RESTORING THE CALIFORNIA WORKERS COMPENSATION SYSTEM: THE TIME TO ACT IS NOW!

Transcription

1 RESTORING THE CALIFORNIA WORKERS COMPENSATION SYSTEM: THE TIME TO ACT IS NOW! The California Workers Compensation system has evolved considerably since its first enactment in the years 1911 and The foundation for the California system emanated largely from the industrial revolutions which occurred in the 1900s, first in Europe and then in the United States. At that time, an awareness developed that as a cost of doing business, employers need to provide benefits to workers who sustain jobrelated injuries. The first legislative enactment was the Roseberry Act of 1911, which provided a voluntary plan of compensation. This act was followed by the Boynton Act of 1913, which replaced the voluntary plan with a compulsory plan. Employers and workers entered into an agreement whereby workers were restricted as to their routes for indemnification, and a so-called no-fault system was created i.e., a system in which the worker was not required to demonstrate that the employer was at fault for a job-related injury. The goals of these early enactments were to provide California workers: the medical care they needed to cure or relieve the effects of their injuries; adequate income during their recovery period; and economic recognition for any permanent disability or impairment remaining after their period of treatment. In 1970, the Federal Government created the Occupational Safety & Health Act, known as OSHA, which promulgated minimum rules for a safe work environment. Finally, in 1975, legislation was enacted which allowed injured workers who could no longer continue with their employment a protocol for vocational rehabilitation so they could successfully re-enter the labor market. Of great significance also was the fact an injured employee could select his/her own physician 30 days after the date of injury. In addition, this legislation established the requirement for employers to give workers notice of their Workers Compensation rights, and payments for life to workers totally disabled and unemployable as a result of a job-related injury. Additional changes were made in 1989 and 1993, with the system evolving generally in a positive direction until April In the meantime, the population of California workers has grown to nearly 10,000,000, with approximately 1,000,000 having sustained job-related injuries. On 4/19/04, Senate Bill 899 was enacted, and for the first time since the creation of Workers Compensation nearly a century earlier, benefits available to California injured workers and their families deteriorated substantially. Fortunately, as the reader is aware, Gov. Jerry Brown believes a revamping of the California Workers Compensation system is a necessity. With that in mind, it is very important that the information provided to the Assembly, Senate and Governor regarding what needs to be done to restore the California Workers Compensation system be consistent and reflect the basic concept embraced in 1911 and 1913 i.e., that job-related injuries are a cost of doing business which must be borne by employers. As a society, we must create a safe place of employment for California workers, and a meaningful vehicle for individuals who sustain job-related injuries to continue with their lives, whether through temporary or lifetime medical care; access to temporary disability in lieu of their salary; job retraining opportunities, if necessary; and compensation if they have lost their employment, or have impairment which affects their bodily functions or their earning capacity. The current system has shifted to individual private health plans expenses which should be borne by employers as a cost of doing business (or paid by the state or Federal government), and has caused many California workers to lose their health, negatively impacting not only the workers themselves, but also their families and the family unit. ATTACHED YOU WILL FIND A LIST OF AREAS WHICH ARE INADEQUATE AND REQUIRE LEGISLATIVE CHANGES TO ENSURE THE HEALTH AND ECONOMIC SAFETY OF CALIFORNIA WORKERS AND THEIR FAMILIES.

