It’s time to look at what has been happening in California workers’ compensation during the first six months of 2019.
While it has not been a particularly eventful stretch, here is my list of the Top 10 Developments in California Workers’ Comp for the first half of 2019, in no particular order:
1.The legislative debate over AB 5, defining employment status has been anxiously watched
As this post is written in early July, the fate of AB 5 (Gonzalez), is still unknown. New gig economy companies, unions, the CalChamber, the applicant attorneys and many other groups have been fiercely lobbying on the bill. Various interest groups have sought exceptions from the bill, which would codify the Dynamex Supreme Court’s ABC test as the standard for determining employment. Several WCAB panels have declined to apply the Dynamex ABC test to workers’ compensation, but if passed, AB5 would result in Dynamex being applied to California workers’ comp.
The July 2019 Senate analysis provides a good summary of some of the issues surrounding AB 5:
2. An en banc decision by the California WCAB clarified the application of the term “catastrophic” for purposes of post-2013 claims where there is permanent disability as the sequelae of an injury.
The case, Kris Wilson v. State of California Cal-Fire (2019), is important because it resolves, for now at least, a controversy about how to define the term “catastrophic”, which along with a separate “violent act” exception, is one of the criteria that allows a worker to pursue compensable consequence psyche PD claims. My blog post on the case can be found here:
SCIF has filed for reconsideration, and if they do not prevail on recon, I expect them to file a petition for writ with the Court of Appeal. Highlighting the insurance industry’s interest in this case, the California Workers Compensation Institute filed a request to file an amicus brief.
3. Allegations of bad conduct by former DIR Director Christine Baker remained in the news as the March 2019 findings of the State Auditor and an April 2019 report from the State Personnel Board were released.
As a result of the DIR handling of the matters, the SPB revoked the authority of the DIR to hold career executive assignment exams and to process civil service appointments. For the moment the DIR hiring is being supervised by the California Department of Human Resources.
Baker was quoted in the workers’ comp press as being defiant, and there has been much speculation as to whether she can remain on the Fraud Assessment Commission.
My post “More Dominoes Fall” has links to the SPB report:
4. The DIR finally arranged for treating physicians to have online access to the MTUS guidelines.
Whether this will eventually affect the volume of UR/IMR disputes is not clear, but it was long overdue to provide access for the physicians. Here is my post which outlines the details:
5. A June 2019 WCIRB report indicated that 2018 insurer expenses ($6.6 Billion) exceeded the cost of medical services paid in 2018 ($4.6 Billion) and far exceeded the amount of indemnity payments made in 2018 ($3.8 Billion).
If medical and indemnity costs for 2018 are added they come to $8.4 Billion (i.e. $4.6B for medical and $3.8B for indemnity), so insurer expenses of $6.6B are basically over three quarters of the combined expenses paid to or on behalf for California workers!
Those figures are contained in the June 28, 2019 WCIRB report, “”2018 California Workers’ Compensation Losses and Expenses”:
But employers are generally happy. According to a June 2019 WCIRB presentation, the average charged rate for 1st Q 2019 was $2.04 per $100 of payroll (versus $2.97 in 2014 and $6.02 in 2003). The advisory “pure premium” rate for 1st Q 2019 was $1.63 per $100 of payroll (versus $2.81 in 1st Q 2015 and $4.43 in 1st Q. 2003).
According to the WCIRB, medical costs have remained stable and pharmaceutical costs are at historic lows.
6. An under-the-radar attempt by the outgoing Brown Administration to make substantive changes in the Subsequent Injuries Benefit Trust Fund via obscure language in the state budget failed, as the language was removed.
7. At mid year, there were a number of significant comp-related bills in play. Not all bills that are nominally alive at mid-year are in fact likely to survive til the end of the session and get signature by the governor. But persons wanting to track current bills should note the following:
SB 537 (Hill)
At mid-year this bill had passed the California Senate and was in Assembly Insurance, with some recent amendments. According to the May 2019 Senate analysis prepared by Gideon Baum, the bill “requires medical provider networks (MPNs) to list all medical providers on a public roster, prohibits MPNs from altering medical treatment plans and medical billing codes, and prohibits any contract between a medical provider and a contracting agent, employer or insurance carrier that is less than the applicable Medicare fee schedule .”
SB 537 includes provisions that will make it easier to identify and track the small slice of medical providers whose requests are generating many of the UR/IMR disputes.
Here is a link to information about this bill:
SB 542 (Stern)
This bill would create a rebuttable presumption of injury in the case of a diagnosis of cost-traumatic stress or a mental health disorder that developed of manifests during a period in which a firefighter or peace officer is serving. The bill passed the California Senate on a 33-3 vote and at mid-year is in the Assembly Insurance Committee. Public safety unions and public entities are squaring off on this one.
