The American Legislative Council (ALEC) has been hemorrhaging corporate sponsors in the wake of the controversy over Florida's stand-your-ground law after the killing of Trayvon Martin.

ALEC has been a proponent of stand your ground laws in various states. Other causes have been privatization of state services,opposition to taxes on sodas, tort reform, rollback of regulations and the end of Obamacare. On ALEC's website is a pdf document "The State Legislator's Guide to Repealing Obamacare".

Evidence based medicine is not a favorite of ALEC either. Included on the ALEC site is a position paper, "Evidence-Based Medicine: Rationing Care, Hurting Patients".

I guess a War of the Acronymns would be in order. Let ACOEM face off against ALEC.

With this agenda, it is not surprising that the billionaire Koch brothers, embroiled in Wisconsin's controversy over unions, are supporters.

But you probably were not aware that sponsors included such companies as Coca-Cola, PepsiCo, McDonald's, Wendy's, Kraft Foods, Exxon Mobil, State Farm Insurance, Peabody Energy, AT&T, Johnson & Johnson and Pfizer.

Talk about Blue Chips.

Coke and Pepsi have decided to bail on ALEC, however. As have the burger folks.

The clean coal guys and Pharma industry are hanging on.

What caught my eye (and that of Orange County attorney Tom Martin, who brought this to my attention) is that ALEC did venture into California workers' comp back in 2004.

The Spring 2004 ALEC Policy Forum Journal published an article "How to Fix California's Broken Workers' Compensation System", (link to the article is below).

That article was initially published by the San Francisco-based Pacific Research Institute, a conservative think tank headed by Sally Pipes.
Facebook VP and general counsel Ted Ulyot currently sits on the PRI board.
Written by Lawrence J. McQuillen and Andrew M. Gloger, the article suggested a number of reforms, some of which were enacted in 2004.

In publishing the PRI article in Spring 2004 , ALEC noted that "ALEC has formed a special working group to address workers' compensation reform".

ALEC has in many instances in various states drafted legislation and pushed its reform agenda on a multi-state basis.

Workers' comp reforms have been a big issue as many states did do workers comp reform over the past decade. Perhaps ALEC was involved in many of those instances, though I don;t have details to substantiate that.

But it's worth note that nationally focused think tanks are interested in
workers' comp reform as part of their overall economic vision.

Here is a link to the ALEC article:
http://heartland.org/sites/all/modules/ ... /16004.pdf

Julius Young
www.workerscompzone.com

A key focus of upcoming legislative or regulatory proposals in California's workers' comp system will be escalating medical costs, measures used to contain costs, and the costs of those measures.

It's striking that almost everyone seems unhappy with the current system.
Workers and doctors are frustrated with the delays and hassles of the UR system.

These delays can cause considerable suffering and delay return to work, throwing the worker and families into financial crisis, particularly with the 104 week limitation on TTD.

And many stakeholders are now uncomfortable with the expanding price tag of cost containment.

So there could be tinkering with utilization review procedures. Proposals to eliminate UR altogether will surface, replacing it with an Independent Medical Review scheme that is used with California's managed care health insurers (more on that in posts to come). Those proposals could include appealable IMR or, most extreme, a non-appealable IMR.

But if IMR does not come to pass and UR survives, there are many things that could be done.

Why should an insurance carrier be allowed to have a financial interest in a UR company?

Financial conflicts and financial incentives of UR physicians need to be better spelled out.

If an employer can pick doctors to be on its own MPN network, should it be allowed to UR the medical requests of the doctors it selected?

Shouldn't UR be reserved for medical procedures that exceed a certain dollar threshold? Does a cane or a brace need to be UR'd?

Should a carrier be allowed to do utilization review again and again on medication requests even where the medicines have been prescribed for a long time?

Shouldn't the rules be clarified to require the carrier to provide adequate contextual medical records to the UR physician?

The law and regulations could be tightened to simplify the UR timeframes and clarify the process of appealing UR denials. Using the QME system to appeal every UR denial is costly and unworkable.

But lest you think this is an applicant laundry list, there are many other changes that could be considered as part of a UR and treatment overhaul.