2 II I III IV WORKERS COMPENSATION PUBLIC FORUM Have you had any of these problems in your Workers Compensation case? FINDING A DOCTOR / PROBLEMS WITH LIMITED MPNs 1 I can t find a suitable doctor on the MPN. 2 I contacted the doctors on the MPN, but they won t take Workers Comp patients. 3 I want to treat with a physician outside the MPN, but it s not allowed. 4 I want to move out-of-state, but no doctor will take California Workers Comp. GETTING MEDICAL TREATMENT / UR DENIALS (Just want to get well and back to work) 1 Prescription medications. 2 Diagnostic tests MRIs, EMG studies, lab tests, etc. 3 Physical therapy, cortisone and epidural injections, etc. 4 Limit of 24 visits for PT/chiropractic/acupuncture. 5 Spinal surgery second-opinion process. TWO-YEAR LIMIT ON TEMPORARY DISABILITY BENEFITS 1 I need surgery, but I have no TD left. 2 The doctor says I m not ready to go back to work, but my benefits have ceased. PERMANENT DISABILITY / APPORTIONMENT 1 I can t do my job, but my permanent disability money is minimal. 2 I had a prior award years ago; why is this affecting my permanent disability benefits? 3 I have had multiple injuries with the same employer, and my doctor says I m 100% disabled; why am I receiving small separate awards instead of one major award? 4 Age/gender discrimination arthritis, osteoporosis, etc. V LIMITATION ON PENALTIES The adjuster just doesn t seem to care if... VI VII 1 My benefit payments are late. 2 My out-of-pocket medical treatment or mileage expense reimbursements are delayed. 3 My medical treatment is denied or delayed. VOCATIONAL REHABILITATION VOUCHERS 1 I would like to get training, but I need money for daily living expenses. 2 I can t use the voucher if it only covers tuition and books. THIRD-PARTY CREDIT I got hurt doing my job and get nothing from Workers Comp? Page 2

3 THE CALIFORNIA WORKERS COMPENSATION SYSTEM: AN OVERVIEW ON THE REFORMS NEEDED In the vast majority of cases, job-related injuries create a need for medical care. Labor Code 4600, and sections subsequent to that, set forth that California injured workers have an absolute right to receive medical care reasonably required to cure or relieve the effects of a job-related injury. Moreover, this care is to be provided at the expense of the employer not the worker s health plan, the worker s savings, or the worker s family. California injured workers have an absolute right to receive medical care... at the expense of the employer. The treatment required may include medication, surgery, chiropractic care, acupuncture, physical therapy, hospital care, nursing care and supplies (such as prosthetic devices, crutches, wheelchairs, etc.). Unfortunately, however, the enactment of SB 899 on 4/19/04 dramatically impacted workers access to medical care by delaying or removing their right to receive said care from a doctor who is pro-patient as opposed to one who has economic dependency on the carrier and/or the employer. SB 899 allows employers and carriers to create Medical Provider Networks (MPN), and injured workers are obligated to use these MPNs. This has created a catch-and-release program, because, if MPN doctors do not please the employer or carrier who utilizes them, they will be removed from the economically-rewarding opportunity of providing care within these employercontrolled networks. The implementation of utilization review (UR) is another vehicle which harms California workers and their families. Utilization review allows doctors who are not even licensed in the state of California, and/or do not reside in California, to make determinations as to the adequacy of care recommended by an injured worker s treating doctor, resulting in delay in obtaining necessary treatment. Some workers, because of their medical needs and great frustration, due to the delays or denial of access to the care they need through Workers Compensation, will instead seek it through their own private insurance or even pay for it themselves. This is contrary to one of the basic principles of Workers Compensation established in 1911 and Page 3

4 The Workers Compensation Public Forum outline on page 2 sets forth many of the common issues injured workers face in accessing medical treatment. I. FINDING A DOCTOR / PROBLEMS WITH LIMITED MPNs 1. I can t find a suitable doctor on the MPN. 2. I contacted the doctors on the MPN, but they won t take Workers Comp patients. 3. I want to treat with a physician outside the MPN, but it s not allowed. 4. I want to move out-of-state, but no doctor will take California Workers Comp. II. GETTING MEDICAL TREATMENT / UR DENIALS 1. Diagnostic tests MRIs, EMG studies, lab tests, etc. 2. Physical therapy, cortisone and epidural injections, etc. 3. Limit of 24 visits for PT/chiropractic/acupuncture. 4. Spinal surgery second-opinion process. The goal of medical treatment is to cure or relieve the effects of an injury. Some of the difficulties in accessing medical care can be avoided. By having a doctor who is a proactive patient advocate a doctor who is knowledgeable as to an injured worker s needs the worker can receive needed care promptly. The more informed worker, who has a made a proper pre-designation of a treating physician, can escape the MPN. The more informed worker, who has a made a proper predesignation of a treating physician, can escape the MPN. The goal of medical treatment to cure or relieve the effects of an injury is achievable by allowing California workers to select a doctor who does not have economic dependency upon the employer s catch-and-release program. The catch of the employer s MPN should be released by the removal of the MPN provisions. Some of the problems with MPN and UR procedures have resulted in major lawsuits. State Compensation Insurance Fund, the largest Workers Compensation carrier, paid $1,131,000 in damages to a medical group which sought admission to State Fund s preferred provider network but was denied that admission because of an arbitrary decision by State Fund s physician (Palm Medical Group v. State Compensation Insurance Fund). Page 4

