Friday, February 27, 2015

It Works Out

Nicolas Mercado will get his home modifications.

Bully for Mercado. And good for CIGA.

The California Insurance Guarantee Association has withdrawn its petition for review from the 2nd Appellate District, telling the court that that it was able to resolve the Mercado matter (which I interpret as meaning that Mercado will get the mods).

Nicholas Mercado had worked as a truck driver until a horrific accident left him a quadriplegic in 2011.

His employer had been insured by the Ullico Casualty Co., and CIGA inherited its liabilities after the carrier went insolvent in 2013.

When Mercado's doctor requested authorization for 66 modifications to his home in order to accommodate his wheelchair, CIGA submitted the request to UR, which was conducted by Dr. Phil Martin.

The doctor certified 31 of the requests as reasonable and necessary, but he modified nine and denied 26.

When CIGA failed to have the modifications approved by Dr. Martin made to Mercado's home, Mercado moved for sanctions. He also demanded payment for his wife's attendant care services, and a ruling on his need for further medical treatment, including additional home modifications.

In May 2014, Administrative Law Judge Paul DeWeese ruled that the UR decision was defective. Pursuant to the WCAB's en banc decision from two months prior in Dubon v. World Restoration, he could decide the disputed medical issues instead of IMR.

However, based on the record he had, DeWeese said he couldn't decide whether the disputed home modifications were actually necessary or not. He ordered the parties to further develop the record.

DeWeese also ordered CIGA to pay Mercado's wife for her attendant care services and to pay his attorneys $110,997.38 for their work.
Mercado in a TV inteview.

CIGA appealed, but the WCAB affirmed DeWeese's decision last September.

(One week later, the WCAB issued a second en banc decision in Dubon, which said that a UR decision becomes ineligible for IMR only if it is untimely. Dubon 2, as it is known, is pending before the Supreme Court.)

After the WCAB's Dubon II ruling, CIGA petitioned for judicial review of Mercado's case, arguing the WCAB's change in position meant DeWeese erred in finding Dr. Martin's UR decision invalid. It also challenged the imposition of penalties and the order to pay Mercado's wife for her services.

I applaud the parties ability to work out their differences, and get Mercado the modifications to his home.

But I also wonder whether home modifications really were what the dispute was all about, or whether the real issue was penalties and indemnification to Mercado's wife that was driving this litigation.

Because in my mind, home modifications to accommodate severe disability is not a medical issue, it is a disability accommodation issue. A physician might "prescribe" home modifications, but ultimately a physician is not an expert on disability or construction - this topic belongs to disability experts, and I still argue that is not medical treatment subject to utilization review.

Meanwhile, Don Smith's similar case, also with CIGA, about the need for home modifications, is still pending before the 3rd DCA.

If you recall, Dr. Samuel Hahn, CIGA's UR reviewer, had concluded that the modifications weren't necessary because there was no reason for Smith to be using a wheelchair to begin with.

Hahn wasn't asked to review whether a wheelchair was necessary - that point had been capitulated to by CIGA earlier.

The 3rd DCA granted writ on Jan. 22, and it received a certified record of the administrative proceedings from the board on Monday.

In an interview for the upcoming Seismic Shifts recorded webcasts, founder and CEO of the Integrated Benefits Institute in San Francisco, CA, Tom Parry, made an interesting comment - workers' compensation is an established integrated benefits system already, albeit within its own jurisdictional silo.

And these home modification cases highlight that point. Injury occurs, medical treatment is provided, disability money is paid, health services are established, and at least in Mercado's case, disability accommodations are (ultimately) constructed.

Workers' compensation has experience integrating disparate pieces of the puzzle (sometimes under acrimonious objection), so it's not a stretch to see this industry morphing into bigger, more consolidated, services that include other jurisdictional silos, such as issues under the Americans with Disabilities Act, the Family Medical Leave Act, the Affordable Care Act, and other laws affecting medical or disability issues.

When it comes down to it, this is what the trend of "opt-out" laws is about: control over the big picture so that integrated, and more efficient, service of injuries and disabilities can be provided by the employer which has the resources to tackle such complex combinations.

Cases like Mercado and Smith provide ammunition towards that trend. And the employers that don't have resources to "opt out" ultimately will demand and get law changes that help drive integrated services.

This will come from the top down - yesterday, president and CEO of AIM Mutual Insurance Company in Massachusetts, Michael Standing, told me in an interview for Seismic Shifts that the most difficult thing for the executive suite to accept in making decisions about integrated services is that the return on investment isn't clear.

"Sometimes you have to make an investment without knowing what the return is going to be," he said, "because each case is different, even if the injuries are the same," commenting that its difficult for executives, trained analytically to make the numbers work, to make decisions based on faith and hope.

What Standing is really saying,, though is just do the right thing and it all works out.

I hope the parties in Smith are likewise able to resolve their differences.

Thursday, February 26, 2015

Bad Faith Followup

A couple days ago I asked whether workers' compensation claims payers should be subject to "bad faith" civil liability, or whether the cloak of exclusive remedy that employers and workers bargained for should also cover those tasked with administering claims.

As I noted, jurisdictions are split, though the details of those that do recognize bad faith liability vary quite a bit.

The responses to my highly unscientific, completely anecdotal, and purely sophomoric inquiry surprised me.

First a couple disclaimers. While the backgrounds of those who responded are varied and different, I don't know from which jurisdictions respondents are from or what political affiliations these folks harbor.

Also, my question was posted only two days ago, so it is likely that there is still some pent up response out there.

Bad Faith Followup

Nevertheless, I was still surprised that every single response, regardless of perceived orientation, was that exclusive remedy should NOT protect the payor, and that if egregious behavior was committed then liability for bad faith claims administration should be applied.

A risk manager said: Not only should they be held accountable for clear violations of Law but publicly announced. I will also suggest that directors of (Police, Fire etc) make sure that Risk Management is not buying their legal failures in their budgets and claiming that Workers Comp cost are too high for (Police/Fire) departments.

A California Qualified Medical Examiner stated: It is a sensitive question because what some of these carriers are doing to the IWs is horrible! They routinely DENY straightforward claims with no legitimate reason. You fall off a ladder in front of your boss, get taken to the ER in full spinal precaution and they very well may deny your claim! (My example isn't hyperbole, I have cases similar to that!) It's like, are you kidding me? Obviously, they must not even be getting a slap on the wrist...more like high fives and slaps on the back.

An injured worker's advocate (not an attorney) commented: Workers' compensation insurers routinely controvert claims in a manner that cannot be described in any other way -- the are clearly acts of legal "bad faith".

A Senior Claims Examiner noted: Sometimes in some companies the bad faith does exist. They should be able to bring a civil law suit against the carrier or TPA. They bring class action law suits. Why not ?

A Georgia injured worker's attorney said: If state statutes (like in GA) are not going to have any meaningful 'teeth' then yes, bad faith actions should be allowed. Perhaps it would encourage more ethical behavior from insurance companies.

And a Wisconsin defense attorney agreed: In Wisconsin bad faith claims are part of the workers compensation statute and allow recovery of the lesser of $30,000 or a 200 percent increase in benefits to be paid. Seems to be among the better equitable ways to deal with such situations.

I'm interested in more comments. Please post them or send them to me.

In the meantime, my colleagues and friends Mark Walls, vice president of communications & strategic analysis at Safety National Insurance Company and Kimberly George, senior vice president of corporate development, M&A and healthcare at Sedgwick Claims Management Services, Inc., are collaborating on a new initiative to further educate the industry, which I applaud.

