitable. At best, the indemnity portion of workers' compensation, whether temporary disability or permanent disability, is a temporary financial relief.

Any attempt to make the indemnity portion of work comp actually meet some compensatory goal of returning someone to a certain financial level will fail because the variables are too great.

California is famously a liberal state. The citizens, for the most part, want fair treatment of everyone. In the California Nirvana, everyone should have an equal chance and be treated with equanimity.

The real world doesn't work that way however - and frankly I think it's time to stop the fairy tale that workers' compensation should be fair and equitable, because it isn't and never will be.

There are minimums and maximums to indemnity. There are limitations on medical procedures. There are restrictions on benefits.

Are there devastating disabilities? Yep. Are some worse than others? Yep. Is each case different? Yep.

Does each case deserve to be treated differently? Not necessarily.

The concept of workers' compensation is that everyone compromises. That dialogue has been repeated over and over and over again - everyone gives up something for security.

The employer's security is supposed to be protection from civil lawsuits. The employee's security is supposed to be the promise of prompt medical care and an allowance to stave off financial ruin.

What happens when a system tries to be fair and equitable is exactly what happens to Doreen Dahl - a case that lingers for ten years while other people argue about a small component to the overall scheme because the variables make it worth while to do so.

The financial difference to Dahl is about $100,000 in gross indemnity, plus a "life pension" of about $73.00 per week.

The financial incentive to argue this small point of the rating string demonstrates how friction gets created out of "fair and equitable."

I don't know what Dahl's age was at the time of injury (the panel opinion from which the appeal was taken doesn't provide that detail) but let's assume that she was 50 years old for ease of calculation. And let's also assume that she was permanent and stationary 2 years post injury after her temporary disability indemnity ran out.

That brings us to 2007, and 52 years old. At that time Dahl would have an average life expectancy based on US life tables of about 30 years - to age 82.

Let's also assume a 5% return on investment rate.

The gross value of the 79% PD award, inclusive of the present value of the life pension, is about $215,000.

Fifty nine percent doesn't merit a life pension, so the gross value of that is about $80,000.

$80,000 invested at 5% in 2007 will generate about $38,000 in interest. And if none of that money is touched the gross amount today would be almost $120,000. If left alone for 12 years it grows to over $130,000, and if left alone for 15 years it grows to nearly $170,000. For 30 years the value grows to about $350,000.

And Dahl gets to move on with her life in 2007.

Let's assume that the court renders its decision this year, 2015 - that means according the life tables there's 22 years left in Dahl's life expectancy. $225,000 at 5% for 22 years generates a gross return of about $630,000.

And Dahl gets to move on with her life in 2015, with potentially twice the financial gain.

It's a trade off, for sure. I'm not saying whether one result is better than the other. What I am saying is that in an attempt to make a system "fair and equitable" the system itself became unfair and inequitable by implanting points of friction - and Dahl may be better off financially because she got an attorney than someone who didn't.

A truly fair and equitable system would not create incentives for people to get lawyers to maximize an award. A truly fair and equitable system would eliminate the difference having an attorney on a case could make.

The DFEC component was eliminated by SB 863, so that point of contention is gone. But there are many others.

Complexity begets litigation because an attorney can make a difference. And as we can see, sometimes a big difference.

The cost to the system is delay and uncertainty.

In order for workers' compensation to be fair and equitable, it has to be less fair and less equitable...

Friday, January 16, 2015


CAVU - ceiling and visibility unlimited.

To a pilot that means two things: unbelievable views and probably a little bit of turbulence.

CAVU means the winds aloft are strong enough to push away any clouds and the moisture that forms them.

In California we get more than our fair share of CAVU days, particularly in the fall and winter when Santana winds originate from high pressure in the Great Basin to bring cold dry air to the region.

Yesterday was CAVU. Climbing off of runway 7, where there's not a lot of room to gain altitude before hitting Camarillo's airspace, I was seeing climb rates of 1,300 to 1,500 feet per minute on the Vertical Speed Indicator - a very healthy rate of climb in a Bonanza A36 with a normally aspirated Continental IO 520 engine! I was well clear of Camarillo Class Delta altitude before I reached the edge of that airspace.

We did a little tail wagging getting to cruise altitude, but nothing out of the ordinary. And cruising through the San Fernando Valley at 5,500 feet was nonchalant.

On the Coastal Route through Los Angeles Class Bravo space, between Santa Monica and Los Angeles airports, though, we had a shake or two. Nothing violent, and certainly predictable given the atmospheric conditions, but enough to wake you up!

