Mea culpa.

My weekend column predicted there'd be no health care bill emerging from the "special session." But Schwarzenegger and Nunez did connect on a hail mary pass. Nunez rounded up his Democratic troops and herded the bill through the California Assembly on a 45-31 party line vote.

There's a lot to like in the bill. Individuals could not be excluded from coverage due to preexisting conditions. Millions of Californians would gain coverage, including almost a million children.

But the financing of the program would be determined by an initiative which has yet to be written. The concept will be a mix of funding sources. A much higher tobacco tax (expect Philip Morris to open its checkbook against the funding initiative). A tax on employers who don't provide coverage (ranging from 1% for small businesses to 6.5% for large businesses). A tax on hospitals.

And there may be other provisions. After all, the initiative is still being drafted.

But all of this comes at a time when the state is facing a $14-15 billion revenue deficit. Filling that hole would require closing the state's prison system or ceasing support for the University of California. It's a monster. And that has State Senator Don Perata very concerned. Publicly, Perata has been suggesting that the health care reform bill must be considered in light of what budgetary impacts it will have on that deficit. And will the deficit dictate health care funding cutbacks at the same time the Schwarzenegger-Nunez bill is being rolled out?

I'm not opposing or endorsing the bill yet. Before we rush to embrace this plan, perhaps we should breathe deeply and study it carefully. Writing in the Sacramento Bee this morning, columnist Dan Walters compares the bill to the disastrous energy deregulation bill in the 90's. Legislators voted on a bill having little understanding of the eventual impacts.

Workers' comp practitioners know that SB 899 was the same. After voting for SB 899 literally in the middle of the night, many legislators expressed surprise at what was in the bill and claimed remorse over unintended impacts.

To see a critical analysis of the bill by Donna Gerber of the California Nurses Association in California Progress report, click here:
http://www.californiaprogressreport.com ... ll_th.html

Stay tuned. It's an issue of great interest to many disabled workers that I'll continue to cover.

Julius Young
www.boxerlaw.com
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Two WCAB commissioners were recently termed out.

William K. O'Brien and Janice Murray are gone. Both were Gray Davis appointments.

Over the past few years, there has been backstage grumbling about Murray by workers' comp insiders for her lack of involvement. Murray, a Los Angeles resident and wife of Democratic State Senator Kevin Murray, apparently never attended weekly case conferences in San Francisco with board staff and other board members except by phone. Nevertheless, she was a reliable vote for pro-worker interests.

Ending soon are the appointments of James C. Cuneo and Frank M. Brass.

Prior to appointment to the board, Cuneo was a longtime fixture in the Sacramento workers' comp defense community. A partner at Hanna, Brophy, MacLean, Jensen et al and then at Cuneo, Ward, Black, Missler before his board appointment, Cuneo is known to be interested in reappointment to the board.

Likewise interested in reappointment is Frank M. Brass. Brass, whose patron is his friend John Burton (the former California Senate leader on whose watch the SB 899 reforms were passed), worked early in his career in comp with the labor-side firm Neyhart, Anderson, Freitas et al
(which included the eventual San Francisco DA Joseph Freitas Jr, DA during the George Moscone and Harvey Milk murder events). Brass later worked at a string of workers' comp defense firms before his board appointment.

I'm predicting that Cuneo and Brass will get their reappointments. Cuneo and Brass are both personally some of the nicest guys you'd ever want to meet. But neither have shown signs that they are willing to go on a limb to resolve ambiguities in the 2003 and 2004 comp reforms in favor of the worker-"liberal construction" of the law it's called-and so it's hard to see why they would not get their reappointment from Governor Schwarzenegger.

But what about the other two slots that are open? Word on those slots may well come before the New Year.

I've heard a lot of rumors, some perhaps self-generated by people interested. A Shasta/Butte county applicant's attorney? Not likely. A Hispanic partner in a statewide comp defense firm? Possibly. A female defense attorney from a Bay Area office of a statewide firm? Possibly. A member of the governor's staff? Possibly.

And there may be others I haven't heard. Candidates always do well to keep their ambition on low profile. I can remember when Boxer & Gerson's Barry Williams-one of the most distinguished comp lawyers in the state before his death-sought an appointment from Gray Davis. It's hard when you count the chickens before they hatch.

When the chickens do hatch, I'll be blogging about it. Stay tuned.

Julius Young
www.boxerlaw.com
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Looks like any slim remaining chance for passage of a California healthcare reform package this year has slipped away.

The legislature has been in "special session," of course. You'd never know it, because no sessions are actually being held. But every week, there have been leaks from the back room that the Governor and Fabian Nunez, Assembly Speaker, were on the verge of a deal.

Along comes the gorilla in the room. A $14 billion budget deficit. All of a sudden, it's "back to the future." Wasn't this where we started when Arnold moved to recall Governor Gray Davis?

