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Sounding Board: Reponses to August 2009 Editor's 2 Cents

Editor's 2 Cents: I was Just Saying
• Legal Update:  The Tangled Web of Laws
• Joan Lloyd: Do you have an Eddie Haskell in your workplace?
• Fraud Watch:  Out Smart the Schemers
• Newsflash: Editorial: Selling State Fund assets is stupid, and worth a fight
• Job Alert: Investigator...
• Events Calendar: South Bay Wine Tour 9/11
• Poll: Do you Support Obama's Health Plan?
• Poll Results: Will SCIF be Sold?
  

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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.

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Responses to Editor's 2 Cents August 2009 Issue

Bill,
Don't you look at the bills submitted by your own lawyers? They are a part of this cost too. They run up billing hours; don't you know? They profit from every delay they create. Don't you see that? How can you not know that? 

In my opinion, defense lawyers are the biggest problem, and always have been.

John Norman Law 
Independent Rater

Bill,
I was disappointed in your article and felt it was unfair and biased. Unfair is when an injured worker cannot return to work with a damaged knee and get a 1% WPI – don’t you agree? Unfair is when a Police Officer gets a 60% rating and returns to work full duty – don’t you agree?

Bill, I realize you are writing for Adjusting World but shouldn’t you push an agenda that is fair for both sides?

Most physicians have no way to determine what is “fair” but we can take a shot at what is accurate and reasonable. The trouble is that the WCAB has not provided a metric to figure this out. Further, physicians are not privy to the results of the DFEC or Oglivie calculation.

Thanks for listening.

Steve
Steven Feinberg, MD

I Was Just Saying.....

William Nathans
Editor

bill@adjustingworld.com  

My last article generated a couple of responses that I am going to address. I would like to thank those who took the time to respond….. It is appreciated.

The first response casts the blame for the high costs on defense attorneys. What this individual fails to understand or appreciate is that 90% of the claims with defense attorneys also have applicant attorneys. The primary reason the file gets referred to a defense attorney is because the applicant's bar keeps harvesting body parts to be added to the claim to drive up the permanent disability (their fees). It is not the defense attorney who inflates a back strain claim, (that if was non-industrial would be better in six weeks not six years) by adding depression, sleep disorder, sexual dysfunction, high blood pressure and other internal organs. Am I just supposed to roll-over and pay? Or do I have a duty to the employer, and yes my employer is an insurance company, to defend their interests? I submit that if the applicant's bar didn't make a mountain out of a mole hill there would be no need for depositions, board appearances, etc.

The other comment accused me of being biased and unfair. I feel this side of the story has not been heard or represented. I wrote the article because I believe that the interest of the employer is not being heard. The doctor who wrote the article made a valid point about how it is unfair for a laborer with a damaged knee to get a 1% WPI and cannot return to work while a police officer gets 60% WPI and returns to work with full duty. While I agree with the underlying principle, the examples are comparing apples and oranges. There are so many legalized presumptive compensable conditions for public safety officers that one would be hard pressed to find one that it is not work related.

He further goes on to say that most physicians determine what is fair but can “take a shot" at what is accurate and reasonable. He further indicates that there are no guidelines from the WCAB to figure this out. I beg to differ. The metric is the AMA guidelines, if used properly. He further states that the physicians are not privy to the DFEC or Ogilivie calculations. I respectfully fail to see the relevance. It is my understanding that the physician is charged solely with determining the Whole Person Impairment or the impact on activities of daily living.  The DFEC is a figure created by a bunch of number crunchers and Ogilivie was a reaction to the permanent disability benefit that the majority of the system stake-holders agree needs to be adjusted, but that is a job for the legislature and Governor.

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

The Tangled Web of Laws

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

 

 

An interesting set of facts is presented in the matter of Bauer v WCAB ( City of Stockton), a published decision issued in late August by the Third District Court of Appeal. It shows how the courts deals with conflicts between rival provisions of the law.

 

The facts are fairly simple. The applicant, a Stockton police officer was injured when he became involved in a fight with the suspect. He filed a workers’ compensation action and the city provided him over $72,000 in benefits. His claim was resolved so that he had future medical benefits as a result of his injuries.

 

The applicant also filed a third party lawsuit in the Superior Court against the suspect who had a $50,000 insurance policy. The suspect’s insurance carrier became insolvent and accordingly, the California Guarantee Insurance Association (CIGA) became responsible for the defending and paying the third-party claim.

 

The City of Stockton filed a lien in the civil action pursuant to Labor Code section 3861. That section provides, that “the employer of an injured employee is entitled to a credit against the employer’s liability for future workers? compensation benefits out of “any recovery” the employee receives for his injury, either by settlement or after judgment, from a third party tortfeasor.”

 

The civil action was resolved through mediation in the following manner:  The value of the lawsuit was determined to be approximately $132,000 whereby the City extinguished its lien with no recovery and the applicant/plaintiff/police officer was paid the policy limits of $50,000 new money less his attorney fees which netted him approximately $30,000.

 

The City then filed a Petition for Credit with the WCAB.  The applicant opposed that Petition on the basis that since CIGA had paid the civil settlement, the City could not take credit against his recovery because this would amount to CIGA paying a claim that could be covered by “other insurance” which is prohibited by Insurance Code section 1063.1

 

The Workers’ Compensation Judge agreed with the City and allowed them credit against any future medical payments up to the amount of the applicant’s net recovery.  The Petition for Reconsideration was denied.

