Recent Workers' Compensation News for Feb 05, 2012
Providers' Suit Against UR Vendor Survives AntiSLAPP Motion
Fri, 3 Feb 2012 06:51:04 - Pacific Time
Workers' Compensation reform has provided employers with multiple layers of control over benefits and medical care. One process, the Utilization Review, was created to provide a scheme for determining if a request for authorization for medical care meets standards of evidence based medicine.
But a lawsuit filed by Electronic Waveform Lab, Inc., the developer and Manufacturer of the H-Wave® Instrument, alleges that Utilization Review (UR) doctors and EK Health, a large provider of UR services to insurance companies, have conspired to deny coverage for the H-Wave device, disparaged the device to others, and intimidated prescribers. The Complaint alleges Violation of the Cartwright Act, Intentional Interference with Prospective Economic Advantage, and Defamation/Trade Libel.
And this week, their suit moved a step forward. The Utilization Review defendants moved to strike the entire complaint under the California AntiSLAPP statute. Under California law, to survive such a motion, the plaintiff must prove, among other things, that there is a probability that they will prevail with their suit.
After reviewing the evidence submitted by the plaintiff, Superior Court Judge Michael L. Stern denied the utilization review defendants' AntiSLAPP motion. The Court found that "plaintiff has offered sufficient evidence to show a probability it will prevail at trial on its claims." In so finding, the court noted that: "Plaintiff furnishes several declarations from physicians' offices regarding statements by certain defendants maligning the H-Wave Treatment"...For example, numerous declarants testified under oath that defendants made "disparaging statements that the H-Wave device would never be authorized and no review was necessary." In addition, the court received expert testimony from Susan Honor-Vangerov the former Manager of State of California Division of Workers' Compensation Medical Unit. According to Judge Stern, Ms. Honor's expert testimony demonstrated "that the defendants' actions go beyond their review capacity and outside their opinion-rendering or decision-making powers."
Officials from the company say that this case has industry wide ramifications for those organizations who seek to control the utilization review process beyond the statutory rules.
H-Wave's counsel, Nicholas Roxborough and Joseph Gjonola of Roxborough, Pomerance, Nye and Adreani are thrilled with the outcome of this motion. Removing unwarranted barriers to providing evidence based treatment modalities such as the H-Wave will help allow injured employees to return to work. Read More...
Exclusive Remedy Does Not Bar Emotional Distress in Sexual Harassment Case
Fri, 3 Feb 2012 06:09:17 - Pacific Time
Melissa Routh filed a complaint in Kern Superior Court, naming the Kern County Probation Department as the sole defendant. The complaint alleges that Routh was sexually harassed and then subjected to discrimination and retaliation when, after reporting the sexual harassment, her complaint was ignored, one of the harassers was given a job promotion, and she was subjected to the internal affairs investigations and demoted. Routh further alleges her termination was a pretext for retaliating against her reports of sexual harassment and requested reassignment, and that the Department’s actions caused her emotional distress.
The Department filed a motion for summary judgment or summary adjudication. With respect to her claim of intentional infliction of emotional distress, the Department asserted the conduct of its employees was not extreme and outrageous, and the claim was barred by the exclusivity provisions of the Workers’ Compensation Act. The trial court granted summary judgment on this claim, finding it was barred by the Workers’ Compensation Act. Routh appealed.
The Court of Appeal in the unpublished opinion of Melissa Routh v Kern County Probation Department concluded that if any of Routh’s FEHA claims survive summary judgment, Routh’s cause of action for intentional infliction of emotional distress is not subject to the exclusivity provisions of the Workers’ Compensation Act. (See Accardi v. Superior Court (1993) 17 Cal.App.4th 341, 347, 352.) This is so because such a claim, if based upon the employer’s harassment or discrimination, is "founded upon actions that are outside the normal part of the employment environment.’" (Murray v. Oceanside Unified Sch. Dist. (2000) 79 Cal.App.4th 1338, 1363.)
