http://workerscompzone.com/index.php Copyright 2010, julius@workerscompzone.com julius@workerscompzone.com en-US SPHPBLOG 0.4.8 http://workerscompzone.com/index.php?entry=entry100729-180939
The California Supreme Court has agreed to hear the legality of last year's furloughs. But that case will not be decided for some time.

With efforts to reduce state worker pay to minimum wage levels tied up in Sacramento County Superior Court and with the state budget negotiations at an impasse, Schwarzenegger has reverted to state worker furloughs.

This time SCIF employees will be exempted. Also to be exempted are employees of some agencies that bring in money, like the Franchise tax Board. And some workers who recently agreed to contract concessions
in bargaining are excluded from furloughs.

Noticeably absent from those exempted are employees of the Department of Industrial Relations, including employees of the California Division of Workers' Compensation. Yet again the Governor has refused to acknowledge that employer assessments supposedly create a user funded system.

In January 2010 the Legislative Analyst Office (LAO) questioned salary reductions of state personnel funded through targeted and user funded mechanisms. The LAO noted that "the administration has not put forth a credible rationale" why reductions should be extended to personnel expenses funded by special funds, federal funds or other non-governmental funds".

A bill was introduced to address this issue. SBX8 29, carried by California Senate Pro Tem Darrell Steinberg, proposed to exempt employees funded at least 95% by sources other than the General Fund. The bill was vetoed by the Governor:
http://www.leginfo.ca.gov/cgi-bin/postq ... =steinberg

So unless there's a quick budget agreement, it's likely we'll be back to furloughs soon. Despite court battles over their legality, no court order was able to stop the furloughs during the 2009 budget cycle.

Most DWC personnel prefer the furloughs to pay cuts. At least they can use the time off.

I was told by several DWC employees that they made up in overtime pay what they would have been paid but for the furloughs. So some employees may do OK.

Some attorneys have told me that they have coped with the furlough days be scheduling depositions, informal settlement conferences and mediations on furlough blackout days.

But the undeniable effect of the furloughs is that the doors of the hosue of justice are blacked out three days per month. Trial time is reduced, and the wait for getting a case on calendar will be longer.

All of this in a user funded system....

Here's a link to a post I did, "Assessing Assessments", which quotes extensively from a piece done by David DePaulo, publisher of Workcompentral.....In trenchant comments, DePaulo rails against the disconnect between large increases in assessments and furloughs...
Check it out:
http://www.workerscompzone.com/index.ph ... 129-222117

Stay tuned.

Julius Young
www.boxerlaw.com]]> Political developments http://workerscompzone.com/index.php?entry=entry100729-180939 julius@workerscompzone.com Fri, 30 Jul 2010 01:09:39 GMT http://workerscompzone.com/index.php?entry=entry100727-221908
Many of us have more interest in the ice cream flavors at the shop down the road than we do in what workers' comp cases are up on a writ or when that think tank is releasing another study.

Gotta hand it to California. We are cutting edge here. My favorite local shop in Berkeley is now into herbal and spice based ice creams. Allspice. Lemon Thyme. Bay Leaf.

But if you're reading this space instead of Wiki-leaked documents about treacherous Pakistani double dealing, you must be hard core.

And so you'll want to know that Joe Matthews sees another workers' comp reform coming.

Mathews is an astute observer. Those who never read his history of the Schwarzenegger recall of Gray Davis might want to pick up a copy. That's "The People's Machine: Arnold Schwarzenegger and the Rise of Blockbuster Democracy":
http://www.amazon.com/Peoples-Machine-S ... 1586482726

After all, you should know a little history. Who were the carrot people, after all? They are still very much around.

Mathews, a former L.A. Times reporter, is now a senior fellow at the New America Foundation and the author of "California Crackup: How Reform Broke the Golden State and How We Can Fix It".

Mathews notes that there are four major legs to the workers' comp table.

Employers are one leg, of course. Insurers are another. Medical providers are a third leg. Labor and the attorneys who represent workers are a fourth leg.

Mathews observes that six years after the 2004 reforms:
"the aggrieved parties are injured workers and medical providers who have found it difficult to get paid."

Continuing, Matthews claims that :
"they have a third leg of the four- legged stool joining them; insurers have seen a big decline in their premiums (for reasons that are disputed). Only businesses remain happy."

Since I started doing the blog I've had a number of employer lobbyists assure me that employers and insurers were joined at the hip, happy with the reforms and in constant contact.

