Happy New Year!! 

With the New year comes new Regulations, revamped and renumbered "old" Regulations and some repealed regulations.
For a complete text of all new, amended, renumbered or repealed regulations, just click here:

www.dir.ca.gov/wcab/WCABProposedRegulations/Rulemaking-August-2019/Final%20Rulemaking/Final-Text-Of-Regulations.pdf

​The California Division of Workers’ Compensation (DWC) has announced an increase in the minimum and maximum temporary total disability (TTD) rates. The increase will go into effect on January 1, 2020, and see the minimum TTD rate increase from $187.71 to $194.91 per week, and the maximum TTD rate increase from $1,251.38 to $1,299.43 per week.

The Department of Industrial relations notes that:

“Labor Code section 4453(a) (10) requires the rate for TTD be increased by an amount equal to percentage increase in the State Average Weekly Wage (SAWW) as compared to the prior year.  The SAWW is defined as the average weekly wage paid to employees covered by unemployment insurance as reported by the U.S. Department of Labor for California for the 12 months ending March 31 in the year preceding the injury.  In the 12 months ending March 31, 2019, the SAWW increased from $1,276 to $1,325 – an increase of 3.84013 percent.”

Workers with a date of injury on or after January 1, 2003 who are receiving permanent total disability (PTD) or life pension (LP) benefits are entitled to have their rate adjusted based on the SAWW under Labor Code section 4659(c).

■ Kimberly Allen v. Antelope Valley Union High School District, 2019 Cal. Wrk. Comp. P.D. LEXIS 66
Psychiatric Injury—Violent Acts—Increased Permanent Disability—WCAB rescinded WCJ’s finding that applicant was entitled to increased permanent disability for her psychiatric injury, and concluded that applicant was barred under Labor Code § 4660.1(c)(1) from receiving additional permanent disability for that injury, when WCAB reasoned that applicant’s psychiatric injury was not directly caused by events of her employment but rather was compensable consequence of her multiple industrial orthopedic injuries, and, consequently, pursuant to Labor Code § 4660.1(c)(2)(A), applicant’s permanent disability could only be increased for psychiatric impairment if injury resulted from either being victim of violent act or from direct exposure to significant violent act or catastrophic injury, and WCAB found that here applicant’s injuries, which were incurred in slip and fall accident during her employment as high school receptionist, were not sufficiently extreme or intense so as to rise to level of “violent act” where there was no loss of consciousness or immediate need for medical treatment and found no merit to applicant’s assertion that all head injuries, regardless of how mild, constitute violent injuries. [See generally Hanna, Cal. Law of Emp. Inj. and Workers’ Comp. 2d §§ 4.02[3][a], [b], [f], 4.69[1], [3][a], 8.02[4][c][ii], [5], 32.02[2][a]; Rassp & Herlick, California Workers’ Compensation Law, Ch. 7, §§ 7.05[3][b][i][ii], 7.06[6], Ch. 10, § 10.06[3][a], [b][i].]

​In Rodriguez v. Rubio's Restaurants, 2019 Cal. Wrk. Comp. P.D. LEXIS 231, the WCAB held that an applicant was not entitled to temporary disability (TD) benefits when a defendant offered her modified duty with her work restrictions after she resigned from employment. The applicant resigned Oct. 6, 2017, and received an offer of work dated Oct. 13, 2017. She never responded to the offer. The defendant paid TD benefits from Oct. 25, 2017, to May 1, 2018, but disputed liability for another period of TD starting Oct. 11, 2018. The WCAB explained that after an offer of modified duty, an applicant is no longer entitled to TD benefits, even if he or she does not accept the modified duty. It concluded that the defendant's offer of Oct. 13, 2017, precluded benefits from Oct. 11, 2018, and continuing, and that the defendant's payment of benefits from Oct. 25, 2017, to May 1, 2018, did not create any additional obligation to continue to offer modified duty

Deciding whether a person suffered a catastrophic injury depends on a host of factors including the gravity of the worker’s condition, and not just the circumstances of the industrial accident itself, the WCAB said in the en banc decision Kris Wilson v. California Department of Forestry and Fire Protection.

