inside

• Editor's 2 Cents: The Crack of the Bat
• Legal Update:  The Waiting Game
• Joan Lloyd:  An Office Romance in the Making?
• Fraud Watch: Hangin' With the NCFIA

  Newsflash: Naughty State Workers: The 2009 Edition

• Job Alert: Investigator...
• Events Calendar: What's Happening in May
• Poll: Will Workers' Compensation See Claims for Swine Flu?
• Poll Results: Should Work Comp Medicine Be Included Under Universal Healthcare?
  
  

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  Planet Work Comp is Here….
  

  May 4, 2009 is the official launch of our blog…Planet Work Comp.

  This will be a resource for the Workers’ Compensation community as well as a unique place where Employers can get answers and information about how the work comp system affects their business.

  Steve Kline Esq.  (legal Update) will be a constant contributor, but you never know who will join in on the conversation.

  Read the posts….share your opinion…. exchange information…

  Don’t forget to sign-up via RSS to get alerts when fresh content is posted on the site.

  Click here (http://www.planetworkcomp.com) for a Valuable New Resource for California Workers' Compensation News & Information.

  
  

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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 Crack of the Bat

William Nathans
Editor

bill@adjustingworld.com  

 

It is that time of year! The crack of the bat, hockey and basketball play-offs, and the NFL draft. Just think hundreds of millionaires all waiting for the anointed time to file their workers compensation claims. Ain't sports grand!

I was thinking (scary) how would the permanent disability be calculated? I mean how would you determine the loss of future earning capacity?

 A great many professional athletes have no earning capacity other than sports, since that has been the focus of their training to the exclusion of the real world. It would be easier for the super-stars who have mega endorsement deals to carry them through retirement. But what about the marginal or role player? The ones with no endorsements and no education. Also what jurisdiction would compensate them. I have seen claims for professional athletes who have filed claims in every state they have played in, talk about an apportionment nightmare! Just think not only are claims filed in the United States, but also in Canada and Japan for baseball, England Mexico, and Canada for football. I am glad I do not have to deal with that. California claims are complicated enough.

Most professional athletes are not concerned with the permanent disability but are concerned about obtaining medical treatment for their injuries.

I bring this up because as more and more employees are called away from home or transferred due to downsizing or because they can no longer afford to live in various areas.  There is a serious need for universal healthcare.

  

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

The Waiting Game

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

Without beating it to death, the California Workers Compensation World is in a waiting game with respect to the WCAB’s next step with regard to the Almarez / Guzman / Ogilve decisions.  While the en banc decisions have not been stayed and remain the law for the trial judges to follow, most attorneys on both sides are reluctant to press cases forward without the certitude of whether the 2005 Revised Permanent Disability Schedule has any validity at all.

 

But, fear not … there are other cases that have been decided and other issues for us to look at with a critical eye.

 

One of the many questions that often arise in evaluating a claim is whether or not the injury arose out of and in the course of employment and thus compensable (commonly referred to as AOE/COE).  The Fifth District Court of Appeal reviewed an interesting situation with the recently unpublished, writ denied case of Costco v WCAB (Slayton).

 

              The Court succinctly set out the facts as follows:  

 

Ms. Slayton was scheduled to work at Costco on the date of the incident from 10 a.m. until "approximately 2:30 p.m." Later that day, three employees were working in the deli department and only one was working in the bakery. It was Costco's policy that its employees were not allowed to make purchases during their shift except while on breaks or lunch, but according to Ms. Slayton and three other Costco staff members it was common practice for employees and even managers to set aside items during work hours they intended to purchase. While on her afternoon break, about 1:45 p.m., Slayton paid for a cake that her sister had ordered. Around 2:10, Slayton realized she had finished her duties for the day with approximately 20 minutes remaining in her shift and she decided to go home early, telling her coworker, Josh, that she was going get her cake and come back.”

 

The Court continued, “Ms. Slayton went to the bakery department and discovered the cake her sister had ordered was not on the customer pickup racks. The lone bakery worker had four customers waiting so she proceeded behind the counter to the refrigerated area to search for the cake, which had not yet been wrapped or labeled, with the intention of packaging it herself. With the cake in hand, she fell to the ground on her right knee with her left knee landing in a mixing bowl. The bakery employee heard the fall and helped her up, and she told a couple of employees what happened before going home.”

 

Was the injury that resulted from the fall AOE / COE and thus compensable?

 

Costco conceded that her injury arguably arose out of employment.  However, they disputed that Ms. Slayton was acting in the course of her employment. They argued that she “was not acting in furtherance of a valid business activity because she ‘chose to purchase and pick up the cake as a favor [to] her sister on the date of injury of July 15, 2006."  They also relied on her ‘job title as that of a deli service worker to suggest she was working outside of her assigned working area and without the express approval from a manager to be in the bakery.” Finally, Costco contended that she had effectively ended the employment relationship at the time of her injury because she had decided to leave 20 minutes before her shift ended.

 

The Court was not persuaded by Costco’s argument. They agreed that the WCAB had made the correct decision in finding that the injury was AOE / COE compensable.  The Court supported its decision standing on the principle that where the employee is acting “in furtherance of employer’s business activities”, that satisfies the course of employment test. They detailed evidence which substantially supported that conclusion.

 

“Costco admits to this court that an act of personal convenience occurs in the course of employment so long as it is reasonably contemplated and provides some benefit, no matter how minimal, to the employer.”    Thus, under the 'dual purpose' doctrine, where the employee is combining his own business with that of his employer, or attending to both at substantially the same time, no nice inquiry will be made as to which business he was actually engaged in at the time of injury, unless it clearly appears that neither directly or indirectly could he have been serving his employer.”  The facts did not support Costco’s position.