That embrace may be starting to sour a bit.

Stay tuned.

Soon I''ll be posting about the Top 10 Developments in California Comp in the 1st half of 2010. I'll also be covering the 6th District Court of Appeal Decision in Guzman which will likely be coming down shortly.
And I'll be making an announcement about a major new project I'm involved in.

Here's a link to the Joe Mathews piece:
http://www.nbclosangeles.com/blogs/prop ... 75014.html

Julius Young
www.boxerlaw.com



]]> Political developments http://workerscompzone.com/index.php?entry=entry100727-221908 julius@workerscompzone.com Wed, 28 Jul 2010 05:19:08 GMT http://workerscompzone.com/index.php?entry=entry100721-210002
That's the title of a piece released today by Dan Walters, veteran political columnist of the Sacramento Bee.

Walters is widely admired in Sacramento and other political circles for his decades of experience as observer of the California scene.

Among the points made by Walters:
-in 2006, insurers earned nearly 27% on employer paid premiums of $17.3 billion
-premiums dropped to $9.1 billion in 2009

Walters essentially notes what I've been saying for some time.

Insurers reaped record profits in the early years after the 2003 & 2004 California comp reforms. Benefits paid to or on behalf of workers during those early years were a pitiful percentage of premium paid by employers.

Then came the housing crisis, the fall of Bear Stearns and Lehman and AIG, the tanking of the economy, and soaring unemployment.

As premium has declined (in large part because of a weak economy), costs have risen, especially medical costs.

In a number of other posts I've noted that cost containment and overhead expenses have risen sharply as a percentage of premium written.

So there's been less margin, leading the Schwarzenegger DWC to refuse to comply with the statutory mandate to revise the permanent disability rating schedule to increase benefits.

Meanwhile, benefits for workers with permanent disabilities were cut.
Using figures from a WCIRB 2008 Legislative Monitoring report, intended statutory reductions in permanent disability reduced permanent partial disability payments by $600 million. This included reductions due to changes in the law of "apportionment", PD reductions for a "return-to-work adjustment", and reductions in the number of weeks of disability paid out for many injuries.

Moreover, worker attorneys charge that PD benefits have been effectively cut by the 2005 permanent disability rating schedule and the refusal to amend the PDRS.

But as time went on, industry profits have been squeezed.

Citing the recent report from the Workers' Compensation Insurance Rating Bureau, Walters notes that "...insurers lost $1.5 billion on workers' compensation insurance policies last year after breaking even in 2008."

Walters acknowledges that insurers have been clamoring for rate increases. But Insurance Commissioner Poizner refused to recommend rate increases, and most insurers have been loathe to raise rates very much. Walters notes that there will be a new Insurance Commissioner elected in 2010.

Walters predicts that the stage is set for more workers' comp battles in the future, "making it a key, if little known, aspect of the gubernatorial duel" in the current Governor's race.

The WCIRB report, "2009 California Workers' Compensation Losses and Expenses" can be found here:
https://wcirbonline.org/wcirb/resources/data_reports/pdf/2009_loss_and_expenses.pdf

Stay tuned.

Julius Young
www.boxerlaw.com]]> Understanding the CA WC system http://workerscompzone.com/index.php?entry=entry100721-210002 julius@workerscompzone.com Thu, 22 Jul 2010 04:00:02 GMT http://workerscompzone.com/index.php?entry=entry100719-224539
30% of California doctors are over 60 years old. That's well above the national average.

Six out of nine California regions now have a primary care physician shortage. Only the Bay Area, Orange County and Sacramento meet primary care access standards.

Los Angeles, the Central Coast, the Inland Empire and the San Joaquin Valley and San Diego are among the regions underserved by primary care doctors.

As the population ages, this trend is likely to increase. Expanded coverage under the Obama healthcare reforms may exacerbate physician shortages.

Meanwhile, specialists are distributed unevenly among the various California metro areas.

The stats are all in a report of the California Healthcare Foundation in a study by Craig Paxton of Cattaneo and Stroud, a healthcare consulting firm. The study has many nifty graphs and charts, comparing physician access among many metro areas.

The study is found here:
http://www.chcf.org/~/media/Files/PDF/C ... es2010.pdf

Its a study that merits close analysis by workers' comp stakeholders.
Will tomorrow's workers' comp system be struggling to attract treating doctors? Should future regulatory and legislative fixes consider the effect on attracting doctors to comp? Should there be more organized attempts to train doctors for occupational medicine?

