http://www.workerscompzone.com/index.php Copyright 2012, julius@workerscompzone.com julius@workerscompzone.com en-US SPHPBLOG 0.4.8 http://www.workerscompzone.com/index.php?entry=entry120202-220831
One of the parties requested a panel QME in psychology. The request was filed with the Medical Unit in early March 2011. No response was received, and the parties therefore requested the WCAB issue an order requiring the Medical Unit to issue a panel.

A panel was finally issued by the Medical Unit over two months from when the request was filed.

A QME was selected, but the QME was unavailable to see the worker after multiple attempts to schedule the exam.

By that time it was over four months from the original request for a psych panel. A replacement panel was requested and issued some four and a half months after the original request.

The replacement panel QME could not schedule the worker until December 2011.

Defendant requested a second replacement panel on the grounds that the first replacement panel doctor was not available to do the exam within 60 days of the issuance of the replacement panel.

The applicant went to the December 2011 appointment but was turned away, being advised that the defendant had cancelled the appointment.

A declaration of readiness was filed regarding the panel selection issue. An expedited hearing was set for February 2012.

By that time it was almost a year from the initial panel request. The Medical Unit had not yet acted on the request for a second replacement panel.

It was pointed out to the WCJ that the California Constitution entitles the injured worker to an expeditious, unencumbered remedy, and that if the Medical Unit is understaffed and burdened with technology problems such that it is not able to function within its own rules, then the remedy is to allow the parties to obtain their own QMEs.

The applicant attorney noted that this had been done in a case reported in the California Workers' Comp Reporter at 35 CWCR 185, Fabry v. ACE (OAK 326189). In that 2007 case, handled by my law partner Michael Gerson, WCJ Christopher E. Hamilton ruled that the parties were permitted to select their own QME when the DWC delays designation. The Fabry case never went up on appeal.

At the February 2012 hearing the WCJ issued the following order:

"It is my belief that the panel QME system is broken. This case needs to come to resolution and this can only be achieved if both parties have an opportunity to obtain their own QMEs."

The sad thing about this true story is that versions of it are happening again and again. A toxic mix of bureaucratic delay and rule-based gamesmanship all too frequently stymies employers and applicants.

Perhaps the WCJ is on to an elegant solution. Let the parties develop the evidentiary record without the bureaucratic intermediary.

Policymakers, take note.

Julius Young
www.boxerlaw.com]]> Understanding the CA WC system http://www.workerscompzone.com/index.php?entry=entry120202-220831 julius@workerscompzone.com Fri, 03 Feb 2012 06:08:31 GMT http://www.workerscompzone.com/index.php?entry=entry120131-221523
That's not a headline we'd expect to see, particularly given the conventional wisdom that loss ratios of California workers' comp carriers have deteriorated. The conventional wisdom is that comp carriers have seen declines in investment income and in premium volume while costs were rising.

So it was with some surprise that I see the January 31, 2012 bulletin from the California Workers' Compensation Institute. The numbers do the talking, so I'll present the results without a lot of editorializing in this post.

According to the press release:

"After declining for four years in a row, California workers' compensation insurers' return on net worth showed signs of improvement in 2010 according to new National Association of Insurance Commissioners (NAIC) data, which pegs the California insurers' 2010 return on net worth at 5.2 percent vs. 4.6 percent in 2009, moving the state's ranking from 25th to a tie for 18th out of 46 states that operate without a monopolistic state fund."

The CWCI bulletin noted that the NAIC compiles an annual report on profitability of all lines of insurance by state and by type of insurance.
According to CWCI, because the NAIC report "is the only source of complete, direct income statement data for al lines of insurance for every state, and it is produced by an objective source, the report is a useful tool for tracking the performance and profitability of different lines of insurance over time."

In 2010, California workers' comp was said to generate a 5.2% return on net worth vs 3.9% for all United States workers' comp. By comparison, all California lines of insurance generated 9.7% returns. Property and casualty lines of insurance generated 6.0% returns in 2010, only slightly higher than the California workers' comp returns.

So comp isn't the most lucrative type of insurance in California, but the results here were better in 2010 than the national average.

The 2010 Fortune rate of return for all industries was 12.7%.

The CWCI bulletin notes that:

"As an industry, California workers' compensation insurers met or exceeded the 12% standard from 2004-2007, but the market has been on a roller coaster ride since the late 1990s, and those double-digit returns in the middle of the decade followed four straight years of losses that ended when they finally moved into the black in 2003. After the 2006 peak, California insurers' returns began to trend down, dropping to a 6-year low of 4.6% in 2009, so even though the 5.2% return for 2010 was slightly below the 10 year average, it did mark the first year-over-year improvement in the rate of return in four years. Although California workers' compensation insurers' average return on net worth for 2010 was less than the returns for all lines of insurance in California and the U.S., as well as the returns for property and casualty insurers and the Fortune's Industrial and Service Sectors, it was better than the 3.9% average earned by workers' compensation insurers nationwide."