From their press release, with a little editing by me:

They will be hosting a regular, complimentary webinar series and interactive forum called "Out Front Ideas with Kimberly and Mark." The series – sponsored by Sedgwick and Safety National – will be dedicated to covering important workers' compensation-related topics that are not receiving enough attention in the industry.

"Out Front Ideas with Kimberly and Mark" will provide a unique alternative to the traditional webinar format by including a mix of communication methods, such as podcasts and live interviews from industry events. The approach will be to collaborate on meaningful topics that are not discussed openly in the industry or, in some cases, not at all.

Both well-known experts and advocates in their fields, George and Walls plan to explore the perspectives of risk managers, brokers, third-party administrators, human resources professionals, carriers and other industry stakeholders. The goal of the series is to bring in a variety of experts to provide input from each thought-provoking angle to initiate or advance conversations.

"Out Front Ideas with Kimberly and Mark" will launch with its first webinar on the advantages of unbundled claims handling scheduled for March 31, 2015. Visit for more information.

So Mark and Kimberly, you both knew THIS was coming!

Should claims payers be cloaked with exclusive remedy immunity from bad faith civil liability? Or should they be made to answer civilly for egregious claims handling behavior?

Wednesday, February 25, 2015

Who's To Blame?

I was talking to a physician friend of mine yesterday.

I know - the first thing in your mind is that you didn't know I had any friends and second question is why, assuming I did have friends, a smart guy like a doctor would talk to me.

Those are beside the point - the crux of the conversation centered on his clinical observation over the past 30 plus years of practicing orthopedic medicine in both forensic (including work comp and auto) and non-forensic settings is that the forensic medical complex routinely produces worse outcomes than the non-forensic setting.

My friend has done principally defense oriented forensic work, but is also widely used as an independent medical examiner and agreed medical examiner - he was speaking from a purely interested scientist's perspective.

He relayed a couple of clinical stories - stories that I think are all too common.

The basic theme is that Patient (I'll use that instead of injured worker, because I'm trying to relay this from the physician's view), a 60 year old female worker, complains of pain, tingling and numbness in her hands.

She makes a workers' compensation claim because she BELIEVES that her work has something to do with it (and yes, there are co-morbidities and other factors).

The insurance company denies the claim. She lawyers up, they fight over causation, insurance company loses that battle.

That process takes about four years.

This is after nearly every doctor that Patient sees, whether on "her side" or for the defense, opine that there likely is SOME industrial component.

The next battle is what to do about it. That takes another four years after rounds of physical therapy, drug treatments, and ultimately surgery.

My friend sees her as an independent physician - his opinion, ultimately, is maybe or maybe not work had anything to do with her hand complaints. That point is now moot.

The real issue, says my friend, is that the process itself absolutely contributed to her current state of injury and disability - and likely such would not be the case had the claim just been accepted right at the beginning, treatment provided, some indemnity paid, and the claim closed out.

My friend is now not so sure that our system of dealing with work injury claims (or any medical issue that is claimed the result of something other than a person's own doing) is much more than just a money shuffle.

Doctors, lawyers, adjusters, other vendors - everyone attaching to Patient's discomfort, contributing to the declination in health of a person.

They look at risk factors - namely centered on Patient's co-morbidities: female, over age 50, over weight, perhaps tobacco or alcohol intake, maybe some psychological issues.

In other words, Patient gets blamed for her condition.

In a "no fault" system.

"I'm not believed," is Patient's mindset. So her symptoms get worse. Someone MUST believe her at some point!

She gets coerced, essentially, into ineffective treatment. Ineffective because she'll never return to work, will never "get better," and forever to the end will be angry at her employer, at the insurance company/claims administrator; and in the meantime a whole panoply of financial interests are "circling the wagon" looking for another opportunity to strike for personal gain.

Coerced because it's treatment that she doesn't really want. She just wants to get better. But no one believes her. So she undergoes various treatments, procedures and time off that extend disability and make it worse.

In the meantime, the carrier/adjuster is paying far more in the denial and deflection of the claim than if it had just taken care of matters immediately.

The conclusion, says my friend, is that the PROCESS of dealing with the claim of injury ultimately causes MORE injury and MORE disability.

In other words my friend's experience affirms the immortal words of Walter Kelly's famous cartoon character, Pogo, "We have met the enemy, and he is us."

Christopher Brigham, MD, in his latest book, Living Abled, likewise makes the argument that our legal processes contribute disproportionately, and unnecessarily, to an unhealthy and more disabled America (actually, he makes the argument that this is an international issue).

And while the focus on work place safety in the past two decades has reduced claims frequency by some 35% (i.e. the number of people claiming that work hurt them), and while the work force has expanded by millions during that same time, the hard dollar costs to support the industrial accident complex has grown 65%.

In other words, even though much fewer people are claiming work injuries, the industrial injury system has expanded. This is counter-intuitive, but for the unaccounted financial self-preservation of an industry.

This can't, and won't go on. This industry is its own worst enemy, and ultimately social and legal forces will cause a tectonic change and I'm not talking about some little "reform" - I'm talking about a MASSIVE shift as employers become more savvy about the use of resources, and the law mandates ever greater protections for occupational issues (not injuries, but things like sick leave, parental leave, discrimination, job protection, etc.).

In other words, the industry itself is in the process of changing, and radically. We have opt-out spreading, frankly, like wild fire. Large employers, those with the resources to avail the option, have weighed in mightily - Oklahoma's opt-out system, as you know, is only a couple years old and it already has 35 or more employers signed up even though the obligation is to meet or beat what work comp requires.

And Tennessee is next.

And so is YOUR state.

Because employers at that end of the spectrum don't like work comp. It is wasteful, it does not deliver as promised, and does not integrate at all with any of the other absence related legal and medical systems.

At the other end of the spectrum are the small employers; collectively they represent a HUGE market. Just as Uber has radicalized urban personal transportation, or Facebook has radicalized interpersonal relationships, or any other number of disruptions where technology has enabled new efficiencies, someone, somewhere, is going to knock down the walls and provide integrated services because the shrinking work injury population is running head-on into a growing employment population.

The numbers don't make sense any longer.

And this affects YOU. It doesn't matter if you're an attorney, a doctor, a claims administrator, a regulator, a risk manager, or a patient.

Work comp doesn't like change.

Too bad. It's coming.


Peter Rousmaniere, a Harvard MBA and consultant to the work comp industry for over 3 decades, has written a white paper, published by WorkCompCentral, "Seismic Shifts: An Essential Guide for Practitioners and CEOs in Workers' Comp." It is a free download. Printed copies can be ordered by contacting WorkCompCentral customer service.

There is also a five part recorded educational series based on "Seismic Shifts" that I host, narrated by Peter and guest speakers, in which the case of radical change is powerfully made. The introductory video is free; the balance of the series requires "tuition." You can register here.

If you don't at least read the paper, you're doing yourself a huge disservice. But only take the recorded webinar series if you're serious about the future of work comp and absence management - this is for professionals and executives only. And I'll be frank - if you don't care about the industry and what we do, then don't bother wasting your time and money.

Tuesday, February 24, 2015

Bad Faith or Not?

Here's a sensitive question for the workers' compensation community that I'm sure will provoke passionate debate: should workers' compensation insurance companies and/or third party administrators be subject to civil "bad faith" lawsuits?

Or should a state's workers' compensation system remain an exclusive remedy, even if a claims payer intentionally commits egregious acts such as denying benefits that it knows are due in order to "facilitate" a settlement?

WorkCompCentral Legal Editor, Sherri Okamoto, reports that about half of the states have done away with any civil bad faith remedy either through legislative or judicial actions, and the other half of the nation retains that remedy.

The contrasts are stark.

