Consult The Checklist

We were short and final for runway 22 at Catalina Island's Airport in the Sky yesterday when I decided to go around because we were too fast.

Just as I input full throttle a voice came over the radio, "check landing gear."

THAT's why we were so fast! I had failed to lower the landing gear.

How did this happen? I have 1500 hours of flight time, and over 800 of that is in Forty One Mike, and have never failed to check for landing gear deployment.

I thought about how that could have happened while relaxing with a cold one that evening in my lounge chair.

It was a WorkCompCentral director's meeting - we decided a day away from the office after all of the hustle and bustle of Comp Laude the weekend before so we could have some quiet time.

The conditions were perfect for a trip to Catalina and a Buffalo Burger - calm, clear air and modest temperatures. Wednesdays aren't too busy in the Los Angeles Class Bravo airspace and I figured Catalina wouldn't be too busy either.

The flight itself to the island was non-eventful for me, the pilot, and the passengers were thrilled with the view and stability of the flight.

Forty One Mike circled KAVX into pattern altitude for a right traffic entry to runway 22. On the downwind I sighted the touchdown zone and kept an eye on it as we turned right.

I felt for the landing gear knob and activated it, focused on the runway because Catalina is an "aircraft-style" landing - the runway sits atop a mesa with sheer cliffs on both sides, and it is steeply angled with a hump in the middle that causes a distortion from the normal cockpit view.

Forty One Mike was also heavy, with close to 800 pounds of humans aboard and only about 10 gallons of fuel burned off, so its handling was a little slow and ponderous.

And the passengers were gawking with delight.

In other words I was distracted.

As Forty One Mike was turned into final I reached to lower the last step of flaps, but it was already there - weird I thought.

I didn't think enough.

Nor did I check, as my habit and per check list, for "three green" - the three landing gear indicator lights illuminate green when the gear is fully deployed down and locked.

Normal approach speed in Forty One Mike is 80 knots with 15 inches of manifold pressure - but she wouldn't slow to less than 100 even at idle, so with about 100 feet of altitude to go to touchdown throttle went in to full power and I initiated the go-around.

All the clues were there, and yet, I almost got caught in a gear up landing.

This is a lesson we learn all the time in workers' compensation.

If things aren't the way you're expecting them to be, then they probably aren't...

In Ohio the mayor of Toledo died after an auto accident from a heart attack while in route following a snow storm press conference. The Bureau denied the claim, presumably based on the going and coming rule, but that was reversed by the Industrial Commission because substantial evidence reflected that D. Michael Collins often traveled the route home to check on road conditions. The Bureau is now seeking appellate review.

In Nevada some tweaks to the medical fee schedule for hospitals and ambulatory surgical centers should not cause more than a point four percent increase in medical costs in the state, but a study released last month by the Workers' Compensation Research Institute largely confirmed that you can't predict future behavior on past performance; reimbursement rates have a disproportionate affect on what procedures are deployed.

And in Pennsylvania a 48 year old field maintenance worker, with a long history of heavy smoking, hyperlipidemia, and family history of coronary artery disease died after working a 14 hour day in cold weather performing hard physical labor under stress. The substantial evidence standard supported the claimant widow's appeal for death benefits over the defense opinion that a heart attack was inevitable, and it just so happened to occur at work.

There are, every day, clues that should cause us to consult the check list. Things aren't what they seem. Sometimes the courts have to remind us. Sometimes history is not a good indicator of future performance.

As we were climbing out for the go-around another voice came over the radio.

"You owe that guy a beer."

"Yep" is all I could say.

Courts and The Bargain

This week I've been writing about the Grand Bargain - whether it is still Grand and whether it is still a Bargain.

And my opinion has been that certainly workers' compensation has changed as has the economy it covers, and that each change involves bargaining and compromise. There are winners and there are losers.

We sometimes wonder how does the bargain change and why the winners and losers get redefined - a case reported yesterday in WorkCompCentral is demonstrative.

Armando Tavares had worked as a truck driver for Luis Scattini & Sons. The 48-year-old father of four complained of chest pains while he was at work on June 13, 2011.

After Tavares finished pressure-washing the disc brakes on his truck, he asked his supervisor for a ride to the doctor's office.

Tavares indicated that he needed to use the restroom before departing, and his coworkers became concerned when he did not emerge from the portable toilet.

Tavares' colleagues forced the door open and found him slumped inside. Emergency responders were summoned to the scene and they attempted to revive Tavares, to no avail. A coroner later determined that Tavares had died from ischemic heart disease.

Tavares' widow and dependent children filed a claim for death benefits, which Scattini contested.

Dr. Revels Cayton was assigned to the case as the panel qualified medical evaluator. Cayton opined that Tavares' work activities contributed to the cause of his heart attack and death.

Cayton noted that Tavares had "very severe coronary artery disease," which "placed him at increased risk for the development of a sudden cardiac event."

Cayton said he thought it was "fairly obvious given the extensiveness in the coronary disease," that Tavares would still be alive "had he not washed those disc brakes and had he not come to work that day."

Scattini then obtained a report from Dr. Maria Nellie Betancourt which attributed Tavares' death was "solely due to the nonoccupational, preexisting and extensive coronary artery disease without any contribution from work."

Betancourt opined that Cayton’s finding of a causal-connection was speculative because Tavares was not performing any physically demanding activities at the time of his heart attack.

As there was some evidence that Tavares had been complaining of chest pain for two days prior to his death, Betancourt said it was possible that Tavares' heart attack had actually begun long before he got to work.

Betancourt also posited that Tavares "may have had to do a Valsalva maneuver to force the stools out" when he was in the restroom. The Valsalva maneuver is the medical term for the act of attempting to forcibly exhale while keeping the mouth and nose closed.

Betancourt said this action "may have tipped the scales enough to provoke a cardiac decompensation leading to death," and she thought this was "most likely" what had happened.

The Workers' Compensation Judge relied on the opinions of both doctors to find that Tavares' death was compensable. He awarded $320,000 to Tavares' family last December.

Scattini petitioned for reconsideration, but a WCAB panel comprised of Commissioners Katherine Zalewski, Marguerite Sweeney and Deidra Lowe upheld Crymes' ruling in March.

Scattini then sought judicial review, and the 6th District Court of Appeal issued writ on Sept. 14, accepting the case.

I was frankly surprised to see an appellate court accept the case for review. There is a long line of case law about heart attacks at the work place, and in general, if a heart attack is experienced at work, regardless of the co-morbid factors or non-industrial onset, it is compensable.

Scattini's lawyer argues that the "WCAB's order denying reconsideration allows a decision to stand which does not comport with well-established legal precedent as to what constitutes credible scientific evidence," stating that the proper standard for review of the medical evidence is the Daubert standard.

The Daubert standard is used in Federal courts, and has been adopted formally by some states, discounted by other states, and some states have been silent on the issue. California is one of those states.

The general standard in California though is "substantial evidence": is the evidence "good enough" that it can be relied upon to support a conclusion, even in the face of perhaps better, contradicting evidence.

Did Scattini bargain (or in actuality, its insurance carrier, Star Insurance Company administered through Meadowbrook Insurance Group) for a heart attack? Did Tavares bargain for a fight?

Probably none of this. The bargain is being mediated by the courts in this situation, where neither Business nor Labor have much persuasion beyond the facts and the law, and there may be an alteration to the generally accepted standard of evidence in workers' compensation heart attack cases.

Or not.

Which brings me to my point about the Grand Bargain and its various permutations through the years - If the facts are not in your favor, argue the law; if the law is not in your favor, argue the facts; if neither the law nor the facts are in your favor, baffle 'em with bullshit.