The view, however, was astounding. All of the Los Angeles Basin was clear and detailed. And it stretch all the way to the mountains where a white, snow capped Mt. Baldy accentuated the scene.
CAVU yesterday
Once out of Bravo and heading south again the Mexican border and Tijuana was clearly visible, war ships were lined up to get into Long Beach Harbor, and a bit more aerial dancing was experienced passing by the Santa Ana Mountains.

And yesterday the Workers' Compensation Insurance Rating Bureau of California issued a study that, again, reports claims frequency is growing and that Southern California and Greater Los Angeles is the geographic anomaly that is the culprit.

The rest of the nation, and Northern California, continue to see frequency rates (how many work injury claims are filed per 1,000 employees) go down.

California went up zero point nine percent. The rest of the nation (National Council on Compensation Insurance statistics) went down two percent.

The report states that 16.3 out of every 1,000 workers in California filed a workers’ compensation claim in the first nine months of 2014. When frequency is measured per $100 million of exposure, the Los Angeles area saw a 3% increase last year (27.48), while the Bay Area posted a 1.8% reduction in frequency and the rest of the state’s rate fell by 0.6% (13.78).

The theories abound about why this is: more low wage workers in the LA area, economic growth, young workers coming into employment, etc.

Some of the blame is being hurled at the type of claims - cumulative trauma - and those types of claims involve more litigation which means they're more expensive.

From 2007-2010, 72% of cumulative trauma applicants sought legal representation, but from 2012-2013, 80% did.

In 2012, claims payers denied all body parts in 57% of all cumulative trauma claims, compared with a 66% denial rate the next year. In 2012, 37% of those claims were filed post-termination, but in 2013 that number rose to 41%.

The WCIRB’s research shows that higher-risk industries, such as construction and agriculture, have seen marked increases in claim frequency since 2010, while industries like professional services and finance have seen reduced frequency. The bureau estimated that industry mix drove up frequency 1.1% in 2013.

And those who have been on the job for less than two years, where the greatest employment gains have been seen in the economic recovery from the Great Recession, made up 49% of claims in the 2014 accident year, up from 41% in 2010. During the same timeframe, injured workers who had been on the job for two to six years fell from 30% of claims to 21%.

Am I concerned? The statistics might be alarming, but then again, maybe not. In the end, the employer pays the insurance bill, and it's a matter of whether the risk of doing business in Los Angeles is worth the benefit of ceiling and visibility unlimited conditions. The employer community will tell us that eventually; whether or not this leads to some "reform" down the road will depend on how long those conditions last.

There's been a lot of press about Southern California claims ruining the rest of the state's statistics, and when there's enough noise then people get anxious and seek to remedy a perceived problem that is not understood.

We've been through this before many times with psychiatric claims, with physician dispensing, with medical legal mills, etc. In each instance a reform was put through only to open up other, more creative, ways to seek benefits, and other, more creative, ways to deny claims.

At the end of the day, though, we don't really know why, and ergo, don't know how.

In other words, CAVU in workers' compensation means Claims And Vindications Unknown. And like aviation there's turbulence in clear air that you can't see but you know is there, somewhere.

So let's take a moment, stay calm, and chive on (acknowledgement to clothing company theChivery for their trademark phrase). No more reforms please. Not yet.

Thursday, January 15, 2015

Formulary Coming To You

A panel presentation at the the upcoming Workers' Compensation Research Institute's 31st Annual Issues & Research Conference (March 5–6, 2015) to be held in Boston, MA will review physician dispensing of pharmaceuticals and the impact on costs (of course) and health outcomes for patients.

This is a timely topic as the trend of prescription drug formularies is spreading across the nation, and part of the debate is whether or not doctors should be fulfilling prescriptions from their offices.

Regulators in Tennessee, Arkansas and Oklahoma are writing proposals to establish a formulary based on the Official Disability Guidelines. The Maine Workers’ Compensation Board is forming a task force to consider creating a formulary, while California regulators have wrestled with the idea for years.

Formularies are already in place in Texas, Washington and Ohio. Oklahoma is operating a formulary under emergency rules that expire in September.

Formularies' primary purpose is to restrict the prescription of opioids and compounded drugs and that should lead to reductions in the number of injured workers receiving those drugs. Texas' experience seems to support that goal.

Texas adopted a closed formulary in 2011. Since then, the number of opioid prescriptions for injured workers in the state has dropped 10%, according to the Workers’ Compensation Research Institute. Prescriptions for opioids not on the formulary list have dropped 60%, while scripts for all drugs not in the formulary have fallen 70%. Overall prescription drug costs for injured workers have declined 15%.