Okamoto cites an Iowa jury award an earlier this month of $25 million in punitive damages, along with $284,000 in damages, payable by his former employer's workers' compensation carrier for its bad-faith handling of his claim. The offense was failure to pay permanent total disability benefits after a 2009 accident left the injured worker with catastrophic injuries.

Other states where there is no civil remedy rely on administrative penalties and administrative judicial enforcement, such as California, which has been criticized because those policies lack sufficient deterrence to bad behavior such as wrongfully denying medical care to the critically injured.

Bad Faith?

Okamoto notes that the states that do allow for civil remedies vary widely in the standards and definitions for reprehensible conduct.

Alaska and Arizona, for example, define "bad faith" as a refusal to pay a claim without any arguably reasonable basis. In contrast, Arkansas requires a showing of "affirmative misconduct" or “dishonest purpose” to avoid liability.

Colorado, Maine and Michigan make a carrier's failure to act in good faith a breach-of-contract claim. Hawaii and Mississippi make carrier misconduct redressable in tort.

Texas used to permit bad faith actions until the Supreme Court's decision in Texas Mutual Insurance Co. v. Ruttiger, which held there was no common-law bad-faith action in the Lone Star State for workers' compensation claims handling.

Likewise, two months after Ruttiger came out, though, the New Jersey Supreme Court held that the state's injured workers do not have a common-law right of action for pain and suffering caused by an insurer's administration of a workers' compensation claim in Stancil v. Ace USA.

Last week, the North Carolina Court of Appeals ruled that an injured worker cannot bring a tort action to recover damages from an insurance carrier for its alleged bad-faith claims handling.

The split surely raises the passions in people: civil remedies fly in the face of the concept of administrative expediency that underlies workers' compensation; yet, administrative enforcement needs sufficient "teeth" to encourage compliance and deter bad behavior.

What do you think?


At 8 a.m. this morning the pre-recorded introduction webinar to Peter Rousmaniere's ground breaking white paper, Seismic Shifts: An Essential Guide for Practitioners and CEOs in Workers’ Comp, will be broadcast on WorkCompCentral (click here to register to watch the introduction for free, or purchase one or all of the subsequent four parts of the series here, and click here to download the white paper).

Rousmaniere argues that the workers' compensation industry, despite rising costs, is actually shrinking. He explains why, and what industry executives and other professionals should be doing. If your job has anything to do with workers' compensation (and you wouldn't be reading this if it weren't) then you need to at least read the paper - better though, you need to "attend" the webinar series to get the most from Rousmaniere's work, including exclusive interviews with subject matter experts.

If this isn't convincing enough, read Tom Lynch's review of the paper and the series here.

Monday, February 23, 2015

It's Not Rocket Science

The Texas Supreme Court will hear Seabright Insurance Company's argument that Labor Code Section 401.011(12), as interpreted by the various district appellate courts, is ambiguous.

Here's the code section Seabright says needs clarification:

(12) "Course and scope of employment" means an activity of any kind or character that has to do with and originates in the work, business, trade, or profession of the employer and that is performed by an employee while engaged in or about the furtherance of the affairs or business of the employer. The term includes an activity conducted on the premises of the employer or at other locations. The term does not include:

(A) transportation to and from the place of employment unless:

(i) the transportation is furnished as a part of the contract of employment or is paid for by the employer;

(ii) the means of the transportation are under the control of the employer; or

(iii) the employee is directed in the employee's employment to proceed from one place to another place; or

(B) travel by the employee in the furtherance of the affairs or business of the employer if the travel is also in furtherance of personal or private affairs of the employee unless:

(i) the travel to the place of occurrence of the injury would have been made even had there been no personal or private affairs of the employee to be furthered by the travel; and

(ii) the travel would not have been made had there been no affairs or business of the employer to be furthered by the travel.

But 401.11 when taken into context is not ambiguous, as I'll explain. Seabright, in my opinion, is instead making a disingenuous argument to avoid paying a death benefit.

Here's the facts as we know them:

Candelario Lopez worked as a carpenter and foreman for Interstate Treating, an Odessa-based business involved in building and installing gas plants.

His work for Interstate always required him to travel away from his Rio Grande City home, which is near the Mexican border – to destinations such as Missouri, Virginia, Oklahoma and Colorado.

In 2007, Interstate sent him to work on a fabrication and construction project in Ridge, Texas, which was an almost seven-hour drive north from his home.

Candelario would stay in hotels near the site where Interstate had sent him to work. He would make his own lodging arrangements, though Interstate would pay him a "per diem" in addition to his hourly wage whenever he was away from home. Candelario's widow, Maximina, said he always used this per diem to pay for his hotel room and meals.

Interstate also provided Lopez with a company vehicle to use, and a company credit card to buy gas and supplies (though Seabright contends that the truck was provided as a gratuity, and Candelario's employment didn't require the vehicle's use).

While Candelario was working for at the Ridge job site, he stayed in a hotel about 47 miles away, in Marlin. He used the company truck to get to and from the job site each day.

While he was headed to work on the morning of Sept. 11, 2007, a vehicle traveling westbound on State Highway 7 crossed over the median and crashed into the truck.

At the time, two subordinate employees were riding with Candelario in the truck, and he was hauling company equipment to the job site.

The truck was propelled into a ditch, and Candelario, 57, died from his injuries.

After his death, Maximina filed a claim for workers' compensation benefits. Seabright denied the claim on the grounds that Cadelario was not in the course and scope of his employment at the time of the accident because he was traveling.

At hearing, the Division of Workers' Compensation found Candelario's fatal injuries were compensable because he "was engaged in or furthering the affairs or business of (his) (e)mployer" at the time of the crash.

An Appeals Panel agreed and Seabright sought judicial review; a Starr County District Court Judge granted summary judgment in favor of Maximina, and the 4th DCA upheld that decision last year.

Seabright then asked the Texas Supreme Court to review - all the while, I presume, holding on to the death benefit money.

Seabrights novel argument is that since the Supreme Court's 2010 decision in Leordeanu v. American Protection Insurance Co., "multiple courts of appeals have construed the statutory requirements of Section 401.011(12) in different ways," and that there is "continuing confusion over the construction of Texas Labor Code Section 401.011(12) as to travel in the course and scope of employment," and "substantial deviation in statutory construction between courts of appeal."

This is why Seabright's cloak of legal basis is disingenuous - the analysis of the law and in particular 401.11(12), is very, very simple: was the worker injured while benefiting the employer?

There is no confusion in this case. Apply the standard and, as applied to Maximina, pay the damned benefit.

Seabright doesn't like that the court used the "but for" test: but for his employment Candelario wouldn't have been where he was when he was killed.

Too bad - that's a proper analysis of the law as applied to the facts of this case.

Seabright will lose at the Supreme Court, and perhaps the court will clarify the standard. But I doubt it.

The LEGAL standard is already clear, as it is in countless workers' compensation cases throughout the country, not just in Texas and whether or not death is involved; it's the FACTS that will always be different.

Which is why a basic analysis is required and that basic analysis comes down to whether or not the employee was doing something that he or she otherwise wouldn't be doing if not for the benefit of the employer.

Conservative insurance folks will argue that's too loose - What about parking lots? What about personal errands? What about idiopathic injuries?

This is not rocket science. It's not even first year law school case analysis. Strip away all of the legal mumbo jumbo and the result is obvious.

Interstate paid for insurance. Seabright took that money. Now it's time for Seabright to make good on its contractual promise.

The petition for review in the Seabright case is available here.

The opposition to the petition is available here.

The reply is available here.

Seabright's petition on the merits is available here.

Maximina's petition on the merits is available here.

Seabright's reply is available here.

Hey, maybe I'm wrong - it's happened before. My suspicion, however, is that you'll read my vindication here in a few months...