SB 731 (Bradford)
This bill prohibits the consideration of race, religious creed, color, national origin, age, gender, marital status, sex, sexual identity, sexual orientation, or genetic characteristics in the development of an apportionment declaration. Essentially it would prevent apportionment to genetics such as in the City of Jackson (Rice) case.
This bill has passed the California Senate but sits in the Assembly. A link to the text and analysis of this bill can be seen here:
SB 416 (Hueso)
This bill passed the California Senate on a 26-10 vote, but remains in Assembly committee at mid-year. It would expand existing presumptions of occupational injuries to all peace officers except some whose principal duties are office or clerical. As you can guess, public safety unions are supporting and opposition is coming from public sector employers.
AB 528 (Low)
This bill would have allowed workers’ comp carriers to access the California CURES database under certain regulations that would have to be promulgated. The bill passed the California Assembly and at mid-year is in the California Senate, but recent amendments removed language that would have enabled insurers to tap into CURES.
AB 981 (Daly) and AB 25 (Chau), both aimed at dealing with the workers’ compensation system interface with the California Consumer Privacy Act of 2018.
Other pending bills, some of which may not be moved this year, included:
•AB-932 (Low) (coverage for off-duty firefighters injured in the Las Vegas mass shooting)
•AB 1107 (Chu) which was summarized in an analysis as “Creates a vehicle through which stakeholders in the workers’ compensation system might engage in discussions aimed at creating efficiencies in delivering medical care to injured workers.”
•AB-1360 (Ting) which would regulate third-party food delivery
•AB 1400 (Kamlager-Dove) requires Cal-OSHA standards for mechanics working on firefighter vehicles. An earlier version of the bill would have broadened the presumption of industrially caused cancer to certain firehouse personnel, but this was dropped from a recent amendment which now would require a study be done.
•SB 567 (Caballero) would have specified presumptions for acute hospital employees, including PTSD and musculoskeletal injuries. This bill failed an April committee vote.
•AB 346 (Cooper), expanding the number of peace officers who can take fully paid leaves due to occupational injury
8. Various possible regulatory changes remained in a state of limbo at mid-year.
Possible changes to how QMEs are compensated for record reviews and reports are still undone. A DWC forum closed in May 2018, and various stakeholder meetings have occurred, but there has been no formal DWC rule making yet.
Likewise, a DWC forum on interpreter regs closed in April 2018, but there has as yet been no formal rule making.
Meanwhile a forum on UR regs closed in January 2019 and there was an update to MTUS that became effective April 2019.
And the WCAB began the process of amending the Rules of Practice and Procedure, posting an online forum from June 2019 to early July.
9. At mid-year, 2019 was shaping up to be an uneventful year in for California workers’ comp in the appellate courts
As usual, there were many board panel decisions that may be useful to parties. For example, at the June 2019 CAAA Summer Convention, speakers cited cases dealing some of the current trending WCAB disputes, i.e. COLA calculation, apportionment, replacement QME panels, interpreter fees, ex party communications, uses of a self-procured med-legal report, issues as to the appropriate QME specialty, among others. A similar raft of panel cases were discussed at CWCI’s Case Law Seminar.
But there has been a dearth of citable appellate workers’ comp cases in the first half of 2019.
An exception was Allied Signal Aerospace v. WCAB (Wiggs), a case involving a prior agreement to a home-care evaluation. I blogged on this case as follows:
Several writs were recently granted:
•Meadowbrook v. WCAB (Velasquez) (3rd DCA) (interpreter fee dispute)
•Skelton v. WCAB (6th DCA) (eligibility for temporary partial payments for lost time where the injury is not P&S but the worker has returned to full-time employment)
10. As usual, there were a raft of notable studies about aspects of the California system. Historically, studies are often the seeds that later sprout into systemic changes.Here were some of them from the first half of 2019:
•The WCIRB report on losses and expenses in the California system:
•From the UC Berkeley Center for Labor Research:
•Problem medical provider behavior that impacts workers’ comp costs:
•From WCIRB, a report on opioids:
•From the California Orthopaedics Association, a report on telemedicine:
•From WCIRB, a presentation on the differences in workers’ comp between Northern & Southern California:
• From WOEMA (the Western Occupational & Environmental Medical Association), a study recommending changes in California’s healthcare system and integration with workers’ comp:
•From CWCI, a report on IMR decisions:
•Also from CWCI, a report on the California Formulary:
•And a report on from CWCI on drug spending:
•From the DWC, a report on Independent Bill Review (IBR):
Stay tuned. The remainder of 2019 should be interesting. As the year develops we will get a clearer view of how the Newsom Administration intends to deal with California workers’ comp.