Stay tuned.

Julius Young
www.boxerlaw.com




]]> Medical treatment under WC http://workerscompzone.com/index.php?entry=entry100719-224539 julius@workerscompzone.com Tue, 20 Jul 2010 05:45:39 GMT http://workerscompzone.com/index.php?entry=entry100715-191249
That's the deadline for comment on the latest version of the California physician fee schedule. An earlier version of of a revised physician fee schedule has been modified.

The initial proposal was supposedly "budget neutral". With this new version, costs have been added into the system, supposedly funded from cuts in spinal hardware costs and cuts in ambulatory surgical center fees.

The initial proposal followed the release of a study by the The Lewin Group on introduction of RBRVS into the California workers' comp fee schedule.
The Lewin Group study can be found here:
http://www.dir.ca.gov/dwc/RBRVSLewinRep ... rt2010.pdf

Many physicians were highly critical of the first proposed fee revision.

The DWC walks a fine line here. There is enormous pressure to find system cost savings. Medical costs have been increasing significantly (along with loss control costs). Unless medical costs are under control, it's hard to see how indemnity benefits will be brought to adequate levels.

But there needs to also be attention to keeping doctors in the system.
My recent post, "To Treat of Not to Treat", examined this from the perspective of some of the doctors. The question raised was whether it was worth it for doctors to take workers' comp cases:
http://www.workerscompzone.com/index.ph ... 707-091110

The comment forum on the revision to the fee schedule is open til July 20th:
http://www.dir.ca.gov/dwc/DWCWCABForum/ ... hedule.htm

Here is a link to the comments posted so far (note: the DWC often takes down these links after the comment period expires):
http://www.dir.ca.gov/dwc/ForumDocs/Phy ... mments.pdf

Among the comments so far, comments from neurologists and physical medicine doctors are particularly notable. The commenting doctors note that reimbursements for diagnostic procedures such as EMG/NCV testing would be substantially reduced. This would lead to an exodus of neurologists from the comp system, they predict.

As reimbursement schedules are adjusted, someone's ox is likely to get gored. But these changes can substantially affect worker access to treatment.

That's why it's good for doctors to give their input now, up front.

Stay tuned.

Julius Young
www.boxerlaw.com]]> Medical treatment under WC http://workerscompzone.com/index.php?entry=entry100715-191249 julius@workerscompzone.com Fri, 16 Jul 2010 02:12:49 GMT http://workerscompzone.com/index.php?entry=entry100714-222411
Not literally, of course, but Oakland, site of my Boxer & Gerson office, really is the heart of the Bay Area. It's where the burbs of CoCo County meet, where the North Bay begins to transition into the South Bay.

Reputedly a place where there is "no there there", its a place where many different ethnic enclaves intermingle, a place of mean streets, hipsters in lofts, hillside architectural gems, and more good restaurants on one mile (College Avenue) than in some whole upper middle class counties in the Golden State.

Oakland is also home to many of the key players in workers' comp.

The Callifornia Workers' Compensation Institute, an insurance industry organization, is headquartered here. The WCIRB (Workers Compensation Insurance Rating Bureau) is here. The Division of Workers' Compensation has administrative offices in Oakland. The Commission on Health, Safety and Workers' Compensation is headquartered here. Non-profits dealing with worker safety, such as Worksafe, are sited here. And of course, the WCAB has a large district office in Oakland.

Federal deficit commission members Erskine Bowles and former Senator Alan Simpson have noted that the United States has cancer; a cancer of debt that could destroy our economy and way of life as we know it.

But if the country has cancer, so does Oakland.

The Oakland City Council has given pink slips to 80 police, about 10% of the force. With the city out of money and facing huge shortfalls, cops agreed to contribute more to pensions if they were promised job security. Rather than make cuts in libraries and some other services, the Council has decided to issue the layoff notices. Without passage of higher taxes, cuts could be deeper next year.

It's ironic that this comes after a second round of downtown violence following protests over the BART officer shooting of a young African American male.

Our office, like most in downtown Oakland, emptied out early last week as word arrived that the jury verdict in the Oscar Grant shooting would be forthcoming within the hour.

At least four depositions set of clients with Boxer & Gerson clients were immediately canceled as court reporters waited in our lobby for the lawyers to arrive. As streams of workers left downtown, police were gathering around our building and around the sites of many of the other workers' comp offices.

