inside

• Editor's 2 Cents: The Times They Are a Changing!
• Sounding Board: You Should Explore the History....Response to the Editor
• Legal Update: The Inter-Relationship of Workers' Compensation and FEHA
• Joan Lloyd: Can I Return to My Old Job?
• Fraud Watch: Bad Boys...Whatcha Gonna Do?
• Newsflash: DWC Reminds Community About Sunset of the Vocational Rehabilitation Program

• Job Alert: New...Hearing Rep (East Bay)
• Events Calendar: What's Happening in November & December
• Poll: Was the AIG Bailout Good for America?
• Poll Results: Is Gossip Impacting Your Work Environment?
• The Last Laugh

Adjusting World welcomes emails/letters to the editor and comments on any of our articles. Emails/letters should not exceed 250 words in length and can be sent to the individual email address listed on the article or to: comments@adjustingworld.com.

All emails/letters received become the property of Adjusting World and cannot be returned. Adjusting World reserves the right to print, edit for space, grammar, and clarity. Letters must include the name, address, telephone number and email address of the author. Adjusting World reserves the right to limit the number of emails/letters printed.

The Times They Are A Changing!

William Nathans
Editor

bill@adjustingworld.com  

  

The DWC and the Medical Unit will have new leadership. As I am sure you are aware, the nomination of the very capable Carrie Nevans was allowed to lapse since no confirmation was instituted. I guess that it fits in with buyer’s remorse

 

Mr. Perata decided in his infinite wisdom and short sightedness that pay back, being a b--ch that it is, did not move the nomination to the floor for a vote. It will be interesting to see how Ms. Nevans, who is remaining as the assistant director, will interact with the legislature once the new director is appointed (if they ever get confirmed).  

 

It also turns out that Dr. Anne Searcy is leaving her post as medical director to work for Zenith. I wonder why she is changing now?  I am no conspiracy theorist but I find it curious that the two most powerful figures in the bureaucratic world of workers compensation are leaving at the same time.

 

  

Comments, questions, e-mail me at bill@adjustingworld.com

(Response to Editor’s 2 Cents column "Crisis All Around Us," October 2008) 

 

You should explore the history of the failures in a little more depth. Certain congressional representatives-you know, the ones now lambasting the Bush Administration for the financial failures-have previously resisted administration attempts to reign in Fannie Mae and Freddi Mac proclaiming them the be “financially sound.”  Try looking into the Wall Street Journals articles/warnings dating from 2003-2005, that would be a nice start.

Also, one may consider that the Depression Era regulations designed to prevent such financial shenanigans were repealed during the Clinton Administration. Surely, one may also agree that in the least there is enough blame to implicate both political parties.  

Donald Garavaglia

The Inter-Relationship of Workers Compensation and FEHA

Stephen L. Kline, Esq.
steve@adjustingworld.com

 

With the extinction of Vocational Rehabilitation on December 31, 2008, one issue that will be coming up more often is the inter-relationship between Workers Compensation and FEHA.  While the insurance carrier is concerned with the workers compensation liability, the employer has to also be concerned with its exposure to the FEHA actions and the potential for some very serious pay-outs.

 

In an unpublished case, the Second District Court of Appeals tackled these issues in an interesting case, Butler v DirecTV, early in October.  Mr. Butler worked full-time for DirecTV and was injured on the job.  He filed a workers compensation action and was provided the appropriate benefits.

 

About two years after the accident, Mr. Butler spoke to the company’s worker's compensation manager, about the possibility of returning to work on a part-time basis. He was told it was not possible.  A short-time later, Mr.  Butler informed the manager  that his doctor was going to release him to work part-time. The manager asked for a doctor's note. The doctor sent a letter indicating Mr. Butler could work 10 to 20 hours per week as long as the job did not involve repetitive neck flexion.            

