Back in the Day
William Nathans
EditorIt is that time again. In the last month, our fearless leader has perhaps set in motion, the means of undoing the reform of SB-899. He did this with a stroke of the pen. The action that will bring back the chaos of years past; is vetoing the bill that will increase the permanent disability benefit.
The bill had the support of the head of Zenith Insurance, who was one of the architects of the reform. It was his opinion that the increase would have no effect on the savings generated by SB-899. This view was shared by others in the industry. As an adjuster, I was dismayed at the shortsightedness of the Governor.
SB-899 has achieved its goal. We have seen incredible rate reductions. It was and is time to give something back to the injured workers. Instead, he threw down the gauntlet playing into the opposition’s hand.
Signing this bill would have taken the wind out the sails of those who are attempting to undo SB-899. The major argument used by those attempting to go back to the old ways is that injured workers have taken the brunt of the reforms and are being made to suffer even more; despite the assurances from the Governor that they wouldn’t.
By vetoing the bill, the politics of the next session of the Legislature is going to get real interesting as far as workers compensation is concerned. The upcoming November election is going to be the key to keeping the current reforms.
If the Democrats maintain control and increase their majority, we could see massive changes to the reform. Especially if enough seats are picked up to override a veto. If this happens, SB-899 will go down as an interesting anomaly in the history of our industry and we will have given back the keys to the candy store to the applicant attorneys and over-treating doctors who will drive rates back up and businesses out of California. Our Governor giveth and he may just take it away. Comments, questions contact me at:
Fasten Your Seat Belts for the Lightening Round
Stephen L. Kline, Esq.
Armstrong Law Firm
stephenk@arm-law.com
This month, we’re going to present a lightening round of published decisions issued by the various District Court of Appeals between August 29th and September 11th. This recent spate of published opinions demonstrates the vitality and attention that workers compensation has in the Court system. Without a doubt, this is only the beginning. Let’s get started.
August 29th Sonoma State v. WCAB (Hunton) First District
Ms. Hunton was a police dispatcher at Sonoma State. In 2000 she filed a workers compensation claim alleging a psyche injury because of the frequent and unexpected sounding of false fire and burglar alarms in the work place.
The AME opined on the issue apportionment, 65% of her current psychological disability was attributable to non-industrial factors and the remaining 35% to industrial factors. The AME also stated that she would have likely suffered the psychological disability even if she had never worked for Sonoma State.
The Court posed the question whether an employee's psychiatric injury meets the threshold for compensability where the entire psychiatric disability is not predominantly work induced but where one (or more) of several diagnosed psychiatric conditions is entirely (or predominantly) work induced. Their answer, “we conclude that a psychiatric injury cannot be parsed into separately diagnosable components for purposes of satisfying the standard set forth in section 3208.3.”
The ruling stands for the principal that there is only one psychiatric injury and that in order for there to be a compensable psychiatric injury, the industrial cause of the injury must exceed 50%.
August 29th Gamble v WCAB Fourth District
The WCAB ordered the employer to provide vocational rehabilitation maintenance allowance (VRMA) benefits to an injured worker, but allowed them a credit for wages that the injured worker earned at his employment while on VRMA.
The Court reversed the WCAB ruling, “that when the Legislature amended section 139.5 to create the maintenance allowance component for permanently disabled workers, it clearly and unambiguously determined the payment would be less than what a temporarily disabled worker would receive and, more importantly, would be based on a preset fraction of the worker's AWE. It was foreseeable that permanently disabled workers could be collecting permanent disability indemnity as well as income from secondary employment. Yet, nowhere in section 139.5 is there any indication the Legislature contemplated a credit for wages to employers paying the maintenance allowance.”
VRMA can be supplemented by permanent disability advances and by supplemental income through other employment.
August 31st Welcher, et al. v WCAB Third District
This is the crown jewel of the five opinions. Four cases were consolidated in one hearing and one opinion. The crux of the issue for all of the cases considered by the Court was how to deduct a prior Award from a new disability Award.
Recent history needs to be reviewed. First, there was the Nabors case from the WCAB, en banc which set forth the Fuentes formula A which is to deduct the Old % from the New % and pay the % value. Next, the Dykes and Nabors published opinions from the Fifth & First District Courts of Appeal ruled that the method should be to deduct the dollar value of the old from the dollar value of the new. Applicants & their attorneys gets the most amount of money under this method.