After several hours of peaceful speeches and protests, some looting ensued. It appears that some of the damage was led by anarchists and
graffiti spraying protesters. Of course, black owned businesses were not spared from the damage.

If you've seen a TV screen in the past week you probably know most of that.

But it's disconcerting to see the heart of the Bay Area on economic life support.

Many of us in the "comp community" like Oakland. We may live here, or we come here to work and get used to its gritty charms and its fab weather.

I'll bring you more on this story from time to time.

Julius Young
www.boxerlaw.com



]]> Political developments http://workerscompzone.com/index.php?entry=entry100714-222411 julius@workerscompzone.com Thu, 15 Jul 2010 05:24:11 GMT http://workerscompzone.com/index.php?entry=entry100712-205918
Not so. The margin between Salas and Vargas was not more than a few hundred votes. As some slow returns filtered in, Vargas took a small lead.
There were over 12,000 Riverside County ballots that had not been tallied.

With those ballots in, Vargas had a 22 vote lead. Vargas declared victory today in the primary. The 50th stretches across parts of San Diego, Imperial and Riverside Counties. The winner of a Democratic primary in the district is basically assured of election in November.

There's word tonight that Salas has requested a recount.

This is a bitter battle that has attracted major interest from various California interest groups. Vargas attracted large amounts of cash from insurance interests and tort reform groups.

Millions, actually.

Salas was backed by applicant attorneys, trial lawyers and most unions. I'm aware of only one union backing Vargas, AFSCME.

Although I cover some of the legislative background from time to time, you, dear reader, may be wondering why the fascination with this race.

Consider the picture. Business interests smell blood.

They seek a more receptive audience in the legislature if there is a Brown administration. The goal will be to find some Democratic votes to block legislation.

And if Whitman is elected, those interests seek Democratic friends who will join with Republican minorities to move legislation.

Holding onto Democratic California Senate seats is not a forgone conclusion.

State Senator Dean Florez is termed out. Kern County Supervisor Michael Rubio is seeking to replace him, but issues have arisen regarding whether Rubio resides in the district.

In a coastal counties district, State Senator John Laird survived to fight another day in a runoff, but faces a tough race against the GOP's Sam Blakeslee. The runoff is scheduled for August.

It's all inside the beltway River City stuff that many readers may find as interesting as watching paint dry.

But there's a reason why people who do care are pouring millions into these races. They matter.

Politics is sometimes played as a blood sport. These races are prime examples.

Stay tuned for my piece on the Top 10 developments in California workers' comp in the first half of 2010.

Julius Young
www.boxerlaw.com]]> Political developments http://workerscompzone.com/index.php?entry=entry100712-205918 julius@workerscompzone.com Tue, 13 Jul 2010 03:59:18 GMT http://workerscompzone.com/index.php?entry=entry100708-090447
But we are in modern times. We have dueling lawsuits.

This time it's Arnold Schwarzenegger versus State Controller John Chiang.

Schwarzeneger has filed to get a court order to force Chiang to cut state woker pay to minimum wage levels while the state has no budget. Chiang has filed his own action, seeking to throw out the order to cut salaries that was sent to him from Schwarzenegger's Department of Personnel Administration.

Here's more on the Chiang lawsuit in a piece by Wyatt Buchanan from the San Francisco Chronicle:
http://www.sfgate.com/cgi-bin/article.c ... &tsp=1

It's a duel of great interest to the folks who work for DIR/DWC and the WCAB.

Stay tuned.

Julius Young
www.boxerlaw.com]]> Political developments http://workerscompzone.com/index.php?entry=entry100708-090447 julius@workerscompzone.com Thu, 08 Jul 2010 16:04:47 GMT http://workerscompzone.com/index.php?entry=entry100707-091110
Yesterday's call? From doctor's group (to protect confidentiality, I'll mask any particularizing details).

The medical practice is debating whether to join an MPN and whether it wants to treat injured workers under California's workers' comp system.
The caller was seeking input from sources with knowledge about California's workers' comp system.

At first, I envisioned a need to educate the caller about issues that concern providers....utilization review....fee schedule issues....medical treatment guidelines.....lien claims.......

I quickly realized that was unnecessary. The caller already understood what was going on in those areas quite well.

The caller was really looking for something else. What's the benefit in treating workers' comp cases? Why should our doctors do it?

