Labor Code 4658(d)(3)(A)

By Joseph Yrulegui

The primary focus of the California’s workers’ compensation system is to return injured workers back to work. As an incentive for this goal, the legislature enacted Labor Code 4658(d)(1-4). Labor Code 4658(d)(3)(A) states in pertinent part:

"Labor code 4658(d)(2) mandates a 15% increase of each of the remaining disability payments if an offer of regular, modified, or alternative work is not made within 60 days of the injured worker becoming permanent and stationary."

The permanent and stationary date is often determined by the med-legal report, either an AME or QME. What if the doctor finds the injured worker P&S as of the date of the examination, but the report does not arrive to the parties for several months? What if the doctor finds the injured worker P&S several months prior to the examination, making it impossible for the employer to make a timely offer of return to work within 60 days?

Is the employer liable for the 15% increase?

Luckily, a recent panel decision further clarified the issue. In Campo v. Costco Wholesale Corp, the WCAB held, "that the sixty-day period for offering work in sections 4658d2 and d3A does not begin to run until the employer has actual or constructive knowledge of the applicant’s permanent and stationary status and the applicant’s permanent work restrictions." Although the WCAB has ruled on this issue in the past, this most recent panel decision is unequivocal.

The statute begins to run when the report is received by the parties. Keeping the proof of service is pivotal. For example, if the P&S date is April 1, and report is not received by the parties until June 1, subject to proof, then the 60-day period begins to run on June 1.

However, there is a caveat. The WCAB found that the sixty-day period begins to run when the employer has actual or constructive knowledge of the P&S date. As a claims examiner, if your attorney receives the report, you could be found to have constructive knowledge of the P&S date.

Often, the attorney receives the med-legal report, and a copy is not sent to the examiner for weeks or months. It is imperative that your attorney not only forward you a copy of the report, but also note the P&S date so the examiner may begin their process of informing the employer, and making the return to work offer on a timely basis.

Promptly following the procedures set forth in Labor Code 4658 can result in significant savings for the payor. Do not miss the opportunity.


Download Table

TTD & PD Rates for Seasonal Employees

By Joseph Yrulegui

What are the indemnity rates for an employee that only works seven months out of the year? For example, what is the temporary disability rate for an employee that only works for the picking season in the Ag industry? What is the permanent disability rate?

In Signature Fruit Company v. WCAB (Ochoa), 71 Cal. Comp. Cas 1044 (2006), the Court of Appeal, Fifth District, held that pursuant to Labor Code § 4653, temporary disability during a seasonal employee's in-season period of regular employment is payable based on two-thirds of employee's in-season average weekly earnings, but the seasonal employee was not entitled to temporary disability during off-season when parties stipulated that employee did not have any off-season earnings.

First, the examiner must determine the employment history of the injured worker in the off-season. Does the IW begin another job after the end of the season in September or November? What earnings, if any, are there in the winter months? This can be accomplished by taking the deposition of the injured worker, or sending an interrogatory to the applicant’s attorney.

If there are no off-season earnings, determine the injured worker’s average weekly wage, under LC 4453, by dividing the total earnings of the in-season by the number of weeks employed during the in-season. From that amount, take two-thirds, and that will produce a TTD rate, which will often be at minimum levels. For the PD rate, divide the total earnings of the in-season by 52 weeks.

This can greatly impact the translation from an impairment rating to actual dollar figures. The difference between a minimum indemnity rate and a maximum indemnity rate, in TTD and PPD, will often be thousands of dollars and will save a significant amount of money.

Moreover, TTD will not be owed in those months the IW is not working, again, typically in the off-season. This can greatly reduce exposure in denied claims where retroactive TTD might be an issue.

If you have any questions, please feel free to contact me by phone or email.

An Alternative Strategy for Protection against Illegitimate Treating Practices

By Joseph Yrulegui, Esq.

There is no dispute that workers' compensation fraud is present throughout the California system. Most attorneys and claim examiners have likely come across at least one treater who has provided either unnecessary or questionable treatment, or even billed when no such treatment took place. Unfortunately, as is often the case, unless the attorney/claims examiner puts together a rock-solid, unbreakable case for the district attorney, no prosecution or even investigation will ever take place. So what can an employer/carrier do to combat the fraud?

One option would be for the employer/carrier to send out a simplified EOB, or explanation of benefits, to the injured worker directly. As is often the case, the injured worker usually has no idea what is being billed by the treater, or even what exact treatment was provided. If the injured worker was given a statement showing exactly what was performed, how much it cost, along with other specifics, such as the date, he/she would be able to identify fraudulent activity, especially that treatment which never took place.