The WCAB’s decision said it is up to judges to decide whether an injury is catastrophic based on the facts of the case. The board listed factors that “the trier of fact may consider in determining whether an injury may be deemed catastrophic,” that include:

The intensity and seriousness of treatment received by the employee that was reasonably required to cure or relieve from the effects of the injury.

The ultimate outcome when the employee’s physical injury is permanent and stationary.

The severity of the physical injury and its impact on the employee’s ability to perform activities of daily living (ADLs).

Whether the physical injury is closely analogous to one of the injuries specified in the statute: loss of a limb, paralysis, severe burn or severe head injury.

Whether the physical injury is an incurable and progressive disease.

READ THE ENTIRE OPINION HERE.

​Step aside, opioids. Non-steroidal anti-inflammatories are now the most common therapeutic drug group prescribed to injured workers in the state, according a new report by the California Workers’ Compensation Institute.

CWCI said efforts to curb inappropriate use of opioids, such as utilization review, treatment guidelines and restrictions by payers, are having a measurable impact on usage rates. Opioids made up 30.5% of all prescriptions filled in the California workers’ compensation system 10 years ago, but that fell, to 18%, in the first half of 2018. Opioids made up 20.2% of workers’ comp prescriptions in 2017.

By comparison, NSAIDs grew, to 31.7%, of drugs dispensed to injured workers in 2018, compared to 21.4% in 2009.

Similarly, CWCI chronicled a dramatic increase in the usage of anticonvulsants, which also are also an alternative to opioids for the treatment of pain. Anticonvulsants made up 4.1% to 5.6% of workers’ comp prescriptions from 2009 to 2014, but increased steadily, to 9.7% in 2018, as opioid use declined.

Opioids were the most costly, as well as the most prevalent drug group used in workers’ comp a decade ago. CWCI said opioids made up 23.5% of the drug spend in 2009 but made up only 13.8% of the drug spend last year. 

Dermatological agents and anticonvulsants have stepped in front of of opioids in terms of the share of spending. Dermatological agents represented 17.6% of the drug spend in 2018, up from 10.1% in 2009. Anticonvulsants represented 15.2% of the drug spend in 2009, up from 4.8% in 2009, CWCI said.

Those dermatological medications include high-cost topical creams and patches for pain management. While the number of dermatological prescriptions increased only moderately, from 5% of all prescriptions in 2009 to 5.6% in 2018, the share of total drug spend increased, from 10.1% to 17.6% during that period.

CWCI said that indicates an increase in the average amount paid for dermatological prescriptions, “which in 2017 surpassed opioids as the most costly drug group in California workers' compensation.”

The shift away from opioids to alternative drugs brings its own set of problems.

“Highly addictive benzodiazepines, such as Valium, Xanax, Ativan, Librium and Klonopin, are a prime example of this,” CWC said. “Originally prescribed as tranquilizers, benzodiazepines are found in multiple therapeutic drug groups, including anticonvulsants, antianxiety drugs and hypnotics/sedatives.”

The report notes that the Journal of the American Medical Association released a report last month that showed benzodiazepines are increasingly prescribed by physicians for a wide range of conditions, including back and chronic pain, anxiety and insomnia. Often they are combined with other drugs and are implicated in a growing number of overdose deaths.

The trend away from opioids to anticonvulsants is proving expensive for workers’ compensation insurers. The average cost of anticonvulsant prescriptions increased, from $102 in 2016 to $125 in 2018, a 22.5% price hike. The vast majority of the prescriptions are for brand-name drugs, CWCI said. 

The average price of opioids, by contrast, decreased, from $70 in 2016 to $61 last year.

​Wiggs, M. B293080 ADJ2798585, ADJ2723676 Writ issued 12/3/18
In this case involving admitted 1990s injuries resulting in the need for further medical treatment, whether the Board erred in ordering defendant to serve a nurse case manager with certain medical reports and in ordering the nurse case manager to evaluate applicant and report on the need, frequency and duration of home health care, based on the parties’ 2012 stipulation to use a nurse case manager to evaluate applicant’s health care needs, and not based on Utilization Review and Independent Medical Review.