Now you know how the Grand Bargain has become distorted over time.

Guilty Without Charge

The other day I wrote about the fear in the workers' compensation industry to blow the whistle on wrong doers.

Many readers acknowledged that fact and I got several telephone calls and comments/emails that there is a culture of retaliation in workers' compensation against do-gooders.

And everyone thinks that they will be singled out, believing that the problem is only in the state or jurisdiction in which they participate.

It's not. What happens in one state is rampant, and unfortunately, standard, practice in probably every state. I think I've had enough phone calls on the topic from different people in completely different jurisdictions to confidently state that.

Bowzer knows it when he sniffs it...

One trick that happens to be in vogue across state lines is the use of third party networks to obfuscate the true medical treatment bill, as I mentioned Wednesday.

Here's how it works:

A medical provider renders services to an injured worker and submits his or her bill to the medical provider network.

The MPN has a contract with XYZ claims department to manage the medical billing and is paid on a percentage of "cost savings" basis.

The MPN then manipulates the original medical billing, recoding and otherwise changing the bill to inflate it and then "discount" it.

I was told of one specific incident where a neurologist had received authorization from the claims examiner for a $10,000 procedure, but then the MPN interceded. The neurologist performed the procedure and submitted his bill to the MPN, and got paid a bit less because the MPN negotiated the fee down.

The MPN then recoded and manipulated the bill up to reflect $24,000 in services, and submitted the reformatted, new, billing to the carrier, which then paid the bill without question.

The allegation is that the MPN not only falsely represents what the charges were, but falsely represents what the actual savings are, and gets away with it by kicking back a "fee" to someone with a white collar high in the chain of command at the claims department.

Somehow the neurologist got a hold of the billings and documentation to support this - but won't divulge it to reveal identities because he gets too much business from the MPN and carrier.

If this scenario is happening on one state, it's happening in every state where there are MPNs, and in fact my bet is this kind of activity happens in nearly any case where cost controls are delegated to private enterprise.

So why doesn't someone do something about this? How can such illegal behavior continue on for so long without law enforcement interception?

This behavior was identified long ago - in 1961 President Dwight Eisenhower warned the American public of the dangers of the military-industrial complex: the policy and monetary relationships which exist between legislators, national armed forces, and the arms industry that supports them. The temptation to take advantage of the back door obfuscation for ill gotten profit is too great, particularly if the company is reporting to public investors.

I recall growing up news about all the big defense contractors getting wrapped up in investigations, hearings, fines and penalties, and monetary damages, as dirty relationships were uncovered. Nobody ever admits wrongdoing, but everybody pays a little more money to make the story go away.

In the case of workers' compensation, we don't have any big investigations going on that I'm aware of, and if there were then they are probably best kept secret at this time lest interference occur.

But it's not the fact that these shameful actions are occurring, or aren't stopped, which causes me consternation.

Its the fact that the fear of reprisal is so great that even those with the strongest of ethics, morals and sense of right-doing won't come forth with their information and identify people and companies.

Sure, we can all wait for law enforcement to jump in, but by then it's too late, if at all. The harm to the public has been done. The profiteers have had sufficient time to launder their gains and hide the evidence.

And ultimately the behavior is reinforced with what amounts to slaps on the wrists.

The industry is good at distracting us, and the public, from this white collar crime: there are fraud enforcement divisions that get their funding from the insurance industry, there are fraud think tank organizations that get their funding from the insurance industry, and press releases of injured worker fraud get lots of airplay despite the fact that the dollar amounts involved are de minimis in comparison to all other forms of fraud.

Nothing is more effective in curbing bad behavior than the court of public opinion - but until identification and documentation is provided then we're all, each and every one of us, just as guilty of condoning fraud as the criminals committing it are.

Dirty Business Fears

The single biggest threat to the health of workers' compensation in the United States is a fear of retribution that keeps those in the know about the shenanigans that go on in this "dirty industry."

It's a shame, but it's real.

I get phone calls and emails all too frequently, like the other day from a guy I'll call Mike - not his real name, but as the introduction noted, anonymity is paramount because of fear of reprisal.

But the story is not unusual and, like the others, it goes essentially like this:

Top tier executive in a large claims department puts himself between vendors and claims in exchange for payola.

In other words, extortion for a "guarantee" flow of future referrals, regardless of the quality of services or products, and regardless of outcomes, expense, etc.

Fee schedules and other cost controls are subverted by layering the bills through third party intermediaries, what we like to refer to as "networks."

"I have been in this industry for 23 years," says Mike. "Although I always knew that vendors paid for meals, vacations, and rounds of golf, I never thought that they also paid for the equivalent of vacation homes in Florida and to fund supplemental retirement slush funds for c-suite baby boomers."

"When I asked colleagues about this," he continues, "I was told to 'let it go' because 'everyone is doing it.'

"The problem with workers' compensation today is that policy is driven by people with conflicts of interest.  When 'reforms' call for the potential use of more vendor oversight then you can see what has been happening.  Look no further than the growth in CA MCCP and ALAE costs to prove my point (there are additional 'hidden' vendor costs as well).  Now, expand that same system across the country...wash, rinse, repeat.  Managed care is BIG BUSINESS.  Payers are benefiting because they sometimes own these vendors AND/OR they arbitrage the revenue AND/OR they receive revenue-sharing payments AND/OR they can lower their administrative costs AND/OR key executives are quietly receiving compensation so long as the referrals continue to flow."

This may all in fact be true, and I have no reason to doubt that it isn't. There is enough illogic going on in workers' compensation that I can't discount Mike's cynicism.

Mike suggests several steps to curb or discourage executive cheating of the system, including anonymous hotlines, criminal penalties for bribes or payola, unbundling vendor billings to see what caregivers are actually paid, and transparency disclosures for conflicts of interests.

Many states, however, already have some or all of these requirements or programs in their laws.

The problem is not with the laws or lack of them. The problem is that hardly anyone is willing to spill; without naming names of people and companies, and without willing to testify and/or provide documentation, there will be no stopping such nefarious activity.

And I don't have an answer to that one. I'm quite certain that there are elements of the work comp industry that have ties to organized crime. Most folks don't want to risk disappearing in the middle of the night...

Even if there is no connection to organized crime, work comp is essentially a small industry and word gets around. A sure way to amputate a career is to squeal, because, as Mike was told, "everyone is doing it."

"To conclude," says Mike, "99% of the people in this industry are working every day without knowledge of the corruption that I mentioned above. These are the people who would rightfully defend the integrity of their co-workers and of the system.  If the relatively few bad actors are removed and replaced with good, decent people, then perhaps the WC industry will continue to enjoy its privatization for another 100 years.  If not, a federalized future surely awaits!"

I don't think federalization would be a response to c-suite fraud because wrongful acts can and will occur regardless of who "owns" the system (just look at Medicare as an example).

The bottom line is that without names and sources it's just a story, fiction, unverified and unvalidated.

Anonymity protects the guilty, fosters the hypocrisy, and promulgates the regulatory burden that the 99% must shoulder.

Work Is Not A Neutral Risk

Life is a risk - embrace it, don't dispute it.

Workers' compensation is supposed to be a "no fault" system. The basic concept is that if you get hurt at work then you get benefits.

It is amazing to me, though, how many states introduce fault as a concept. A recent Illinois appellate case is a prime example.

The Illinois Appellate Court last week ruled against an employer and said that a welder who injured his knee while pivoting on the wheeled stool he used at work was entitled to benefits.