5 In October 2011, Gov. Brown vetoed Assembly Bill 584 by Assemblyperson Fong which mandated that all physicians who perform utilization review be licensed as doctors by the State of California. The concept that doctors can reside outside the state and not even by licensed in California and yet their determinations can be the basis for denial of care to California injured workers also needs to be corrected. The concept that doctors can reside outside the state and not even by licensed in California and yet their determinations can be the basis for denial of care to California injured workers needs to be corrected. The second entitlement to California injured workers besides medical care is monies to compensate injured workers during the time they are unable to work because of their job-related injuries. The payment of temporary disability is only a partial payment to most workers for wages and benefits lost. The date of injury determines the appropriate rate of payment. These TD payments continue until the injured worker has recovered sufficiently to return to his/her regular or modified work, or the worker s condition has reached maximum medical improvement. Referring again to the Workers Compensation Public Forum outline on page 2, an additional issue facing workers is the limitation on temporary disability benefits: III. TWO-YEAR LIMIT ON TEMPORARY DISABILITY BENEFITS 1. I need surgery, but I have no TD left. 2. The doctor says I m not ready to go back to work, but my benefits have ceased. For injuries occurring on or after 4/19/04 but prior to 1/1/08, temporary disability payments may not extend beyond 104 weeks within two years from the date of commencement of said benefits, pursuant to Labor Code For injuries occurring on or after 1/1/08, temporary disability payments may not extend beyond 104 weeks within a five-year period from the date of injury. Page 5

6 Certain exceptions allow temporary disability benefits to be paid up to a total of 240 weeks, but these exceptions are rare. These limitations have created tremendous economic hardships for many injured workers who are weighing and measuring whether they can improve without the aggressive option of surgery. The inadequacies of temporary disability were sought to be addressed by Assemblyperson Solorio through Assembly Bill 947, which would have extended temporary disability payments up to 240 weeks in some post-surgical cases. However, this bill was vetoed by Gov. Brown, who does not want to reform Workers Compensation through a piecemeal approach. If a worker delays his/her surgery in the hope that the non-surgical approach will allow sufficient improvement, but that never occurs and the worker ultimately must proceed with surgery, there is no payment for lost wages if the 104 weeks of temporary disability payments have been exhausted. The economic and medical consequences are monumental, and some workers are forced to embrace the concept of surgery without the benefit of a less aggressive approach because of the 104-week temporary disability limitation. Some workers are forced to embrace the concept of surgery without the benefit of a less aggressive approach because of the 104-week temporary disability limitation. Additional issues addressed in the Workers Compensation Public Forum outline on page 2 concern permanent disability and apportionment: IV. PERMANENT DISABILITY / APPORTIONMENT 1. I can t do my job, but my permanent disability money is minimal. 2. I had a prior award years ago; why is this affecting my permanent disability benefits? 3. I have had multiple injuries with the same employer, and my doctor says I m 100% disabled; why am I receiving small separate awards instead of one major award? 4. Age/gender discrimination arthritis, osteoporosis, etc. Page 6