Friday, February 20, 2015

Buffalos in Illinois

My daughter and I flew N6641M to Catalina Island yesterday.

Catalina/Avalon airport is 24 miles as the Bonanza flies from Los Angeles Harbor and is, I think, one of those magical places that few ever get to experience.

My daughter was excited to see a few of the famous Catalina buffalo. She asked the airport manager on duty when we checked in if there were any around.

"There were quite a few roaming near the airport yesterday," he said. So we paid our fees and hiked the Airport Soapstone loop - a short 2.3 mile walk without a whole lot of elevation change.

The airport is at 1,600 feet above mean sea level, so the vistas are spectacular, and the nearly unspoiled environment served up red tailed hawks feeding, wild flowers blooming, and a soapstone quarry.

But no buffalos. There was plenty of buffalo evidence and a couple were large enough for discus throws, which of course was tempting, except for the relative freshness of the discs.

In workers' compensation several states serve up more buffalo discs than others.


Illinois is the one state that has a workers' compensation system as much maligned as California's.

And like California, political attempts to "reform" it focus on costs arising out of the symptoms rather than the underlying "disease" that gives rise to the symptoms.

Newly-elected Republican Gov. Bruce Rauner made workers' compensation reform a center-piece of his campaign, albeit with little detail, but his fellow Republicans in the legislature have some ideas.
In search of buffalo.

A legislative package, filed by Sen. Kyle McCarter, R-Decatur and Rep. Dwight Kay, R-Edwardsville, would, among other things, tighten the rules governing compensation for travel-related accidents, place a 500-week limit on cumulative awards for partial disabilities, reclassify shoulder and hip injuries and define the term "injury" so that claimants would have to prove they are medically impaired to "a reasonable degree of medical certainty, based on the medical findings."

The new definitions are included in Senate Bill 770 and its companion, House Bill 2421, and some companion bills (see below).

Supporters of these bills refer to them as the "causation" bills because the bills try to more tightly define what a work injury is by calling an "accident" an "occurrence arising out of the employment, resulting from a risk incident to the employment, and in the course of employment at a time and place and under circumstances reasonably required by the employment."

SB 770 and HB 2421 also would require workers to show that an "accidental compensable injury" was a major contributing cause of the injury – meaning it was more than 50% responsible for the injury compared to all other causes combined for which treatment and benefits are sought.

The two bills also provide that injuries would be deemed to include the aggravation of a preexisting condition only for as long as the aggravation continues to be the contributing cause of the disability.

Also included in the Kay/McCarty package are:

SB 769 and HB 2419 , which covers instances in which an employee is working for multiple employers and the employers named as a respondent in the claim is aware of the worker's other jobs. Under the bills, the worker's wages from all of the jobs would be considered as being earned from the employer deemed liable for the injury.

SB 771 and HB 2420 would bar temporary partial disability benefits to workers discharged for cause. Claimants would be entitled to a hearing to restore benefits before the Illinois Workers' Compensation Commission and would receive retroactive benefits if the commission rules that worker was not fired for cause. "Discharge for cause" is defined as a discharge resulting from an employee's voluntary violation of a rule or policy not caused by his or her disability.

SB 772 and HB 2422 would limit the maximum cumulative compensation for workers receiving partial disability to 500 weeks. Awards for partial disability would be deducted from any award for a subsequent injury to the same portion of the body. In addition, injuries to the shoulder would be considered injuries to part of the arm and injuries to the hip would be considered injuries to part of the leg.

Seems to me that these bills would simply invite a large dosage of litigation to define what the definitions actually mean when applied to real live facts of a case.

But this is politics, and the point of politics is to propose something that might be distasteful to some in order to get an advantage on something else that may or may not be related.

And with Democrats solidly holding majorities in Illinois' Senate and House, Republican's know they have an uphill battle if they don't compromise on some other topic.

The opinion from business groups is that Rauner may offer an increase in the state's minimum wage as a bargaining chip to pass workers' compensation legislation. Rauner also announced a budget Wednesday that calls for cutting state spending by $6.7 billion, which also may enter into the political debate over business reforms according to sources interviewed by WorkCompCentral.

And we also know that what gets introduced into a legislative session is far different than what ultimately makes it to the governor's desk, if at all. Similar legislation has failed to clear the General Assembly since 2011.


We didn't see any buffalo on our hike and I didn't toss any discs.

So my daughter and I lunched at the DC-3 restaurant at the airport.

We both ordered buffalo burgers.

They were good.

Thursday, February 19, 2015

Why It Is The Way It Is

A couple of weeks ago Joe Paduda in his Managed Care Matters blog posted that there was a suspicious upcoding of physical therapists billings by some networks using the "59 modifier."

It seems there are some medical networks that are adding the 59 code to bills without a) telling the actual provider of the services, and b) automatically and systematically without supporting documentation.

And they have been getting away with it.

Paduda states that there is a concerning lack of appreciation for what this means - the actual providers, the physical therapists, aren't too concerned as long as they get paid, despite the fact that someone or some entity is modifying their billing without their knowledge against professional protocol.

The modifier is typically used when two procedures are used on the same patient within 15 minutes. In some cases, those services would be bundled together and reimbursed as one item. But for others, the provider appends the number 59 to the code to indicate that they should be reimbursed separately.

Paduda, a principal in the firm Health Strategy Associates, says that some of his clients have seen modifiers on more than 40 percent of their bills, but also notes that there is some official documentation floating around that indicates that the 59 modifier shouldn't be seen on more than 10% of the bills.

Something is amiss.

"I think I'll take a mile..."

One commentator to Paduda's blog post states, "I am in CA and this is on my radar. I am concerned. Several of my colleagues can confirm what you are saying is 100% true. I have seen the smoking gun. In this case, the gun is still red hot and has not come even close to cooling down. The gig is up…"

What is the gig?

The motivation on the part of the networks and the third party administrators they are tied to, it seems, goes to their marketing and reimbursement practices whereby the TPA gets a percentage of billings saved.

Inflating bills creates the illusion that the network is saving payers more than it actually is. Because a network might reimburse for 80% of a bill, it would show the payer that it saved $20 off a $100 bill for physical therapy. But if the bill was $120 because of a 59 modifier, the network would report to the payer that it saved $24.

In an interview with WorkCompCentral, Paduda wouldn't identify who is doing what, and clearly these bad apples are the exception.

And it comes down to transparency, which is tied to the number of entities through which a bill is passed until payment is rendered.

“The only way we could show that this has been done is if we were able to get the bill that was sent on to the third-party administrator or the employer and compare it to what we've originally sent in,” Jeffrey Hathaway, president of the Physical Therapy Business Alliance, told WorkCompCentral. “So there's no transparency. We have no idea what the network is getting paid, we have no idea what the network is telling the third-party administrator.”

So, once again, give someone an inch and they'll take a mile - which is exactly why work comp is the way it is today: because people can't behave themselves without someone overlooking them with baseball bat in hand to keep things in check.

You don't have to wonder why work comp is the way it is. Just open your eyes (ears and wallets).

Wednesday, February 18, 2015

Better Than Nothing

Work comp sucks unless you don't have it.

Then, presumably, it's better than nothing.

Opposition to Oklahoma opt-outs have asked the state Supreme Court to assume original jurisdiction in the hopes that the court will declare the 2013 law creating the new system unconstitutional.

Remember there was an attempt to get the court to act when SB 1062 was first signed into law on the grounds principally that the bill violated the state's "single subject" principal, among other arguments.

The Supreme Court ruled that SB 1062 was not unconstitutional as a multiple-subject bill, but declined to address the constitutionality of its contents until an actual controversy over the application of its provisions arose.