The years after the Schwarzenegger 2004 reforms were fat for the industry.
From a negative 11.5% return on net worth in 2002, returns climbed to 12.6% in 2004, 14.2% in 2005, 16.4% in 2006, and 12.1% in 2007 before settling down to lower levels.

But despite all of the California system's problems, profitability of insurers appears to have stabilized.

These results come at a time when we've learned that injured workers experienced a 58% decline in PD payouts.

It's all part of the puzzle we call workers' comp, as various stakeholders envision how possible changes in the system might fit together to create a different picture.

Stay tuned.

Julius Young
www.boxerlaw.com



]]> Understanding the CA WC system http://www.workerscompzone.com/index.php?entry=entry120131-221523 julius@workerscompzone.com Wed, 01 Feb 2012 06:15:23 GMT http://www.workerscompzone.com/index.php?entry=entry120125-182758
The sheer volume of liens has made it hard to do business in some boards, overwhelming staff and judges and causing massive calendaring problems.

This has been developing for some time, and the problem has been under study for quite a while. Possible legislative fixes have fizzled. Regulations to deal with the problem have been slow to evolve. The Schwarzenegger DWC held a "lien fiesta". Some liens have been offloaded from Los Angeles to Oxnard.

So it was with interest that I read quoted comments from DWC Administrative Director Rosa Moran on the issue. Moran spoke this week at the Employers' Fraud Task Force lunch in Commerce, Ca. The event was covered by Greg Jones, who covers the California workers' comp scene for workcompcentral.com.

Apparently the Los Angeles WCAB office has 500,000 liens. These include liens filed by providers and so-called "zombie liens" which are purchased by companies from providers.

That's not to say that all the liens are illegitimate. Liens are filed for many reasons. A carrier may cut the doctor's bill without proper justification.
A worker may have a legal basis for seeking treatment outside the MPN.
A doctor may simply find that repeated billing for services has not resulted in payment.

But it stretches credulity to believe that these problems are so much more prevalent at certain LA boards than elsewhere.

The problem has been well-documented and analyzed by CHSWC, which did a report on January 5,2011. Those wishing to read reaction to the lien report can find the public comments still posted on the CHSWC website.

The CHSWC draft recommended 28 measures to deal with the lien problem.
Although some of the measures may need some work, as a whole they are a reasonable way to address the problem.

In case you missed the CHSWC draft, here are the recommendations:

Recommendation 1: Consider reinstating a filing fee for medical and medical-legal liens. ......................
Recommendation 2: Require frequent lien filers to file their liens electronically.....................................
Recommendation 3: Prohibit filing of amended liens prior to Declaration of Readiness. ........................
Recommendation 4: Until the volume of liens is substantially reduced by other measures such as recommended in this report, equip the WCAB District Office with sufficient resources to meet workloads.......................
Recommendation 5: Adopt medical fee schedules to cover those services that are often disputed due to gaps or ambiguities in the existing fee schedules. ............
Recommendation 6: Establish an administrative system for fee schedule determinations, subject to limited judicial review...............................
Recommendation 7: The boundaries of MPN control over medical treatment should be more clearly defined to minimize the potential for disputes over rights to select medical providers. ..........
Recommendation 8: Disputes over assertions of MPN control over medical treatment should be brought to adjudication promptly. .................
Recommendation 9: Sanctions should be imposed on providers and claims administrators alike for repeated patterns of incorrectly asserting or denying the status of an authorized medical provider. .....
Recommendation10: [Withdrawn]...................
Recommendation 11: Labor Code section 4903.6 should be amended to forbid filing a medical or medical-legal lien until the bill is genuinely in dispute. .......................
Recommendation 12: Labor Code section 4903.6 and Rule 10770.5 should be amended to provide consequences for violation that can be effective deterrents to premature filings.........
Recommendation 13: Enact a statute of limitations, effective prospectively based on date of services to bar any lien unless the service is billed in accordance with regulations and the lien is filed within a defined time following that service. ............
Recommendation 14: Enact a statute of limitations to bar any lien for service, regardless of date of service, which is not filed within three years of the date of medical service............
Recommendation 15: Eliminate implied liens for medical treatment or medical-legal expenses.........
Recommendation 16: Impose automatic dismissal by operation of law for any lien which is not activated for hearing within finite time....................
Recommendation 17: Allow additional time for medical insurers to file liens for reimbursement of sums paid for covered treatment. ......................
Recommendation 18: A lien claimant should be required to disclose its relationship to the original provider of goods or services and produce documentation on demand. ...........
Recommendation 19: A lien representative should be required to provide documentation of the representative’s authority upon demand....................1
Recommendation20: [Withdrawn]...........
Recommendation 21: Payments in satisfaction or settlement of liens should be made only to the original provider of goods or services unless a bona fide assignment is documented. ........
Recommendation 22: The Administrative Director should adopt a fee schedule and ground rules for payment of copy services. .............
Recommendation 23: The Form 6, “Notice and Request for Allowance of Lien,” should be revised to identify liens for document copying services as well as the grounds for claiming the lien...........
Recommendation 24: Either regulation or statute should be adopted to clearly prescribe the events for which interpreter services are payable. ....
Recommendation 25: Either the interpreters' fee schedule should provide for apportioned billing when an interpreter serves multiple cases concurrently, or the WCAB should contract for interpreters to attend hearings and proportionately bill the defendants in each in which they participate...........
Recommendation 26: The Administrative Director should amend the fee schedule for interpreter services to promote uniformity and to make the fees generally commensurate with the fair market value of the services. ...
Recommendation 27: One or more independent organizations should be identified whose accreditation can serve as an alternative to SPB certification for medical examination and administrative hearing interpreters. ...........
Recommendation 28: The subjects of liens should be monitored, and the subjects that arise most frequently should be considered as candidates for improved guidance by the medical treatment utilization schedule and/or applicable fee schedules...............................
Recommendation 29: Liens by frequent filers that state incorrect lien type or make other material misrepresentations should be subject to substantial penalties, ranging from mandatory sanctions to dismissal with prejudice for repeat violations. ......................
Recommendation 30: Lien claimants should be required to use EAMS Uniform Assigned Names (UANs), and until UANs are assigned, lien claimants should be required to use correct legal names. ..........