7 Permanent disability/impairment has been radically changed by the legislative embrace of the AMA Guides to the Evaluation of Permanent Disability, Fifth Edition. This applies to all injuries occurring on or after January 1, 2005, and in other cases prior to that date if certain evidence is not available. The new system mandates that either the Panel QME, Agreed Medical Evaluator or treating physician evaluate any residual disability from a worker s injury utilizing permanent impairment standards set forth by the AMA Guides. The impairment can be the loss or lost use of a body part or organ, and/or a change in the function of same. The evaluators do not view the Schedule for Rating Permanent Disability originally adopted effective January 1, 1914, which through minor amendments or changes had been the vehicle to determine permanent disability up until the mandated change to the AMA Guides in The AMA Guides are radically flawed to the point that Assemblyperson Alejo submitted Assembly Bill 1155 to prohibit apportionment that was discriminatory based on a person s race, gender or sexual orientation. In a series of cases, most significant was Ogilvie, which sets forth inadequacies under the 2005 system and forces the worker to have an additional evaluation performed if he/she is not either able to rehabilitate himself/herself to the former level of employment or return to the labor market and therefore has suffered a greater loss of earning capacity than is reflected in the current schedule. The AMA Guides are radically flawed... and the present system has tremendous inadequacies. As an example of the tremendous inadequacies of the present system, a police officer/firefighter aged 45 with a post-surgical back would have had a disability rating of 40% equivalent to a settlement value of $43, under the Schedule for Rating Permanent Disability, but now would have a rating of only 24% equal to $22, pursuant to the AMA Guides. Likewise, a UPS worker that same age would previously have had a disability rating of 35% equivalent to $36, under the old Schedule, but would now have a rating of only 20% equal to $18, according to the AMA Guides. Page 7

8 The Workers Compensation Public Forum outline on page 2 also addresses the limitation on penalties since SB 899 was enacted in 2004: V. LIMITATION ON PENALTIES 1. My benefit payments are late. 2. My out-of-pocket medical treatment or mileage expense reimbursements are delayed. 3. My medical treatment is denied or delayed. Unfortunately, penalties are necessary to force timely compliance in providing medical care, temporary disability payments, and/or payments of permanent disability. The penalties previously were strong and aggressive, thereby forcing employer compliance. However, on 1/1/04, the amended Labor Code 5814 became effective, applying to all injuries regardless of the date of injury. This watered-down version of Labor Code 5814 was enacted pursuant to Senate Bill 899, with the operative date of 6/1/04. The maximum value of penalty now is only up to $10,000 or up to 25% of the delayed or denied benefits, whichever is less. As a result, the threat of penalty no longer has the bite to prevent providers from delaying, denying or removing access to care. The threat of penalty no longer has the bite to prevent providers from delaying, denying or removing access to care, causing some California workers to make a critical error selling their access to lifetime medical care. This change has caused some California workers to become burned out in dealing with the medical provider network, utilization review and the delay in benefits, and therefore make a critical error by succumbing to the employer or carrier s solution to the problem selling their access to lifetime medical care. This demonization of the system substantially hurts California workers and their families for the remainder of the worker s life, creating an economic shift from employer responsibility to individual and family responsibility (and potentially state and Federal responsibility). Page 8

9 Penalties for non-compliance with respect to mandated care, mandated temporary disability payments and mandated permanent disability payments need to be resurrected so injured workers can return to work more rapidly and not be caught in the economic conundrum. Penalties for non-compliance with respect to mandated care, temporary disability payments and permanent disability payments need to be resurrected so injured workers can return to work more rapidly and not be caught in the economic conundrum. Vocational rehabilitation previously was a substantial benefit providing a path for injured workers to return to economic productivity. The current voucher system is not effective (see the Workers Compensation Public Forum on page 2): VI. VOCATIONAL REHABILITATION VOUCHERS 1. I would like to get training, but I need money for daily living expenses. 2. I can t use the voucher if it only covers tuition and books. As previously stated, the vocational rehabilitation system has been gutted, removed and replaced by a minimal offer of vouchers. The worker who loses the ability to continue with his/her present occupation indeed does receive some money for impairment or permanent disability, but it is de minimus in comparison to the loss of one s career. Vocational rehabilitation provided a substantial re-introduction into the labor market, preventing many people from ending up on welfare. As mentioned above, the 1975 legislation established vocational rehabilitation for injured workers who could not return to their employment. For the individuals affected, this program provided a substantial re-introduction into the labor market, preventing many people from ending up on welfare and avoiding a situation which might otherwise have produced a serious negative impact on the family unit. Page 9