That controversy has arisen.

Judy Pilkington and Kim Lee both worked for employers who elected to take the Oklahoma option.

Both of their employers offered benefits under plans that had been prepared by PartnerSource, a Texas-based consulting firm for employers who wish to pursue alternative benefit programs to the Texas and Oklahoma comp systems.

Neither Pilkington nor Lee were able to get benefits under their respective employers' plans, they allege, and now they claim they have no remedy available, unless the Supreme Court declares the opt-out program – formally known as the Oklahoma Injury Benefit Act – unconstitutional.

Though the OIBA requires plans provide benefits equal to or better than the work comp system, and plans require approval of the state Department of Insurance Commissioner to be valid, the plaintiffs argue that the limited availability for them to seek judicial or administrative review of decisions to deny them benefits under their employers' plan violates such provisions.

Pilkington and Lee say under their employer's plans they have to appeal to a committee comprised of three people who were not involved in the original adverse benefit determination. Those three people can be appointed by the employers, so panel members "obviously have a suspiciously vested and biased interest in the appeal," the plaintiffs complain.

It is the record from the appeal proceeding that is reviewed on appeal, not an original trial record.

"There is no due process protection in allowing an Oklahoma employer to opt out of the statutory workers’ compensation system, set up its own benefit plan, make all the decisions regarding benefits, determine who and how a plan can be reviewed, and have total control of the development of the record for appeal," the complaint contends.

The plaintiffs also argue that the Oklahoma option creates different rights of appeal for adverse benefit determinations, depending on whether an employer has exercised the option or not.

"Under the opt-out scheme, the initial determination of compensability is made by the employer, and then appealed to an employer committee, rather than to an impartial reviewer, such as a court or administrative agency," say the plaintiffs. Employees whose employers didn't take the option are able to get review of the denials of their claims through the commission, the plaintiffs explain.

They also contend that their employer plans that provide for reporting of an injury within 24 hours is adversely different than the one year limitation in filing a claim with the Workers’ Compensation Commission.
Bowzer Assimilated.

The plans also give claimants less control over their medical care than they would have in the comp system, they claim, and that such disparate treatment, based on whether their employers made the unilateral decision to exercise the Oklahoma option, violates equal protection.

Perhaps one of the biggest issues that the court may confront however, is none of these arguments, but it is the exclusive remedy that OIBA gives employers even if they aren't participating in the system.

Texas doesn't do that - employers in Texas who do not subscribe to the state work comp system have civil liability, though most who employ alternative risk systems mandate arbitration of claims and more often than not such arbitration clauses are enforced.

The flip side of the argument though is that the reason Texas employers are not given exclusive remedy protection is because they are not required to match state benefits - because Oklahoma opt-out employers must meet the same standard as the work comp benefit program then they should also get the benefit of protection from civil suit.

With Tennessee waiting in the wings with its opt out provision just introduced into the legislature, lawmakers there have deep interest in how Oklahoma handles this.

Under Sen. Mark Green's SB 721, a Tennessee employer who wishes to take the option would have to go through the process of applying as a qualified employer, and then offer at least a mandated set of benefits, like in Oklahoma.

But like Texas, an injured employee for a qualified employer in Tennessee would be able to sue the employer if the worker can prove negligence, albeit with damage caps.

And like any state where change is faced, there is opposition to the Tennessee plan, with basically the same arguments, albeit based on different facts, that is being raised by the Oklahoma opposition.

Change is difficult to implement and difficult to accept.

But this isn't 1915. This nation and its society, economy and culture have changed radically since the early days of "workman's" compensation.

Change is inevitable from my viewpoint. Enough people have said that workers' compensation isn't working, and that there are many different laws now that provide various levels of employee protection that didn't exist previously.

While there may be some Supreme Court interference with Oklahoma's opt-out plan, or any such state plan that may come to be in the future for that matter, opt-out is here to stay, and will be coming to a state near you earlier than you might expect.

This industry is likewise changing and assimilation will occur.

Resistance is futile.

Unless you want nothing.

Tuesday, February 17, 2015

My President's Day

It's not often that I actually take a day off. I usually do at least some work on a holiday and the amount is just measured by volume.

President's Day was slightly different. I slept in (okay, some of you are not impressed with a 5 a.m. wake up time, but that's 2 extra hours of sleep for me!). And I had no time schedule for the day; usually on weekends, I may work 4 or 6 hours total, I will also have obligations scheduled.

Living in Southern California, and in particular Ventura County, I am appreciably spoiled by unforgivingly good weather, wide open space, supreme agriculture, mountains that rise to 8,000 feet from the Pacific Ocean. It is unbelievably good living and begs recreation whether you cycle, surf, hike, motorcycle, or fly airplanes.

Hey - I like to do all of that! I reckon that's why I've made Ventura County my home for 35 years...

Freedom, as Janis Joplin sang, is having nothing to lose - so yesterday I decided to set out on a bicycle ride with no clear direction and no clear intention other than to enjoy the morning because with no schedule, and no commitments I didn't feel I had anything to lose.


From 2007 to 2008, Gilberto Rincones worked as a technician for WHM, a maintenance company that builds, removes, repairs and installs catalyst systems used in refineries and chemical plants. WHM contracted with Exxon for work at its Baytown facility.

Under terms of the contract, Exxon required all employees who work at the plant to submit to random drug screens. WHM contracted with DISA, a substance abuse administrator approved by Exxon, to conduct the testing.

DISA performed a drug test on Rincones, which yielded a positive result for marijuana use. Rincones denied using marijuana and tried to submit a new sample for testing, but DISA refused. WHM informed Rincones that he was no longer eligible to work at the Baytown plant.


Like the Door's Jim Morrison, I "took a look around me, which way the wind blow?"

That's where I went - took the slight tail wind out of the west and headed first down to Malibu to Sycamore Cove. Pacific Coast Highway was closed a couple months ago following severe slides. It had been closed at Point Mugu, but recently was opened down to Sycamore Canyon State Park.

It was overcast when I departed, but sometimes the Malibu coast will break up the cloud layer, and as I rounded Mugu rock I was treated with a most biblical scene - rays of light shining through the clouds onto the water with the precipice of the Santa Monica Mountains falling into the sea.
Sun shines on Sycamore Cove, Malibu

I stopped to take a picture and enjoy the spectacle ... and thought about the weather broadcast on the news the evening before about the North East and the huge storms, snow and freezing weather that region was under. I hoped that the California contingency (Alex Swedlow of CWCI, Saul Allweiss of the law firm that is his name, me and a few others) will bring some of our good weather fortune to Boston March 5 and 6 for the Workers' Compensation Research Institute's annual conference.

I turned around at Sycamore Cove - the destruction from the mudslides a couple months ago was still very evident the entire route, and there were still large cranes just around the Sycamore Cove bend. Trucks with loads of granite passed by every few minutes.


Rincones went to a different laboratory where he was tested for drug and alcohol use. The results were negative. Rincones contacted WHM to prove his innocence, but the company refused to consider a second test and told Rincones to "work it out" with DISA.

According to Rincones, neither WHM nor DISA disclosed to him that they had a return-to-work policy and procedure for employees who tested positive for drug and alcohol use.

Rincones filed a claim for unemployment benefits. WHM told the Texas Workforce Commission that he had been fired for violating the company's substance abuse policies.


I headed up towards Camarillo, home to the spacious and luxuriously appointed offices of WorkCompCentral's world wide headquarters. Actually that office space is old and dated - we move into new space in April!

Through Camarillo the back way, I ended up going through Somis (famous nut house and I'm not talking a mental institution - that used to be Camarillo but is now a university) and Bradley Road.