The employer argued that using the stool was not a peculiar risk and that activities associated with "daily living" aren't supposed to be the subject of workers' compensation.

Illinois law provides that workers "should not award benefits for injuries caused by everyday activities like walking, bending, or turning, even if an employee was ordered or instructed to perform those activities as part of his job duties, unless the employee’s job required him to perform those activities more frequently than members of the general public or in a manner that increased the risk."

This is the "increased risk" doctrine that several other states embrace.

The "increased risk" test was the prevalent standard for compensation in the United States 40 years ago, but most states use "positional risk" standard, which applies a presumption that an injury "arises out of" employment if it occurs while the employee is at work. The reason is that the benefit of greatly reduced litigation outweighs the risk that once in a while a non-legitimate case gets through the system.

In Adcock v. Workers' Compensation Commission, Adcock injured his right knee on the job, and his doctor imposed limitations on his ability to twist, kneel, or walk extensively.

In order to accommodate his restrictions, Knaack, Adcock's employer, provided him with a wheeled stool so he could move about his workspace in a seated position. I have to commend Knaack for this proactive return to work accommodation.

Adcock said he was constantly moving along the length of the workstation on the stool, and swiveling from side-to-side, as he worked.

He said he was unable to maneuver the stool using his right leg because of his knee injury, so he always had to use his left leg to propel the chair.

Adcock said he felt his left knee "pop" while he was twisting towards his work station in May 2010. His doctors later determined he had torn the meniscus in his left knee.

The arbitrator determined this injury was compensable.

"Conducting welding duties from a rolling stool would simply not be a risk to which the general public would likewise be exposed," he opined.

The Workers' Compensation Commission reversed, finding "(t)he act of turning, even in a chair, is an activity of everyday life," so it was "a hazard to which the employee would have been equally exposed apart from the employment."

The Circuit Court judge upheld this decision, but the Appellate Court on Friday reversed, finding compensability.

Presiding Justice William Holdridge wrote for the majority.

He noted that the act of turning while in a seated position is "an activity of everyday life" which is regularly "faced by all members of the general public."

Thus, he said, it was not “distinctly associated” with the Adcock's employment, and an injury from engaging in this act would only be compensable if something about Adcock's job exposed him to a risk of harm that was greater degree than the risk faced by the general public.

Since Adcock performed his job duties under time constraints, and his job duties undisputedly required that he be constantly moving in his chair, Holdridge reasoned Adcock was moving the chair more frequently than members of the general public would, which increased his risk of injury "both quantitatively and qualitatively."

Under such circumstances, Holdridge said, Adcock clearly confronted a neutral risk of daily living to a greater degree than members of the general public by virtue of his employment.

The ruling comes at a unique time in Illinois work comp history as political activity is focused on a more refined attempt at amending the system. Business leaders want cheaper work comp insurance. Labor wants better protection. It seems both are losing right now.

I don't know the specific statistics, but my educated guess is that litigation is a major contributing cost factor to the Illinois system. Litigation arises out of disputes. One big dispute is whether or not an injury arises out of and occurs in the course of employment.

As I said, in most states, with rare exception (such as horseplay) if one gets hurt at work then benefits are due; i.e. "no fault."

A concurring opinion was written in the Adcock case, which I think explains why having any sort of "risk" qualification increases disputes, which thus increases costs.

As the concurrence noted, "almost everything we do at work, we can do at home," but the difference is at work, "you are doing what employer hired you to do," so an injury in the course of engaging in that activity should be compensable.

If Adcock's employer didn't want to take on the risk that he'd hurt himself using the stool, then it could just pay total disability benefits and let Adcock stay home, the concurring opinion stated. But the employer "asked him to come to work an tool around on the seat" doing as much work as he could despite his medical restrictions, and "they got what they bargained for."

It's too bad that Adcock got hurt during a work accommodation. Knaack did the right thing, and I can understand the frustration. But sometimes bad stuff happens. The goal of work comp gets defeated when fault is introduced, and the Illinois standard creates its own extraneous costs by creating disputes when none should exist.

Finance, Politics and Yoga

Photo is non-illustrative. Just me windsurfing big waves when I still could...

In an old presentation I stated, "Workers' compensation is a political construct that obfuscates medical science to achieve a financial result."

That's a pretty pessimistic viewpoint.

But a couple of stories today highlight the truth in that statement.

The State of Nevada is, for the first time in 15 years, is taking a look at the discount rate used to calculate the present value of lump sum settlements and awards.

As you know, the cost of funds, or ability to generate future returns, has been stagnant the past few years as the Federal Reserve Bank has kept the lid on monetary policy following The Great Recession.

I don't need to go into the financial wizardry that has made it so, but the bottom line is that interest rates have never been so low for so long.

That means that a dollar invested today doesn't produce much more than a dollar tomorrow.

Conversely, it also means that if an annuity (a steady stream of regular payments) is based on a higher interest rate than what is market normal, then the recipient of the annuity gets cheated out of future buying power.

A $100,000 award that would be paid out over 20 years has a present value of only $31,180.47 at the 6% rate, but is worth $55,367.58 at a 3% rate.

Las Vegas claimants' attorney Virginia Hunt, with whom I've had the privilege of working in the past, brought this to the attention of Division of Industrial Relations officials, who admit they have been negligent in following the law, which mandates that the division look at the discount rate every year.

The division hasn't reviewed the rate since 2000 and hasn't changed the rate since 1997.

The difference is significant. In September 1997, the federal funds rate was about 5.5%. On Friday, it was 0.14%.

DIR Chief Administrative Officer Chuck Verre told WorkCompCentral Friday, "We did not do what we should have done. It's as simple as that."

Bully for Mr. Verre and Mrs. Hunt for tackling an important financial component of the claims pay process.

In the meantime, the political football that is workers' compensation is being played in Illinois.

There's a budget fight going on in that state between Gov. Bruce Rauner, a Republican, and House Speaker Mike Madigan, D-Chicago; the budget deadline was June 30. Workers' compensation, which was just recently "reformed" in Illinois, is said to be the bargaining chip being used to break the stalemate.

Rauner has said he may support a spending plan that includes a tax increase if Democrats agree to a list of nonfiscal to-do items, including workers’ compensation reform.

But instead of dealing with House Bill 1287, a bill passed by the House of Representatives on June 4 that included a provision to prohibit insurers from charging "excessive rates," a provision that Rauner and his business allies found objectionable, the Senate approved its own version of workers' comp reform, SB 162, introduced by Sen. Kwame Raoul, D-Chicago.

SB 162 incorporated some of the ideas contained in Rauner’s memo, but there are numerous contentious issues in the bill on which the parties are basing fiscal compromise.

In the end, as with everything politics, “It depends who else gets a haircut,” said Raoul.

And the medical part is about yoga.

Yoga has come into vogue as a treatment modality for back pain patients in workers' compensation.

A survey by the Centers for Disease Control and Prevention released earlier this year says the number of yoga practitioners has doubled from 2002 to 2012, highlighting the popularity of this ancient Indian exercise.

One of the best remedies for generalized back pain is exercise - and yoga is exercise.

Even the Official Disability Guidelines recommends yoga for “highly motivated patients.”

The key of course is the injured worker must be "highly motivated," which in practical terms means discipline - participating in the exercise on a daily basis.

Claims payers seem to embrace yoga as "treatment."

"Treating chronic pain is a complex endeavor and in some cases involves utilizing alternative treatment options such as yoga," California State Fund Medical Director Dinesh Govindarao wrote in a statement to WorkCompCentral on Friday. "The biopsychosocial treatment model is an effective way to approach chronic pain patients. State Fund supports the use of alternative treatment options on a case-by-case basis with utilization review oversight."

