How To Understand The New Workers Compensation Reform In California

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1 SCOTT T. FORD* CHERYL L. WALLACH* LEWIS N. LEVY** EDITH E. LEVY ANALISA SWAN DANIEL R. BARTH JAY S. SIDHRA RUSSELL E. SHUBEN Levy, Ford & Wallach ATTORNEYS AT LAW A Professional Corporation 3619 Motor Ave. Los Angeles, CA 90034S Tel (213) (818) Fax (213) SAN FERNANDO VALLEY 2520 West Olive Avenue Suite 304 Burbank, CA **Licensed to Practice in California and Nevada *Certified Specialist, Workers' Compensation Law The State Bar of California Board of Legal Specialization ABE F. LEVY ( ) SB 863 Workers Compensation Update Note: The law is constantly being interpreted by court decisions. For any questions, please feel free to contact Levy, Ford & Wallach (213) Motor Ave. Los Angeles, CA Below are the important changes that you need to know regarding SB 899 and the new SB 863 workers compensation reform. The workers compensation law is full of pit falls and traps for the unknowledgeable worker. Miss a deadline and your claim may be over. Before you are injured, know your rights!!! Temporary Disability: For injuries occurring on or after 4/19/04 through 12/31/07, SB 899 imposes a two year hard cap for temporary disability from the first date of TD time. For injuries on or after 1/1/08, the injured worker can receive TTD for 2 years within a 5 year period. 1

2 Permanent Disability: SB 899 and SB 863 require the use of American Medical Association ( AMA ) Guidelines/loss of earning capacity to determine the level of permanent disability. The general rule is that the AMA Guidelines will apply to injuries occurring on or after 1/1/05; however, there are situations in which the AMA Guidelines will be applied retroactively despite the date of injury. SB 899 allows an Award to be decreased by 15% if the injured worker returns to work for the same employer provided that the employer has 50 or more employees. The Award is increased 15% if he/she does not return to work because of the injury. For dates of injury occurring on or after 1/1/13, SB 863 increases the minimum and maximum permanent partial disability weekly benefit. However, for dates of injury on or after 1/1/13, the 15% bump-up/bump down is eliminated. Under SB 863, for all dates of injury, permanent disability advances prior to settlement are not required if the employer has offered the employee a position that pays at least 85% of pre-injury wages and compensation or if the employee has work that pays at least 100% of pre-injury wages and compensation. Labor Code Sections 4663/4664: These Code sections give employers a rebuttable presumption regarding credit for old Awards. They also provide for apportionment to pathology (i.e.: old age, degenerative changes and obesity). And these sections apply retroactively to all dates of injuries. As a result of these changes these Code sections have been, and will be in the future, the source of a significant number of Appellate Court decisions. Treatment: SB 899 limits the number of therapy sessions to 24 each for physical therapy, occupational therapy, chiropractic treatment, and acupuncture sessions. These limitations are per injury and affect injuries occurring on or after 1/1/04. SB 899 gives the employer a shield to delay or deny treatment pursuant to Utilization Review ( UR ) and American College of Occupational and Environmental Medicine ( ACOEM ) Guidelines. Warning: watch out for improper denials! SB 863 significantly changes the process for challenging Utilization Review delays or denials of treatment. SB 863 requires submission of the UR medical dispute to an Independent Medical Review ( IMR ) Organization within 30 days of service of the UR decision. The IMR process is mandatory for all cases, regardless of the date of injury, where the UR decision is communicated to the requesting physician on or after 7/1/13. The IMR Organization is designated by the Administrative Director ( AD ) for the State of California. The name of the reviewer is confidential. The final determination of the IMR Organization is presumed correct and the Workers Compensation Appeals Board ( WCAB ) i.e., the court/judge, cannot make a finding of medical necessity contrary to the final determination of the IMR Organization. 2