However, the Court went to to say that an intentional infliction of emotional distress cause of action requires a showing of extreme and outrageous behavior beyond all bounds of decency. The conduct must have been committed with the intention of causing, or reckless disregard of the probability of causing, emotional distress, and the plaintiff must have suffered severe emotional distress. "Behavior may be considered outrageous if a defendant (1) abuses a relation or position which gives him power to damage the plaintiff’s interest; (2) knows the plaintiff is susceptible to injuries through mental distress; or (3) acts intentionally or unreasonably with the recognition that the acts are likely to result in illness through mental distress."
The Court concluded that given an employee’s fundamental, civil right to a discrimination free work environment, by its very nature, discrimination in the work place is outrageous conduct as it exceeds all bounds of decency usually tolerated by a decent society. Accordingly, if properly pled, discrimination will constitute the outrageous behavior element of a cause of action for intentional infliction of emotional distress.
The summary judgment with respect to Routh’s causes of action for retaliation, discrimination, wrongful discharge in violation of public policy and intentional infliction of emotional distress was reversed. Read More...
Funding Bill Seeks to Address Drug Shortages
Thu, 2 Feb 2012 07:01:30 - Pacific Time
Legislation aimed at relieving shortages of crucial drugs used to treat cancer.chronic pain and other illnesses may get momentum next week when lawmakers decide whether to attach it to a must-pass funding bill for the U.S. Food and Drug Administration according to an article in Reuters Health.
A House of Representatives hearing next week about FDA funding will address the shortage of life-saving medicines, said the aides, who spoke on condition of anonymity. The number of drugs in short supply rose to 220 in 2011 from 56 in 2006, the year a clear trend started emerging. Some doctors have had to postpone care or use second-best drugs or more costly alternatives to compensate for shortages. President Barack Obama made shortages a national priority with an executive order in October, and urged Congress to quickly pass legislation to address the issue. Two bills that would force drug companies to tell the FDA about looming shortages have been stuck in a deadlocked Congress this year, despite bipartisan support. A third bill was introduced on Tuesday.
Next week's House hearing is part of the process to renew FDA user fees, or the funds companies pay to the agency in exchange for faster review of drugs and devices. Congress must renew the Prescription Drug User Fee Act (PDUFA) every five years. The current legislation is due to expire in September."We're hoping that the user fee bill can be a vehicle for the (drug shortages) language," said one congressional staffer familiar with the matter. Since fees from makers of drugs and medical devices provide more than a third of the FDA's funding, the bill often serves as a vehicle for broader FDA-related changes. The Senate is also working on including the issue of drug shortages in the FDA user fee legislation, another aide said.
On Tuesday, Representatives John Carney, a Democrat from Delaware, and Larry Bucshon, a Republican from Indiana, proposed the third drug shortages bill. Among other measures, this legislation would force the FDA to speed up its review of applications from companies that want to change or ramp up production to address shortages. It would also require the Drug Enforcement Administration (DEA) to raise its quota for certain controlled substances if they are needed for a drug in short supply.
Manufacturers have said the DEA's quota system has prevented them from increasing production of drugs such as Adderall to treat attention deficit hyperactivity disorder. "Certainly the user fee reauthorization is the most likely course of action" to get Carney and Bucshon's bill passed, a third aide said. Read More...
San Francisco Factory Fined $700K For Ammonia Leak
Thu, 2 Feb 2012 06:52:30 - Pacific Time
Columbus Manufacturing Inc. a plant in South San Francisco which makes salami, deli meats and cheeses for sale at retailers such as Albertsons, Bristol Farms and Costco - is still mopping up after poisonous gas leaked twice in 2009.. According to a story in the Los Angeles Times, the company this week said it will pay a penalty of nearly $700,000 to the Environmental Protection Agency and the Department of Justice in connection with the two incidents, which caused 47 people to seek medical attention. Columbus has already paid $850,000 in fines last year to San Mateo County.