 

The Court of Appeal affirmed the City’s rights for credit by denying the Writ.  The ruling was based on Labor Code section 3861’s use of the term “any recovery”.  They wrote that 3861 “speaks broadly in terms of “any recovery.” Specifically, it grants the city a credit for “any recovery” by the applicant for his injury that he received by way of settlement.”

 

Critical to this opinion was a careful working of the settlement agreement and the care with which the resolution of the lien was handled at the mediation. Too often, the subrogation recovery statutes lead employers and carriers to believe they will get a dollar for dollar recovery of the money that they have expended for workers’ compensation benefits. The practical nature rarely affords that type of recovery.

 

The interrelationship between the civil action and the workers compensation action must be carefully thought out and balanced to maximize the recovery for either the employer or the carrier. More often than not, settlement conference judges at the Superior Court do not understand the intricacies of the interrelationship and workers’ compensation.

 

One of the justices writing in a concurring opinion, lamented that while he agreed with the decision, he felt the need to state that this was not fair to the applicant. He suggested that the legislature should look at this decision and in his opinion, correct this unfairness. Certainly at the next legislative session, we probably will see a bill presented for consideration on this issue. It is always important to kill flies with atomic weapons.

 

MEA CULPA … I need to make a correction to last month’s article entitled, “The lazy days of summer”. In that article I wrote that the J C Penney v. Edwards case was unpublished. Thanks to one of our very loyal and astute fact checking readers, it was brought to my attention that the case in fact had been published. I apologize for my laziness and trust that no harm has been caused.

 

Thanks for your attention.

 Stephen Kline

      

 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 September 25th at the SBICA Luncheon and follow his blog entries on planetworkcomp

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.

 

Out Smart the Schemers

David Dindak

Coast to Coast Data Search

david@2mypi.com

Recently I received an email from a reader asking us to address liability issues.  To answer that request I thought I would expand on an interesting article written by Andrea Brown from the
Chicago Tribune. 

Phony fall insurance scam in Illinois and Wisconsin under investigation

Con artists preyed on big-box stores, officials say

Several safe guards can be put in place to help deter this type of fraudulent activity.  Here are a few suggestions:

Training – the current economy breeds Fraud and there has been an uptick of false claims.  All personnel should be made aware of the different scenarios Fraudsters use to take advantage of retailers and wholesalers. An aware staff keeps a watchful eye and is an effective tool in prevention.  Training can start as early as the new-hire orientation with refreshers throughout the year.

Close-circuit cameras –Many of our clients utilize cameras covering the check-outs, service desk and front door; which is great.  However, the bad guys conduct their own counter-surveillance and find the “dead zones” in back corners.  There we find a lot of the slurpee and ice cream falls.  Covering these areas with a camera as well as the stockroom and delivery access areas would not only combat consumer fraud but can counter Workers’ Comp fraud. 

Remember, having a camera system is the first step.  So often we visit a site and learn the video of the alleged incident has already been recorded over.  Therefore, it is vital that someone be designated to copy the tape immediately after an event has occurred.

Investigation – The most crucial time of any investigation is immediately following an occurrence.  Managers and Assistant Managers should all be armed with the necessary questions, forms and protocol to conduct the preliminary on-site investigation with the Claimant.  Teach them how to use the “7 Magical Questions of the Investigator” – Who, What, When, Where, Why, How and How Much.

Having a digital camera on site is helpful to secure evidence at the time of the event.  This will aide the “contract or in-house” investigator when the site visit is conducted.   

Fraudsters know which stores conduct investigations immediately and those that don’t.  Once the word is out that your insured is proactive at asking questions and taking photos, the bad guys will certainly be deterred.

Area canvases - is one of the best front-line defenses to a questionable claim.  Floor staff should be canvassing their assigned area at least every 30 minutes looking for hazards, spills, and suspicious activity.  Keeping a log of the routine canvas provides great evidence insuring that your insured has taken every step possible to keep their customers safe, and could likely catch the Fraudster in a lie.

In conjunction with the area canvasses, one important potential hazard is the “end caps.”  Many claims are the result of a customer walking down the aisle with an arm-full of items unable to see the floor immediately beneath them, and then trips over an empty” end cap”.  Is your insured proactive at keeping them filled?

Talk to your insured about establishing or updating their protocols. Also, think about conducting periodic training sessions for your insured and their staff. Enlist the help of your investigators with creating and conducting these sessions.

Being proactive could certainly keep more claims off your desks, deter expensive fraudulent claims, and make you the hero for having shown so much concern.

See you next month!!!!

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.

The Other Public Option

You've been comatose for three months if you don't know that Congress (and by extension the country) is fighting about whether to include a public option as part of a health insurance overhaul plan.  However, you may not know about the paradoxical fight in Sacramento over worker's compensation insurance.

More >>

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Poizner plans suit to halt ‘pilfering’ of Calif. workers’ comp. funds
Calling a move by California Gov. Arnold Schwarzenegger and the legislature to sell $1 billion worth of business at the state-run workers’ compensation insurance company a “pilfering of funds,” the state’s insurance commissioner is taking his fight to court.

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Editorial: Selling State Fund assets is stupid, and worth a fight
While Gov. Arnold Schwarzenegger is right about the need for prison reform, his budget strategy this summer also included one of the stupidest ideas imaginable: trying to sell $1 billion worth of workers' compensation policies

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