3 The WCAB can only consider an appeal of the decision by the IMR Organization in very limited circumstances showing fraud, improper bias (race, religion, sexual orientation etc.), plainly erroneous mistake of fact, conflict of interest, or that the AD acted in excess of her powers. The result is that the IMR Organization s doctor(s) who will never personally examine you and whose identity is unknown will be making extremely important decisions about whether you are entitled to medical treatment. Except in very rare circumstances, that decision cannot be appealed to any court/judge. The IMR Organization s decisions cannot be submitted to any other non-imr Organization physician for an appeal or second opinion. Pre-designation still applies as long as the treating doctor is within your health insurance plan and the doctor agrees to be your primary treating physician. Medical Provider Network: SB 899 allows an employer to create a Medical Provider Network ( MPN ). A MPN is a network of doctors chosen by the employer. Without a MPN, the employer only has 30 days of medical control, and then the injured worker can select their own physician(s). However, assuming a MPN is created, medical control is totally switched to the employer, unless the employer fails to follow certain timelines and regulations governing the MPN process. Under SB 863 either the injured worker or the defendant will be able to file for an expedited hearing with the WCAB judge on the issue of medical control. If there is a final determination by the judge that treatment outside the MPN was justified, the employer cannot later claim medical control. However, if it is determined that treatment should have been provided in the MPN and that treatment with a doctor outside of the MPN was improper, the injured worker is liable for the cost of that non-mpn treatment and is held responsible for the consequences of that treatment. Vocational Rehabilitation: For injuries occurring prior to 1/1/04, a $16, benefit still applies, but the rehabilitation plan must have been completed by 12/31/08. For dates of injuries on or after 1/1/04 through 12/31/12, there is a voucher system based upon the level of disability. The voucher ranges in value between $4, and $10, depending on the level of disability. Per SB 863, for dates of injury on or after 1/1/13, regardless of the level of disability, the voucher is set at a value of $6, Under SB 863, two new conditions apply to all vouchers issued on or after 1/1/13 regardless of the date of injury. First, all vouchers will expire two years after they are furnished to the employee or five years after the date of injury, whichever is later. Second, the employer is not liable for compensation for injuries that occur while utilizing the voucher. 3

4 Procedural Changes: SB 863 amends Labor Code Section ; this section applies to injured workers not represented by attorneys. If either the injured worker or the employer has a dispute regarding any issue in the case other than medical treatment, the employee has 10 days to submit the proper paperwork to the Administrative Director advising her that there is a dispute between the parties. For disputes pertaining to issues other than medical treatment, the employee must submit a request for an evaluation by a panel qualified medical evaluator ( PQME ). The inured worker also has to indicate which type of specialist (PQME) he/she would like to see. If the employee does not do this within 10 days, the employer can prepare the paperwork and the employer then is allowed to choose what type of specialist the injured worker needs to see. The Administrative Director then sends the injured worker a list of 3 doctors from which to choose. The employee must then select one of the doctors and make the appointment. If this is not done within 10 days from the receipt of the list of doctors, the employer can choose one of the doctors from the list and schedule the evaluation for the employee. Once the injured worker goes to one of the doctors provided by the Administrative Director the injured worker is barred from going to any other doctors to resolve the dispute. This is the case regardless of whether the injured worker eventually retains the services of an attorney. As discussed above, as of 7/1/13 all medical treatment disputes for all dates of injury will go to the IMR Organization. However, all other issues in the case will still go to a PQME, or if represented by an attorney can go to an Agreed Medical Examiner ( AME ). SB 863 modified treatment and claims for sleep disorders, sexual dysfunction and psyche (emotional complaints). For injuries occurring on or after 1/1/13, sleep disorders and sexual dysfunction arising out of a compensable physical injury cannot increase the impairment rating, but medical treatment must still be provided for these conditions. For injuries on or after 1/1/13, psychiatric disorders arising out of compensable physical injuries cannot increase the impairment rating unless the disorder is a result of a violent act, direct exposure to a significant violent act, or a catastrophic injury, but medical treatment must still be provided for such a disorder. SB 863 establishes a $120 million per year Return-to-Work Fund, to be established and administered by the Department of Industrial Relations ( DIR ). Payments from the fund will be available to injured workers whose permanent disability ratings are disproportionately low in comparison to their wage loss. Eligibility for the benefits and the specifics of how the fund will be administered are still in progress and have yet to be determined by the DIR. 4

5 Per SB 863, if your injury occurred on or after 1/1/04, your chiropractor can no longer act as your primary treating physician ( PTP ) once you have reached the 24-visit cap. You will have to designate a new, non-chiropractic PTP once the claims administrator notifies you that you have reached the cap. Penalties: Penalties for failure to provide the required benefits to the injured worker have been capped at $10, The insurance carrier will also have 90 days to correct any delay without being responsible for the $10, penalty. That means you can lose your car, your home, and your family, and then the insurance company can then fix the delay without facing any punishment. Is There Anything I Can Do? Yes!!! FIGHT BACK!!! Union stewards, members and employees must know their rights. You must consult with an attorney immediately. Whether you hire an attorney or not, you need to discuss your situation early on in your case and learn your time sensitive deadlines. You need to fight to get out of the MPN. It is difficult, but it is possible. You need to know your rights and learn the timetables. You can force the insurance company to have to deal with your timetable, not theirs. Most importantly, you need to let your elected officials know when you think that someone is being treated unfairly by the insurance company. The insurance companies are pushing for further drastic cuts. If the elected officials do not hear it from you, they will not hear it at all. The only way we can succeed in getting back some of what we lost is by letting them know the problems we are facing. If you do not know who to contact, call Levy, Ford & Wallach at (213) and we will help you send this message. 5