Some people like to fool around with dummies.

Some are dummies.

Years ago I had a roommate who would put an inflatable doll in the passenger seat as he drove across the San Francisco Bay Bridge in the carpool lane. It worked for awhile, but he eventually paid a stiff price after being pulled over by the CHP.

Before that, one of my fellow college students pulled a similar trick, installing a mannequin in his seat during a college-required assembly.

But you'd think a doctor would know better than to pose as having performed work that wasn't performed.

That's what Los Angeles psychiatrist Kristine Eroshevich is now accused of having done. Eroshevich is said to have billed SCIF for work that was performed by others. Eroshevich has been in the public eye before in connection with her role as treater of Anna Nicole Smith.

The allegations-centered around misrepresentations in the QME process- are in a complaint filed against Eroshevich by the Medical Board of California. The complaint is viewable here:
http://documents.latimes.com/anna-nicol ... iscipline/

Stay tuned.

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

The Disneyland conference of CCWC wrapped up last Friday with a panel analyzing the current state of California's workers' comp system.

Moderated by CCWC lobbyist Jason Schmelzer, panelists included insurance industry exec Mark Webb and Michael Nolan of the California Workers' Compensation Institute. There speaking on behalf of doctors active in the system was Steve Cattolica of CSIMS. President-elect of CAAA Brad Chalk showed up to speak for the applicant attorneys. John Riggs of Disney, a major employer, participated, as did Sean McNally of Grimmway Farms. Rounding out the panel was retired workers' comp judge and author David O'Brien, now a defense attorney with the Floyd, Skeren firm.

Although Angie Wei of the California Labor Federation had originally been slated to join the panel, Wei (who like McNally is on the CHSWC commission) was not present.

One session wasn't enough to solve all the comp world's problems.

But I had the sense that if we could get these guys holed up for a weekend and there were a few bottles of good wine and scotch on hand, progress could have been made.

That's not to say that each of the panelists doesn't see one of the others as the ultimate scourge in the system. But at least the tone of discussion bode well for future negotiations.

The discussion jumped around quite a bit. Here are my notes summarizing (not strictly quoting and admittedly selective) a few of the more interesting observations made by some of the panelists:

Mark Webb:
It's worth looking at the Oregon system with adequate benefits and prompt medical care. Oregon focuses on return to work and helping workers get a job rather than punishing employers for not taking employees back

Mike Nolan:
Following a discussion or the relationship between rates, premiums, and combined ratios, he noted that the threat of carrier insolvency is low, and with poor returns in the bond market and property & casualty lines, "where else can they put their money?"

Brad Chalk;
Noted that PD indemnity benefits were greatly reduced. But "frictional costs" of cost containment have skyrocketed

Sean McNally:
Frictional costs are a problem. There's too much litigation. But yes, some of the prior reforms need to be improved. The system still needs to be uniform and predictable. On medical issues, dispute resolution process systems in private insurance seem to work and may be a model.
Interested in looking with Angie Wei and the Administration at whether we do some of these things in a less litigious way than in the past

Steve Cattolica:
Thinks we should be looking at the delta between what self-insureds and insureds pay to settle a claim. Points out the 300% increase in cost-containment costs. Notes that adjustment to the physician fee schedule
are not likely to have a large impact on premiums, estimating a 6-cent impact.

John Riggs:
SB 899 may have swung too far to the right. He's concerned with trends where attorneys and claimants "add in body parts that make the person sicker'.

Mike Nolan:
Changing elements in the system may have unintended consequences. The DWC and the legislature needs to decide on some policy issues like opioids, compound drugs, and medical foods.

Mark Webb:
Remember that insurance is by its nature risk transfer and risk sharing. Self-insureds may have ways of dealing with their risk via captives and excess carriers

David O'Brien
California has a terrible system and it needs reform. Many states stop paying out PD when a person is 65 or on Social Security. Some states have a "deductible"; they don't pay money out for PD at the lower PD percentages. Why are judges needed to approve settlements in cases where there is a lawyer? Judges spend too much time dealing with liens and approving settlements.

McNally:
Employers and adjusters care about workers

Chalk:
Applicant attorneys see the problem cases. If the worker's treatment is going well and things are being authorized that worker may not come to an attorney

Mike Nolan:
PD is a flashpoint, but medical costs are the cost driver. Certain segments of PD need to be enhanced, but there can be unintended consequences. There is room to enhance PD. But how much cost savings are needed? Is a 1:1 offset enough? If premiums are on the verge of rising then a 1:1 offset will not satisfy employers. There's room for political compromise. On the medical side there is stuff that regulators need to deal with, such as compound drugs and medical foods.

Sean McNally:
The medical-legal process needs revamping. Expansion of body part allegations is a problem. Perhaps dispute resolution should be taken away from the attorneys and the WCAB and managed administratively.
Almaraz-Guzman was also mentioned.

Mark Webb:
UR is sometimes a problem. Need to look at independent medical review and how it works in group medical. Perhaps it would make sense to pay higher rates to physicians if that would eliminate some of the UR disputes.Medical licensing boards need to do a better job of training and disciplining occ med doctors. HCOs are better at reducing frictional costs.