When I present this to clients, typically the first objection raised is that of the scenario where a claims examiner is bombarded by three trillion phone calls every day from the injured worker. Granted, this is a justifiable concern. However, preliminary results have found this to not be the case. Most injured workers are not aware of what they are looking at, and honestly, it would take a certain type of engaged worker to make the telephone call and report fraudulent activity. If needed, one way to prevent such overwhelming number of calls would be to create a separate telephone number, a fraud "hotline," whereby an injured worker can leave detailed voice messages about the alleged fraud.

Utilizing this strategy can create transparency between the injured worker and the employer/carrier. It has been my experience that the most frustrating aspect of the claims process for the injured worker is that of misunderstanding, and their inability to determine the outcome. Sending the EOBs can give the worker some control over his claim and provide some dialogue between the examiner and the worker – not to mention the goodwill created on the part of an examiner if the worker is reporting fraudulent activity.

The promotion of communication can strengthen the ties between the worker and employer/examiner, which would only serve to facilitate a painless and manageable workers' compensation claim. This communication will also lead to greater awareness on the part of the worker as to the true costs of medical care, perhaps even providing greater incentive for the worker to report fraudulent activity.

Ultimately, one of the best results from sending the EOBs to injured workers will be the effect on the treating physician. If a treating physician knows that his treatment practices are not only being watched by the carrier, but also by the injured worker, he/she might be more hesitant to bill for treatment not provided. After all, the injured worker is the party best positioned to discover and report fraudulent activity on the part of the treating physician. Only an injured worker will be able to testify if certain treatment was performed on any given visit.

Despite the numerous benefits this practice can provide to the carrier/employer, there are downsides to its implementation. For instance, many injured workers will simply not understand what they are reading, which could lead to pointless phone calls and wasted time for the claims examiner. In the end, though, sending out the EOBs to the injured worker could prove to be an invaluable resource for carriers/employers to combat fraud. The practice would lead to transparency, increased dialogue, and further awareness, which all translate into greater goodwill between the parties. That goodwill will invariably lead to a smoother claims process, with less aggravation and more satisfaction.

If you interested in hearing more about this strategy, or would like a seminar on the possibilities, please feel free to contact Yrulegui & Roberts. We can assist any carrier, third-party administrator, self-insured, or joint-powers authority in the creation, education, and implementation of these ideas.

Thank you very much.

A First-Year Associate's Perspective on Workers' Compensation in California

By Joseph Yrulegui

It's official. The day has come and gone. I am no longer a first-year associate. No longer do I have the stigma and aura of a newbie attorney in the big, bad workers' compensation microcosm of the legal profession. Being more experienced than words can describe, with one whole year under my belt, I felt it was time to write an article! That's one WHOLE year people! 12 months. 365 days of rabid, unbridled workers' compensation experience.

But wait! What do I write about? The possibilities are endless! A whole year of substantive thought to digest in one page!? Do I attack Ogilvie? How about psyche claims? I will slice and dice these topics into a clear, coherent, and articulate article which will be read for centuries to come! After all, I've been practicing for a YEAR!

Two weeks go by......

Okay. So maybe, perhaps, quite possibly I don't know as much as I think I do. Who knew Ogilvie was so complicated? I am not going to write a substantive article this time around. But, what I can do is share some preliminary "thoughts" about the workers' compensation system in California. All useless, but "thoughts" nonetheless. So here goes.

1. Workers' compensation law is complicated. And I thought the Rule Against Perpetuities was difficult! Now, I'm not saying civil litigation is easy, because it certainly is not. But, workers' comp is not the simple, "only for those attorneys who can't do civil," area of law some people might think it is. At least civil law is fairly constant. We have to deal with an uppity legislature who decides to completely revamp the system every 5 years. Thanks Arnold.

2. Doctors are not the all-knowing, beyond reproach professionals I once thought they were. This aspect is perhaps the most shocking part of workers' compensation. Going into this practice, I held the view that doctors were practically saints, only smarter. Boy was I wrong. For some of these guys, the Hippocratic Oath has waived BYE-BYE! It has been truly appalling to discover just how shady some doctors can be. I've already seen everything from over-prescribing opiates to the point of addiction, to frivolous treatment that would make a hypochondriac say "Enough doc, I'm good!" This realization has been not only horrifying, but also a revelation.