There are plenty of other worthy solutions. Perhaps carriers who have not paid in full should be put on tight timelines to provide documentary justification for why they have not paid in full. Failure to do so could be deemed to establish presumptive liability.

Providers could be required to file a document with more information about how the services were requested and rendered.

But unless and until the DWC adopts some of these recommendations, proposed new regs by the WCAB are likely to the primary effort addressing the lien problem.

In her speech Moran endorsed rules which would allow the WCAB to dismiss liens which have not been pursued within a year of filing or within a year of an off-calendar order. The proposed rules would also tighten up on continuances in lien matters.

Here is a link to the proposed WCAB lien rules:
https://www.dir.ca.gov/wcab/WCABPropRegsJul2011.htm

Public comments were solicited and are viewable here:
https://www.dir.ca.gov/WCAB/ForumDocs/WCAB%20Rules%20and%20Practice%20and%20procedure/WCAB_rulesandProceduresComments.pdf

So the issue is obviously getting attention at the WCAB and the DWC.

Next step, please.

Julius Young
www.boxerlaw.com



]]> Understanding the CA WC system http://www.workerscompzone.com/index.php?entry=entry120125-182758 julius@workerscompzone.com Thu, 26 Jan 2012 02:27:58 GMT http://www.workerscompzone.com/index.php?entry=entry120122-212406
That was the question addressed in a significant new study by Frank Neuhauser, Executive Director of the UC Berkeley based Center for the Study of Social Insurance.

My last post briefly covered a presentation Neuhauser gave to last week's meeting of the California Commission on Health, Safety and Workers' Compensation.

Neuhauser's study compared permanent disability claims evaluated by the DEU for the years 2003 and 2004 with claims during the 1/1/2010 to 6/30/2011 period. The study notes that "By using claims from the most recent data period available (1/1/2010-6/30/2011) we are evaluating the PDRS-05 schedule after the parties have adjusted to the new schedule and include the impact of the Almaraz/Guzman/Ogilvie case law as interpreted during the period."

At the bottom of this post I've included a link to a pdf version of the study.
But let's look at some of the key findings and "do the numbers".

Average permanent disability ratings for cases with ratings of more than zero decreased overall by 31.5% (40.1% for unrepresented cases and 28.4% for represented cases). As you might expect, ratings dropped at various percentages depending on the body part involved. Neuhauser's report did not explain the phenomenon, but it is widely noted among doctors and lawyers that some of the AMA chapters are particularly strict compared to other chapters.

Average compensation for cases with ratings of more than zero decreased overall by 40.4% (51.7% for unrepresented cases and 37.2% for represented cases).

At least 25% of the cases which received a permanent disability rating of more than zero under the old rating system now are rated as "zero".

The effect of changes in the law on apportionment was to reduce the average rating for unrepresented workers by 5.3% and to reduce the average compensation for unrepresented workers by 6.2% (note: apportionment reductions might be higher in represented cases "because apportionment is more likely to be an issue in litigated cases").

The bottom line?

