Wednesday, April 25, 2012, 10:31 PM - Understanding the CA WC systemI recently settled a case that I'd handled for about eight years.
As I wrapped up some loose ends on the file, I printed out a log of "case activity".
The log was 33 pages long. There were about 800 activity entries. From the first meeting, filing the opening papers, to scanning in the settlement documents.
Entries of hundreds and hundreds of phone calls. Hundreds and hundreds of letters. Hundreds and hundreds of documents logged in or scanned.
And those are just the noteworthy calls, letters and documents. We wouldn't log or scan many of the random activities undertaken in the file.
I suspect the actual activity total was at least double if not triple.
Like a symphony played by an orchestra, there it was, laid out in the log. Notes from a receptionist, my secretary, my paralegal, our scheduler, and myself.
Responding to late checks, requests for advances, scheduling doctor appointments and depositions. Status discussions. Hand holding the applicant. Trying to explain why things happen. Explaining what may happen next. Taking information. Putting pieces of a puzzle together.
Putting out the "fires" which inevitably happen in cases.
In the workers' comp system, lawyers and judges get plenty of attention.
But in truth in many offices it is the staff that keeps the system running.
We're in the middle of what used to be "Secretaries Week", now commonly referred to as "Administrative Professionals Week".
Any office representing injured workers has a dedicated staff doing the sorts of things outlined above.
These are the workers who speak with the injured worker claimants, who hear the frustration and angst those workers voice. They are the folks who make many of the followup calls while the attorneys are in court and deposition.
It's not an easy job, but many of them do it year in and year out with aplomb. Many of them are incredibly dedicated.
They deserve our recognition and thanks. We couldn't do it without them.
Friday, April 20, 2012, 09:33 AM - Understanding the CA WC systemI found myself "in the dark" in a number of instances this week.
The experience got me thinking about how failure to serve documents leads to extra delays and costs in workers' comp.
Vendor costs, including costs of interpreters and copy services, have become hot topics for potential reforms.
I'm not one to go out and subpoena from day one all medical treaters that the worker has seen, all employment records and the like.
Why would I want to even consider doing that? Why stir up a hornet's nest and raise potential issues that might be unimportant or possibly even hurt my client?
But what is galling is when adjusters fail to serve medical reports on counsel as required by the WCAB rules. Some carriers seem to have a culture of not serving reports on a timely basis. Some don't even serve their own defense counsel with documents.
Some examples of how this plays out......
After I send the claims department of a major grocery chain a notice of representation and a request to be served with medical reports and documents, I wait for compliance...and wait. a followup contact effort leads nowhere. So I subpoena medical records and the claims file. More "frictional costs" now incurred. This self-insured grocer that prides itself on efficiency will now be saddled with copy service costs.
We're at a settlement conference at the board. Stipulations are drafted. The defense lawyer looks forward to resolution of a long-running case. I am recommending the resolution to my client. The client will not sign. He wants to know what is going to happen with his doctor's recommendations
Huh? It turns out that a slew of reports from the treating doctor have not been served on me (or defense counsel). Apparently requests for certain tests and treatments have been ignored, perhaps not even sent to utilization review.
Steps that could have been taken to move matters forward did not happen because the parties were in the dark. Records will now be subpoenaed. More copy service costs.
Another scenario? The phantom treater.
This time the culprit may not be the carrier. It's the phantom treater.
A worker whose case has been relatively quiet calls to ask about what is going on with the claim. Mentioning a doctor I've never heard of (and who has never been designated as PTP) it appears that doctor has multiple office locations and has cross-referred the client for a variety of tests and consultations. A call to the defendant reveals that they are not aware of this.
Treatment and tests appear to be ongoing in a parallel universe.
Undoubtedly these are doctor who intend to treat "on a lien". Perhaps one will eventually produce a letter showing that the client did designate then as PTP. For now it is phantom treatment.
More copies will be ordered to track all this down.
As you can see, it's complicated.
Thursday, February 2, 2012, 10:08 PM - Understanding the CA WC systemThe following is a true story:
One of the parties requested a panel QME in psychology. The request was filed with the Medical Unit in early March 2011. No response was received, and the parties therefore requested the WCAB issue an order requiring the Medical Unit to issue a panel.
A panel was finally issued by the Medical Unit over two months from when the request was filed.
A QME was selected, but the QME was unavailable to see the worker after multiple attempts to schedule the exam.
By that time it was over four months from the original request for a psych panel. A replacement panel was requested and issued some four and a half months after the original request.
The replacement panel QME could not schedule the worker until December 2011.
Defendant requested a second replacement panel on the grounds that the first replacement panel doctor was not available to do the exam within 60 days of the issuance of the replacement panel.
The applicant went to the December 2011 appointment but was turned away, being advised that the defendant had cancelled the appointment.
A declaration of readiness was filed regarding the panel selection issue. An expedited hearing was set for February 2012.
By that time it was almost a year from the initial panel request. The Medical Unit had not yet acted on the request for a second replacement panel.
It was pointed out to the WCJ that the California Constitution entitles the injured worker to an expeditious, unencumbered remedy, and that if the Medical Unit is understaffed and burdened with technology problems such that it is not able to function within its own rules, then the remedy is to allow the parties to obtain their own QMEs.
