Monday, June 30, 2008, 10:10 PM - Political developmentsI've been in Monterey over the weekend, attending the summer Applicants Attorneys convention.
Some selective snippets......
The overall theme? "Practical solutions for a broken system".
Brad Chalk, Judge Colleen Casey, Dirk Stemerman & Dr. Michael Klassen: the AMA Guides are only that...they are guides. Evaluating "whole person impairment" require integration of ALL medical relevant information in a case, not just mindless application of tables and charts.
Barry Hinden and Richard Wooley: Medicare doesn't cover many items and Medicare has a donut hole. The mantra? When settling a case for a worker who is eligible for Medicare, it's not just the PD plus the value of a MSA. The Medicare "donut hole", premiums for Medicare Part D and non-Medicare covered expenses are significant factors to be considered in settlements.
Assemblyman Joe Coto: growing up as a copper miner's son, recalls hearing the whistle that indicated an emergency in the mine. Sometimes that was a signal that a work tragedy had occurred. That formed his life long advocacy for working people.
Chalk, Stemerman & Casey: Under the AMA Guidelines, grip strength may be rated under Section 16.8 if an examiner believes that a claimant's loss of strength has not been adequately assessed by other methods in the Guides. Assessment by a physician may be followed by the judge despite the opinion of the DEU rater.
Richard Jacobsmeyer, Jeff Greenberg & Julius Young: workers with disability ratings from 70% to 100 % (for post 1/1/03 injuries) will qualify for cost of living adjustments to payments, resulting in large awards for the limited class of cases who qualify for the benefits. Arguments were advanced that the COLA computation commences upon either date of injury, permanent and stationary date, or date of commencement of life pension. Settling COLA cases needs to be done with creativity, given the high likelihood of Social Security Disability and LTD offsets.
Art Johnson: subsequent injuries cases are important, particularly given recent apportionment decisions. Lawyers need to familiarize themselves with the SIF. There are significant client benefits available from the SIF.
Learn how to line up your case to meet the SIF thresholds. Educate and cultivate doctors who can address those unique issues.
Colleen Casey: Work all 4 corners of the guides to document all the problems the worker is having. LeBoeuf is back.
Todd McFarren: Physicians not only may, but must exercise their clinical judgment in performing impairment evaluations....Where the generic impairment rating does not accurately reflect the impairment, a physician may use the direct ADL method or analogize to a more accurate table.
Art Johnson: in some cases the attorney may choose to attempt to rebut not the AMA rating but rather the "Combined Value Chart". Vocational evidence may show that the compressive effect of the Combined Values Chart is inappropriate and that multiple impairments combine to increase disability in an additive or synergistic fashion.
Coto: every member of the California Assembly's legislative caucus may sign a letter criticizing the small proposed PD increase recently floated by Schawarzenegger's appointee Carrie Nevans.
Jim Butler: "honor dies where interest lies"; the applicant's bar enjoys being David, fighting Goliath.
Scott Wechsler, Esq: You can "turn bad to good". Where there are injuries to employees of unlicensed contractors, homeowners may have liability. Uninsured employers are subject to civil suit with presumptions of negligence and no offset for comparative negligence or negligence of a co-employee. The Uninsured Employers Benefits Trust Fund may slap liens on uninsured employers.
Skip Tescher and Mark Gearhart: Constitutional challenges are difficult, given the tendency of the California courts to credit the legislature with "plenary powers" over comp legislation. The attack on the 24-visit chiropractic cap was valiant but perhaps ill-conceived.
Art Johnson: using Labor Code 4662, it will be easier to prove permanent and total disability by analogy to enumerated conditions in 4662 than it will be to prove higher disability by using "diminished future earning capacity" to rebut the PD rating schedule. 4662 states that "....in all other cases, permanent total disability shall be determined in accordance with the fact". 4662 invites attorneys to present testimony on factual disputes over whether the worker has permanent total disability.
Assembly candidate Bill Monning: in a couple years we'll no longer have a celebrity governor who "lulled people into voting against their own economic interest".
Richie Ross: Democrats have a good shot at taking a couple of California assembly districts currently controlled by Republicans, including districts in San Diego (AD 78th), the Coachella Valley (AD 80th), the San Francisco area's East Bay and the 10th AD east of Sacramento and Stockton.
Julius Young: the recently released WCIRB report on 2007 comp results shows that applicant attorney fees were half of defense attorney fees and that fees for insurance brokers were equal to applicant and defense attorney fees combined.
Richard Jacobsmeyer: given the significance of state average weekly wage adjustments in some cases, determining earnings will be critical.
Attorneys may have more issues under the Thrifty Drug case regarding
the impact of promised future wage increases on earning capacity and TD rates.
Many themes I'll be covering in future posts. Stay tuned.