A difficulty is that yoga providers and claims payers don't particularly gel on billing codes or how to reimburse for expenses tied to yoga instruction and practice.

And that's because there's no standardization of the practice, with literally dozens of different forms or disciplines.

But, regardless, yoga is cheap, it's non-invasive, and its practical effects for the "highly motivated" aren't in dispute - it's good medicine.

Mandated Burden

I have a great idea - let's make the burden on physicians in the California workers' compensation system even greater by requiring additional documentation on requested medical treatment, even before it is rejected by either utilization review or independent medical review.

This would force physicians to just stick to the Medical Treatment Utilization Schedule and there would be nearly instantaneous control over medical treatment requests!

Just think - fewer out of schedule recommendations, fewer experimental prescriptions, lower treatment costs, lower billing, review and containment expenses...

... and even fewer physicians willing to put up with such nonsense.

Yet, the California Division of Workers' Compensation in its latest revision to the MTUS regulations is proposing just such a regulatory change.

The proposed update to the MTUS, its first revision since 2009 would require doctors seeking to deviate from the schedule’s recommendations to provide research to back up their requests.

When doctors request treatment for a worker that deviates from the schedule’s recommendations, the new provision would require that physician to attach with the request “a copy of the entire study or the relevant sections of the guideline containing the recommendation he or she believes guides the reasonableness and necessity of the requested treatment that is applicable to the injured worker’s medical condition or injury.”

Doctors that wish to go outside the MTUS basically are already required to support such treatment requests with evidence to avoid denial up the UR and IMR food chain. What does making this requirement a part of the law have to do with efficient, efficacious or adequate medical treatment?

Further, because the DWC updates the schedule only once every five years, but medical research is ongoing, there will be an increasing body of evidence outside of the state’s recommendations thus increasing the burden on physicians just to comply with the regulation.

Physicians aren't paid to support their treatment requests under the present fee schedule - I can't imagine any would go the extra mile with the regulatory mandate as proposed. It would be much easier, and financially safer, to ignore the medical interests of the injured worker regardless of whether there would some better treatment options.

Or just get out of industrial medicine altogether.

And, even if a doctor went that extra mile and supplied the studies or evidence, that does not mean it will pass muster at the UR or IMR level. If DWC wants doctors to support their requests, and doctors do so, then there should be a concomitant obligation on UR/IMR to approve the proposed treatment.

The category of cost containment services is receiving the dubious distinction of being the fastest growing expense category as measured by the Workers' Compensation Insurance Rating Bureau. Adding more documentation to the mix adds more time to the UR/IMR reviewer's job, and more money needed to pay utilization-review doctors.

This is a bad idea, plain and simple. California is already the most regulated, most burdensome workers' compensation system in the United States, and probably all of the world. Heck, there are still parts of SB 863 that have yet to be implemented more than 2 years since that legislation upended the system.

This part of the proposed update is unnecessary over-regulation.

The division is accepting comments on the proposal until 5 p.m. Tuesday. Written comments can be emailed to dwcrules@dir.ca.gov or faxed to Maureen Gray at 510-286-0687. Commenters can also mail their input to Maureen Gray at the Department of Industrial Relations, P.O. Box 420603, San Francisco, CA 94612.

A Cultural Challenge

Independent Medical Review is probably the most contentious change introduced to the California workers' compensation system in history because it upends, in dramatic fashion, The Culture.

Over the course of a hundred years physicians had sought, and were granted, great latitude to order up pretty much any "treatment" desired for an injured worker, and frankly there were many that abused this privilege.

Doctor's orders were sacrosanct - for instance, I recall when practicing law many cases where the physician ordered up a new, specific mattress, regardless of the cost and regardless of less costly alternatives, and the carrier/employer would be obligated to pay for it.

Any objection to such orders were stymied at the workers' compensation judge level because, the reasoning went, if the doctor ordered it then it must be necessary. After all, I wasn't a doctor, the claims adjuster wasn't a doctor, the judge wasn't a doctor. It didn't matter that the physician didn't have any evidence of treatment efficacy - he or she is a doctor!

There was a period of time when chiropractors ran amok, and it wasn't unusual to see "treatment" consisting of chiropractic adjustments and massage every week for years regardless of what published treatment guidelines said.

Again, objections to such over treatment abuse was stifled at the hearing level because doctor's orders trumped everything. A hard cap on chiropractic visits put the issue to rest eventually and survived judicial scrutiny and constitutional challenge.

There are many, many such examples where the medical profession's elevated status cleared the path for the provision of "treatment" that would not be tolerated in any other medical setting.

Guidelines didn't change that culture, push back from carriers/employers didn't change that behavior, Utilization Review didn't make much of a difference. The Culture remained - if a doctor ordered something called "treatment" then the carrier/employer was obliged to provide it.

It's very difficult to effect change to The Culture.

This is my preferred Culture.

Culture means a practice is deeply embedded and accepted by a large population.

If you're absolutely truthful with yourself, you'll agree that The Culture of medical treatment in workers' compensation had taken on preposterous qualities.

That's why we have IMR now - frankly because the people that could not behave themselves took it too far, for one reason or the other.

It's a huge, radical shift and resulted in a revolution. New rules, new mandates, new systems - old expectations, old operations, old sentiment: a confluence of mixed emotions seeking to either vilify or justify this new process.

And this is not to say that there are injured workers who are not getting medical treatment that they otherwise should be getting - because there are many case examples where reasonable doctor's orders aren't being granted now - a very public example is when Comp Laude Award winner Dwight Johnson, a double amputee, was denied handicapped modifications to his restroom so he didn't have to travel to the municipal gymnasium just to take a shower.

Those were doctor's orders that were initially denied in UR, but ultimately provided after a change in adjuster, a lawyer, and more well written orders from the doctor.

Late Friday afternoon the California Department of Industrial Relations released the first report on the IMR system, and declared it a success. Whether one agrees with that conclusion is dependent on your personal position relative to SB 863, of course.

And I'm not going to pass judgment at this time on whether IMR is a success or not, but there are some very interesting observations made in the report.

For instance, it seems that an unrepresented injured worker is more likely to succeed in an IMR review than one with attorney representation, albeit by a small margin.

And where additional consultation or diagnostic testing is involved, IMR overturns the UR denial over a third of the time.

Nearly half of all IMR requests involves pharmaceuticals, and most of those involve opioids. I would expect those numbers to ameliorate over time, bowing to the next medical trend that hits work comp.

Indicating to me an acceptance of restrictions in medical practice via treatment guidelines, the report says that UR was overturned more often by IMR in cases where date of injury was 2013. UR in earlier cases was more often upheld.

You certainly can draw your own conclusions from DIR's report, but I think DWC is correct in its analysis regarding the high rate of IMR upholding UR:

"Our analysis highlights two reasons for the comparatively high uphold rate in the DWC IMR program. First, disputed treatment requests that were not consistent with evidence-based guidelines were highly likely to be overturned. Additionally, medical records for IMR FDLs that upheld UR decisions frequently did not contain adequate documentation to justify medical necessity."

To state it more succinctly: doctors don't practice evidence based medicine and records aren't getting to reviewers.

Both are real problems. Docs that aren't following guidelines, or offering alternative evidence aren't doing their jobs. And we've all heard many anecdotes of records not making it to reviewers either intentionally or through gross negligence.