Neuhauser notes that :
"If one assumes the fraction of apportioned cases was the same for represented and unrepresented cases, and the average "zero" case eliminated was similar in rating to cases not eliminated, then the impact of the PDRS-05, the change in apportionment, and the case law involving Almaraz, Guzman, and Ogilvie was to reduce PD compensation by 58%".

Although Neuhauser didn't specifically say it, it is obvious that without the Almaraz/Guzman/Ogilvie cases that the overall drop in PD compensation would have been even more than 58%.

If the Brown Administration and some in the labor movement had been tempted to latch on to arguments advanced by some stakeholders that would do away with the Almaraz/Guzman and Ogilvie cases, Neuhauser's
study will make that less appealing.

A 58% reduction EVEN WITH Almaraz-Guzman and Ogilvie.

Any legislation that may cause workers to lose even more ground in permanent disability awards and payouts would seem likely to receive even higher scrutiny after the Neuhauser study.

Here's the link to the study, which is a draft posted for public comment on the CHSWC website:
https://www.dir.ca.gov/Chswc/Reports/2012/CHSWC_ImpactOfAMABasedPDSchedule.pdf

Stay tuned.

Julius Young
www.boxerlaw.com]]> Understanding the CA WC system http://www.workerscompzone.com/index.php?entry=entry120122-212406 julius@workerscompzone.com Mon, 23 Jan 2012 05:24:06 GMT http://www.workerscompzone.com/index.php?entry=entry120119-174546
I wasn't expecting him to do so. There are far bigger icebergs in the ship of state's path than comp.

But today's meeting at CHSWC (the California Commission on Safety, Health and Workers' Compensation) proved to be quite interesting.

I'll have more analysis later.

But the outstanding take away from the presentation by UC Berkeley's Frank Neuhauser was that when all is said and done, figuring in the AMA rating system, apportionment, increased amounts of workers who get zeros as well as the recent Almaraz-Guzman and Ogilvie cases, there has been a
58% decline in permanent disability compensation for workers.

Neuhauser documented that at least 25% of injuries rated under the "old schedule" recieved "zero" under the AMA rating system/2005 PD schedule.

Neuhauser noted that this was a "really dramatic reduction".

I'll have more details later. But 58% is a figure you'll be hearing quite a bit.

If there were questions about the adequacy of PD benefits even before SB 899, and if they have now fallen by 58%, how shall and can they be raised?

This study will be key as stakeholders move forward with ideas about how to raise benefits in an environment where the governor wants offsetting cost reductions.

Julius Young
www.boxerlaw.com]]> Understanding the CA WC system http://www.workerscompzone.com/index.php?entry=entry120119-174546 julius@workerscompzone.com Fri, 20 Jan 2012 01:45:46 GMT http://www.workerscompzone.com/index.php?entry=entry120118-202723
The agenda promises to be interesting:
https://www.dir.ca.gov/chswc/meetings/2012/January2012.pdf

DIR Director Christine Baker will be appearing and offering remarks.

Seth Seabury of RAND will be presenting on "Permanent Disability Ratings Under the AMA Guides".

Frank Neuhauser of UC Berkeley will be discussing "Permanent Disability Awards Under Senate Bill 899".

Previous RAND studies have been influential in systemic reforms. So many stakeholders will probably be looking with great interest at what conclusions come from RAND now.

Both RAND and Neuhauser have close ties to Baker, who headed CHSWC before Governor Brown appointed her to be Director of the Department of Industrial Relations, the umbrella agency over the California Division of Workers' Compensation.

And with the conventional wisdom being that there may be efforts to put together an omnibus comp reform package this year, the think tank studies can set the tone of the debate and influence the political agenda.

Readers wishing to attend can appear January 19 at 10am at the auditorium at the Elihu Harris State Building, 1515 Clay Street, Oakland.

I'll provide some commentary tomorrow on what I hear.

Julius Young
www.boxerlaw.com]]> Political developments http://www.workerscompzone.com/index.php?entry=entry120118-202723 julius@workerscompzone.com Thu, 19 Jan 2012 04:27:23 GMT http://www.workerscompzone.com/index.php?entry=entry120115-221937
Many of us now bank online, book our own flights, stream our movies, and read downloaded books, so tellers and travel agents and projectionists and bookstore clerks are endangered species.The telecommunications, entertainment, publishing and news gathering industries are constantly evolving in new ways.

It's all part of the structural changes in the economy-along with the shrinking domestic manufacturing sector-that has so many concerned where they and their children will fit in.

This year from time to time I intend to muse upon some of those trends and how the basic notion of work is evolving.

The conventional wisdom is that job growth will be in service sectors of the economy.

But if tech increasingly gives us tools to do things for ourselves, will tech render many of those services obsolete?

What caught my eye on this subject over the weekend was an article by Stacy Finz in the San Francisco Chronicle, "Tablet Computers Take the Wait Out of Waiting Tables".