A study by WCRI published last year postulated that a Texas-like formulary would likely result in savings for other states. The institute’s researchers found that if physicians in other states behaved the same as Texas doctors, a Texas-like formulary would cut prescription drug costs 29% in New York, 25% in New Jersey, 18% in Florida, 16% in Illinois and 14% in California.

The California Workers’ Compensation Institute in its own study last year found that a Texas-like formulary would cut prescription drug costs by $102 million to $541 million annually in California.

Alex Swedlow, president of the California Workers' Compensation Institute, will be part of a panel on physician dispensing at the conference.

Certainly the insurance community likes the idea of "closed formularies."
This chart has nothing to do with formularies - I just thought it was a neat infographic...

The American Insurance Association supports formularies, and is lobbying legislatures to adopt Texas' process, which is based on The Official Disability Guidelines published by the Work Loss Data Institute.

Still, the handful of states that are considering formularies doesn't mean that this is a sweeping trend.

As Maine Workers’ Compensation Board Executive Director Paul Sighinolfi told WorkCompCentral, “The real focus is to minimize pain as much as possible and ... bring [injured workers] back to a functioning level, and I think that's what our focus is really going to be,” citing concerns that insurance companies and other claims payers will use formularies solely as a means to cut expenses.

The WCRI study found that claimants in Texas increased the use of alternative options such as non-steroidal anti-inflammatory drugs and physical therapy since the state’s formulary went into effect in 2011, effectively shifting medical spending away from opioids and toward those treatments.

Regulators in California have the same concern.

California Department of Industrial Relations Director Christine Baker told state legislators in 2013 that the department was considering a formulary as part of a package meant to fight the over-prescription of opioids. The department is still looking at the issue.

"We are doing due diligence in terms of researching the benefits both from an appropriate medical care standpoint, because that's really important that injured workers get appropriate medical care and there are formularies that can do that, (and) we are also looking at it from a (cost-benefit analysis) standpoint," she told WorkCompCentral Wednesday.

States in general like to watch what happens with an innovator for a couple of years before considering adoption of something new. Then there seems to be a tidal wave that sweeps across jurisdictions in an exponential way.

My best guess is that formularies are more likely than not to be a part of your workers' compensation system within 10 years - particularly if California adopts one because state legislators and regulators like to see how a very large system adapts so anticipated issues can be planned.

The WCRI conference will also include presentations on the Affordable Care Act, fee schedules, and lessons from a couple of decades of "reforms" reflecting the last couple of trends across the nation.

Wednesday, January 14, 2015

Whose Body Is It Anyway?

The cardinal rule in workers' compensation has always been, control of the medical is control of the case.

Those in work comp litigation understand this concept very well, on both sides of the fence.

A recent Illinois case is demonstrative.

In Bob Red Remodeling Inc. v. Illinois Workers' Compensation Commission (Lemanski), No. 1-13-0974WC, 12/31/2014, Zenon Lemanski, a mono-lingual Polish immigrant, suffered a traumatic brain injury in July 2007 when he fell 11 feet from a rooftop while working for Bob Red Remodeling.

He was hospitalized for several days after his fall, and he underwent a craniotomy, performed by Dr. Leonard Kranzler.

Lemanski followed up with Kranzler after being discharged from the hospital. He then began seeing Dr. Prasad Gourineni, an orthopedic specialist.

On the advice of his attorney, Lemanski later switched to Dr. Victor Forys as his treating physician.

Bob Red also had Lemanski see Dr. Felise Zollman for an evaluation.

Zollman recommended vestibular rehabilitation for Lemanski's vertigo, further neuropsychological testing, speech therapy, psychological testing and perhaps counseling for depression.

Bob Red authorized the course of treatment recommended by Zollman, but it refused to authorize treatment from Dr. Anna Wegierek, a psychologist to whom Forys had referred Lemanski.

Let's hit the pause button here for a moment: 

The employer controlled physician recommended evaluation for potential depression. Lemanski goes to see a psychologist (which to me seems reasonable under the case facts), just not the specific psychologist that the employer wants.

Play button:

Bob Red filed a motion to terminate the payment of benefits to Lemanski based on his failure to obtain care in accordance with Zollman’s recommendations.

An arbitrator denied the motion, because Bob Red could not show that Zollman’s recommendations offered a reasonable prospect of restoring Lemanski to a level at which he could perform work, and instead found Lemanski to be permanently and totally disabled.

The Illinois Workers' Compensation Commission upheld the arbitrator's ruling, and Bob Red sought judicial review.