The applicant attorney noted that this had been done in a case reported in the California Workers' Comp Reporter at 35 CWCR 185, Fabry v. ACE (OAK 326189). In that 2007 case, handled by my law partner Michael Gerson, WCJ Christopher E. Hamilton ruled that the parties were permitted to select their own QME when the DWC delays designation. The Fabry case never went up on appeal.
At the February 2012 hearing the WCJ issued the following order:
"It is my belief that the panel QME system is broken. This case needs to come to resolution and this can only be achieved if both parties have an opportunity to obtain their own QMEs."
The sad thing about this true story is that versions of it are happening again and again. A toxic mix of bureaucratic delay and rule-based gamesmanship all too frequently stymies employers and applicants.
Perhaps the WCJ is on to an elegant solution. Let the parties develop the evidentiary record without the bureaucratic intermediary.
Policymakers, take note.
Tuesday, January 31, 2012, 10:15 PM - Understanding the CA WC systemCalifornia workers' comp insurer profitability has improved?
That's not a headline we'd expect to see, particularly given the conventional wisdom that loss ratios of California workers' comp carriers have deteriorated. The conventional wisdom is that comp carriers have seen declines in investment income and in premium volume while costs were rising.
So it was with some surprise that I see the January 31, 2012 bulletin from the California Workers' Compensation Institute. The numbers do the talking, so I'll present the results without a lot of editorializing in this post.
According to the press release:
"After declining for four years in a row, California workers' compensation insurers' return on net worth showed signs of improvement in 2010 according to new National Association of Insurance Commissioners (NAIC) data, which pegs the California insurers' 2010 return on net worth at 5.2 percent vs. 4.6 percent in 2009, moving the state's ranking from 25th to a tie for 18th out of 46 states that operate without a monopolistic state fund."
The CWCI bulletin noted that the NAIC compiles an annual report on profitability of all lines of insurance by state and by type of insurance.
According to CWCI, because the NAIC report "is the only source of complete, direct income statement data for al lines of insurance for every state, and it is produced by an objective source, the report is a useful tool for tracking the performance and profitability of different lines of insurance over time."
In 2010, California workers' comp was said to generate a 5.2% return on net worth vs 3.9% for all United States workers' comp. By comparison, all California lines of insurance generated 9.7% returns. Property and casualty lines of insurance generated 6.0% returns in 2010, only slightly higher than the California workers' comp returns.
So comp isn't the most lucrative type of insurance in California, but the results here were better in 2010 than the national average.
The 2010 Fortune rate of return for all industries was 12.7%.
The CWCI bulletin notes that:
"As an industry, California workers' compensation insurers met or exceeded the 12% standard from 2004-2007, but the market has been on a roller coaster ride since the late 1990s, and those double-digit returns in the middle of the decade followed four straight years of losses that ended when they finally moved into the black in 2003. After the 2006 peak, California insurers' returns began to trend down, dropping to a 6-year low of 4.6% in 2009, so even though the 5.2% return for 2010 was slightly below the 10 year average, it did mark the first year-over-year improvement in the rate of return in four years. Although California workers' compensation insurers' average return on net worth for 2010 was less than the returns for all lines of insurance in California and the U.S., as well as the returns for property and casualty insurers and the Fortune's Industrial and Service Sectors, it was better than the 3.9% average earned by workers' compensation insurers nationwide."
The years after the Schwarzenegger 2004 reforms were fat for the industry.
From a negative 11.5% return on net worth in 2002, returns climbed to 12.6% in 2004, 14.2% in 2005, 16.4% in 2006, and 12.1% in 2007 before settling down to lower levels.
But despite all of the California system's problems, profitability of insurers appears to have stabilized.
These results come at a time when we've learned that injured workers experienced a 58% decline in PD payouts.
It's all part of the puzzle we call workers' comp, as various stakeholders envision how possible changes in the system might fit together to create a different picture.
Wednesday, January 25, 2012, 06:27 PM - Understanding the CA WC systemSome would say that the volume of liens clogging some California WCAB district offices are like a plague of locusts.
The sheer volume of liens has made it hard to do business in some boards, overwhelming staff and judges and causing massive calendaring problems.
This has been developing for some time, and the problem has been under study for quite a while. Possible legislative fixes have fizzled. Regulations to deal with the problem have been slow to evolve. The Schwarzenegger DWC held a "lien fiesta". Some liens have been offloaded from Los Angeles to Oxnard.
So it was with interest that I read quoted comments from DWC Administrative Director Rosa Moran on the issue. Moran spoke this week at the Employers' Fraud Task Force lunch in Commerce, Ca. The event was covered by Greg Jones, who covers the California workers' comp scene for workcompcentral.com.
Apparently the Los Angeles WCAB office has 500,000 liens. These include liens filed by providers and so-called "zombie liens" which are purchased by companies from providers.
That's not to say that all the liens are illegitimate. Liens are filed for many reasons. A carrier may cut the doctor's bill without proper justification.
A worker may have a legal basis for seeking treatment outside the MPN.