For years there have been systems which transmit table side orders taken by the waiter to the kitchen. But the concepts are being refined and expanded.

Finz profiles the Presto tablet which is being used at Calafia Cafe in Palo Alto. Diners using the tablet can order food themselves, track their order, and pay with the tablet, even splitting checks. Diners can also play games with the tablet and can research wines.

Presumably tables would turn more quickly, and the need for waiters and waitresses would be reduced.

Some diners may be turned off. Making the dining process too mechanical may be a turn-off. After all, earlier attempts to "automate" the dining process such as 50s era "Horn and Hardart" ultimately failed:
http://en.wikipedia.org/wiki/Horn_%26_Hardart
But some customers, such as one quoted in the article may love it because they "dread human interaction".

Food service is a huge source of jobs in the economy, of course.

So are we on the verge of transition in one of the world's oldest industries?

It's not clear in this instance, but what is clear is that many "service sector" jobs previously thought to be immune to technological change may in fact be at risk in an era of smartphones, tablet computing, and rapid developments in robotics and artificial intelligence.

In such a world, how do we value work? And who gets to work, and who is not given work?

Here is a link to the article on the Presto:
http://www.sfgate.com/cgi-bin/article.c ... 4/MNQN1MOO

Stay tuned.

Julius Young
www.boxerlaw.com


]]> Political developments http://www.workerscompzone.com/index.php?entry=entry120115-221937 julius@workerscompzone.com Mon, 16 Jan 2012 06:19:37 GMT http://www.workerscompzone.com/index.php?entry=entry120111-215002
As we roll into 2012, its hard to believe that I've been doing this for over half a decade.

Some of you have asked me how I manage to do this and handle a busy workers' comp caseload.

Sometimes there's lots to write about. Think tank studies. Pending legislation. Case law developments. People in the news in workers' comp.
Emerging trends. Even though there are some terrific reporters covering the California workers' comp beat, there are often angles that don't get covered.

And I've had an occasional scoop along the way.

But sometimes things are slow. The system just kind of rolls on. We're in one of those periods, as the WCAB and the courts are in a fallow period for comp, and legislative and regulatory developments are slow to emerge.

And yet, at those moments, I'll get an inspiration, or make some connection.
That's part of the challenge and the fun of it.

What strikes me as I look back over these past 5 years?

California itself has changed. The post-Lehman brothers meltdown and ensuing mortgage debacle has left millions of Californians more uptight about their future. Nationally and locally many started to feel that the country was on the "wrong track", and respect for Congress and the California legislature dived to record lows.

Some cities declared bankruptcy. Jobs disappeared. Credit and savings dried up for many folks. Some state workers were furloughed.

The Tea Party and the Occupiers stepped into the vacuum. Anger boiled over at both ends of the political spectrum.

The Schwarzenegger era ended. Brown took over, telling us that we are in an era of limits when government must do more with less. Brown's message was (and is) that increases must be offset with savings.

Actually the workers' comp "community" of judges, lawyers, doctors and insurance company staff has managed to pull through all of this without massive layoffs or upheaval (except at SCIF).

But the system itself lives in the shadow of the greater economy. One of the recurring themes of the blog has been how the system fits into the state's larger economy. California employers are now more organized and more vocal on workers' comp costs than they had been before the millennium.
With national healthcare policy still in legal and political play, there is no real resolution about how to control healthcare costs.

Job creation and job killers are now themes that arise in almost any policy consideration, whether in comp or other arenas of California life.

Adequacy of compensation is still on the minds of many system stakeholders, but it's taken a back seat to affordability. In an era of limits, there's a lack of the "vision thing" about where the system could or should go. Even CAAA feels constrained to set forth a minimalist legislative program.

These are just a few of the background noises against which the daily workers' comp drama unfolds.

If you're reading this, thanks for inviting me into your cyberworld from time to time. My goal is to both inform and challenge you.

May the system continue to evolve in order to provide assistance to the working men and women of California.

Julius Young
www.boxerlaw.com

]]> Understanding the CA WC system http://www.workerscompzone.com/index.php?entry=entry120111-215002 julius@workerscompzone.com Thu, 12 Jan 2012 05:50:02 GMT http://www.workerscompzone.com/index.php?entry=entry120103-204205
Those who may at the end of 2012 recognize a perfect score shall hereby be entitled to a beverage at the Oakland saloon of your choice.