A judge from the circuit court of Cook County dismissed the appeal based on Bob Red's failure to file an effective appeal bond, but the judge proceeded to address the merits of the dispute anyway. The judge opined that it was not an abuse of discretion for the Commission to deny Bob Red's motion to terminate.

Bob Red appealed, after correcting the deficiency with its appeals bond.

The appellate court said that Lemanski's decision to follow the advice of his treating physician rather than the advice of Zollman was not unreasonable.

"Admittedly, Zollman’s credentials with respect to brain injuries are more substantial than those of Forys," the court said, but "Forys is board certified in internal medicine, and his credentials are not insignificant."

But the relevant inquiry "is not which course of treatment was superior, it is whether claimant’s behavior was reasonable under the circumstances," the court said, and it found Lemanski wasn't unreasonable in listening to Forys.

This isn't an issue of compliance with a set of medical treatment guidelines, it's a dispute over who is going to invade the psychological space of the patient: a doctor that is chosen by the patient (well, in this case, the patient's attorney), or a doctor that may be better controlled by the "payer" employer.

In other words, who's body is it?

The likelihood is that Lemanski doesn't really know which doctor, if any of them, is best for his physical and mental health. But he chose to put trust in his attorney, for better or for worse.

As in the majority of workers' compensation treatment cases, Lemanski himself wasn't in control of his medical destiny.

At least relative to litigation outcomes, the attorney-directed medical was probably a better choice as this got Lemanski a finding of permanent total disability, and frankly based on the facts recited by the appellate opinion, that's probably a fair award.

Perhaps Lemanski did receive the very best care for traumatic brain injury ... or maybe he did. We don't know.

The kicker: Bob Red was liable for the cost of Forys' treatment.

Tuesday, January 13, 2015

Budgets and Flying IMC

Flying IMC
Sunday was a great flight to go see Mom.

The second of two troughs of low pressure was making its way through Southern California bringing steady rain, low overcast, mist, low visibility, no icing threat below 9,000 feet, no forecast turbulence - all the makings for a great Instrument Meteorological Conditions instrument flight.

In Southern California, IMC flight is a rarity, so I relish every chance I can get to go do "actual" instrument flight. Not the fake stuff where you have a safety pilot or an instructor, but the real deal where you really can't see, and really must pay attention, and really must be "on your game" because the consequences of failure are catastrophic.

In congested air space, such as Southern California with a couple of Class Bravo sectors, numerous Class Charlie zones and untold Class Delta spaces, the Federal Aviation Administration has established Terminal En-route Clearances. These are basically pre-approved instrument flight plans. All a pilot need do is call up Air Traffic Control on the ground to get a clearance - no filing of plans an hour before take off - and the route is well established and published.

The TEC system is custom made for missions such as mine: getting down south to see Mom on a day when the weather keeps most pilots on the ground.

And so off I went, into the wild grey yonder!

It was an impeccably precise flight. Everything was perfect: my on course tracking, altitude assignments, standard rate turns, engine cylinder head temperatures, speed - everything!

But the one thing I have learned about aviation over the years is that nothing is ever perfect - something ALWAYS comes up to challenge piloting skills, decision making, or situational awareness.

Sunday was to be no different.

As I approached the airport I dialed in the Automated Weather Observation Station - the wind was mildly offshore at 050 degrees, 5 knots. That would favor runway 6, but was not so much of a tailwind as to make landing runway 24 out of the question.

So I requested from ATC my preferred instrument approach to the airport - the GPS 24 approach. As you would guess, this means I was planning on landing runway 24.

This particular approach is a "non-precision" approach. That means that there is no vertical guidance; all altitude indications are by waypoints along the flight path to the airport.

I had flown this particular approach in IMC dozens of times before so I was very familiar with it - and frankly everything went smoothly as soon as I was cleared for the approach, including the 90 degree turn onto final, which takes some forethought to complete successfully because of the size of the turn.

On final I was tracking my altitude waypoints - a few miles from the airport the controller calls me up and says, "6641M, do you have terrain in sight?"

I look out the window - right in front of me are clouds, but I know there's nothing higher than I am along my path and altitude, so I look down and I see the ground through a hole in the clouds. Pfft! Of course I see terrain, so I affirm with ATC.

But that got my mind thinking: why would ATC say that? Is my altitude off? Am I too low on the approach? Or is there some hazard that I'm not aware of?

This was enough of a disruption to interfere with my situational awareness; where the hell was I in relation to everything going on around me?

In other words, that little query from ATC made me doubt myself.

I double checked the approach plate. Hmmm, Fogva intersection says 1200 feet. I better hold that altitude.