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Sunday, June 22, 2008, 11:03 AM - Understanding the CA WC systemIt's a lazy summer day. In much of the state Californians are starting their
Today, I'll be looking at the latest comp numbers.
Many industries are having to rethink their business plans as energy, ocean and rail freight, airfares and commodity prices rocket skyward.
Could the concept of travel return to the way it was in the 1920's and 1930's, where only the well-heeled did the grand tour? The far-flung sprawling suburb with its big-box retailers is not looking like a good model for the future. A further climb in the price per barrel of oil-toward $200 or $225 per barrel could put whole sectors of the economy "under water", including the cheap-import driven Costcos and Wal-Marts.
But for comp insurers in the California market, it's still "laizzez le bon
That's the gist of the WCIRB report released on Friday summarizing 2007 results for California workers comp carriers (I've included a link to the WCIRB report at the bottom of this post; for a basic summary, I'd suggest you focus on Exhibit 18.1 to the WCIRB report).
The following are my observations on figures in the report:
Carriers continue to enjoy historically low loss ratios. Total losses (which include the costs of medical treatment for injured workers as well as indemnity payments to injured workers) were at $6.995 billion, 52.8% of
The costs of administering/adjusting those claims (known as allocated and unallocated loss expense) was $1.811 billion, or 13.7% of premiums collected. Thus, the cost of administering the claims was about 26% of the benefits (medical and worker payments) distributed through the system.
But when you add in other expenses, the ratio of benefits to payments looks much worse.
Commissions and broker fees were 7.1% of premiums at $942 million (higher than the $607 million paid to defense attorneys and $306 million paid to applicant attorneys). The categories "other acquisition expenses" and "general expenses" and "premium and other taxes" came in for 2007 at $445 million, $695 million, and $352 million respectively.
Keep in mind that these carrier overhead expenses were IN ADDITION
to the allocated and unallocated loss adjustment expenses which amounted to $1.811 billion.
So lets's do the math.
All of this insurer overhead and broker commissions totaled $4.245
billion. If you divide total losses of $6.995 billion (medical treatment costs and payments to workers) by $4.245 billion (the insurer overhead and broker commissions) you find that the cost of middlemen/overhead was 60% of the benefits paid to or on behalf of injured workers.
Yes, premiums have come down (that's good for employers). Premium
(before "premium credits") was down in 2006 to $13.2 billion from $17.1 billion in 2006.
What's going on here? As the system has shrunk, the ratio of system costs to benefits paid out is increasing. And so a mandated social welfare program ends up having unacceptably high administration costs relative to benefits paid out.
Solutions? Raising worker permanent disability payouts? Capping broker fees for placing comp coverage? Very aggressively pursuing the huge amount of uninsured employers who don't pay premium (many of who hire illegals and/or fail to comply with other labor standards requirements)? A unitary comp system, with one payor (like Nevada)?
Memo to the folks at CHSWC: what's your position on these numbers?
Is it acceptable to have system costs so high relative to benefits paid out? Let's have a public debate about the numbers.
Here is the link to the WCIRB report. To get to Exhibit 18.1, scroll down a bit):
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Wednesday, June 18, 2008, 10:52 PM - Understanding the CA WC system1,000.
That's the number of QMES who have dropped out of the California workers' comp system over the past five years. Wow. My source?
Remarks by DWC Administrative Director Carrie Nevans, speaking to the CSIMS summer conference at Oakland's Claremont Hotel this past weekend.
CSIMS is the professional organization for many of California's physicians who practice industrial medicine. Some do only QME and AME evaluations. Others treat patients and do evaluations.
I was speaking to the group along with defense attorney Richard Jacobsmeyer and WCAB chairperson Joe Miller. The topic: "How to become an AME".
Looking from the podium, here's what I noticed: a graying crowd.
My assessment was confirmed in discussions with a long-term CSIMS member attending the conference. I'm glad to be proven wrong, but I'd say the average age of the CSIMs attendees was around 60.
The QME pool in California is graying.
Put that together with stats that 1,000 have dropped out. Something's gotta give.
Saturday, June 14, 2008, 10:26 AM - QME processDoc, please hold that retrospectoscope.
One thing I like about being in doctor's offices to take depositions is seeing some of the tools of the trade. Modern medical technology is amazing.
If you'd like to see some really strange futuristic tools of the trade (satirical, actually), check out this site:
http://www.freakingnews.com/Medical-Ins ... s--500.asp
In the past there have been a number of medical devices that were either ineffective or fraudulent. There's actually a Museum of Questionable Medical Devices, now located at the Science Museum of Minnesota:
Back to that retrospectoscope.
The retrospectoscope isn't like the Toftness Radiation detector, the MacGregor Rejuvenator, the Psychograph, the Micro-Dynameter, or the Relaxacisor. Actually, it's not a device.