Here, in no particular order, are your choices, with "none" as an option for each item. In some instances there are may be more than one "correct" answer:

1. With regard to multiple current vacancies on the California Workers' Compensation Appeals Board, in 2012 Governor Brown will: a) Leave the seats vacant, thereby achieving some budgetary cost savings; b) appoint some political figures to the WCAB; c) eventually appoint experienced attorneys to the WCAB; d) appoint some non-lawyer members; e) none

2. The expanding lien problem widely perceived as plaguing the California comp system will: a) continue to grow; b) recede somewhat as the effects of expanding MPN use and the Valdez case take effect; c) be addressed by attempted regulations and legislation that are ultimately NOT adopted in 2012; d) be the subject of adopted regulations or legislation that by the end of 2012 do begin to reduce liens in comp cases; e) none

3. Regarding Obamacare and the comp system, by the end of 2012:
a) Key elements of Obamacare will have been declared unconstitutional, leaving Obamacare having no impact on workers' comp; b) Employers will continue a trend toward dropping employer-sponsored health coverage, raising fears of a spike in claims of workers desperate to get some coverage for various health maladies; c) Obamacare survives 2012 court challenges, more workers get coverage and the pressure on workers' comp systems decreases; d) Obamacare survives and it becomes apparent that increased coverage for those previously uninsured will lead to doctor shortages and access problems which may affect workers' comp; e) none

4. Up in River City at California's capitol, 2012 will be a legislative :
a) Dud, as key stakeholders shy away from efforts at any comprehensive reform, preferring the current stasis; b) Another year of minor tinkering, as in 2011; c) A tumultuous year, with several stakeholder groups unveiling a comprehensive reform package that sets off a major political war in the capitol, divisions among some labor groups and squabbles among some stakeholders; d) A historic year, with a consensus driven deal worked out among stakeholders and approved the the Governor; e) None

5. By the end of 2012, the much-criticized WCAB "EAMS" computer adjudication system will be:
a) Still under study, with little apparent change; b) Scrapped; c) Getting better, with incremental changes and adaptations; d) Modified in a major way to make it more user friendly; e)none

6. On the regulatory front, 2012 will be:
a) Very active, with the DIR taking up liens, copy service costs, physician payment rates, compound drug pricing, MPN rules, utilization review rules and QME rules; b) moderately active, with the DIR completing a couple of the issues listed in a), but holding off on some of the Schwarzenegger 12-point cost savings initiative issues; c) Inactive, with the DIR deferring to negotiations among stakeholder groups over cost-savings that might offset a benefits increase; d) Active principally only on regulatory issues mandated by statute; e) None

7.2012 will be:
a) a slow year in the courts, with few significant workers' comp decisions; b) a year in which the Ogilvie case goes back up to the WCAB and Court of Appeal; c) notable more for WCAB en banc decisions than for Court of Appeal decisions; d) a year in which conflicting Court of Appeals decisions emerged on a key workers' comp issue; e) none

8. Average workers' comp premium rates charged California employers will in 2012:
a) remain stable; b) actually decrease, as carriers bid for business in a 2012 economy that continues to struggle; c) increase somewhat, as carriers claim the need for cost increases due to increased medical cost inflation; d) increase dramatically, with carriers claiming that they need double digit increases to cover loss ratios; e) none

9. Hot issues in California workers' comp in 2012 will be:
a) what can be done to control medical costs and loss adjustment expenses in workers comp; b) whether to scrap the current QME system; c) the financial impact of the Almaraz/Guzman and Ogilvie cases on the industry; d) the underground economy and its effect on the comp system; e) none

10. California faces a long list of visible hot button issues: dueling initiatives to reform California's budget and taxation system, the solvency of the unemployment insurance fund, efforts to reform public pensions, efforts to reform the California's DREAM Act, implementation of healthcare reform, school and UC funding, the future of the Occupy movement, to name a few. At the end of 2012 we will find that:
a) workers' comp was hardly a blip on the 2012 radar: b) workers' comp joined the hot button issue camp; c) political horse trading on some issue(s)
had implications for workers' comp; d) workers' comp stakeholders were beginning to look towards the Gavin Newsom, Dave Jones and Kamala Harris era; e) none

You can e-mail your answers to me at jyoung@boxerlaw.com.

If you have predictions for significant 2012 California workers' comp events,
please share them. Confidentiality respected for those who request it.

Quiz connoisseurs may enjoy last year's quiz, "2011 California Workers' Comp Quiz":
http://workerscompzone.com/index.php?en ... 102-095809

Here is a link to the 2009 quiz:
http://workerscompzone.com/index.php?m= ... 107-115444

Stay tuned.