Mike Nolan:
There's room to increase PD. There needs to be focus on bringing down medical costs.

Sean McNally:
Need to rethink the system as a return to work system, not a disability system. . Not sure why employers are not using HCOs. MPNs need to look more like HCOs.

Brad Chalk:
RAND studies showed PD benefits were inadequate before the reforms. The reforms led to a 50-70% drop in PD. Against this a 16% PD adjustment is too low. Cost containment costs are the growing problem now.

John Riggs:
There needs to be a focus on safety as well. Historically, some carriers have offered safety training and evaluation to policyholders.

David O'Brien:
We should raise the threshold for proving sleep disorder claims

Brad Chalk:
Chalk fielded a comment from prominent Southern California attorney Lynn Peterson which charged that in Southern California there are a group of out of control applicant attorneys, some of whom who may be using cappers and having their ads paid for by doctor groups.
Peterson suggested that CAAA needs to find a more active way to manage those attorneys. Chalk questioned whether they were CAAA members but indicated some willingness to look into it. Someone (my notes are not clear) noted that peripheral players in the system such as unscrupulous lawyers and doctors do not have enough penalties for bad behavior.

Mike Nolan:
Lets not forget about the effect of co-morbidities in the system, as we see lots of clients with underlying diabetes and other conditions

With that, the panel ran out of time. Nothing was solved, but a number of the themes are clear, and many of the primary areas of concern were mentioned. But with labor unions not represented, an important voice was not included.

Still, it would be good to see these discussions more often. On a desert island, with some bottles of wine or scotch, who knows what might evolve?

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

As yesterday's post noted, workerscompzone is at Disneyland, site of the
premier employer-side conference on California workers' comp.

Many readers may be interested in the keynote address given by Christine Baker, Director of the California Department of Industrial Relations, at today's luncheon.

Newly appointed DWC head Rosa Moran will be reporting to Baker, the DIR head. Baker noted that Moran will be finishing up her work as a WCAB judge within the next three weeks and then assuming her duties.

To my knowledge it is the first address given by Baker since she assumed this role. Baker's input is likely to be pivotal in what happens on the legislative and regulatory front with the system.

As a disclosure, I should note that I've consulted with Ms. Baker and her staff on several projects and studies while she was at CHSWC. With years of experience in many roles in the workers' comp system, she has a firm grasp on the system's issues and the metrics behind the issues.

The conference is being covered by some excellent journalists who cover the workers' comp beat, Greg Jones of Workcompcentral (www.workcompcentral.com) and Brad Cain of the Workers' Comp Executive (www.wcexec.com). Readers can may wish to check those publications for their perspective as well.

The address was short on specifics about policy changes, but did reveal what the emphasis of the Brown Administration is likely to be in workers' comp matters.

Without my editorializing, here are summaries of some of the key points made by Ms. Baker today:

-the DIR is looking to "consolidate" and "streamline"; with money being tight they will "have to do more with less". In some instances that may mean "breaking down silos", "prioritizing" and determining "core functions". This approach will also apply to other DIR agencies including Cal-OSHA, Labor Standards Enforcement, etc.
-Permanent disability benefits can be raised by reducing excessive costs elsewhere in the system
-labor enforcement is important; they will be sampling employers with 5 or more employers and doing targeted enforcement
-there should be focus on reducing unnecessary liens and the disputes that cause them; most of the liens involve medical issues.
-with EAMS , although there is "more right than wrong", there are many problems and the plan is to implement conclusions of a recent EAMS study "where possible"; there's a need to streamline EAMS and WCIS
-the DIR acknowledges that the 2004 reforms resulted in a 50-65% reduction in PD
-the Administration is concerned that premium increases could damage the economy and therefore there is a need to reduce underlying cost drivers and "look for solid savings"
-medical benefits are the fastest growing component of California workers' comp and closing some loopholes "could save tens of millions"
-a goal should be to simplify the system where possible and the administration will weigh costs and benefits of changes. Overall, the administration seeks adequate benefits for workers and employer costs consistent with a recovering economy.
-on the WCIS (workers' comp information system), there are many gaps in WCIS data and this needs to be addressed. The DWC needs the data, the information
-fee schedules will be a focus
-the DIR's goal is to have the worker get appropriate treatment, to get the worker back to work where medically appropriate; the DIR seeks a balance, where there are adequate benefits for workers and where the costs to employers are fair. The goal is to restore the balance while restoring the California economy
-in an answer to several questions about who would be at the table in meetings with stakeholders, baker assured the group that employers would be included
-in response to concerns that many feel the AME/QME process is broken, Baker noted that the DIR would take a look at the process and requested ideas on how to fix it
-in response to a question of whether medical dispute resolution could be taken out of the WCAB and resolved in some other way, Baker mused as to whether savings could be achieved and whether labor would want to bargain with that
-noted that she had met with Governor Brown for a 3 hour strategic meeting on the California economy and that the Governor is concerned with increasing costs to employers in this economy
-in response to a question on whether the General Fund was tapping into DIR money that is "user funded", Baker said that is not the case
-in answer to a question about whether applicant attorneys have a place at the table in system negotiations, Baker noted that the two key voices are labor and management but that applicant attorneys represent workers and have a role just as insurance companies have a role.
-responding to a question on a revision of the 2005 PDRS that did not occur in 2010 as mandated by statute, Baker noted that if the DIR can't find things to offset increased costs, it might have to be done legislatively but that they don't want a "tidal wave of costs"
-asked a general question about whether the Brown Administration had decided about some of the bills making their way through the legislature, Baker did not indicate Brown's position on specific bills

Stay tuned.