It's more like a habit. A habit some QMES and AMES have when they write reports on injured workers.
In the typical retrospectoscope scenario, the QME or AME will be examining the worker long after the injury. The worker may still be off work on temporary disability, certified for TTD by his or her treating doctor. Or the worker may be back to work, having drawn TTD until the return to work date.
In this scenario, the QME or AME, seeing the worker downstream, undertakes to assign an earlier upstream P&S date or an earlier date at which TD should have stopped and the worker been released to work.
Using the retrospectoscope, the QME or AME may try to assign the retrospective P&S date based on what is felt to be a reasonable recuperation time for that particular type of injury. Or assign a retrospective date on some other factors, including the QME/AME's retrospective concerns about the patient's cooperation or doubts about the treating doctor's clinical judgement in certifying the worker as TTD during the period in question.
Never mind that the treating doctor kept the worker off work on TTD, sometimes even over the worker's objection. Never mind that the employer did not provide modified work consistent with work restrictions during the period. Never mind that the QME or AME did not see the worker during the period in question.
Often the QME or AME will offer these retrospective assessments even though the parties have not requested it. The QME/AME may just assume that the parties want such an assessment. Or the QME/AME may be inclined to micromanage the case.
The result: report comes out. Adjuster sends applicant a letter which says in essence: "you owe us money. Send us your check, you have been overpaid. You are P&S and we owe you nothing due to the TD overpayment".
Is this legal? No, according to Mark Borges vs. WCAB (Quality Terminals):
http://www.grayandprouty.com/articles/B ... v.WCAB.pdf
In Borges, the Court of Appeal rejected a WCAB finding that a worker was not entitled to TD benefits during a period when his treating doctor certified his TTD. The WCAB had based its finding on a defense QME report releasing the applicant to work. But there was a problem. The QME report was not signed and transmitted to the parties until months later. The court rejected an attempt to bar applicant from TD benefits based on a return to work assessment that was never transmitted to the worker.
Might there be times where the parties want the QME or AME to address retrospective TD issues? Sure. Perhaps there were earlier dueling QMEs and the parties actually want the AME to resolve a TD/P&S date issue.
And in some cases where there are disputes about separate periods of cumulative trauma, the parties may ask for P&S dates.
But docs..hold the retrospectroscope unless you're asked to use it.
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Wednesday, June 11, 2008, 10:12 PM - Political developmentsHere's the quiz of the day for you.
The worker is employed by the state of California or some other governmental entity. After conflicts on the job, the worker files a workers' comp psychiatric stress claim under California law. Eventually the state or governmental employer denies the claim, contending that the underlying events were part of a good faith personnel action.
The employee begs to differ, alleging that the events were discriminatory and not part of a good-faith personnel action. The case eventually goes to an AME or QME, who may resolve that issue. If not, it's a factual issue that gets dumped in the lap of the trial judge.
That's the common scenario.
But suppose the worker also sues in Federal court on various theories of discrimination such as race, national origin, gender, or religion. In essence, the worker claims that she was discriminated against on account of membership in a class of persons.
The worker also sues in Federal court on another theory.....the theory that government (her employer is the state, after all) has denied her "equal protection of the laws" by arbitrary, malicious, unjust and discriminatory conduct.
In our quiz example, the worker convinces the Federal District judge to allow the equal protection theory at trial. Although the jury finds no class-based discrimination (race, national origin, etc), they do come back with a plaintiff verdict of around a half million dollars. The theory? "Equal protection of the law". The person was discriminated against
as an individual, a "class of one", not because she was a woman or
member of an ethnic group.
This gets appealed. The result?
1)Hyper-liberal, ACLU friendly 9th Circuit Of the U.S. Court of Appeals
upholds the jury verdict, allowing the lawsuit. U.S. Supreme Court
upholds the verdict also, Justice Anthony Kennedy again exercising
a swing vote on a polarized court. The federal courthouse door is
2)9th Circuit panel rejects theory, overturning the verdict. U.S. Supreme
Court accepts case and gives 9th Circuit big pat on back for refusing
to extend worker discrimination lawsuits. Better stick with workers'
comp or state anti-discrimination laws.
3)9th Circuit panel endorses theory of right to sue in federal court for
discrimination in "class of one" lawsuit. The Supremes give the theory
the old heave-ho. Not going to allow the federal courts to be flooded
with personnel disputes of government employees.
The 9th Circuit decision is here:
http://www.ca9.uscourts.gov/coa/newopin ... 825727C005
Here is the June 2008 6-3 U.S Supreme Court decision, written by Chief Justice John Roberts in Engquist vs. Oregon Department of Agriculture:
I'll venture outside the comp system when there are "crossover" issues worthy of comment.
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