Bradley Road is one of the most picturesque back country farm roads in Ventura County with orchards of citrus and avocado as far as the eye can see and very impressive ranches. In a few months I'm going on a motorcycle tour of the Tuscany region of Italy, and I imagine that it will look much the same...

I made a left onto Balcom Canyon Road. Balcom is one of the steepest roads around and it is used for the Tour of California bicycle race because it is the point where the peloton gets broken up for good - the top riders ascend at lung busting, leg ripping speeds. Most of us mortals are happy just to get to the top.

And at the top is a spectacular view of the Santa Clara river valley with Fillmore and the Sespe off in the distance. I stopped again for the photo op.
Top of Balcom Cyn, towards Fillmore and Sespe

By the way - I NEVER stop for anything when I ride. When I ride I'm on a mission. I'm usually on a time schedule and I don't like to break up my pace or cool down.

But the beauty of President's Day in Ventura County was more powerful than my compulsivity!


Rincones filed a lawsuit against WHM, Exxon, DISA and other defendants, alleging racial discrimination, tortious interference with a contract, negligence, defamation and other wrongdoing. He alleged that another employee who was not of Mexican descent had tested positive for drug use but was allowed to return to work after undergoing rehabilitation and taking another drug test.

It was alleged that WHM's human resources director had told the "white" employee about its return-to-work policy, whereas in Ricones' case, the HR director told him "what's done is done and you can't fix it."

The trial court granted summary judgment to the defendants. Rincones appealed.


Down the back side of Balcom at about 48 mph, and into the Santa Clara river valley towards Santa Paula, home of world famous Santa Paula Airport where the experimental airplane culture dominates and where actor Steve McQueen maintained his passion.

I stopped again for a picture - this time of the monument dedicated to the officers that lost their lives warning the town of the St. Francis Dam collapse in 1928. I reflected for a moment (I was after all cycling...) and then headed off to Ventura along Foothill Road back towards the overcast.
St Francis Dam Disaster memorial in Santa Paula

Eventually, after 82 miles and 4 hours, I was back home, a bit tired, mostly hungry, and hugely fulfilled.

For those four hours I didn't think much about workers' compensation, but when I finally showered, had some food and rested, I thought about how fortunate I am to live where I do, to be able to do what I do, to spend time pursuing life.


Among his arguments was that codefendant Exxon could not avail itself to the exclusivity provisions of the Texas Workers' Compensation Act because he was not an employee of the company.

Exxon was named a defendant in the lawsuit because it had obligated WHM to implement and enforce its drug-testing program and insisted that his employer use a third-party administrator that Exxon selected.

Exxon argued that Rincones could not pursue a negligence claim against it because he had signed an agreement to accept its drug-testing policy. Even if Rincones could prove a negligence claim, Exxon argued, it was protected by the exclusive remedy provisions of the Workers' Compensation Act.

On appeal the court found that Exxon owed Rincones a duty to use reasonable care in creating, enforcing and implementing the substance abuse policies that it required WHM and DISA to follow. And Exxon could not avail itself to the exclusivity provisions of the Workers' Compensation Act because it had disavowed any employment relationship with Rincones.

The trial court had erred in granting summary judgment against Rincones' negligence claim on that basis, the appellate panel concluded.


In celebration of such good fortune, I repeated the route in the afternoon on my motorcycle.


Friday, February 13, 2015

UR is Not Protected Activity

California’s Second District Court of Appeals ruled that State Compensation Insurance Fund's utilization review process was not “protected activity” under the state’s anti-SLAPP (strategic lawsuit against public participation) law.

The court also dismissed an appeal from the state fund’s utilization review provider EK Health, which was seeking the declaration of UR as protected activity under the statute.

A strategic lawsuit against public participation (SLAPP) is a lawsuit that is intended to censor, intimidate, and silence critics by burdening them with the cost of a legal defense until they abandon their criticism or opposition.

California's anti-SLAPP law provides for a special motion that a defendant can file at the outset of a lawsuit to strike a complaint when it arises from conduct that falls within the rights of petition or free speech.

The statute expressly applies to any writing or speech made in connection with an issue under consideration or review by a legislative, executive, or judicial proceeding, or any other official proceeding authorized by law. There is no requirement that the writing or speech be promulgated directly to the official body.

It also applies to speech in a public forum about an issue of public interest and to any other petition or speech conduct about an issue of public interest.

Code of Civil Procedure § 425.17 prohibits anti-SLAPP motions in response to certain public interest lawsuits and class actions, and actions that arise from commercial statements or conduct.
Ouch - no anti-SLAPP here...

If the anti-SLAPP motion is denied, the order denying the motion is immediately appealable. Defendants prevailing on an anti-SLAPP motion (including any subsequent appeal) are entitled to a mandatory award of reasonable attorney’s fees and a plaintiff cannot escape the fee by amending its complaint.

Nicholas Roxborough of the firm Roxborough Pomerance, which has a history of taking on the State Fund, said the case is significant because it establishes that UR is not protected activity despite the declaration of the California Supreme Court in 2008 that the process is mandatory.

“The notion that an insurance company can hide behind utilization review as an official proceeding and then undermine the statutory intent of having utilization review to protect the injured worker is out the window,” Roxborough told WorkCompCentral in an interview.

The Second Appellate District compared the process of UR to a more defined process like fee dispute arbitration and concluded that UR did not fit the bill of an “official proceeding.”

“UR review is medical rather than legal and informal rather than formal,” the court said.

California, as you might expect, has a long history of court cases interpreting the anti-SLAPP laws - this additional case is important to the workers' compensation community because it defines UR as an administrative process, in my mind opening up the review of medical requests to all sorts of civil challenges where improper shenanigans are alleged and/or involved.

In the case at hand, the allegation is that a September 2005 memo from former SCIF Medical Director Gideon Letz improperly targeted Electronic Waveform Lab and its H-Wave treatment devices.

Letz stated that “when authorized, we will limit authorized equipment to the more thoroughly studied and less expensive (transcutaneous electrical nerve stimulation) units. The more expensive interferential and ‘H-Wave’ units will not be authorized.”

Electronic Waveform alleges that there are numerous high quality studies that support treatment therapy using the H-Wave device, and that UR guidelines denigrating such treatment are based on flawed, and ethically compromised studies, in part because either they are based on devices with a similar name in foreign countries, or because a study author was an employee of EK Health.

Regardless of the actual dispute behind this case, the fact that an appellate court, which is binding precedence at least in the second district, found that an administrative workers' compensation process that has been declared mandatory to be exempt from California's anti-SLAPP laws is significant - perhaps evidence of further erosion of the exclusive remedy of the Labor Code.

If I were an insurance company, or claims administrator, executive, I'd be looking very seriously at this case and the UR processes (and perhaps other administrative processes) in place. Exclusive remedy may apply to the actual employer and injured worker - but for those in the supply line chain, civil liability remains a real risk.

The Second Appellate District's opinion is here.

Thursday, February 12, 2015

Texas Audits

Texas looks good to the industry with low average combined ratios and good profitability.

That's not good for injured workers, though, if it comes at the expense of failing to provide mandated benefits.

The latest audit took only 64 cases to uncover $511,000 in underpayments of lifetime income and death benefit payments.

Workers’ Compensation Commissioner Ryan Brannan said in a press release that he is "concerned there may be other deserving claimants in the same situation. These results indicate that we need to continue these types of performance audits.”

I would be concerned too.

That's an average of nearly $8,000 per claim that wasn't paid. To the common working person at the lower end of the economic scale that's a significant amount of money.

Carriers selected for the audits were those for which the division either detected compliance issues, or carriers who were identified as poor performers in the Performance-Based Oversight program.