Yesterday, the other member of the "Big Three," State Senator Don Perata, weighed in on the healthcare reform issue. Here's what Perata said:
"It would be imprudent and impolitic to support an expansion of healthcare coverage without knowing how we're going to pay for vital health programs the state now provides for poor children, their families, and the aged, blind and disabled."

He continued:
"The real issue now is the deficit and how this squares with everything else that we are going to do."

You can see more on this by reading the story by Jordan Rau in today's Los Angeles Times:
http://www.latimes.com/news/local/la-me ... ome-center

Could there be a last minute hail mary deal on the issue? Possible. But it's more likely that the Governor will end 2007 empty-handed.

And in 2008, the Governor faces some daunting choices. Raise taxes? Re-institute the car tax (the focus of his campaign against Gray Davis)? He'll have his hands full without focusing on healthcare. It's a humbling road ahead for a Governor who planned to "blow up boxes."

And Nunez and Perata will be termed out unless the voters pass an initiative tinkering with term limits (not likely).

So the big 2007 focus on California healthcare reform may be ending like the phrase in T.S Eliot's poem. Not with a bang, but a whimper.

Stay tuned.

Julius Young
www.boxerlaw.com
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Every time it seems like a slow period for California workers' comp, something interesting pops up.

Today, it was the Department of Insurance audit of SCIF (the State Compensation Insurance Fund) performed by RSM McGladrey Consulting.

And what an audit! (note: the lengthy report is viewable by a link at the end of this post)

SCIF, the state's largest workers' comp insurer-indeed, the nation's largest-has run amok. And pigs were feeding at its big trough.

Mismanagement. Huge consulting fees and sweetheart deals tied to groups with relationships to SCIF directors. Lack of management controls in many areas. Inappropriate expenditures to many vendors. Lack of oversight of fees paid to "safety groups," many of whose members received no services in return for administrative fees paid by SCIF. Lack of oversight over SCIF property.

This report documents it all.

SCIF's market share has slipped, but just a few years ago it had almost half of California's workers' comp market. Even today it has roughly a quarter of the market.

It's time for some serious house cleaning.

Check out the report here:
http://www.insurance.ca.gov/0400-news/0 ... _20Rpt.pdf

Julius Young
http://www.boxerlaw.com/verdicts.html
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The year was 2000. The George Bush presidency was in its infancy. The Social Security Administration had a backlog of 311,000 pending disability cases.

Fast forward to 2007. The backlog of Social Security Disability cases has mushroomed to over 755,000 cases on Bush's watch.

Repeat. The backlog of Social Security Disability cases awaiting a hearing has doubled under Bush. Applications grew over the same period, but at a rate far slower than the backlog of claims awaiting resolution.

Some disability claimants have to wait years to have their day (or hour) in court.

The law provides that a claimant who is initially denied Social Security Disability or SSI benefits can file an appeal (known as a request for reconsideration). If the claimant is denied at the reconsideration stage, the claimant can file an appeal, requesting a hearing in front of an administrative law judge.

Here in Oakland (where our firm handles these cases), the wait from the time of hearing request to the hearing often exceeds 9 months. And that may be below the national average. When the time from initial application to final decision is calculated, the process often takes two years.

Social Security is dreadfully understaffed. Plans to increase funding by as much as $100 million to increase efficiency are currently stalled in wrangles between Bush and Congress. Bush has resisted Democratic Congressional attempts to increase funding for the Social Security hearings process.

The irony is that national statistics have shown that as many as 2/3 of those who appeal an initial denial will eventually prevail. And the standard is no easy threshold.

To win, an individual must establish that he or she is unable to engage in any substantial gainful activity (i.e. work) for a period of 12 months or more. Consideration is given to the age, education, skill level and residual functional capacity of the claimant. A claimant who is unable to return to his or her past work may nevertheless be able to return to alternate work and thus may not be qualified to receive benefits.

For the individual seeking benefits, long delays may mean personal tragedy. Evictions. Bankruptcies. Loss of medical insurance coverage. Suicide. These are some of the anecdotal stories that are emerging from the backlog.

Check out the front page article by Erik Eckholm in today's New York Times, "Disability Cases Last Far Longer as Backlog Rises":
http://www.nytimes.com/2007/12/10/us/10 ... nted=print

And see the editorial by the New York Times "Disabled, And Waiting For Justice":
http://www.nytimes.com/2007/12/11/opini ... nted=print

Many a California workers' compensation claimant awaits his day in court with the Social Security Administrative Law Judge. Less commonly recognized is that Bush has presided over a procedural debacle for those claimants.

Stay tuned.

Julius Young
http://www.boxerlaw.com/practices/socialsecurity.html
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