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The California Insurance Guarantee Association has withdrawn its petition for review from the 2nd Appellate District, telling the court that that it was able to resolve the Mercado matter (which I interpret as meaning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