The division said in the release that the common compliance errors discovered during the performance audits included:
  • Failure to pay 75% of the average weekly wage.
  • Failure to obtain a complete wage statement from the employer.
  • Failure to properly calculate Average Weekly Wages.
  • Failure to include non-pecuniary wages in the AWW.
Trey Gillespie, senior workers’ compensation director for the Property Casualty Insurers Association of America, told WorkCompCentral that part of the issue may be in the fact that the wage statements submitted by employers covers only 13 weeks preceding injury or death and the AWW is calculated on that.
Bowzer is embarrassed and promises to do better.

And wage statements often only include wage benefits, without reporting the value of other benefits – which is also required as part of the calculation of the AWW.

But that explanation means only that carriers aren't doing a good job of ensuring accurate information from the employer - after all, part of the insurance premium that an employer pays is for the service of making sure that a claim is handled properly, which includes ensuring that the insured employer is passing along the right information.

John Pringle, an Austin attorney who does both claimant and defense work, seemed to agree, in his interview with reporter Joey Berlin, "what I see is adjusters will contact the employer, ask for a wage statement. And then when they get it, they’ll use it even though it may be obviously flawed on its face. They’ll still use it, because that’s what they got … until somebody makes an issue of it.”

Gillespie at least believes that scaring carriers into compliance is a good tactic:

“But it’s good to have these press releases and good to have these performance audits so that basically, insurance carriers, as they’re self-auditing themselves, are sure to have this on the checklist of things to look at.”

Wednesday, February 11, 2015

Somewhere In Between

What's odd about being on the inside of an industry is that the messages we receive about how we're doing don't align well with the perceptions being voiced by the injured worker and employer communities, particularly in California.

This was highlighted at this past Division of Workers' Compensation Educational Conference in Los Angeles, which ended yesterday.

Here's what we're hearing from inside the industry based on the presentations at the DWC Conference:

1) Independent Medical Review is starting to work;
2) Rates are going up but not as fast as they otherwise would;
3) Continuous trauma claims are alarming and tied to litigation;
4) Medical fraud is under-appreciated and is a big cost driver;
5) Filing fees and Independent Bill Review have decimated the cost of liens.

IMR filings have stabilized, according to Robert Nydam, a project manager for Maximus, the IMR contractor. Though applications filed each month has been around 20,000, the eligible number is about 12,000. The balance were filed late, were duplicates or simply weren't eligible for the IMR process.

Workers’ Compensation Insurance Rating Bureau data shows the average charged rates for California peaked at $6.29 per $100 of payroll for the second half of 2003. Average charged rates dropped to $2.10 by 2009, but since then have been increasing steadily, and the average charged rate through the first three months of 2014 was $2.97.

Carrier-reported written premium dropped from $23.5 billion in 2004 to $8.8 billion in 2009, according to WCIRB reports, but has been edging up ever since. Written premium increased to $14.8 billion in 2013 and $16 billion for 2014. Dave Bellusci, WCIRB executive vice president and chief actuary, said the pattern of increases will likely continue this year.

Both David Lanier, California Labor Secretary, and Donald Marshall, vice president and national director of the anti-fraud program for Zenith Insurance Co. and chairman of the Fraud Assessment Commission, said that medical fraud is the big cost driver.

Perhaps these views were fortified more recently with the spinal implant cases involving the Drobot family and related medical entities, which were concentrated in the Los Angeles area, which also accounts for a disproportionate amount of claims, particularly CT claims.

Bellusci said WCIRB research shows that about 80% of CT cases involved attorney representation, 25% include an injury to a specific body part, two-thirds of claims were initially denied and 41% were filed post-termination.

More pointedly though, in 2005, cumulative trauma accounted for 6.8 out of every 100 indemnity claims filed in Los Angeles, 5.9 out of every 100 indemnity claims filed in the San Francisco Bay Area and 4.3 out of every 100 indemnity claims filed in the rest of the state.

As of 2013, 12.5% of indemnity claims in Los Angeles were for cumulative trauma, compared to 7.8% in San Francisco and 6% in the rest of the state. In 2003, cumulative trauma claims accounted for about 7.7% of permanent disability cases. As of 2013, they accounted for 13.4% of PD claims.
“There’s definitely a picture of these claims,” Bellusci said. “They’re typically represented, often denied, often two insurers, specific injuries, multiple body parts and many of them are filed after termination. And most of them are coming from right here in the Los Angeles basin.”

The WCIRB projected the $150 filing fee, $100 activation fee and new statutes of limitations for filing liens would cut filings by 40% and save about $480 million a year, but WCIRB's data shows lien filings are down nearly 60%, so projected savings attributable to the lien provisions was revised to $690 million.

Compare that picture to the anecdotal view from a couple of system physicians
Temperature rising?

A physician who goes by the pseudonym "Soothsayer" commented: "Many of us are about to abandon treatment. When compared to private patients, WC treatment is so difficult to obtain, that it is laughable, but not really funny. OK, we know there was "fraud". But we can control this in treatment schedules. We have limited PT/OT/Chiro. It is not worth dispensing meds in house. MRIs/ EMGs/ PT are corralled into privately contracted deals, by the carriers. Docs are getting prosecuted for dispensing compounds. We wait months for UR/IMR to ok any of the above. Yes, there were a few bad guys, but why do the rest of us and our patients have to suffer? You can bet the next attack is on CTs. They are being abused by the applicant attorneys, so it will be no surprise when the ax falls. Then there will be crying "woe is me" by these attorneys who have brought this on. No, things are not getting better for anyone except the carriers."

And in a LinkedIn post, IMR physician Tony Kim says: "CA WC is like the ghetto of the healthcare. There aren't any good doctors left. Only people that survived, because things were so harsh where crooks and the insurance companies are just playing the chase game one after another."

So what's the BIG PICTURE? Data suggests the system is "working." Anecdotes indicate there's a big gap in the reality perception.

The truth is probably somewhere in between.

Tuesday, February 10, 2015

IBR, Filing Fees and Liens

Probably the single facet of SB 863 that has the greatest bragging rights is its effect on liens.

Providers who frequented the lien provisions of California workers' compensation law certainly aren't enamored with the heavy handed manner in which SB 863 beat lien filings down with filing and activation fees, and the alternative dispute resolution process called Independent Bill Review (which also has a process fee attached of $250), but proponents of the reform law certainly can boast of success.

At the Division of Workers' Compensation's Annual Educational Conference yesterday in Los Angeles, the administration said that 469,000 liens were filed in 2011, 219,000 in 2013, and it looks like about 194,000 in 2014 based on numbers for the first four months of 2014, when providers filed 64,808 liens.

IBR is, by the administration's account, underutilized. Through November 2014, service providers submitted just 2,827 IBR requests.

George Parisotto, acting chief counsel for the DWC’s Legal Unit, said the administration expected the IBR process to be used more than Independent Medical Review.

There were 188,864 requests for IMR through August 2014, according to data in materials presented to conference attendees.

This makes sense to me because there is no fee for injured workers to seek IMR, while providers seeking more reimbursement on their bills have to go through a couple rounds of the payor's bill review within specified time frames, and if not satisfied, then must pay $250 (with some exceptions) for IBR, before paying another $150 to file a lien if a dispute remains.

But, those that do avail themselves of IBR end up much more successful increasing payments than injured workers seeking treatment decisions reversed.

Providers who use the IBR process get paid more than they were originally offered, and consequently are reimbursed the application fee for the service, the DWC statistics show.

Out of 508 decisions issued through July 2014, reviewers for IBR contractor Maximus Federal Services found providers were entitled to more money 59% of the time. That trend is holding true on the preliminary numbers through the end of 2014 too, said Katy Lind Evelyn, a registered nurse and nurse consultant at the DWC Medical Unit.