 

The Writ was denied and attorney’s fees were awarded the applicant’s attorney in connection with answering the writ.  AOE / COE cases are hard for the defense and the employer. The cloud from Labor Code §3202 (that workers compensation laws should be liberally construed by the courts with the purpose of extending their benefits for the protection of persons injured in the course of their employment.) shades the facts often times to provide benefits for cases that are too close.  Development of the facts at an early stage of the investigation, reliance on the day to day procedures of the employers, and good witnesses to the event can help to let the sun shine through that cloud.

 

Thanks for your attention.   I look forward to interacting more frequently with you at our valuable new resource for employers and the workers’ compensation community: www.PlanetWorkComp.com.

         

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

 

 

 Don't miss Steve's Legal Update on April 24th at the SBICA Luncheon.

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.

 

Hangin' With the NCFIA

David Dindak

Coast to Coast Data Search

david@2mypi.com

The Northern California Fraud Investigators Association held its annual conference in April of this year, and I thought this month’s column should cover highlights. 

This year’s was one of the best. The venue assembled representatives of CDI, NICB, various DA Offices, and the Insurance Commissioner’s office, to discuss many aspects of insurance fraud.

The Effect of Prop “B”

California’s yes vote on Prop “B” produced a deficit funding of $50 billion and placed Law Enforcement in the state, at risk.  In this respect, there is a $400 million cut at the Department of Corrections, affecting Parole officers and Correctional Guards, which will create the release of 17,000 prisoners.  As a result, it is likely that those convicted of insurance fraud might be up for early release.  So instead of spending much of their time behind bars watching TV, eating bologna sandwiches and working out as a guest of the state; they might be set free early to work on a new scam.

Information provided by the Insurance Commission Enforcement Branch pointed out that the DOI has had a $17 million cut in its budget.  The Enforcement Branch itself has sustained $4 million in cuts.  However, the good news is that, there will be no cutbacks on investigation efforts, which was enlightening to hear.  This means that investigations will still be an important and necessary part of combating fraud.

Other encouraging statistics were provided as well.  $65 million has been allocated to the State’s District Attorney offices, up $8 million from last year.  36 of the 58 Counties will receive grants, but each individual County decides where to use the money.  Depending on which county you are administering a claim, find out the resources available to prosecute fraud.  You will find several counties like Santa Clara are anxious to work with examiners to pursue Work Comp fraud and will be helpful in developing your potential fraud cases.

Over the past 3 years, funding was allocated year to year to the DA offices, but now

Workers’ Compensation has permanent funding of around $30 million.

AB 801 (Duvall)

The Department of Insurance has 202 sworn Peace Officers, the highest number in years.   Furthermore, AB 801 (Duvall) is providing the department with more tools to fight the good fight.   AB 801 (Duvall) will provide the DOI access to the workers' compensation information system (WCIS), which gives the Fraud Division direct access to the Work Comp system to analyze trends.

Fraud is on the Rise

The Fraud Division receives approximately 24,000 SFC Referrals per year.  Of that, about 20% are Workers’ Comp.  They have also seen a rise in other areas which is somewhat attributed to the economy.  For example, property and casualty is up.  Additionally, vehicle theft and collision fraud is up significantly.  Arson is also up by 30% with up as well, and 25% of residential fires are foreclosure homes.  Surgery Center Healthcare Fraud has doubled, and Property/Casualty Agent/Broker Fraud has tripled. 

What’s Important to the Comish

Priority of case selection in pursuing Fraud referrals was broken down into 5 parts, Public Safety, Commissioner’s Initiatives, Quality of Evidence, Available Resources and Jurisdiction. 

Public Safety is first and foremost concern.  Second are the Commissioner’s Initiatives, i.e., high impact cases, and significant and high dollar loss.  One example was made of a case where some ladies (if you could call them that) in LA were taking out life insurance policies on Indigents, then running them over and killing them, collecting the benefit.

Quality of Evidence is next, followed by resources available.  The department is still understaffed to meet all the needs of combating Fraud, and it wants to press toward using prosecution as a deterrent. 

Fifth on the list is Jurisdiction which includes the area of Arrest/Conviction.  Addressing this item will significantly impact the problem and will be the key to claims reduction.  Another consideration that should have made the list was alternate enforcement solutions.

Next month we will continue with more of the Northern California Fraud Investigators Association annual conference and concentrate on the most popular frauds and what new bills are expect to help in fighting fraud.

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 Instructor in Investigation and Fraud.

David teaches an Investigation & Fraud Training Series to companies. This training series is free and is provided to companies onsite. Adjusters earn continuing education credit for each class in the series.

For additional information on Coast to Coast Data Search and/or how to bring the 2009 Investigation and Fraud Training Classes to your company. Contact him at david@2mypi.com or call (800) 282-6278.

Nurses Union Supports Bill for Presumptions in Workers Compensation for Direct Healthcare Providers

Jimmy Gomez, Political Director for the United Nurses Associations of California/Union of Health Care Professionals (UNAC/UHCP), testified before the California State Assembly Insurance Committee on April 22, 2009, in support of AB 664 regarding new presumptions in workers compensation for direct healthcare providers. The bill passed in committee by a vote of 7 to 3.

More >>

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Naughty State Workers: The 2009 Edition

It's not a big story, but an interesting one: the annual report from state auditors of government workers who have done wrong.

More >>

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Smaller comp rate increase urged for California

Insurance Commissioner Steve Poizner on Tuesday called for the California Workers' Compensation Insurance Rating Bureau to withdraw a portion of the 23.7% rate increase it is recommending.

More >>

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