Perhaps the system could require more clarity from treating doctors on the history of their treatment, the goals and progress toward those goals.

If a test or procedure is to be repeated, a higher threshold of documentation could be required.

Doctor mills which churn out constant procedures and half a dozen medications (or more) on each patient could be required to give a deeper analysis of the long term care plan and the costs and benefits.

In treatment requests, doctors could be required to explain more of the risks and side effects of medications and procedures. For example, how many physicians document the dental risks of certain opioids, which may lead to claims of consequential dental injury?

Tie breaker procedures of the sort currently used for spinal surgery could be used for other types of surgeries or medical device use.

A special protocol could be set up for handling opioid treatments.

MPN regulations and lien regulations could be tightened to make it less appealing for doctors in accepted cases to risk treatment on a lien (something that currently happens on a regional basis).

Special focus could be given toward long term chronic treatments and how to achieve a cost-benefit balance in such situations.

Employers who wanted to offer workers the option of bringing their treatment in-house to employer-sponsored group health plans should be allowed to do so.

And of course, doctor pay could be adjusted.

A shift from the California fee schedule to a Medicare-based RBVS system has been discussed, but not implemented.

And outcome based pay to medical providers could be considered. More on that later.

I recognize that some of these concepts are anathema to legal and medical colleagues I know and respect.

But a train is rumbling down the track. Lots of things are in play.

Julius Young
www.workerscompzone.com
www.boxerlaw.com

As recently announced, the Workers' Compensation Insurance Rating Bureau
has now filed a formal request with California's Insurance Commissioner, seeking an increase in the purely advisory workers comp rate known as "pure premium".

This is the announcement from the Oakland-based WCIRB:
"Today, the WCIRB submitted a July 1, 2012 Pure Premium Rate Filing (Filing) to the California Department of Insurance (CDI) recommending an increase in advisory pure premium rates effective July 1, 2012. The advisory pure premium rates proposed for the 494 standard classifications currently in effect average $2.51, which is 4.1% more than the corresponding industry average filed pure premium rate of $2.41 as of January 1, 2012. The advisory pure premium rates contained in the Filing represent the anticipated cost of losses and loss adjustment expenses expected to be incurred on policies incepting on or after July 1, 2012. Insurers may, and often do, file and use rates other than the advisory pure premium rates proposed by the WCIRB or the advisory pure premium rates approved by the Insurance Commissioner. "

Claiming that system costs continue to escalate, the WCIRB states:

"The proposed change in advisory pure premium rates is the result of continued adverse loss development on recent accident years as paid indemnity and paid medical loss development continues to deteriorate. Other factors contributing to the indicated increase include: (1) the continued growth in allocated loss adjustment expense (ALAE) per claim, which the WCIRB believes is largely the result of an increased volume of liens and increases in litigation related to permanent disability claims, (2) increased levels of indemnity claim frequency on the 2010 and 2011 accident years that is in part attributable to an increase in cumulative injury claims, and (3) the sluggish pace of California's economic recovery and the reductions in the economic forecasts of future wage inflation for 2012 and 2013 which place upward pressure on advisory pure premium rates."

Here is a link to the WCIRB filing, filled with graphs and charts:
https://wcirbonline.org/wcirb/resources/rate_filings/pdf/2012_07_01_filing.pdf

Insurance Commissioner Dave Jones will be scheduling a hearing on the filing.

Whatever Jones does with the pure premium rate, insurers will be free to raise rates if they so choose. Some will probably raise rates by more that the WCIRB benchmark, and some by less. After all, California still has a very competitive insurance marketplace.

With widespread unhappiness among workers and physicians surfacing in the DWC roadshow "listening tour", the current squeeze becomes more and more apparent.

How can benefits to workers be increased and medical costs tamed in a way that does not further frustrate workers and drive physicians from the system?

Julius Young
www.workerscompzone.com
www.boxerlaw.com

Can a worker or a group of workers sue an employer or insurer in Federal court, alleging a violation of the federal RICO statutes?

Are aggrieved workers' limited by the exclusive remedy of state workers' compensation systems, or may they pursue an action in Federal Court under
18 United States Code Sections 1961, 1962 and 1964? That's the RICO statue, actually known as the Racketeer Influenced and Corrupt Organizations Act.