 

After the manager learned of Butler's restrictions, he asked whether Butler’s department could accommodate him. He was informed that Butler could not be accommodated. Subsequently, the Manager sent Butler an e-mail which stated: "There is no light duty or modified work schedule available at this time. In order for you to return we will need a full duty note restriction release."

 

Approximately one year later, Mr. Butler was formally terminated from DirecTV.  The issue before the Court was the discrimination suit under FEHA on the allegations that no reasonable accommodation had been provided and that DirecTV had failed to participate in the interactive process.

 

“To establish a prima facie case, the plaintiff (Mr. Butler) was required to establish that: (1) he had an actual physical disability or was regarded by his employer as having a disability; (2) he could perform the essential duties of his job; and (3) he was subjected to an adverse employment action because of his disability.”  In addition, he “must prove that if he is reasonably accommodated, he can perform the essential functions of his existing job. In the latter type of claim, the employee must prove that he can perform the essential functions of an alternative position he should have been offered. (Jensen v. Wells Fargo Bank (2000) 85 Cal.App.4th 245, 256.)”

 

Mr. Butler was clear that he could not work full-time.  Was the failure of DirecTV to offer him a part-time position a violation of reasonable accommodation principles?

 

The trial court didn’t think so and the Court of Appeals agreed. “Part-time work may be a reasonable accommodation if part-time positions are available. (Terrell v. USAIR (1998) 132 F.3d 621, 626 (Terrell).) But federal courts have held that offering a part-time position is not required when a new position would have to be created. (Terrell, supra, at p. 626 [USAir was not required to create a part-time position "where all part-time positions had already been eliminated from the company"]; Whitbeck v. Vital Signs, Inc. (1996) 934 F.Supp. 9, 16 [courts have found that creating an "entirely new part-time position for a disabled employee" is not required by the Americans with Disabilities Act].”

 

What about the interactive process – the discussion with the employee as to whether other positions are available for which he might be eligible?   The key to this case was that Mr. Butler wanted a part-time position and DirecTV offered no part-time positions. The Court said, “DIRECTV cannot be held liable for failing to engage in an interactive process. Indeed, section 12965, subdivision (b) contemplates that parties suing for a violation of the Act are aggrieved. Butler cannot claim that he is aggrieved if he cannot otherwise work fulltime.”

 

The inter-relationship between FEHA and workers compensation are very difficult mazes to wander through.  There are land-mines everywhere.  But the careful cautious approach for the employer can avoid the risk exposure. For the adjuster, being aware of these issues is important to let the employer know that they may need to review this situation with Counsel.

If you have any questions, please feel free to contact me at my new email address slkesq@me.com.

 

Thanks for your attention.

 

 

Don't miss Steve as the main event in the January 23th SBICA Luncheon in

See the upcoming events calendar for more information......

Have a question for Steve?

Don't hesitate to ask.  Email it to: steve@adjustingworld.com and get it answered right here.

 

Bad Boys....Whatcha Gonna Do When They Come For You?      

David Dindak

Coast to Coast Data Search

david@2mypi.com

Even I catch an episode of Cops once in awhile.  Good to know the bad guys pay in the end and its entertaining to boot. 

I think about our real life interactions with the people we meet through our claims and I’m reminded every day that our struggle with work comp fraud is not so entertaining.  Our industry spends a lot of time and money to catch the bad boys & girls of work comp fraud, but what happens after? 

Good Question.

In the Beginning

The California Workers’ Compensation Fraud Program was set-up in 1991 with the passage of Senate Bill 1218.  This law establishes workers’ compensation fraud as a felony.  The law requires insurers to report suspected fraud and to create a fund that would support prosecution efforts.  The Bill also created the Fraud Assessment Commission to provide guidelines for assessment of frauds as well as funding investigation and prosecution of workers’ compensation insurance fraud.  The commission is funded by insured /self-insured California employers.

It is estimated that as many as 25% of all filed claims involve some form of workers'' compensation fraud.