The real legal question of course is whether injured workers are getting the medical care that is guaranteed them via the state Constitution: "full provision for such medical, surgical, hospital and other remedial treatment as is requisite to cure and relieve from the effects of such injury."

The word "requisite" means necessary. This is tied to "cure and relieve." For many years this concept expanded, as noted above, to include many items that may not actually be medical, or even "other remedial" treatment, but the stated public policy of the state's workers' compensation laws were that they be liberally construed in favor of the injured worker. So if a doctor said it was necessary then it was...

Now, the First District Court of Appeals for California has agreed to hear a constitutional challenge to the IMR process.

A date and time for the oral argument in Stevens v. WCAB, No. A143043, has not yet been set. Briefing in the matter is set to wrap up next Monday.

All of the usual players have weighed in with predictable arguments: California Applicants' Attorneys Association, Division of Workers' Compensation, California Workers' Compensation Institute, Property and Casualty Insurers Association of America, California Chamber of Commerce, and of course defendant State Compensation Insurance Fund.

This is the second time the case has gone to the appellate court. The first time it was kicked back for failure to exhaust administrative remedies. Those remedies have now run the course.

Appellant's argument is that the IMR procedure codified in Labor Code Section 4610.6 violates the state constitution because of the anonymity of the decision-maker and the limited ability of an aggrieved party to appeal the decision reached.

Injured worker Stevens tripped over an area rug and fell while carrying boxes of magazines while at work in 1997. She suffered a broken foot, but her recovery did not go smoothly.

Through the years, Stevens has undergone numerous surgeries and is now confined to a wheelchair. The combination of her chronic pain and lack of mobility has left her struggling with depression and unable to work.

In 2013, a workers' compensation judge declared her to be permanently and totally disabled. Following this decision, her doctor recommended she receive medication management and home health care assistance.

SCIF submitted the doctor's recommendations to utilization review and then denied authorization for the requested services.

Maximus Federal Services, the contractor providing IMR services to the workers’ compensation system, affirmed that decision in February.

DWC, in its report, says it will continue to maintain IMR program transparency, though their definition of transparency isn't the same as everyone's. But, I do believe that the division is being as transparent as the law permits it to be.

The 1st DCA may have a different idea on transparency.

Regardless, this much is true: liberal interpretation is no longer. Now there must be evidence, and it is reviewed in a stratified manner, with some evidence better than other evidence. That requires doctors, not used to following the rules, to change their practices.

That also requires claims payers to follow the rules and change their practices too - they are responsible for ensuring ALL records (some may not be "relevant") get reviewed.

The Culture change affects everyone, and everyone has to adjust.

They Didn't Riot

With all of the racial tension in this country tied to police activity and grand juries waiving indictment of officers blamed for excessive force against blacks, the Commonwealth Court of Pennsylvania overturned a Workers' Compensation Judge's finding of mental injury from a combination of racial and sexist harassment.

In Frog, Switch & Manufacturing Co. v. WCAB (Johnson), No. 149 C.D. 2014, Lindora Johnson was one of only two women and the only African-American female in a workforce of approximately 200 employees at the Frog Switch manganese steel castings manufacturing plant in Carlisle, Pennsylvania.

She claimed that she suffered repeated incidents of harassment at work during a five-month period in 2009, where her male colleagues made disparaging remarks about her gender, used a racial epithet in front of her and hung a noose inside an office where it was visible from the women’s locker room.

Johnson stopped going to work in September 2009 after she burst out crying in a meeting with management and a coworker who had complained she didn't operate her overhead crane safely.

A workers' compensation judge found Johnson had developed atypical depression as a result of her exposure to abnormal working conditions at her job. The judge awarded her TTD from Sept. 30, 2009, until April 19, 2010, when Johnson returned to work.

The WCJ's award was based on three separate medical evaluations who found that Johnson had, "job-related stress," that was suffering an emotional stress reaction, and that she had depression based on “her stressful and overwhelming work conditions.”

The WCJ did not find credible Johnson's coworkers testimony that the noose was a joke directed at a coworker who had said he was "going to hang himself" because of things that kept going wrong. The judge also gave weight to Johnson's testimony that her colleagues had used "the N-word" in her presence, had said females shouldn't be working at the foundry and warned each other not to work below her crane.

"It should be abundantly clear that any reasonable person, let alone a reasonable African-American female in an all-male and virtually all-white environment, would perceive references to the ‘(N-word),’ a noose, and comments about refusal to work under her crane, or that women don’t belong, as degrading and hostile," the judge opined.

A split Commonwealth Court found Johnson's medical evidence didn't establish an industrial cause for her distress.

The the record must contain unequivocal medical testimony to establish the causal connection between a psyche injury and employment for the injury to be compensable, the majority, in an opinion by Judge Anne Covey, said.

"Due to the highly subjective nature of mental injuries," she said, "an injury’s occurrence and cause must be specifically delineated" by the medical experts.

From http://www.blackactivistzine.org/

A claimant further bears the burden of proving that the psyche injury was "more than a subjective reaction to normal working conditions," Covey added. However, she said there was no reason to decide whether Johnson's injury was the result of an abnormal working condition since Johnson couldn't even prove her condition was work-related.

Two justices dissented, stating that the record was "replete with testimony from both sides that these reprehensible incidents did occur and that claimant became upset to the point where she lost control at work and left to see a doctor."

From the time Johnson first sought medical treatment for stress, she indicated that it was due to continual harassment at work based on her gender and race, Justice Bernard McGinley noted. Even though Johnson's care providers didn't specifically mention the "noose incident" and "the N-word" in their reports, McGinley argued that "the only reasonable inference to draw" was that these events were what the doctors were talking about.

The argument among experts interviewed for the WorkCompCentral story on the case opine that either the Commonwealth Court was engaging in inappropriate fact finding, or conversely, that they correctly noted there was no nexus linking the work incidents and Johnson's doctors conclusions in the various reports.

Maybe they're both right. Fact finding, which is the sole province of the trial judge, includes making ultimate findings of fact; i.e. factual conclusions. In this case, that there was a connection between work place harassment and the claimant's mental injury.

Likewise, though, there must be substantial evidence to support an award, and part of that is an expert's opinion on causation; while a physician may conclude that there was a mental injury related to the occupation the doctor should be connecting the dots with specific factual references in the report.

Unfortunately we don't know what happened after Johnson returned to work.

And so far there are no reports of rioting in Pennsylvania.

Mississippi Going & Coming

I don't know if Linde Gas in Mississippi is self-insured, or if it has any leverage over the decision making process of claims management, but to me a recent case out of the state Court of Appeals seems to indicate that there was some wrongfully placed emotion dictating the management of a work comp claim.

Larry Edmonds worked for Linde Gas as an instrumentation technician, responsible for maintaining the instruments at the Linde Gas plant that supplied oxygen, nitrogen and argon, through a pipeline to the steel plants in Columbus, Brandon, Vicksburg and north Mississippi.

Edmonds normally would travel to the Columbus plant every other week and work Mondays through Fridays, from 7:00 a.m. until 3:00 or 3:30 p.m. He would report and travel to the plant locations in Brandon, Vicksburg and north Mississippi during the alternating weeks.

Sometime he would also be called back to a plant to make repairs after his normal work day had concluded.

Linde gave Edmonds a Ford F-150 pickup truck and paid for its maintenance, insurance and fuel, to use to travel to and from work and to the other plants. Edmonds was paid for his travel time when he responded to calls outside of his normal work hours.

While on his way to report to work at the Columbus plant on Oct. 21, 2010, Edmonds suffered injuries in a car crash that he doesn't remember much about, though he testified that he didn't get sufficient sleep, and had taken pain medication before heading out at 5:45 a.m.