That has been the issue in a long-running legal battle in Michigan, where employees of Cassens Transport Company have attempted to pursue a lawsuit under the RICO statute.

To my knowledge, no California plaintiff has attempted such an approach.

The plaintiffs in Cassens have alleged that Cassens, which was self Insured but adjusted by Crawford, solicited fraudulent and biased medical reports.
Doctors hired by Crawford were alleged to have received substantial sums of money for doing "cut off" reports, using electronic and mail communication "in furtherance of this fraud" that was said to fraudulently and dishonestly deny workers' comp benefits. Cassens is alleged to have used doctors to do evaluations who were not competent in the relevant specialty.

The RICO complaint filed by six Cassens workers describes a variety of ways in which Cassens and Crawford were said to have conspired to deny legitimate claims, often contracting for bogus medical evaluations and ignoring or refusing to obtain objective evaluations from qualified specialists.

This litigation has taken repeated twists and turns in the courts, but so far the case has eluded defense attempts to squelch the legal theory forever.

At several points in time it appeared the effort to use RICO to challenge workers comp practices would come to naught.

But now the effort appears to have risen from the crypt.

This week the U.S. Court of Appeals 6th Circuit in a 2-1 opinion (with Judge
Gibbons dissenting) reversed dismissal of the lawsuit by the Federal District Court and remanded the matter back to the Federal District judge for further proceedings. Thus, the possibility of a RICO action under certain circumstances remains a possibility.

At least for now.

The 6th Circuit panel noted that:
"We hold that the Supremacy Clause prevents the Michigan legislature from preempting a RICO remedy by declaring its worker’s compensation scheme to be exclusive of federal remedies. An expected entitlement to benefits under the WDCA qualifies as property, as does the claim for such benefits, and the injury to such property creates, under certain circumstances, a RICO violation."

The 6th District Court summarized the procedural history of the case this
way:
"On June 22, 2004, the plaintiffs sued Cassens, Crawford, and Dr. Margules (except that Thomas did not sue Dr. Margules), alleging violations of RICO and intentional infliction of emotional distress. Each plaintiff seeks monetary “damages measured by the amount of benefits improperly withheld . . . , plus interest as provided by law, all tripled in accordance with RICO, together with attorney fees and costs as provided by law.” R. 1 (Compl. ¶¶ 21, 29, 46, 65, 74). The district court dismissed the case under Federal Rule of Civil Procedure 12(b)(6) for failure to allege reliance on the defendants’ fraudulent misrepresentations. Brown v. Cassens Transp. Co. (Brown I), 409 F. Supp. 2d 793 (E.D. Mich. 2005). A divided panel of this court affirmed. Brown v. Cassens Transp. Co. (Brown II), 492 F.3d 640 (6th Cir. 2007). The Supreme Court vacated our judgment and remanded the case in light of Bridge v. Phoenix Bond & Indemnity Co., 553 U.S. 639 (2008), which held that civil RICO plaintiffs do not need to demonstrate reliance on defendants’ fraudulent representations. Brown v. Cassens Transp. Co., 554 U.S. 901 (2008). On remand, we held that the plaintiffs had pleaded a “pattern” of unlawful activity. We also held that the McCarran-Ferguson Act, 15 U.S.C. § 1012, did not reverse preempt RICO claims because the WDCA was not enacted to regulate the business of insurance and, in any event, RICO would not
No. 10-2334 Brown et al. v. Cassens Transport Co. et al. Page 4 “invalidate, impair, or supersede” the WDCA. Brown v. Cassens Transp. Co. (Brown
III), 546 F.3d 347, 363 (6th Cir. 2008), cert. denied, 130 S. Ct. 795 (2009).
On remand, the district court denied the plaintiffs’ motion to amend their complaint and dismissed their claims under Rules 12(b)(6) and 12(c). Brown v. Cassens Transp. Co. (Brown IV), 743 F. Supp. 2d 651 (E.D. Mich. 2010). The district court determined that the WDCA provided an exclusive state remedy via the WCAC that foreclosed federal RICO claims; that monetary losses stemming from lost benefits were personal injuries that were not injury to business or property; and that the damages were too speculative to support standing. The plaintiffs have appealed.
Meanwhile, three similar cases, all brought by one of the attorneys who represents the plaintiffs in this case, have been dismissed by various district judges. Lewis v. Drouillard, 788 F. Supp. 2d 567 (E.D. Mich. 2011), appeal docketed, No. 11- 1325 (6th Cir. Mar. 14, 2011) (held in abeyance by 6th Cir. Apr. 15, 2011, Order pending the resolution of Jackson and this case); (Jay) Brown v. Ajax Paving Indus., Inc., 773 F. Supp. 2d 727 (E.D. Mich. 2011), appeal docketed, No. 11-1391 (6th Cir. Mar. 28, 2011) (held in abeyance by 6th Cir. June 6, 2011, Order pending resolution of this case); Jackson v. Sedgwick Claims Mgmt. Servs., Inc., No. 09-11529, 2010 WL 931864 (E.D. Mich. Mar. 11, 2010), appeal docketed, No. 10-1453 (6th Cir. Apr. 4, 2010)."