Disputes about payments for physician services were resolved in favor of the provider in 167 out of 266 cases, or 63%. Disputes about the category classified as “multiple” in the DWC data were resolved in favor of the provider in 73 out of 88 cases, or 83%.

While payments to physicians accounted for the largest number of disputes, the average paid per IBR was only $418, the lowest of the five categories used by the DWC. An average of $1,953 was paid for the “multiple” category.

There were 67 disputes involving hospital outpatient departments and ambulatory surgical centers. Of these, 31 were resolved in favor of the provider, who received an average of $3,443.

The greatest amount was paid in disputes involving invoices for inpatient hospital services. Although just three of the 25 disputes were resolved in favor of the provider, the average payment was $16,195.

Through July 2014, employers paid $385,360 in IBR disputes, an average of $2,308 per case, Evelyn said.

The biggest issue facing providers seeking reimbursement if blowing statutes of limitations - untimeliness of requests was the single most common defect observed by the DWC.

More than one-third of requests – 222 out of 642 – were not submitted within 30 days of receiving the response to the second bill review, as required by regulation, according to DWC.

102 IBR applications were rejected for being incomplete, 52 involved services not covered by a fee schedule, 41 were for dates of service not subject to IBR and 30 were for unauthorized services.

So, as with IMR, it seems that providers need further education on IBR and the bill review process in general.

The non-compliance numbers aren't alarming given the infancy of SB 863, and likely timeliness and incompleteness issues will resolve even further as people improve their work flows.

The DWC’s 22nd annual educational conference at the Los Angeles Airport Marriott concludes today. A Northern California version will take place at the Oakland Marriott City Center February 19-20.

Monday, February 9, 2015

Going Around

Rules, regulations and standards are, for the most part, established for the overall safety and welfare of the general public because even though most of us have and use common sense and etiquette, there are those very few whose narcissism is too powerful, and antisocial behavior dominating, that rules, regulations and protocol just don't matter - and it's these people that make it difficult for the rest of us.

I was reminded of this Saturday flying down to see Mom.

Aviation, as you might imagine, is highly regulated - much more so than even California workers' compensation. The various titles of Federal Regulations and the enabling U.S. Code make California's set of laws and rules look like Cliff's Notes.

And in aviation there are many more unwritten standards that pilots understand for purposes of safety and etiquette.

Many of these policies concern communication, because communication is absolutely inherent in safe flight; it is part of situational awareness: knowing what is going on around you so good decisions can be made towards a successful outcome, i.e. a safe landing somewhere.

I departed Oxnard Airport (FAA designator, KOXR) to Oceanside Municipal Airport (KOKB) at about 1700 Universal Time Code on a Terminal En-route Clearance, which is an instrument procedure that does not require the pre-filing of a plan.

I use the TEC route method often when there's inclement weather in the Southern California airspace because it is quick, convenient, and the routes are standardized. And KOXR is a towered airport so it's very easy to get a TEC.

The weather at departure was rain, overcast, and overall gloom, but the icing level was very high and there was no forecast for turbulence - in short, a wonderful day to fly IFR in actual instrument meteorological conditions.

I also knew that my destination, KOKB, was skies clear, 10 miles visibility, light winds out of the west - I would not need any of the published approaches into the airport and would be able to go "visual."

KOKB does not have a tower. At non-towered airports the pilots are responsible for positioning and spacing, and most importantly, communicating frequently aircraft positions so that everyone in the air, and on the ground, understands what's going on - i.e. spatial orientation.

So that was my plan of attack for the flight on Saturday and everything went according to that plan - except when I began my approach into KOKB at approximately 1810 UTC.

SoCal Air Traffic Control (123.7 mhz on the radio) held me at 4,000 feet Mean Sea Level (based on a barometric reading of 30.12 millibars of pressure) because of traffic - which was okay. I had the field in sight and if SoCal was picking up targets on its radar that could interfere with my safe descent into the airport, that's okay with me.

After the targets cleared I cancelled IFR and switched radio frequencies to the Oceanside Common Traffic Advisory Frequency - 123.00.

Hearing no radio chatter on the frequency, I made the call: "Oceanside traffic, Bonanza 6641 Mike is 4 miles out approaching from the east on the GPS 24 approach visual at 4,000 feet, doing a 360 for altitude, then straight in, 24, Oceanside."

I performed the maneuver as announced and reestablished my flight path along the GPS 24 approach at about 2,500 feet, and again announced my position: "Oceanside traffic, Bonanza 6641 Mike is 4 miles out approaching from the east on the GPS 24 approach visual at 2,000 feet, straight in approach 24, Oceanside."

After I lowered the nose of 41 Mike and had the runway in clear view I witnessed a Cessna 182 taxi on to the approach end of 24 positioned for take off. That was unusual, I said to myself, but he has time to take off if he doesn't dilly-dally.

I called up CTAF again, "Oceanside traffic, Bonanza 6641 Mike is 3 miles out approaching from the east on the GPS 24 approach visual at 1,500 feet, straight in 24 - Cessna on the approach end of 24, say intentions."


I again called up CTAF as I was getting uncomfortably close to a landing and that Cessna had not started its take off roll: "Cessna on 24 Oceanside - are you going to take off?"

My tone clearly reflected frustration.

Again, complete silence.

At less than a mile out and 500 feet MSL I announced a go-around and the disgust in my radio call was obvious - noted by Ed who was operating Tsunami One, a jump plane, as he taxied towards 24, and reiterated frustration at the unsafe actions of that Cessna pilot.

As I put in full power, retracted the landing gear and flaps to initiate a climb, the Cessna began its take off roll - again without any communication whatsoever, no acknowledgment of my presence, no indication of intentions, nothing.

This is about as serious an aviation sin as one could commit, and I was furious - if that asshole was unfortunate enough to be on the ground at any point when I'm there, fisticuffs would be warranted and my confidence is that the other local pilots would assist me in the beating.

After landing, Rick, the assistant airport manager, noted the chain of events, and commented that the pilot had stopped to pick up two female passengers.

My assessment was the Cessna was a new pilot, or student showing off to impress the opposite sex: 1) no experienced licensed pilot would go ex-communicado in non-towered operations; 2) the distraction level of machismo is high; 3) a POS Cessna... (sorry Cessna pilots/owners, the Bonanza superiority complex is real).

The bottom line - that Cessna pilot was way too interested in himself to be concerned with all of the operations around him. The obvious narcissistic trait was displayed: It's HIS world; I just happened to be in it at the moment.

And that moment could have been disastrous. Those antics clearly represented a huge safety issue putting the lives of four people at risk - a risk that is easily mitigated and managed IF THE RULES ARE FOLLOWED.

This is no different than workers' compensation. We have rules. We have laws. We have standards and protocol.

Some people think they are above all of these operational necessities, completely failing to understand that the reason we have all these principals of behavior is because of them - people whose narcissism is so strong that they don't feel the rules don't apply to them.

Whether its designating employees as independent contractors, overstating the effects of an injury, paying for services to a governmental agency without bids or a contract, failing to follow safety regulations,  etc., rules exist in a civilized society for stability, safety, harmony, and, above all else, to give citizens security in existence.

Workers' compensation is a creature of statute hammered out of the hot iron of politics and from that forged regulations provide the finishing touch. Communication and dialogue is what allows that process to occur.

Rogue individuals have no place in aviation or workers' compensation.

If you were the pilot of Cessna N453WM out of KOKB on Saturday, February 7 at approximately 1810 UTC, give me a call so we can talk about non-towered airport operations and communication in aviation.

Perhaps you just need a refresher, some education ... or some humiliation.