3. My last thought might be a little mundane, or even laughable, but it is something that has somewhat changed how I perceive medical treatment. Practicing in workers' comp has led me to believe in the effectiveness of acupuncture! Now, I must follow that up with a disclaimer. Trust me. I am not someone who easily buys into the "alternative/holistic/spiritual" medicine. I am one of those people that say, "if it hurts, take a pill." Notwithstanding thought # 3, I always believed modern medicine was the only credible solution to an injury or disease. Not anymore. I have spoken with several applicants, and I have consistently discovered acupuncture was often the only treatment that worked. So, by all means, stick those needles in your body. I believe!

So, there you have it. Three thoughts that I could put down on paper and not have to worry about being sued for defamation.

All in all, I have immensely enjoyed my time serving in the workers' compensation system. I am making arguments before a judge almost every week, I've deposed over a dozen applicants, and I've built some great relationships with our clients. Granted, I have a lot to learn, but indeed I look forward to trying my best to make the lives of applicant's attorneys a living hell. Cheers!

New En banc decision from WCAB allows Defendant's more Discovery

Mendoza v. HuntingtonHospital (ADJ6820138) - 06/03/2010

By Stephen Roberts

Amelia Mendoza worked in a hospital and was bitten and scratched by an infectious disease patient. She went to the emergency room and was treated for a scratch on her left arm and discharged. Subsequently she collapsed into a coma while eating at a restaurant. She remained in a coma and was diagnosed with an intracerebral hemorrhage. Applicant's claim was denied, but her treating physician wrote reports indicating her condition was industrial. There is some dispute over when defendant received the treating doctor's report, but ultimately defendant objected to the treating doctor's opinions on causation and suggested AME's.

The case was then on calendar for a priority conference and Applicant argued the case should be set for trial on causation and that under AD Rule 30(d) (3) defendant could not obtain a panel QME report because it was not obtained before the claim was denied. Applicant also argued Defendant did not timely object to the opinions of the treator and therefore was also barred from obtaining a panel QME on those grounds.

The judge ruled that defendant had timely objected to the treating doctor's reports and that unless the parties reach an agreement on an AME then defendant may request a list of panel QME doctors on the issue of compensability. Applicant filed a Petition for Removal and the WCAB accepted the case on removal and ultimately issued an En banc decision. It is important that this is an En banc decision because that means the decision is binding on all Workers' Compensation Judges, as opposed to a three judge panel decision which is only binding in the particular case related to which it was issued. The WCAB has only issued two En banc decisions so far in 2010.

The Appeals Board addressed the validity of AD Rule 30(d)(3) when compared to Labor Code sections 4060(c) and 4062.2. They also addressed whether or not there are any time limits in Labor Code sections 4060(c) or 4062.2 which would affect defendant's right to a panel QME in this case.

Labor Code section 133 allows the Administrative Director to do all things necessary to exercise any power granted to the Division of Workers' Compensation by the California Legislature, This is what allows the Administrative Director to adopt rules ultimately found in Title 8 of the California Code of Regulations. The Administrative Director specifically is not empowered to create rules that are inconsistent or in conflict with a statute. (California Government Code section 11342.2) In this case the Workers' Compensation Judge found that AD Rule 30(d)(3) (Title 8 California Code of Regulations section 30(d)(3)) was inconsistent with Labor Code sections 4060(c) and 4062.2, and the Appeals Board agreed.

The portion of AD Rule 30 involved in this case is relatively new. Subsection (d)(3) became operative February 17, 2009. It was published in the May 2009 Supplement to the Workers' Compensation Laws of California (LexisNexis). This subsection states in relevant part that "[w]henever an injury or illness claim of an employee has been denied entirely by the [defendant], only the employee may request a panel of Qualified Medical Evaluators as provided in sections 4060(c) and 4062.2." This means that if defendant denies a claim on factual grounds and later decides that there are medical issues relevant to the issue of compensability, defendant cannot at that point obtain a panel QME. Even more concerning would be a situation where a claim is denied based on the medical opinions of the treating physician, who later changes his opinion and indicates the claim is compensable. Applying AD Rule 30(d)(3) to that scenario would result in defendant being unable to do anything to rebut the treating doctor's medical opinion except try to convince the doctor to change the opinion.

Labor Code section 4060(c) indicates that "[i]f a medical evaluation is required to determine compensability at any time after the filing of the claim form, and the employee is represented by an attorney, a medical evaluation to determine compensability shall be obtained only by the procedure provided in section 4062.2."