Edmonds claimed that he was driving the speed limit, and it was still dark outside when the accident happened. He recalled seeing the taillights of a gravel truck moments before his crash, but little else.

Linde's investigation determined that Edmonds' headlights were not on, that Edmonds was not wearing a seatbelt and that he was speeding.

Based on the investigator's report and because Edmonds had two prior car accidents while driving a company vehicle, Linde terminated his employment.

Edmonds filed a workers' compensation claim, but Linde denied it based on the "going and coming rule."

Editorial pause: to the disinterested observer, assertion of this defense on these facts was facetious: company vehicle, demanding travel schedule, payment of expenses, on-call status all conspire against this argument. Nice try though...

Linde also asserted that the accident resulted from Edmonds' willful intent to injure himself because of his medication, failure to sleep, speeding and lack of seat belt, which would bar compensation pursuant to Mississippi Code Annotated Section 71-3-7(4).

A workers' compensation judge rejected Linde's defenses and granted compensation to Edmonds.

On appeal, the Court of Appeals upheld the WCJ's ruling.

On the going and coming, the court excoriated the employer: "The law is clear that the employer-provided-transportation exception to the 'going and coming' rule allows an employer to assume responsibility for the employee's travel either by paying the transportation costs or by providing a 'company vehicle,'" the court said.

The court also said the evidence of Edmonds' lack of sleep and consumption of pain medication did not demonstrate a willful intent to cause injury to himself.

Curiously, Judge Virginia Carlton dissented on the willful intent finding, arguing that Edmonds "imparted risks into his travel" by driving without turning his headlights on, while not wearing a seatbelt, while speeding, driving while not feeling well and while under the influence of pain medication.

"Driving under such conditions reflects a voluntary act by Edmonds and a willingness to incur risk outside the scope of his employment," Carlton opined.

Judge Carlton apparently dismisses any idea that Edmonds might just be stupid, which is not grounds for denying workers' compensation compensability.

Linde Gas v. Edmonds, No. 2013-WC-01942-COA, 09/30/2014, can be read here.

Recognizing Good

Scott Hudson gave one of the key note speeches at the Workers’ Compensation Institute’s annual educational conference Monday.

Hudson is the CEO and president of third party administrator Gallagher Bassett.

He surprised the audience in the Grand Ballroom, I think, by talking about something that is rather taboo in our industry - us old farts are dying and no one is coming into the industry willingly to pick up the slack and as a consequence our industry loses out talent to other industries such as banking, finance, technology and perhaps beer making.

And Hudson, in my opinion, is absolutely correct about the dearth of talent targeting workers' compensation as a career path.

Think about it - how any of you graduated from college and said to yourselves that workers' compensation is a cool industry that does great stuff for people and you want to make a career out of it so you can do good things for the world?

Right - not a one of you!

Why is that? Why is workers' compensation so off the radar screen for the next generation? Why can't we attract top talent into our industry? Why can't we have the big thinkers, people that go outside of the box to solve our problems, to bring good things to life?

Workers' compensation is, after all, as much of a people business as any industry and if you've been in the comp world for more than just a few months you absolutely know that it's all about relationships.

People make things happen in workers' compensation because the industry is all about taking care of people. This industry starts with people and ends with people.

We are as much about humanity as any other industry - we are charged with solving a huge social problem: doing as much as we can using the tools we are given to help people recover from bad things in life and carry on.

Hudson talked about rebranding the industry and that starts with the way we talk about our selves. And I will admit that I'm probably just as much to blame as anyone else.

It's easy to publish bad news and it's easy to criticize what's wrong in the industry. It's much, much harder to talk about the good things because we get so consumed with what's wrong.

But we do make a difference and we do very, very important work.

I guess that last part gets lost in the conversation too often. When we're at a cocktail party and mention to some guest that we're in the workers' compensation business we often do so shamefully.

Like we're embarrassed that we help manage the largest privatized social benefit system in the world.

Or that we help people get back to work, help business manage safe practices, help the economy by spreading potentially catastrophic risk and keeping payroll tax dollars flowing.

"The way you define me is not how I see myself," Hudson said, and it's so true.

Get down to the basics: Our job is to provide comfort to injured workers, to get them healthy, to get them working again because work in the most primal way defines our existence (and this has been proven time and again through psychological studies).

WE DO GOOD THINGS.

There, I said it - we really do good things.

The trend in our favor is that the millennial generation is looking for meaning and social importance in their lives and careers, and that is what comp is all about.

But people don't know that. Even people in our own industry don't know that.

If we are going to attract top talent into this industry we need change the perception of work comp and the mindset of the public.

We need to be ambassadors of our industry and we need to share our stories of success, of helping that injured worker, of assisting that beleaguered employer, of making things right in this world within our own special way.

We are a caring industry and we should celebrate all that is right with workers' compensation.

In that vein I have urged my staff and colleagues to create something wonderful, something that celebrates the good in workers' compensation and recognizes the deep care and understanding that incredible PEOPLE bring to the lives of others.

I hope you will join me and WorkCompCentral to nominate recipients for the WorkCompCentral Comp Laude(tm) Awards.

Though nominees are limited to the State of California at this time, anyone involved in the workers' compensation system, inside or outside California, can nominate an individual or a company in one of eight categories.

We are going to be recognizing injured workers and their employers, case managers, claims adjusters and managers, risk managers and Third-Party Administrators (TPAs), doctors, attorneys, educators and others who have demonstrated to their nominators, and the industry, a high degree of integrity, understanding, education and commitment to doing good things for people via the work comp industry.

Start nominating qualified people and organizations now by selecting one of the categories listed at https://ww3.workcompcentral.com/events/nominations. You can also just call (805) 484-0333 and a WorkCompCentral account representative can take your nomination.

Nominations are due by October 12, 2014. Awards will be presented on Saturday, December 6 at the 3rd Annual Comp Laude Awards & Gala at the Sheraton Gateway Los Angeles Hotel. I hope you can join us to celebrate the good we do.

The next generation will join us if they see an industry of care. Let's show them we do.

A Drug Testing Rebuttal

Last Friday I blogged a title, "Urine Is Big Money."

What I opined was that the very public lawsuits and jury verdicts in the cases between Ameritox, Ltd. and Millennium Laboratories, Inc. revealed unsavory marketing tactics that incentivized physicians to do drug testing and that there was a lot of money involved.

I called this "nonsense" because you and I pay for this surreptitiously through higher fees and greater utilization.

Specifically I said, "Drug testing may have its place in certain situations, but the incentives these companies throw at providers of care to initiate services is offensive to me, and should be to you."

Michael Gavin is president of Prium, a medical intervention firm that has particular expertise in providing tools for drug management.

He called me the other day to tell me that he a) enjoyed WorkCompCentral's new adaptive newsletter format (I know, shameless self-promotion) and that b) he had written a blog post rebuttal to Urine is Big Money but decided to run it past me rather than publish it publicly to deter the wrath of a potential counter-point.

Heck - I think dialogue is good! So with Michael's permission, I took the easy way out today and am posting his opinion with just a little editing for format and readability:

_________________________________________

When Ameritox purchased PRIUM, I did my own due diligence on the Ameritox management team.  I believe I'm working for the good guys and we're genuinely trying to do the right thing.

I like David DePaolo.  A lot.  He is a voice of reason in our industry and I've enjoyed his musings, both personal and professional, for years.  