Julius Young
www.boxerlaw.com]]> Political developments http://www.workerscompzone.com/index.php?entry=entry120103-204205 julius@workerscompzone.com Wed, 04 Jan 2012 04:42:05 GMT http://www.workerscompzone.com/index.php?entry=entry111226-094907
1. TRANSITION FROM SCHWARZENEGGER ADMINISTRATION TO THE JERRY BROWN APPPOINTED DIR/DWC

In 2011 Brown appointees Christine Baker and Rosa Moran took the reins at the Department of Industrial Relations and the Division of Workers' Compensation respectively. Inheriting a slew of immediate problems including difficulties with EAMS, lack of staffing at some WCAB district offices, and the Medical Unit, Baker and Moran have launched some initiatives to tackle these problems, but with money in short supply, solutions may be incremental. 2011 did not see much activity on the rulemaking front, and a number of the Schwarzenegger Administration's 12-point cost saving measures remain in limbo.
At year's end it was unclear whether in 2012 the DIR/DWC will move aggressively on various systemic cost-savings issues or whether the DIR/DWC will hold back to see if stakeholders can hammer out a deal.
Several bills that Brown signed will require DWC implementation (see below).
Meanwhile, over at the WCAB, Brown appointed Commissioner Ronnie
Caplane to be the Chairperson of the WCAB, succeeding outgoing Chair Joe Miller. As Caplane became chair the WCAB had a number of empty commissioner slots, and at year's end it was not clear how quickly Brown would act to fill those slots.

2. MEAGER CHANGES FOLLOW 2011 LEGISLATIVE SESSION

Injured workers and labor advocates who hoped the Governor would sign significant legislation in 2011 remedying injustices from SB 899 were disappointed.
Brown vetoed bills that would have simplified the job retraining voucher process (AB 211) , prohibited discrimination in apportionment determinations (AB 1155) , allowed workers under specified circumstances to draw more than 104 weeks of TTD if they were recuperating from surgery (AB 947), and have required that utilization reviews be done by California doctors (AB 584).
Brown did sign bills requiring the DWC to develop a voc rehab expert fee schedule (AB 1168), requiring the DWC to develop streamlined notices
(AB 335), requiring the DWC to regulate the allowable costs of compounded medications (AB 378), and requiring proof of workers' comp coverage when renewing a contractors license (AB 397).
In casting his vetoes, Brown specifically noted that some of these changes would be approved only as part of a broader overall reform.

3. PREMIUM RATES APPEAR TO BE RELATIVELY STABLE AFTER INSURANCE COMMISSIONER AND WCIRB ADOPT NEW ADVISORY RATE METHODOLOGY

2011 was the first year in which the California Department of Insurance and the WCIRB used a new methodology to determine the advisory "pure premium rate". California Insurance Commissioner Dave Jones adopted $2.33 as an advisory pure premium rate and noted that the
"average filed pure premium rate" in early 2011 was $2.37 per $100 of payroll and the "average charge rate" was $2.38 per $100 of payroll, down from 2003 average charged rates of $6.29 per $100 of payroll.
While rate-setting changes may result in increases for some employee classifications, it appears that rates paid by employers overall have remained very stable at a time that the California economy was weak.
Also noteworthy was news by the WCIRB that the calendar loss ration for the first 9 months of 2011 had decreased from the 2010 calendar loss ratio.
For a link to a post on the topic of rate trends , see "Proof in the Pudding":
http://workerscompzone.com/index.php?m= ... 109-213717

Also adding cheer for California employers was a 28% reduction in assessments authorized by Labor Code 62.5 and 62.6. These assessments fund the Workers' Compensation Administration Fund, the UEBTF, the SIF fund, Cal-OSHA, Labor Standards enforcement and the Workers' Comp Fraud Account. According to the DIR, reduction in assessments were "acieved through fiscal controls put in place by Governor Brown".

4. TRANSITION AND TURMOIL AT STATE COMPENSATION INSURANCE FUND CONTINUES

At SCIF, transition and turmoil continued. Early in 2011 SCIF announced plans to lay off up to 1,800 workers, a move contested by SEIU Local 1000. Later in the year a severance agreement was reached between SCIF and the union that represents many SCIF employees.
Overall, staff morale at SCIF plunged to new lows as SCIF leadership made moves to trim costs and staff and close various offices.
At year's end SCIF announced a $50 million dividend for policyholders, its first since 2001.

5. WCAB VALDEZ DECISION REINFORCES TREND TOWARD INCREASING USE OF MEDICAL PROVIDER NETWORKS

A 2011 study by the California Workers Compensation Institute showed that usage of medical provider networks (MPNs) had continued to rise since 2004.
Meanwhile, an en banc ruling from the WCAB, Elayne Valdez v. Warehouse Demo Services, found that where unauthorized treatment is obtained outside a validly established and properly noticed MPN, reports from the non-MPN doctors are inadmissible, and may not be relied on.
Here is a link to my initial Valdez post:
http://workerscompzone.com/index.php?en ... 420-223325
But despite Valdez, in Southern California many applicant attorneys continue to circumvent MPNs based on carrier non-compliance with MPN regulations. A midyear seminar at the CAAA convention discussed dozens of scenarios where MPNs might be found out of regulatory compliance, enabling applicant to "take control" and choose a non-network provider. Still, at year''s end it appears that Valdez will likely trip up those applicant attorney practice models that routinely attempt to circumvent MPNs.