10 The gutting of the vocational rehabilitation program for injuries occurring before 1/1/04 effectively occurred 1/1/09. For injuries occurring on or after 1/1/04, where the worker was unable to return to his/her occupation within 60 days after the termination of temporary disability payments, the eligibility for supplemental job displacement became the vehicle, with vouchers ranging from $4,000 to $10,000, depending on the level of permanent disability. This amount is for educational retraining or the enhancement of current skills by state-approved accredited schools. The vouchers can be used only for tuition fees and books, with an allowance of up to 10% for consultation with an expert on vocational rehabilitation as to what route to take. Assembly Bill 1145, currently pending, would limit the current job displacement voucher provisions for injuries occurring on or after 1/1/04 and before 1/1/13. For injuries occurring on or after 1/1/13, AB 1145 would expand the voucher benefit by allowing up to $6,000 regardless of the level of permanent disability to be used at the injured worker s choice not only for tuition, fees, books and other school-related expenses, but also for payment for: occupational licensing or professional certification fees and related examination fees; services of licensed placement agencies, return-to-work counseling and resume preparation; purchase of tools required for a training or educational program; purchase of computer equipment up to $1,000; and up to $500 for miscellaneous expense reimbursement with itemized documentation. Employers can escape their liability for providing supplemental job displacement vouchers under certain conditions. Employers can escape their liability for providing supplemental job displacement vouchers if within 30 days of termination of temporary disability indemnity they offer an injured employee modified work lasting at least 12 months and accommodating the employee s work restrictions. If the worker does not respond or rejects same, he/she has no entitlement to the job displacement benefit. Also, if the modified or alternative job offered within 30 days of termination of temporary disability offers wages and compensation that are within 15% of those paid to the employee at the time of injury, the worker loses entitlement to supplemental job displacement if he/she rejects the modified or alternative job. Page 10

11 As part of the evisceration that occurred with the SB 899 legislation, there was further gutting of benefits to workers pursuant to Labor Code 4658(d)(3), which allows permanent impairment or disability monies to be decreased by 15% from the date the employer makes an offer of regular, modified or alternative work which lasts for at least 12 months. This not only impacts workers access to vouchers, but also lowers their monies receivable. AMEs, QMEs AND PANEL DOCTORS The forensic evaluation as to whether a condition is or is not job-related also was radically impacted by SB 899. Previous to this enactment, both parties had the opportunity to go forward and obtain independent forensic evaluations as to whether or not an injury arose out of and in the course of employment, the need for further medical care, periods of temporary disability, and levels of impairment. The current legislation mandated that the parties either utilize an Agreed Medical Evaluator (AME), thereby compromising a full and complete review as to the above-mentioned issues, or select from a panel of three doctors randomly selected by the State of California (QME or Panel Doctor). This random selection is not actually random. Many of the doctors travel throughout the state of California so they can reap the tremendous economic rewards generated by doing panel evaluations. They embrace the catch-andrelease program, and face few consequences if they do not do a thorough investigation and review pursuant to the mandates of the Labor Code and/or the restrictions of same. Panel doctors recognize the value of currying favor with the employer, which results many times in the issuance of a report benefitting the employer. The panel system has created an opportunity for the employer to have unilateral communication with an unrepresented worker and encourage him/her to select a particular member from the panel. The employer is then privy as to the past history of the doctor, and the doctor is aware that there are no checks and balances because the worker is pro per. In addition, the doctor recognizes the value of currying favor with the employer, which results many times in the issuance of a report benefitting the employer. Page 11

12 The importance of many different factors such as the types of doctors, their locations, their understanding or lack of understanding in a given area, and the relevance of their curriculum vitae are not fully understood by the body making the panel selections. The Medical Unit employed by the State of California to make the selections is overwhelmed with work and makes random selections that have no connectivity in many situations to the uniqueness of an individual case. This encourages further development, whether it be the doctor s deposition and/or other discovery by the parties costly actions which previously were not necessary before the enactment of SB 899. Another problem is communication with AMEs and Panel Doctors. In State Farm v. WCAB, the Court issued the opinion that ex parte communication by an employee and a lien claimant with a medical examiner provided sufficient grounds for disqualification of the examiner. Additional case law has created further issues with normal communications which have occurred in the past with Agreed Medical Evaluators. If either party takes issue with the communication, the system allows the disqualification of the doctor a problem which did not occur with forensic examinations prior to SB 899. Stress claims encounter unique obstacles. Relative to psychological/psychiatric cases, the benchmark for the threshold of compensability created by Labor Code is so high that workers who develop these problems because of their job-related injuries or work environment are denied an opportunity to obtain help to allow them to re-enter the labor market and/or continue with their employment. The threshold of compensability for psychological/ psychiatric cases pursuant to Labor Code is too high and clearly needs to be revisited. The devastating consequences of this statute were cemented on 2/29/12 in a Court of Appeal decision certified for publication, County of San Bernardino v. WCAB (McCoy). In the prior proceedings, the WCAB had determined that although the good-faith personnel action doctrine pursuant to Labor Code (h) was a bar to psychiatric injury claims, McCoy was entitled to temporary disability benefits and medical care for the migraine headaches emanating from his stress. Page 12