But on the issue of urine drug monitoring, I think he's off the mark.  On the one hand, I'm coming at this from an admittedly self-interested perspective (PRIUM is a wholly owned subsidiary of Ameritox), but on the other hand, the context and conclusions of David's recent post on drug monitoring beg for someone to clear up the confusion.  

What did he miss?  Nowhere in his piece did he mention several key facts.  David knows all of these things, but critical context is missing from his view on Urine Drug Monitoring.  Namely, he didn't mention that: 

• People are dying.  Overdose deaths from prescription opioids now outpace deaths from traffic accidents and have tripled since 1990; 
• The CDC has identified the opioid crisis as an epidemic, a term the CDC does not use lightly; 
• More than 12 million people reported using prescription painkillers nonmedically in 2010; 
• Urine drug monitoring technology is relatively new.  David's quote from the CWCI data that suggests 192X growth in spend on urine drug monitoring in CA doesn't recognize the point at which the health care community sat on the adoption curve for this technology in 2004.  Nor does it recognize that we still didn't realize the enormity of the opioid crisis in 2004.  And don't tell me we knew in 2004 how bad this was going to get.  I came into this industry in 2010 and spent my first two years here at PRIUM trying to convince payers there was an opioid problem in the first place.   
• There's a distinction between point-of-care testing in a doctor's office and reference lab testing. Failing to make this distinction leads the reader to conclude that all inappropriate behavior rests with reference labs and fails to recognize that some physician practices are by themselves driving inappropriate utilization.  Physicians who partner with experienced and capable reference labs that understand payers' perspectives and expectations can help align stakeholders (injured worker, physician, lab, and payer).   
• There are guidelines for the appropriate use of urine drug monitoring and these guidelines are based on risk stratification of the patient.  We follow these guidelines.  We help payers follow these guidelines. Testing beyond the guidelines is as inappropriate as not testing patients that should be tested.  
• Even in light of these guidelines, WCRI data tells us that less than 25% of injured workers on long term opioid therapy are being tested at all.   David states "we know [the guidelines] are specific case recommendations particular to a certain set of medical facts, not to be applied universally."  Agreed.  Perhaps David doesn't realize how many injured workers fit that "certain set of medical facts."  A lot more than he apparently realizes.  
• Not all companies offer direct financial incentives to physicians.  He lumps an entire industry together and does so just a couple of paragraphs after he details that Millennium's practices were found by a jury to be illegal and that all counterclaims against Ameritox were dismissed.  Perhaps David missed the most important take-away: there's at least one company trying to do it right. 

Bottom line: what David blithely dismisses as "nonsense" is, in fact, a critical patient safety tool, a mechanism for effective claims management, and a necessary application of clinical technology that isn't going anywhere. To suggest otherwise in light of the largest man-made epidemic in the history of the world is simply irresponsible.  

Michael

_________________________________________

So I agree that drugs are a public health concern. I agree that drug testing can be an important part of patient care. And that Ameritox was found clean of engaging in questionable marketing tactics is comforting to me.

But Michael misses the theme of my post.

The point I was making was that the Millennium/Ameritox case simply provided insight into how medical supply businesses work, and how much money is involved. 

This occurs inside, and outside, workers' compensation. And not just drug testing companies, but nearly all medical supply businesses have some marketing systems that provide physicians incentives to use and/or promote their products.

Marketing practices that improperly cause physicians to prescribe specific products or services should not be tolerated without full disclosure to the patient and the payer as to the nature of the incentives to the doctor. 

That's the bottom line.

That Gavin's company, Prium, and it's parent Ameritox, don't engage in "direct financial incentives to physicians" is a good start. Next would be disclosure as to what incentives are placed in front of physicians so the people can make informed choices about whether prices and utilization are appropriate for any given case.

Thank you Michael for taking the time to write a rebuttal.

Urine Is Big Money

Not only is there big money in drugs, but there is big money in drug testing, as evidenced by a recent jury verdict against San Diego, CA based Millennium Laboratories Inc.

The jury verdict handed down June 16 resolves three cases dating back to 2011 that were consolidated before the U.S. District Court in Tampa, Florida, and brings to an end all litigation between the rival drug-testing companies Millennium and Ameritox Ltd., based in Baltimore, MD.

The jury ordered Millennium to pay $2,755,000 in compensatory damages and an additional $12 million in punitive damages to Ameritox for violating federal anti-kickback statutes with a program that provided physicians with free point-of-care specimen cups in exchange for referrals.

The 2011 complaint by Ameritox alleged that Millennium marketed a “revenue-based billing model” promoting drug testing as a way to increase income for physician practices. An exhibit attached to the complaint − purportedly Millennium marketing materials − claims a doctor can make $45,021 a year performing a single drug test per day, $225,108 a year performing five tests per day and $900,423 performing 20 tests per day.

The company further claimed that Millennium provided point-of-care testing cups for free or at prices below market rates on the condition that the providers agreed not to bill for the use of the cup, used it only for an initial urine screening and sent the specimen to Millennium for confirmation testing.

The jury determined the cup program, which Millennium says it has discontinued, constitutes remuneration under the federal Stark Law, which took effect in 1992, and prohibits physicians from referring patients to companies with which they have a financial interest.

Bowzer doesn't pee in cups.

The jury further said that the cup agreement constituted remuneration in violation of the federal anti-kickback statutes.

The jury also found that Millennium tortiously interfered with Ameritox's business relationships and engaged in unfair competition in Florida, awarding it $1.625 million in compensatory damages and $7.08 million in punitive damages, interfered with business relationships in Texas and Tennessee, awarding $575,000 in compensatory damages and $2.52 million in punitive damages for Texas, and $555,000 in compensatory damages and $2.4 million in punitive damages for Tennessee.

Inversely, the jury rejected Millennium’s counterclaims that Ameritox interfered with its business in California, Florida, New York, Oregon, Tennessee, Texas and Washington, and rejected Millennium's allegations that Ameritox violated the Stark law.
Millennium failed to prove that Ameritox:

• Assigned specimen collectors to physician offices to perform receptionist and other clerical duties unrelated to drug testing in exchange for referrals;
• Provided below fair market prices for point-of-care test cups for testing that the doctor can bill for in exchange for referrals;
• Entered into lease agreements with doctors that were not at commercial reasonable rates in exchange for referrals;
• or provided non-monetary compensation to physicians such as paying for Christmas parties and giving gift cards in exchange for referrals.

Though Millennium is asking for a new trial on the grounds that Ameritox was improperly allowed to introduce inflammatory evidence to the jury, the fact that this litigation continues demonstrates the huge margins that drug testing must produce, and the cost of such aggressive tactics on health systems, in particular workers' compensation.

The California Workers’ Compensation Institute reported that carriers and self-insureds paid $98 million for drug testing in 2011, 192 times the $509,000 paid in 2004.

Lon Wagner, a spokesman for Ameritox, told WorkCompCentral, “What we were looking for is a level playing field, and we feel this is a first step toward achieving that.”

How about leveling the field for the consumers, the people that pay for this nonsense? Drug testing may have its place in certain situations, but the incentives these companies throw at providers of care to initiate services is offensive to me, and should be to you.

And such tactics are not isolated - my bet is that these are, unfortunately, normal tactics within the medical supply industry across nearly all medical fields.

Physicians in workers' compensation in particular are vulnerable to such marketing and sales tactics because the actual fees paid to doctors have become increasingly restrictive, and the amount of time bills remain unpaid lengthens, creating impetus for revenue enhancement opportunities.

Some docs of course are unscrupulous and would engage in such revenue enhancement programs regardless, but the motivation for doing so increases the more actual fees for services that provide value to workers' compensation claimants are constricted.