Labor Code section 4062.2 then indicates, in relevant part, that either party may initiate the process of selecting an agreed medical examiner by proposing at least one doctor to the other side, in writing. If the parties cannot agree on a doctor within 10 days, then either party may request a list of panel QME's.

Nothing in Labor Code sections 4060(c) or 4062.2 prohibits the process from taking place if a claim has been denied. In fact, in referring to examinations to address the compensability of a claim, section 4060(c) refers to obtaining an evaluation under section 4062.2 "at any time after the filing of the claim form". This does not limit the availability of that process to only during the first 90 days that defendant has to decide whether to accept or deny the claim. It specifically makes the process available at "any time" after the claim form is filed. Section 4062.2 states that "either party" may request a QME panel.

The Appeals Board states "[t]herefore, when read together, sections 4060 and 4062.2 establish that "either party" may request a QME panel "at any time." As a result, Rule 30(d)(3)'s limitation that "only the employee" may request a QME panel when compensability has been denied conflicts with the language of sections 4060 and 4062.2."

Finally, Applicant argues that defendant may not obtain a report under Labor Code 4060 because it did not timely object to the opinions of the treating physician on compensability. Labor Code section 4062(a) indicates that a party has twenty days from receipt of a report to object to the opinions expressed in that report. Where Applicant's argument fails is that disputes over compensability are not covered by section 4062, and section 4062 specifically indicates it does not apply to issues of compensability. Labor Code section 4060 deals with disputes over compensability and it directs the parties to Labor Code section 4062.2. Labor Code section 4062 does not enter this process at all.

The Appeals Board found that in cases where the entire claim is denied, there is no requirement for defendant to object to any physician's reports on the issue, within any set timeframe. This does not mean that defendants should ignore appropriate opportunities to obtain a report under section 4060. If not obtained in a timely manner, in the face of a contrary medical opinion, defendant could be left without the ability to get a report if applicant files a DOR for a priority conference and convinces the judge that defendant has not acted reasonably by not obtaining a section 4060 report. Under that circumstance discovery could be closed and the case set for trial without any reliance on the now defunct Rule 30(d)(3). This decision is not permission to take all the time in the world to investigate claims.

The Appeals Board sustained the trial judge's opinion and held that AD Rule 30(d)(3) is invalid, but the case was returned to the trial level for further proceedings and decisions. Defendant will be able to obtain a panel QME to address compensability, but that does not mean the doctor will necessarily disagree with the treating physician. Ms. Mendoza may still prevail, but defendant will at least have the opportunity to receive another opinion on compensability.

You can read the decision titled Mendoza v. Huntington Hospital (ADJ6820138) – 06/03/2010, along with the other en banc decision of 2010, also issued on June 3rd, at the WCAB website linked below.

http://www.dir.ca.gov/wcab/wcab_enbanc.htm

Want to know what the applicant is really up to?

Look for her Twitter posts, or other social networking trail.

By Stephen Roberts

The applicant who you think is exaggerating her complaints may be publishing all her activities for her friends to see, and it might also be possible for you to read accounts of her trip to Disneyland or Mardi Gras. All in her own words. A recent WCAB panel decision describes allowing defendant to use applicant's posts to her Twitter account, as evidence that her activities were inconsistent with her claims that she was totally permanently disabled. Wenneker v. County of Contra Costa, et al., No. ADJ2954617, 12/17/09. Ms. Wenneker's case went to trial and she testified among other things that she did not leave her room for weeks at a time and does not socialize. After the case was submitted for decision, but before the decision issued, defendant found evidence in Ms. Wenneker's own words of activities that would seem inconsistent with her description of her activity level. She described a "wicked and wild Mardi Gras vacation" and an Academy Awards party she attended. These activities were described on Twitter and other online sites. Defendant sought to augment the trial record with the evidence of applicant's activities in her own words. The trial judge declined to allow them to add this evidence after trial, but defendant filed a Petition for Removal and the WCAB granted their request to add the information from Twitter to the record.

The decision from the WCAB discusses the basis for allowing the addition of evidence after trial, but in my eyes the most interesting part of this case is where defendant obtained the information about applicant's activities. There have been other types of cases where evidence was obtained from social networking sites such as Twitter. There is even a murder case in New York where the Twitter conversations between the victim and the person accused of murdering him are being used as evidence in the trial. As more and more people use services like Twitter, there will be more and more situations where the information contained there will be used as evidence in many types of cases. Right now no one thinks twice about hearing that telephone records were used as evidence, and we may reach that point soon as it relates to a persons online trail of their activities.