In its opinion the 6th Circuit panel focuses on whether the devaluation of a statutory expectancy to workers comp' benefits amounted to an injury to property within the meaning of the RICO statute.

Representing the plaintiff workers is Marshall Lasser of Southfield, Michigan.

Here is a link to the April 6, 2012 Brown v. Cassens decision:
http://www.ca6.uscourts.gov/opinions.pd ... 95p-06.pdf

The issue may eventually work its way back up to the 6th Circuit and even the U.S. Supreme Court again.

But for now there is a possibility that a claimant could state a valid cause of action under Federal law for egregious employer or carrier behavior.

Potentially, that's big.

Julius Young
www.workerscompzone.com
www.boxerlaw.com

Dear Roger Goodell:

You have a thug in your midst. Whatcha gonna do?

In a week where sports enthusiasts were focused more on the impending baseball season and The Masters at Augusta, your NFL football league managed to get on the front pages.

But not in a good way.

Commissioner Goodell, you've had your hands full dealing with reckless play, including head butting.

Concussion-caused dementia claims are a workers' compensation tidal wave that may hit your league.

But to think that it was the policy of at least one New Orleans Saints coach to encourage players to injure other players?

Whatcha gonna do, Roger? Yes, I know that you already placed Gregg Williams on indefinite suspension.

But the real test will be whether you are going to announce a suspension that will last for years. Or forever.

Players were being targeted for injury. Bounties were given.

For those folks who missed the news this week, here are quotes (noted by Vittorio Tafur in the San Francisco Chronicle) taken from an audio recording done by documentary filmmaker Sean Pamphilon of New Orleans defensive coordinator Gregg Williams, speaking to the Saints team about an impending game with the San Francisco 49ers:
re 49ers receiver Kyle Williams:
"We need to find out in the first two series of the game, that little wide receiver, No. 10, about his concussion. We need to ... put a lick on him right now. He needs to decide. He needs to ... decide."
re 49ers receiver Michael Crabtree:
"We need to decide whether Crabtree wants to be a fake-ass prima donna, or he wants to be a tough guy. We need to find out. He becomes human when we ... take out that outside ACL."
re 49ers running back Frank Gore:
"We've got to do everything we can in the world to make sure we kill Frank Gore's head. We want him running sideways. We want his head sideways".

My law partner Michael Gerson at Boxer & Gerson represents many NFL players in their workers' comp cases.

But workers' comp may not be the sole remedy some of these players will have if they can show evidence which has now been revealed about the Saints' coaching program.

Civil tort liability may be an appropriate remedy in some circumstances. Civil tort liability against coaches, players, and owners who have knowledge of and acted upon a program of intentional injuries.

Even in a violent spectacle such as football, there is a line which has been crossed.

Listen to this disgusting audio and decide for yourself: should Williams be banned for life?
http://www.youtube.com/watch?v=fhnn9kbqQUA

Julius Young
www.workerscompzone.com
www.boxerlaw.com