Maybe Millennium and Ameritox are a bit more level now, but when it comes to those of us who actually pay the bills at the end of the day, the case is just one more example of end point consumer gouging.

While medical guidelines recommend drug testing for compliance purposes and to help ensure that drugs aren't being diverted to the black market, we know those are specific case recommendations particular to a certain set of medical facts, not to be applied universally.

But the way medical suppliers stimulate sales with physician gifting and revenue enhancement programs tests the ethical and moral qualities of the individuals on the front lines, and physicians should not be placed in those positions, and we should not be placed into positions of having to pay for it.

Sometimes drug testing is warranted. Most of the time it is not.

I'm sick of it. You should be too. Then we can all go to the doctor, get our drugs, and pee in cups (unlike Bowzer) so we're all in this together...

It's A Privilege

We get lost in the world of workers' compensation so deeply, it seems, that we sometimes forget what law really governs our actions.

A recent unpublished (which means that the case is not citable in legal proceedings as authority) opinion by the California Fourth District Court of Appeal reminds us that there are times when the Labor Code, the main governing body of statutes in California workers' compensation, takes a back seat.

One of those times is when it comes to evidence.

Shirley Lappi sustained a workplace injury in 2003 while working as an administrative assistant for the University of California at Irvine. Lappi filed a claim for benefits and demanded that her employer and the insurer produce certain documents related to her claim.

The defendants produced most of the documents, along with a privilege log identifying 205 documents that they asserted were not subject to discovery because of the attorney-client privilege and work-product doctrine.

After reviewing the log, Lappi's attorney objected to the defendants' failure to disclose 47 of the listed documents because they were not communications between the defendants and defendants' attorneys.

A workers' compensation administrative law judge ordered the defendants to provide Lappi with copies of some of the documents.

In her order and opinion, the judge stated that she had determined that the documents, which consisted of communications between claims personnel, were not privileged unless they specifically discussed a communication that had been made by counsel. 

The defendants filed a petition for reconsideration in December 2012. They argued that the documents which the judge had ordered them to turn over were communications between claims personnel discussing "action plans," which were based on legal opinions, discussions and advice from defense counsel. They insisted that these documents ought to be deemed privileged and protected attorney work product.

A WCAB panel rescinded the judge's order, but the commissioners said they were not convinced that the documents were, in fact, privileged.

So on remand, the WCAB said the parties have to select a special master, or the judge will have to appoint one if the parties cannot agree on one.

The Board also said the defendants would have to pay the special master to review the substance of the alleged protected documents and prepare a report for the judge and the parties on what he or she considers to be shielded from discovery.

The 4th DCA, on review, said it was "beyond dispute" that the Evidence Code would have prohibited the type of document review ordered by the WCAB if this dispute had arisen in the context of an ordinary civil case.

"(W)hen it comes to the treatment of privileged information specifically, division 8 of the Evidence Code trumps," the court said. 

Division 8 expressly applies to "any action, hearing, investigation, inquest or inquiry (whether conducted by a court, administrative agency, hearing officer, arbitrator, legislative body, or any other person authorized by law) in which . . . testimony can be compelled."

Ergo, the WCAB remains bound by the statutory requirements for dealing with privilege found in division 8. "As a consequence, the WCAB erred in this case when it ordered an in camera review of the University's allegedly privileged documents by a special master for the purpose of assessing the merits of that privilege claim," the court concluded.

The WCAB's order was annulled.

The case is Regents of the University of California v. WCAB (Lappi), No. G048217, 05/23/2014.

By the way - you didn't happen to notice that the date of injury in this case was 2003 ... still messing around 11 years later with legal maneuvering. If anyone want to know what's wrong with work comp, this should be an example.

Go Forth and Compromise

One of the more controversial elements of California workers' compensation law is the requirement in litigated cases to use Qualified Medical Examiners to resolve disputed medical and disability issues (other than treatment since SB 863 came out).

In the old days the litigants would get their own doctors to say what they wanted them to say.

Often enough there would be multiple doctors opining on different medical issues due to specialization and the number of body parts allegedly injured or diseased during the employment risk.

The applicant would procure reports favorable to his or her position, the defense would do likewise, and then they would go to court and ...

... settle. Usually.

Sometimes, and not very often, cases would not settle and then a judge would determine which report would govern the case.

Remember that the evidentiary rules in workers' compensation are very lax, relying on the "substantial evidence" standard, which means that if the evidence is good enough to support what the conclusion for which it is proffered, then it is "substantial" and can be relied upon by the court.

There were two major objections to this historically revered process: 1) medical legal expenses were at least duplicated because not only did both sides have to get expert opinion that were duplicative, but there often would be repetitive diagnostics; and 2) some were rankled because of the perception that money was being given away needlessly under the veil of compromise.

Of course it didn't help that if one went before a judge to determine which medical evidence would rule the case that more often than not it was the applicant's report because, more often than not, it was substantial and judges follow the overarching rule in workers' compensation that the law is to be liberally construed in favor of the injured worker.

So the QME process was born a dozen years ago. The thought behind this was that if the parties could not agree which medical professional was going to govern the case then the government would decide, thus cutting down on litigation, ergo costs, and resulting in less dispute.

The theory didn't translate into practice and one of the more common complaints I hear as I travel the state is that the QME process a) doesn't work as intended, b) is not timely, c) doesn't have enough physicians who know what they're doing, and d) has not reduced litigation.

The Workers' Compensation Appeals Board in a recent decision known as Navarro v. City of Montebello declared invalid administrative QME Regulation 35.5(e), which says, “In the event a new injury or illness is claimed involving the same type of body part or body system and the parties are the same, or in the event either party objects to any new medical issue within the evaluator's scope of practice and clinical competence, the parties shall utilize to the extent possible the same evaluator who reported previously.”

The Board's legal reasoning was that the regulation over-interpreted the Labor Code section that mandated the QME process, and thus there was not requirement to return to the same QME for subsequent injuries.

Honestly, when I read that regulation section I don't interpret it in the same way the WCAB did - because of the last part of the sentence that qualifies it with "to the extent possible."

In my mind that means that there is no requirement or mandate that the parties go to the same QME - because it may not be "possible" to do so for a variety of reasons.

But the Division of Workers' Compensation, which issued the regulation, interpreted it differently and conservatively, that the section mandated a return to the first QME unless there was some emergency or reason why that QME could not perform - thus we got the Navarro ruling.

The DWC has capitulated by DWC saying that its medical unit will issue new panels for claims made after the initial evaluation has taken place.

I was speaking at an event earlier this week and had engaged in conversation with a defense attorney about the QME process. He opined how ridiculous the entire process has gotten because of the shortage of physicians willing to participate in the process and because of the tight regulatory framework.

He relayed to me a situation where he and the applicant attorney both struck from the QME panel list the same QME! What to do? So he called up the applicant attorney and they settled on one of the other physicians on the list.

In essence they agreed to the same QME - they compromised, and settled.

THAT's how workers' compensation should work - get through the muck of the regulatory process (mandatory requirements be damned) to get a matter resolved.

I think at least in California workers' compensation this attitude has been lost - procedure has overtaken substance and gets in the way of resolving cases.

The Navarro case may or may not be a big deal from a technical perspective, but what the WCAB is really saying is, "get over it." Procedure needs to take a step back so that the substance of a case can get through the system to some resolution.

So, to my litigating brethren out there - compromise. Settle those cases and move on. There's a lot more in the pipeline that need resolution, particularly since the latest statistics from the Workers' Compensation Insurance Rating Bureau indicate that frequency is rising...