It will be interesting to see  if the current statutorily mandated utilization review and IMR overcomes a prior stipulation of the parties. Stay tuned.

A federal judge in Northern California denied a request to certify a class in a lawsuit three employers filed against Applied Underwriters over its EquityComp and SolutionOne programs.

“Since a class action is not superior to other available methods for fairly and efficiently adjudicating the controversy, the court will deny plaintiffs’ motion for class certification,” U.S. District Judge William B. Shubb wrote in a Jan. 29 decision.

A week after the former insurance commissioner voided key policy documents that Shasta Linen signed when enrolling in EquityComp, Shasta Linen in January 2016 filed a complaint with the federal court in Sacramento accusing program administrator Applied Underwriters and its affiliates of unfair business practices. Shasta Linen sought to represent all California employers that participated in EquityComp since 2008.

The Shasta Linen complaint was joined with a similar complaint Pet Food Express filed in Alameda County Superior Court that was moved into the federal court system in 2016. Like Shasta, Pet Food Express claimed Applied Underwriters Inc. made misleading statements about how much it would pay for comp coverage through EquityComp.

Alpha Polishing was later added as a plaintiff representing employers that purchased comp coverage through a similar Applied Underwriters program called SolutionOne.

The employers sought to certify a class of hundreds of businesses alleging Applied sold illegal and fraudulent workers’ compensation programs. They argued in June that the court needs to decide whether EquityComp and SolutionOne are insurance products and whether a “reinsurance participation agreement” employers signed when enrolling in the programs modified coverage terms to change rates or dispute-resolution requirements.

Without class certification, the court would have to litigate the same questions using the same evidence in potentially hundreds of lawsuits, the employers argued.

Attorneys for Applied Underwriters in October argued there were too many differences with regard to allegations of unfair competition among the different employers to make a class action lawsuit feasible.

Shubb said in his decision that the question he had to answer was whether a class action is superior to other methods for employers to adjudicate their disputes with Applied. The judge said that though the common allegations that Applied Underwriters violated California law could support consolidating the case in a single venue, other factors more heavily weigh against certification, including the desire of individual employers to control litigation and the fact that some cases are already moving forward in the absence of the class action.

From the outset, the judge said employers that can afford to pay hundreds of thousands in annual premiums to enroll in EquityComp or SolutionOne are better served by bringing individual complaints against Applied.

“Where the stakes are high and each potential class member can take care of itself, the interest in individual control increases,” the judge wrote. “Given the monetary incentive and each putative class member’s presumed ability to bring its own action, this factor weighs against a finding of superiority.”

What’s more, Shubb said employers that would likely be class members represented by Shasta and the other plaintiffs have already filed “a substantial number of actions” throughout the state. The individual lawsuits suggest some employers are interested in controlling litigation themselves rather than being part of a class, the judge said.

Since the cases are already pending, a class action likely would not be appropriate because the threat of inconsistent judicial outcomes already exists, the judge wrote.

Shubb said Applied Underwriters is engaged in more than 100 arbitrations, lawsuits and administrative proceedings before the California Department of Insurance involving 67 employers. In some cases, employers brought only a single claim and are seeking a refund of money paid. Others allege multiple causes of action and ask courts to enforce certain contractual provisions. Some cases have concluded, some are on appeal and others have yet to proceed to trial.

While plaintiffs argued that there are likely still hundreds of California employers that have not filed complaints, Shubb said he was not persuaded that failure to certify a class would lead to hundreds of new lawsuits. The judge said enough time has elapsed since 2016 that it appears any remaining class members don’t have any interest in filing complaints.

Shubb also said it’s possible, as Applied Underwriters has argued, that some employers don’t want to file a lawsuit because they paid less in premiums through the program than they would have if they purchased coverage elsewhere.

Employers suing Applied Underwriters haven’t fared particularly well with Shubb in several key rulings.

On June 20, 2016, Shubb dismissed the plaintiffs’ allegation that Applied Underwriters relied on an illegal policy document, the so-called “reinsurance participation agreement,” to change coverage terms. The judge said there was no evidence at the time that the insurance commissioner had issued a decision disapproving the RPA as an unfiled rate.