I had already left the radio frequency of ATC for the local unicom and had announced my position and intentions, waiting to pass the Fogva intersection so I could descend again.

And as I got close to Fogva I looked down and saw airplanes. Parked. On the ground. And a big "24" at the end of a runway.

"Hey," I said out loud to myself, "that's my airport!"

I looked again at the approach plate - dumbass, the 1200 feet position was 3.5 miles from Fogva. Fogva is the approach end of runway 24.

But the clouds had parted for my arrival! The AWOS had broadcast that there were "few clouds at 800." The broken and overcast layers were higher than pattern altitude. Sure enough, those few clouds were not enough to inhibit visual flight.

So I called up ATC again, told them I had decided to circle to land runway 6, had the airport in sight and to cancel IFR services.

I circled, and made a text book, greased landing on 6. My dumbass maneuver actually turned out to be beneficial to the flight, put me on a better runway heading, and actually was kind of fun since runway 6 is very rarely used.

Kind of like California Governor Brown's proposed budget for the Division of Workers' Compensation - a budget that would increase employer assessments 134% to pay for additional DWC services and fund the as yet untapped $120 million Super Disabled Slush
Fund (aka, supplemental disability fund created by Senate Bill 863).

SB 863 was, and for a big part, still is, an IMC flight. Lots of clouds, rain and mist. Visibility, if any, is limited. But for us IFR pilots, those who have been in the workers' compensation system for years and have experience with such conditions, SB 863 is just a different challenge. We've trained endlessly for such "weather," and just like IMC in Southern California, we don't get to practice "actual" all that often (albeit probably more often in the past 20 years than in any other historical segment).

Brown's budget plan would increase assessments for the Revolving Fund by $177 million in the fiscal year that begins July 1 and runs to June 30, 2016, compared to $131.4 million collected for the current fiscal year.

Honestly on a pro rata share spread amongst all the employers in the state, that's not that much of a dollar increase.

But the distribution is a little troubling to me - it seems that the governor's budget proposal is going to cause us to miss Fogva, to lose situational awareness.

And this is why: Assessments account for more than 96% of all revolving fund revenue. Administrative penalties of about $3 million a year are the next largest component, representing between 1% and 2% of all revenue.
There's no $3M here...

Then there's license and permit fees that are planned to generate about $1.1 million, and some investment income of about $250,000.

There was a time not too long ago when most of the DIR budget came from the General Fund. In the budget pressure years of the Schwarzenegger Administration it was decided that since DWC is in place to benefit employers (and, by association, workers) that employers should pay for its operations, so the bulk of funding was established by an increased tax on policy premiums the employer pays; i.e. assessments to go to the "revolving fund."

Revolving, I suppose, because money goes in, and money goes out, with out as much oversight as if under the watch of the State Controller...

A couple of blog posts ago I essentially railed on DWC for its lack of juevos assessing, and collecting, fines and penalties against wayward and recalcitrant claims processing houses. In fact, I believe I called the audit process "a joke."

I just checked - yep, that's what I said.

$3 million a year in administrative penalties? The governor must mean "assessed" penalties, because that much is not collected. In fact, not even half of that is collected.

In my post, "Stop Whining and Do Something," I basically excoriate the administration for letting claims houses get away with near murder. The extrapolation on what the Audit Unit actually collected in penalties (albeit that extrapolation is based on conjecture - but it is illustrative) highlights why compliance in California is, in my mind, pathetic.

When it really comes down to the numbers, there is no motivation, no urgency, no FEAR, that the mishandling of a claim will result in anything more than just another injured worker dumped into some other social safety net system, such as Social Security.

Here we are, flying around in the system, and the governor gives DWC a TEC route clearance. But DWC seems to mis-read the approach plate, perhaps because of some disruptive query, and flies right over Fogva.

The good news is that DWC can cancel its IFR clearance and land on the favored runway - make the governor proud by actually collecting $3 million in penalties.

In fact, if audit results were really enforced, there would be much more than $3 million in penalties. And that money could go to further fund the Audit Unit so that it could actually do its job of making sure that benefits are delivered as required by law.

California work comp administration keeps passing by the airport. The target is right under our wing. We just need to cancel IFR and circle to land; but our situational awareness keeps getting interrupted by misdirected inquiries.

Employer assessments fund DWC. Employers expect some return on that operational investment - which means taking care of the people that seek benefits, and that in turn means making sure that benefits reach injured workers timely, efficiently, accurately, and per plan (i.e. the law).

Collect those penalties, fund the Audit Unit, meet or exceed budget expectations.

And then grease the landing.

Oh, by the way, Mom was doing great - that a post for another day.