6. MANDATED REVISION OF PERMANENT DISABILITY SCHEDULE STILL NOT ACCOMPLISHED

By statute, California's permanent disability rating schedule is supposed to be revised every five years. In 2010 the Schwarzenegger Administration declined to adopt a revise of the 2005 PDRS, citing the fragile California economy.
Although the DWC may now be allocating some staff resources to the issue, 2011 saw no public leadership by the DIR/DWC on the issue. Various stakeholder groups have met with the DIR/DWC to discuss possible cost savings.
At year's end it was still unclear whether the DIR/DWC would take the lead in outlining its vision of a plan for cost-savings that would fund a PD increase or whether nothing will be done until a stakeholder consensus emerges.

7. LIEN BACKLOG CONTINUES TO PLAGUE CALIFORNIA SYSTEM

Lien backlogs continued to choke the California WCAB district offices at several California boards, principally in Southern California. The issue has been studied by CHSWC staff, which presented a comprehensive report on the scope of the problem that was adopted by CHSWC in January 2011. The CHSWC report included 28 recommendations for dealing with the problem of liens.
SB 863 (Lieu), a bill to tighten limitations periods on liens, did not make it through the legislative gauntlet.
As 2011 ends it is not clear what the DIR/DWC intends to do on many of the CHWSC recommendations. Proposed rulemaking by the WCAB has not been finalized:
http://www.dir.ca.gov/WCAB/WCABPropRegsJul2011.htm

8. EMPLOYERS WIN IN COURT ON COLA ISSUE

In 2011 the California Supreme Court issued an opinion in Baker vs. WCAB (formerly known as Duncan v. WCAB and before that as the XYZZ case), handing injured workers a defeat. At issue was the proper interpretation of California's COLA statute, Labor Code 4659(c) which applies a COLA to injuries after 1/1/03 where the worker is 70% disabled or above (i.e. permanent total or eligible for a "life pension" as disabled between 70% and 99%). Here is a link to my post on the case:
http://workerscompzone.com/index.php?en ... 811-121111

9. WORKERS PREVAIL IN COURT IN OGILVIE CASE
Advocates for disabled workers scored a win at the California Court of Appeals, First District in the case of Ogilvie v. City and County of San Francisco. The issue was over whether the "adjustment factor" in the 2005 PDRS could be rebutted by vocational testimony and whether the court would uphold the formula for doing so adopted by the WCAB in its en banc Ogilvie II decision.
Under the decision by the Court of Appeals, First District, the schedule can be rebutted by showing a factual error in calculation the rating formula, by showing the omission of medical complications in the preparation of the schedule, or by demonstrating a greater loss of future earning capacity than reflected in the scheduled rating. In so holding, the Court equated the pre SB 899 standard of lack of ability to compete in the open labor market with the SB 899 standard of diminished future earning capacity.
The California Supreme Court declined to hear the case. But since the Court of Appeals, First District had remanded the case back to the WCAB for further factual determination, we may yet hear more about Ogilvie in 2012.
At year's end the meaning of the decision and methodologies permissible under Ogilvie are still subject to debate in the comp legal world.
Moreover, it is thought that advocates of reform will try to take away "the cases" (Ogilvie and Guzman) as part of a deal for a revised benefit schedule.

10. DIR CONTINUES TO FOCUS ON THE UNDERGROUND CALIFORNIA ECONOMY

As 2011 came to a close, a hearing at California's Capitol reminded observers of the huge problem known as the "underground economy".
Testimony by DIR director Christine Baker noted that out of a sample of 1,498 employers identified by EDD , over 25% were found by the Workers Compensation Insurance Rating Bureau to be lacking insurance coverage.
Baker's testimony noted that it appears that many employers are misclassifying or buying just enough coverage to stay under the radar.
Here is a link to my post on the topic:
http://workerscompzone.com/index.php?en ... 210-162217

Notable on this topic is SB 459, which will allow fines of up to $15,000 per violation for willful misclassification of an employee. Penalties of up to $25,000 can be assessed if there is a "pattern and practice" of willful misclassification of employees.

That's my list for 2011.

In a post coming soon I'll be featuring a quiz about predictions for California workers' comp in 2012. Meanwhile, here is a link to my quiz for 2011:
http://workerscompzone.com/index.php?m= ... 102-095809

To put all this in perspective, here is a link to the Top 10 Developments in California Workers Comp in 2010:
http://workerscompzone.com/index.php?m=12&y=10

The Top 10 Developments in California Workers Comp in 2009 is here:
http://workerscompzone.com/index.php?m= ... 101-104842


Julius Young
www.boxerlaw.com]]> Understanding the CA WC system http://www.workerscompzone.com/index.php?entry=entry111226-094907 julius@workerscompzone.com Mon, 26 Dec 2011 17:49:07 GMT