But former Insurance Commissioner Dave Jones on that same day did issue a decision concluding the RPA was void and illegal because it had not been filed with his department for review. The commissioner also said he would not have approved the document had it been filed.

Shubb, however, wasn’t persuaded. He said in an October 2017 decision that he does not believe the insurance commissioner followed the proper procedure to disapprove the document. The judge also said the insurance commissioner can invalidate an unfiled document only on a prospective basis. And he pointed out that as a federal judge he wasn’t bound by administrative decisions coming from the California Department of Insurance.

The judge in 2017 also dismissed a racketeering allegation brought by Shasta Linen, Pet Food Express and Alpha Polishing after finding Applied Underwriters made no attempt to defraud employers by concealing how the EquityComp and SolutionOne programs work.

The judge said Applied disclosed the programs in a patent application that described a way to sell retrospective plans to employers that may not otherwise be allowed by buy retrospective coverage.

At the same time the judge allowed the case to proceed on the basis that failure to file the RPA could constitute an unlawful act under California’s unfair competition law.

On October 23, 2018, the Appeals Board issued an en banc decision interpreting Labor Code section 4062.3, holding as follows:

(1) Disputes over what information to provide to the QME are to be presented to the WCAB if the parties cannot informally resolve the dispute.

(2) Although section 4062.3(b) does not give a specific timeline for the opposing party to object to the QME’s consideration of medical records, the opposing party must object to the provision of medical records to the QME within a reasonable time in order to preserve the objection.

(3) If the aggrieved party elects to terminate the evaluation and seek a new evaluation due to an ex parte communication, the aggrieved party must do so within a reasonable time following discovery of the prohibited communication.

(4) The trier of fact has wide discretion to determine the appropriate remedy for a violation of section 4062.3(b).

5) Removal is the appropriate procedural avenue to challenge a decision regarding disputes over what information to provide to the QME and ex parte communication with the QME.


​To read the Entire decision, click HERE.

California’s 3rd District Court of Appeal will hear arguments later this month about whether the opinion of an agreed medical evaluator is sufficient to support a finding that a worker with an impairment rating of less than 100% is nonetheless permanently and totally disabled.

State Compensation Insurance Fund and the California Department of Corrections and Rehabilitation argue that the Workers’ Compensation Appeals Board erred when it determined Dean Fitzpatrick suffered a permanent and total disability as a result of a cumulative injury to his heart and psyche.

The California Chamber of Commerce argued in an amicus brief that the potential financial harm to employers would be “astronomical” if the WCAB decision is allowed to stand.

The California Applicants’ Attorneys Association says in an amicus brief that the WCAB decision was both correct and based on substantial medical evidence, and should not be overturned.

Dean Fitzpatrick was a correctional officer who suffered an accepted cumulative trauma injury to his heart and psyche. He apparently suffered from Prinzmetal’s angina that caused anxiety and depression, according to State Fund’s petition for review.

A panel qualified medical evaluator determined that Fitzpatrick reached maximum medical improvement for his heart condition on Jan. 16, 2016, but his MMI status was disputed for the psychological condition. An AME who examined Fitzpatrick three times concluded that he had reached maximum medical improvement for the psyche condition on June 13, 2015, and that Fitzpatrick was permanently disabled on “strict psychiatric grounds.”

The QME assigned a 97% impairment rating for the heart condition. The AME provided a Global Assessment of Functioning score of 45, which translated to an impairment rating of 71%. When the ratings were combined, Fitzpatrick was left with a 99% permanent disability rating.

Following a trial last year, a workers’ compensation judge in June found that Fitzpatrick was 100% disabled, pursuant to Labor Code Section 4662(b). The WCAB denied State Fund’s petition for reconsideration in September.

The carrier said in its petition to the 3rd DCA that the WCAB has interpreted the Labor Code section as “providing an unfettered path to 100% permanent disability based on its subjective assessment ‘in accordance with the fact.’”