A doctor may simply find that repeated billing for services has not resulted in payment.
But it stretches credulity to believe that these problems are so much more prevalent at certain LA boards than elsewhere.
The problem has been well-documented and analyzed by CHSWC, which did a report on January 5,2011. Those wishing to read reaction to the lien report can find the public comments still posted on the CHSWC website.
The CHSWC draft recommended 28 measures to deal with the lien problem.
Although some of the measures may need some work, as a whole they are a reasonable way to address the problem.
In case you missed the CHSWC draft, here are the recommendations:
Recommendation 1: Consider reinstating a filing fee for medical and medical-legal liens. ......................
Recommendation 2: Require frequent lien filers to file their liens electronically.....................................
Recommendation 3: Prohibit filing of amended liens prior to Declaration of Readiness. ........................
Recommendation 4: Until the volume of liens is substantially reduced by other measures such as recommended in this report, equip the WCAB District Office with sufficient resources to meet workloads.......................
Recommendation 5: Adopt medical fee schedules to cover those services that are often disputed due to gaps or ambiguities in the existing fee schedules. ............
Recommendation 6: Establish an administrative system for fee schedule determinations, subject to limited judicial review...............................
Recommendation 7: The boundaries of MPN control over medical treatment should be more clearly defined to minimize the potential for disputes over rights to select medical providers. ..........
Recommendation 8: Disputes over assertions of MPN control over medical treatment should be brought to adjudication promptly. .................
Recommendation 9: Sanctions should be imposed on providers and claims administrators alike for repeated patterns of incorrectly asserting or denying the status of an authorized medical provider. .....
Recommendation 11: Labor Code section 4903.6 should be amended to forbid filing a medical or medical-legal lien until the bill is genuinely in dispute. .......................
Recommendation 12: Labor Code section 4903.6 and Rule 10770.5 should be amended to provide consequences for violation that can be effective deterrents to premature filings.........
Recommendation 13: Enact a statute of limitations, effective prospectively based on date of services to bar any lien unless the service is billed in accordance with regulations and the lien is filed within a defined time following that service. ............
Recommendation 14: Enact a statute of limitations to bar any lien for service, regardless of date of service, which is not filed within three years of the date of medical service............
Recommendation 15: Eliminate implied liens for medical treatment or medical-legal expenses.........
Recommendation 16: Impose automatic dismissal by operation of law for any lien which is not activated for hearing within finite time....................
Recommendation 17: Allow additional time for medical insurers to file liens for reimbursement of sums paid for covered treatment. ......................
Recommendation 18: A lien claimant should be required to disclose its relationship to the original provider of goods or services and produce documentation on demand. ...........
Recommendation 19: A lien representative should be required to provide documentation of the representative’s authority upon demand....................1
Recommendation 21: Payments in satisfaction or settlement of liens should be made only to the original provider of goods or services unless a bona fide assignment is documented. ........
Recommendation 22: The Administrative Director should adopt a fee schedule and ground rules for payment of copy services. .............
Recommendation 23: The Form 6, “Notice and Request for Allowance of Lien,” should be revised to identify liens for document copying services as well as the grounds for claiming the lien...........
Recommendation 24: Either regulation or statute should be adopted to clearly prescribe the events for which interpreter services are payable. ....
Recommendation 25: Either the interpreters' fee schedule should provide for apportioned billing when an interpreter serves multiple cases concurrently, or the WCAB should contract for interpreters to attend hearings and proportionately bill the defendants in each in which they participate...........
Recommendation 26: The Administrative Director should amend the fee schedule for interpreter services to promote uniformity and to make the fees generally commensurate with the fair market value of the services. ...
Recommendation 27: One or more independent organizations should be identified whose accreditation can serve as an alternative to SPB certification for medical examination and administrative hearing interpreters. ...........
Recommendation 28: The subjects of liens should be monitored, and the subjects that arise most frequently should be considered as candidates for improved guidance by the medical treatment utilization schedule and/or applicable fee schedules...............................
Recommendation 29: Liens by frequent filers that state incorrect lien type or make other material misrepresentations should be subject to substantial penalties, ranging from mandatory sanctions to dismissal with prejudice for repeat violations. ......................
Recommendation 30: Lien claimants should be required to use EAMS Uniform Assigned Names (UANs), and until UANs are assigned, lien claimants should be required to use correct legal names. ..........
There are plenty of other worthy solutions. Perhaps carriers who have not paid in full should be put on tight timelines to provide documentary justification for why they have not paid in full. Failure to do so could be deemed to establish presumptive liability.
Providers could be required to file a document with more information about how the services were requested and rendered.
But unless and until the DWC adopts some of these recommendations, proposed new regs by the WCAB are likely to the primary effort addressing the lien problem.
In her speech Moran endorsed rules which would allow the WCAB to dismiss liens which have not been pursued within a year of filing or within a year of an off-calendar order. The proposed rules would also tighten up on continuances in lien matters.
Here is a link to the proposed WCAB lien rules:
Public comments were solicited and are viewable here:
So the issue is obviously getting attention at the WCAB and the DWC.
Next step, please.