This physician noted that the medical group was already very busy with non-workers' comp patients. The group was a member of various HMO
groups.

Why should they take workers' comp? Was it worth getting involved in the hassles of paperwork documentation and authorization disputes?

I wondered whether their HMO contracts bound them to treat injured workers. The caller didn't think so.

I noted that with changes coming under Obamacare, healthcare reforms could affect treaters in unanticipated ways. Perhaps the doctor group wanted to diversify into workers' comp.

The caller was unmoved.

Did the doctors feel a sense of civic duty to treat some share of the state's working folks? After all, many of the doctors live in the community. The workers they would be treating serve the doctors in various capacities. I appealed to the communitarian, altruistic impulses of the caller.

The caller was unimpressed.

I tried an economic argument. Perhaps, I noted (not having stats to back up my hypothesis) if the doctors did not take comp cases, would that have a negative effect on the economics of local MRI facilities and surgicenters which may be partially owned by these doctors? Would other treating doctors refer patients to alternative surgicenters and MRI centers instead, negatively affecting the calling doctors' investments?

The caller noted that this argument could resonate with some of his partners, but might not be compelling.

As the call ended, I wondered how often this debate goes on in partnership meetings at doctors groups. Was the call just an "outlier", or was it a mainstream wake-up call showing deep dissatisfaction among doctor groups with practice in the comp system?

Julius Young
www.boxerlaw.com



]]> Medical treatment under WC http://workerscompzone.com/index.php?entry=entry100707-091110 julius@workerscompzone.com Wed, 07 Jul 2010 16:11:10 GMT http://workerscompzone.com/index.php?entry=entry100703-095633
But Chiang now has to devise a legal strategy to deal with the California Court of Appeal 3rd District decision rendered yesterday in Gilb v. Chang.
In that decision, 3rd DCA justices Rick Sims, Vance Raye and Arthur Scotland upheld a ruling by Sacramento Superior Court Judge Timothy Frawley that allows the Department of Personnel Administration to order Chiang to cut state worker wages when there is no state budget.

Here's a pdf of the ruling:
http://kqed02.streamguys.us/anon.kqed/b ... DCApay.pdf

Chiang has noted that the state's computer and accounting system do not make it feasible to do the reductions that have been ordered.

The 3rd DCA opinion was rendered in connection with the 2008 Schwarzenegger order to lower state worker salaries due to the 2008 budget increase.

But in response to Chiang's claims about the computer and accounting systems the 3rd DCA noted:
"We decline to consider the feasibility issue, because it involves variables that may or may not recur in the future, depending on the content of any future pay letter by the DPA, and the state of the evidence in any future litigation. We will not speculate as to the future capabilities of the payroll system that will be in place at the time of future budget impasses. We recognize the Controller's payroll chief attested that a pending upgrade (the 21st century Project) will not solve the problems that make unfeasible compliance with the DPA's interpretation of White v. Davis. However, that does not necessarily excuse or preclude the Controller from implementing other changes to make compliance feasible."

In coming days we'll see whether Chiang appeals the 3rd DCA decision to the California Appeals Court or whether he pursues an injunction in Sacramento Superior Court against the 2010 pay cut order, or both.

Chiang has vowed to fight. It's a fight of great interest to employees of the WCAB and the Division of Workers' Compensation.

Here is Chiang's response to the order from Debbie Endsley, Director of the Department of Personnel Administration:
http://www.sco.ca.gov/Files-EO/07-02-10lettertoDPA.pdf

And here is the brief statement Chiang made on the 3rd DCA ruling, noting that it is not a simple software matter to reduce pay and then comply with wage payment timelines once a budget is enacted:
http://www.sco.ca.gov/eo_pressrel_contr ... uling.html

Here's a link to the text of the 2003 California Supreme Court ruling in White v. Davis (133 Cal.Rptr. 2d 648, 30 Cal 4th 528, 68 P.3d 74):
http://scholar.google.com/scholar_case? ... i=scholarr

Stay tuned.

In a few days I'll be doing a post of the top 10 developments in California workers' comp for the first half of 2010.

Julius Young
www.boxerlaw.com
(have an iPhone or iPad? you can create a workerscompzone.com widget/button by clicking on the cross to the left of the url box)]]> Political developments http://workerscompzone.com/index.php?entry=entry100703-095633 julius@workerscompzone.com Sat, 03 Jul 2010 16:56:33 GMT