13 However, the Court of Appeal determined that Labor Code (h) did indeed bar recovery for such physical conditions which are caused solely by the stress resulting from a good-faith personnel action. The Court of Appeal restated that the legislative intent in enacting Labor Code was to limit psychiatric claims. The artificially-high threshold of compensability for these claims has had devastating consequences on injured workers and their families, friends and co-workers and clearly needs to be revisited. THIRD-PARTY CREDIT A third party is someone other than the employer or employee. When a third party causes or contributes to an employee s injury (such as in a motor vehicle accident where the third party is at fault), and the employer has provided Workers Compensation benefits, California law provides the employer with rights to reimbursement and credit for benefits paid to the injured worker. Under the present law, the employer s reimbursement and credit rights can result in the employee receiving no Workers Compensation benefits despite having suffered a catastrophic work-related injury. Under the present law, the employer s reimbursement and credit rights can result in the employee receiving no Workers Compensation benefits despite having suffered a catastrophic work-related injury. For example: An injured worker suffers permanent brain damage in a work-related motor vehicle accident through no fault of his/her own. The injured employee s civil damages against the third party total $4,000,000, comprised of $300,000 of past medical, $200,000 of future medical, $200,000 of past wage loss, $800,000 of future wage loss, and $2,500,000 of general damages. The Workers Compensation carrier has provided benefits to the employee totaling $500,000, consisting of the following: $300,000 of past medical, $100,000 of temporary total disability, and $100,000 of permanent disability. Due to the policy limits, the injured worker only receives $500,000 from the third party. Under current law, the employer or Workers Compensation carrier would be entitled to the entire sum of $500,000 as reimbursement. Therefore, the employee s net recovery would be $0.00, despite the catastrophic injury. Page 13

14 The present law unfairly prioritizes the reimbursement and credit rights of employers to the substantial prejudice of injured employees. The reality is that few injured workers ever recover full value for their injuries in third-party cases. Legal reform is needed in third-party cases to create a system fair to both the employer and the employee. To address this inequity, where the current system is manifestly unfair and tilted to the employer, legal reform is needed to create a compensation system that is fair to both the employer and the employee. A reasonable solution would be establishment of an equitable reimbursement and credit right procedure which fairly and equitably allocates the third-party recovery between the employer and the employee. MEDICAL PRIVACY A person s medical profile is an area of privacy infinitely more intimate, more personal in quality and nature than many areas already judicially recognized and protected. (Medical Quality Assurance v. Gherardini (1979) 93 Cal. App. 3d 669, 678.) The interest in maintaining the privacy of one s mental health records is equally as compelling as protecting medical records. While protections over the privacy of these records exist under the California Constitution, the protections are not absolute. Statutory provisions attempt to strike a balance between your right to privacy and your employer s need to access medical information to evaluate your ability to perform your job. It is important to understand both the limitations and the exceptions for employer s access to an employee s medical information. These issues frequently come into play with work-related and non-work-related injuries. They can arise in the context of industrial disability claims and compelled fitness-forduty evaluations. SAFETYOFFICERATTORNEYS.COM safetyofficers.com i i LAW-1199 SCOTT O MARA, MICHAEL PADILLA, RICK PINCKARD & BRAD FIELDS NOTICE Making a false or fraudulent Workers Compensation claim is a felony subject to up to 5 years in prison or a fine of up to $50,000 or double the value of the fraud, whichever is greater, or by both imprisonment and fine. Page 14