Before giving some ideas on how to dig up this information, it is probably worthwhile to describe what a social networking site is, and what it may contain. Wikipedia describes social networking as consisting "of a representation of each user (often a profile), his/her social links, and a variety of additional services. Most social network services are web based and provide means for users to interact over the Internet, such as e-mail and instant messaging." Social network service, http://en.wikipedia.org/w/index.php?title=Social_network_service&oldid=350143410 (last visited Mar. 16, 2010). This definition fits sites like Facebook, and MySpace, but does not really describe Twitter. Wikipedia defines Twitter as "a social networking and microblogging service that enables its users to send and read messages known as tweets. Tweets are text-based posts of up to 140 characters displayed on the author's profile page and delivered to the author's subscribers who are known as followers. Senders can restrict delivery to those in their circle of friends or, by default, allow open access." Twitter, http://en.wikipedia.org/w/index.php?title=Twitter&oldid=349989383 (last visited Mar. 16, 2010). As awkward as it may be to use the word "tweet", that is what posts on Twitter are called, and that is how we will refer to them.

It may seem that trying to find information on an applicant at a social networking site is not likely to be productive, and I would agree that you will probably see a very low percentage of results at this time. I don't know if that is going to continue to be true in the future. The number of users of sites like this continues to rise. In January 2010, Twitter was the 12th busiest website in the United States. Worldwide there are 50 million tweets per day. In January 2010, Facebook had 133,623,529 unique visitors to their site. This is up from 68,557,534 in January 2009. That means its use almost doubled in one year. Over that same time period visits to Twitter increased by four times. Just so we can understand what this means in terms of a trend, over the same time period visits to CNN.com decreased by 20% to 26,893,051. (All statistics from Compete.com) So right now an applicant may not be using a social networking site, but the chance of them doing so in the future is going up. I was an early user of Facebook, but I had a friend who recently joined tell me that it allowed her to connect with old friends from high school, and then remember why she lost touch with them in the first place.

The likelihood that your applicant is using Facebook or Twitter depends on who they are, and you may want to selectively look for applicants based on that likelihood. Only 9% of Twitter users live in rural areas, while 35% live in what would be described as an urban area. The median age of Twitter users is 31, and the median age for Facebook is 27, while MySpace comes in with a median age of 26. It takes just moments to see if you can find someone on one of these sites and see if they have their posts set so that anyone can read them. You will still want to look for the 30 year old living in San Francisco before the seventy year old who lives in Exeter (it's rural, trust me).

How do you look for information about applicants at these sites? The links to some possible websites to search are listed below. You will need to get an account for yourself on each of the websites you want to use for your search, other than Google, Bing or Yahoo Search. The accounts are free, but I would suggest that if you use any of these sites in your personal life, that you set up another account that includes no real information about yourself, to use for searching for applicants. Also consider changing your personal privacy settings so that only friends can look at your information, so that applicants cannot find any of your personal information. You will only be able to read posts from an applicant who has not changed privacy settings to allow only their friends to see their posts, but the default privacy settings normally allow anyone to look at posts, and many people do not adjust the privacy settings because they just don't think about it. I have also listed links to popular search engines because you can often find a person's Facebook page by searching on their name in a regular search engine. One other thing to keep in mind is that if you have an applicant's email address that often makes it easier to search for them without getting a lot of false positive results. A search for "John Smith" on Facebook returns over 500 results, but if you had an email address you would get only one result, or no result at all.

Each of the sites has a search box on the front page after you become a member. There are also more specific ways to search for other members. If you do not want to get an account, some of the sites allow Google and other search engines to obtain information on users, so that if you search for someone's name on Google, Bing, or Yahoo Search, their Facebook page could show up as one of the results. You would not be able to look at it without having an account of your own, but you would at least know in advance if there was possibly something to find. Search results will only show a Facebook page if the person you are searching for has not changed their privacy settings to not allow their information to be obtained by the search sites. If they have gone to the trouble to make these changes, you probably will not be able to look at their posts without being their friend anyway.

If you ultimately do find an applicant on Facebook, or Twitter, but there is nothing useful in their posts don't give up. Look for pictures of them doing strenuous activities. Facebook makes it very easy to upload pictures, and a picture of applicant water skiing is just as useful as a written description. Finally, save the link to their page so you can check back later. You never know what you may learn after Mardi Gras, or the Oscars.

Links:

• Twitter
• Facebook
• Myspace
• Google
• Bing
• Yahoo Search