In Welcher, the Court said the WCAB, en banc with Nabors I had got it right. Labor Code sections 4663 and 4664 were amended by SB 899. The language of those statutes clearly set out that an employer is liable only for that percentage of disability which is caused by their employment. In a phrase, Fuentes lives again.
What’s next? The conflict in published opinions between the First, Third and Fifth Districts should move on to the Supreme Court to resolve these differences. Stay tuned.
August 31st Signature Fruit v WCAB (Ochoa) Fifth District
How do you calculate Temporary disability for a seasonal worker? Ms. Ochoa was only employed during the harvesting season, during which time she was injured. However, she wanted to be paid TD for the off-season period of time. The Workers Compensation Judge agreed and ordered those payments. The WCAB issued its own decision essentially doing the same as the WCJ.
The Court annulled the decision. They held that, “a seasonal employee is not entitled to temporary disability during her off-season where the parties stipulated she did not have any off-season earnings.” They continued, when “an employee does not have any off-season earnings and does not compete in the open labor market during a portion of the year, the employee is not entitled to temporary disability payments during that season.”
TD is a wage loss replacement. If there was no lost wages, then there is no TD because there is nothing to replace.
September 11th Kopping v WCAB Third District
This case is important but is a little bit more esoteric than the others. The question here is whether the presumption established by subdivision (b) of Labor Code section 4664 (section 4664(b)) is conclusive or rebuttable.
There is a possible conflict in the statute where the legislature used both concepts in the section. However, the California Evidence Code sets out that presumptions can be either conclusive or rebuttable, but not both.
After a detailed review of the statute and the history of presumptions. The Court ruled, “that section 4664(b) creates a conclusive presumption of the continued existence of a prior permanent disability when the claimant received an award of permanent disability benefits based on that disability, thereby precluding the claimant from proving medical rehabilitation from the prior disability.”
However, the Court changed who has the burden of proof in proving the overlap of the disabilities. The Court said, “the burden of proving overlap is part of the employer's overall burden of proving apportionment, which was not altered by section 4664(b), except to create the conclusive presumption that flows from proving the existence of a prior permanent disability award.”
Well there you have it …. Quite a month. Thanks for your attention.
Jeffery L. Gary
WorkCompTV.Com
Investigations are normally conducted on Workers’ Compensation claims when injury AOE/COE is in question. Injury AOE/COE means, did the injury Arise Out of Employment or was the Cause of Employment.
This is an essential question that must be answered in order to make an acceptance/denial decision on a claim.
Delaying and investigating a claim under Workers’ Compensation law has very specific timeframes and guidelines.
INVESTIGATION TIMEFRAMES
The claims examiner has:
- 14 days from first receipt of claim to advise the injured employee of the decision to accept, delay or deny the claim
- 90 days from the employer’s receipt of the DWC-1 to make a decision
The decision to delay and investigate a claim is usually based on the following factors:
- Late reporting of the injury – The claim is reported 30 days or more after the alleged injury
- Mechanism of injury does not match physical injury – This is usually determined by the treating doctors first evaluation of the employee
- Other Red Flags, such as unwitnessed accidents, pending disciplinary action, Monday morning injury reporting, injury after a vacation, etc.
Once the delay notice is sent to the employee, it is important to initiate the investigation process in a timely manner. Important components of the investigation process include:
- Assigning the case to a qualified AOE/COE investigator to take recorded statements
- Setting appropriate diary review dates to confirm receipt of reports
- Initiating the QME process under Labor Code Section 4062 if appropriate
- Obtaining past medical records and factual information as required
- Review and evaluate all reports when received
- Make a final compensability decision prior to the expiration of the 90 days
A thorough investigation should answer the 5 “W’s”:
- Who?
- What?
- When?
- Where?
- Why?
There are a variety of investigative services offered to the Workers’ Compensation community. They include:
- Full AOE/COE Investigations
- Surveillance
- Activity Checks
- Written or Recorded Statements
- Subrogation
- Accident Scene Investigations
- Clinic Inspections
- Background Checks
- Special Assignments as Directed
It is critical to the investigation process that the claims examiner is familiar with and follows the Claims Service Instructions, (CSI’s) for each client, as there can be different procedures for investigation of claims, assignment of investigators and notification of the acceptance/denial decision to the client.
Jeffery L. Gary is the President of WorkCompTV.Com, a provider of DVD-training and educational videos to the Workers’ Compensation industry. For more information about their product, log onto the web site at http://www.workcomptv.com
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