Moving Forward

According to statistics from the California Department of Insurance in 2006 & 2007 the California Fraud Division received 5,933 suspected fraud cases, which generated 724 new cases.  This produced 401 arrests and 483 cases were sent for prosecution.  The Fraud Division estimates a potential loss of $222,916.

The District Attorney’s Workers’ Compensation Fraud Program states that in the same period
549 arrests were made, which also included the majority of Fraud Division arrests. 

The DA Fraud Program states: “During the same time frame, district attorneys prosecuted 1,115 cases with 1,224 suspects, resulting in 499 convictions while many cases are still pending in court.  Restitution of $24,953,650 was ordered in connection with these convictions and $8,639,562 was collected during Fiscal Year 2006-07.  The total chargeable fraud was $260,292,381, representing only a small portion of actual fraud since many fraudulent activities had not been identified or investigated.”

Remember these numbers do not just reflect claimants who falsify a claim but include medical, employer and attorney fraud.

The Road to Restitution

Labor Code 3820 states that Civil Penalties for insurance fraud can be between $4,000 - $10,000 in addition to paying three times the amount of medical treatment and related expenses as well as any other civil penalties and jail time attached to the crime. 

The California Department of Insurance website lists some of the successful prosecutions like this press release from June 13, 2008:

San Diego Man Sentenced To Jail, Ordered to Pay More than $25,000 in Restitution for Workers Comp Fraud Scheme  (full story)

Work comp fraud is prosecuted but you need to do your part and refer your cases to the fraud division.  It might be a lengthy process, but we have to work together to combat the problem.

Statistical information from the California Department of Insurance

If you have any questions about Sub Rosa, AOE/COE, Fraud or Investigation, email me. at david@2mypi.com   

David Dindak is the CEO of Coast to Coast Data Search, an investigation firm that has successfully serviced the insurance industry for the past 20 years.  He is a licensed PI and a continuing education trainer in Investigation and Fraud. The above article is from the 2008 Investigation & Fraud Training Series. 

This training series is a free and is provided to companies onsite.

For additional information on Coast to Coast Data Search and/or how to bring the 2008 Investigation and Fraud Training Classes to your company. Visit the website at: www.2mypi.com or call (800) 282-6278.

Temporary Total Disability Rate for 2009 Will Increase to $958.01 Per Week

The maximum temporary total disability (TTD) rate will increase to $958.01 on Jan. 1, 2009. This increase to the maximum TTD rate marks the third year in a row that the TTD rate will be affected by a change in the state average weekly wage (SAWW).

More >>

****************************************

Division of Workers’ Compensation Reminds Community About Sunset of the Vocational Rehabilitation Program

The Division of Workers’ Compensation (DWC) is reminding the workers’ compensation community that the vocational rehabilitation program established under Labor Code section 139.5 will sunset on Jan. 1, 2009. Because the program

More >>

****************************************

Division of Workers’ Compensation Posts Revised Benefit Notices Manual

The Division of Workers' Compensation (DWC) has updated three benefit notices and posted a revised benefit notice manual and sample benefit notices to its Web site. The benefit notice manual offers guidance for claims administrators in providing injured workers with notices that comply with the benefit notice regulations.

More >>

****************************************

California Contractors Network Secures Workers' Comp Fraud Conviction

Plumber to Serve Two Years for Insurance Fraud

Fraud busters at California Contractors Network self insured workers' comp group, managed by Self Insured Solutions (SIS) ( http://www.calsig.com), has secured an Insurance Fraud conviction against Honorio Pena, a former employee at Executive Plumbing in Corona, according to Tom Wheeler, SIS's President.

More >>

Have an insurance related event coming up?

Email us the relevant information and we can place it in our Events Calendar. Send us a note with the relevant facts and sponsoring organization to eventform@adjustingworld.com

POLL

Missed an issue of Adjusting World? Visit our newsletter archives.

©2003-2006 Adjusting World is a publication of Sienna Staffing @ work for you™ Disclaimer/Limitation of Liability