The carrier said there are two recognized paths to a total and permanent disability rating. Labor Code Section 4662 creates a conclusive presumption that certain injuries result in 100% disability, and also says in other cases that PTD “shall be determined in accordance with the fact.”

Labor Code Section 4660 establishes the Permanent Disability Rating Schedule. The PDRS, which is based on the fifth edition of the American Medical Association’s Guides to the Evaluation of Permanent Impairment, can be rebutted by a worker showing he suffered a greater loss of future earnings capacity than is reflected in the scheduled rating.

“Therefore, if an injured worker seeks to rebut the PDRS, he or she must first demonstrate that a work-related injury precludes him or her from taking advantage of vocational rehabilitation and participating in the labor force by presenting evidence from a vocational expert to establish that due to the effects of their injuries, their loss of future earnings capacity is greater than reflected in the scheduled rating,” according to State Fund. “Although such evidence was provided in this case, it was explicitly dismissed by the WCJ and not considered by the board in rendering its decision.”

The carrier argues that the judge and the WCAB relied on an “invented expansion” of Labor Code Section 4662(b) in arriving at the conclusion that Fitzpatrick was 100% disabled.

State Fund argues that the legislative intent of the provision in 4662 allowing PTD determinations in accordance with the fact was to limit the conclusive presumptions to the enumerated conditions, which includes the loss of both hands or eyes, and injuries causing mental incapacity or paralysis.

“For over 100 years, no judicial body has ever interpreted Section 4662 as creating a second pathway to total disability because the Legislature did not intend the phrase ‘in accordance with the fact’ to be interpreted so broadly,” the carrier said. “The legislative history establishes that the plain meaning of the phrase ‘in accordance with the fact’ as set forth in Section 4662(b) merely means there is no presumption of total disability in any case other than the conditions listed in Section 4662(a).”

The California Chamber of Commerce agreed with State Fund’s statutory analysis and said Labor Code Section 4662 was not the proper way for the WCAB to conclude that Fitzpatrick was totally disabled.

Fitzpatrick didn’t have the specified conditions under 4662(a), the chamber argues. By jumping straight to finding that Fitzpatrick was totally disabled in accordance with the facts of the case, the WCAB ignored the requirements in Labor Code 4660, according to the chamber.

The chamber also claimed that the board didn’t require Fitzpatrick to present substantial evidence to rebut the presumption that his 99% rating was correct.

“In doing so, the board presented future litigants with an improper advantage wherein employees would be found total and permanently disabled without proper rebuttal evidence being required and forcing employers to accept a total permanent disability rating when the employee is actually only partially disabled,” the chamber said.

The chamber also said that while the difference between a 99% disability rating and a total disability rating may appear minor, the financial implication is not.

“While the permanent disability established here was 99%, the 1% difference would mean that the employer is liable for an additional $1.3 million,” the chamber said.

The California Applicants’ Attorneys Association said in its amicus brief that employers are trying to shift the appellate court’s attention to rebutting the PDRS and Labor Code Section 4660, when such issues are not relevant.

CAAA argues that the phrase “all other cases” in Labor Code 4662(b) makes the statute applicable to all other cases, and was not an attempt to restrict the conclusive presumption of total disability to the four specified conditions as State Fund argued.

“If the Legislature sought to limit all findings of permanent and total disability to only those defined by Labor Code 4662(a) or rebuttals to the PDRS via Ogilvie, this could have easily been done,” CAAA said. “Both SB 899 and SB 863 provided sweeping changes to the workers’ compensation scheme including the 2005 PDRS, yet the plain, unaltered language of Section 4662 states unambiguously that an injured worker may prove permanent and total disability in accordance with the facts."

CAAA said the argument that the WCAB has created an unfettered path to arrive at PTD is false.

“Injured workers still have to prove the facts upon which a finding of permanent and total disability could be made, and absolutely nothing in Labor Code 4662 in any way hinders a defendant’s ability to submit medical evidence, rebut exert testimony, provide their own vocational experts, or enter the full gamut of discovery that could be employed to argue against a finding of permanent total disability,” CAAA said.

The 3rd DCA is holding oral arguments at 9:30 a.m. Sept. 17.