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

Workerscompzone is at Disneyland, attending the California Coalition on Workers' Compensation 9th Annual Conference.

The California Coalition on Workers' Compensation has emerged as one of the principal voices for California employers on workers' comp issues.A list of attendees reads like a who's who list of key risk management personnel at many of California's largest employers, along with some public entities.

Dodging the mouseketeers and families from Peoria with kids bouncing off the walls in anticipation, I head into meeting rooms. The CCWC conference is a good place to guage employer sentiment on what's on the horizon for California workers' comp.

Leading off today were CCWC legislative Advocates Paul J. Yoder and Jason Schmelzer. Schmelzer previously was a lobbyist for the California Chamber of Commerce. Yoder and Schmelzer are currently associated with a Sacramento lobbying firm, Shaw/Yoder/Antwih.

After a lively focus on the status of the budget debate in Sacramento and the ongoing uncertainty over revising legislative districts, Yoder and Schmelzer noted that it is possible that reapportionment could give California legislative Democrats the coveted 2/3 majority in the 2012 elections.

Soon the presentation turned to bread and butter comp issues. Here are some nuggets which I found notable:

-Schmelzer noted a diagram of the workers comp system's stakeholders. The center was a circle representing employers and labor.
Four spokes extended from that center: insurance carriers, attorneys, doctors and vendors servicing the industry.

-Schmelzer noted that from the perspective of employers there are legislative "good news stories", noting 3 particular bills that might help tamp down a rise in workers' comp costs:
-AB 378 (Solorio) (a bill to control compounded medicine costs)
-AB 1168 (Pan) (a bill mandating the DWC to adopt a fee schedule
for vocational expert testimony)
-SB 863 (reform in how liens are handled). Schmelzer noted that
liens are a problem in Southern California, with employers
being "conned" by "unscrupulous doctors'

-Schmelzer noted that from an employer perspective there are some bad news stories. He cited concerns on the following:
-AB 376 (Skinner) (presumption that MRSA/blood pathogen illness
is industrial for hospital workers). Schmelzer claimed that
industrial presumptions are "government on government
violence" but assailed AB 375 as the first expansion of
presumptions against private enterprise
-AB 947 (Solorio) (bill to extend the current 104 week TD cap to
240 weeks for workers who are not MMI by 104 weeks.
Schmelzer noted that "because of costs to the state" that
there is a chance to hold the bill in the appropriations
committee. Otherwise, he pledged to seek a veto by Brown.
-AB 1155 (Alejo) (eliminating discrimination in apportionment)
Schmelzer charged that the real impact of the bill is to reopen
settled litigation on apportionment. He noted that it is a
"politically sensitive bill".

-Yoder and Schmelzer noted a recurrent workers' comp cycle that goes like this:
1. Balance
2. Slippage
3. Imbalance
4. Political tension
5. Correction

-The discussion moved toward an assessment of where things stand.
Injured workers and attorneys are concerned with the reduction in permanent disability under the PD schedule and want an increase. They are also concerned with TD cap limits, MPNs and cost management tools.Employers are concerned with increasing costs. "Politics and disagreements" have held up large increases, but premium increases are coming.

-The solution from the employer perspective? Schmelzer noted that the solution is "increased benefits and reduced frictional costs". A PD increase could be financed through a comprehensive package that cuts frictional costs. But Schmelzer warned that from the employer perspective the savings would have to be higher than the benefit increase, also benefiting employers who seek to control workers' comp costs. According to him "the money is there in the system".

It's interesting food for thought for the new AD Rosa Moran and various stakeholders to consider.

Stay tuned.

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

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Rosa Moran has been appointed by Governor Jerry Brown to be the Administrative Director of the California Division of Workers' Compensation.
Moran is currently a workers' compensation judge in Oakland, a position she has held for 6 years.
The AD post has now been filled after a long process of interviews, background checks and lobbying among various system stakeholders.
I expect that many of the other prominent candidates for the AD job will land positions in the system which will allow them to continue to contribute to both the welfare of California's workers and the health of the industry.
Moran will be working at the Department of Industrial Relations, headed by Christine Baker, formerly the director of the California Commission on Health, Safety and Workers Compensation.
Moran, a Filipina, is known for being thorough and inclusive. With years as a practicing applicant attorney before her appointment as a workers' compensation judge, Moran has a broad perspective which will likely serve her well in the post.

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