The first accident, in February 2009, released 217 pounds of anhydrous ammonia into the air. The next created a 200-pound plume of the gas, which forced a full evacuation of the factory and several nearby businesses. Off-ramps from the nearby Highway 101 and several local streets were also shut down. Seventeen employees were hospitalized - one for four days - and 30 workers from downwind biotech company Genentech were also sickened. Ammonia exposure can cause temporary blindness and skin irritation, while extended contact can result in lung damage and even death. Columbus has settled claims with Genentech.
The company has taken "corrective action" with its employees, according to a statement from Columbus Chief Executive Tim Fallon. The meat-processing facility has already spent $7 million upgrading its emergency protocol and refrigeration system -- now fully contained in an enclosed building along with the ammonia that it uses. Fallon said that the "unfortunate incident" was caused by "actions made by a third-party contractor during a plant upgrade." The ammonia release had "no impact whatsoever on our production quality, and no products were affected," he said. Read More...
California Workers’ Comp Insurers Returns Improved in 2010
Wed, 1 Feb 2012 05:42:32 - Pacific Time
A brief article in the Insurance Journal says that after declining for four consecutive years, California workers’ compensation insurers’ return on net worth showed signs of improvement in 2010.
This conclusion was based upon the data from the National Association of Insurance Commissioners, which was compiled, analyzed and released by the California Workers’ Compensation Institute on Tuesday.
The data puts California insurers’ 2010 return on net worth at 5.2 percent, up noticeably from 4.6 percent in 2009. That ups the state’s ranking from 25 to a tie for 18 out of 46 states that operate without a monopolistic state fund. Worker’s comp 10-year average is 5.6 percent, the report shows. This is less than 1/3 of the record 16.4% return noted at the 2006 peak. The California market has seen wild swings, But the current uptick still comes as good news.
Workers’ comp wasn’t the only line that was up from 2009 to 2010, according to the data. The average return on net worth of all lines in California rose to 9.7 percent, up from 9.4 percent the year before. Read More...
DWC Posts Report on Alternative Dispute Resolution/Carve Out Program
Wed, 1 Feb 2012 05:42:26 - Pacific Time
With Senate Bill (SB) 983 (Chapter 117, Statutes of 1993), the California Legislature established the "Construction Carve-Out Program" under Labor Code section 3201.5. In doing so, it permitted employers, groups of employers, and employee organizations involved in the construction industry to use collective bargaining as a way to create alternatives to the traditional workers’ compensation dispute resolution process.The passage of SB 228 (Chapter 639, Statutes of 2003) amended Labor Code section 3201.7 to allow non-construction employers, groups of employers, and employee organizations to participate in carve-out programs.All employers participating in a section 3201.5 or 3201.7 ADR/carve-out program are required to report annual claims and payroll data to the DWC. The resulting dataset for the 2010 Carve-out Report contains data from 19 construction carve-out programs (Labor Code section 3201.5) and 4 non-construction carve-out programs (Labor Code section 3201.7). The Administrative Director of the Division of Workers’ Compensation is required to prepare a report to the Legislature based upon the aggregate date reported by these employers. Some of the conclusions drawn from the new 56 page DWC report are as follows.
In 2009, 3,282 total claims were reported filed, of which 1,554 (47 percent) were medical-only and 1,728 (53 percent) were indemnity. From 2008 to 2009, the total number of claims reported decreased by 82 claims, or 2 percent. Overall, 2009 was the first year more claims were filed by non-construction programs (1,761) than construction programs (1,521). For total programs (construction and non-construction), the average paid cost per claim filed in 2009 was $4,978. This average was $5,457 (52 percent) less than the $10,435 average paid cost in 2008.
In 2009, carve-out programs reported resolving 59 litigation claims at mediation, 12 at arbitration, five at the WCAB, and none at the Court of Appeals. Of these litigated claims, non-construction programs litigated only four claims at mediation; the rest were litigated by construction carve-outs.
In order to fulfill the reporting requirements of section 10203, non-construction carve-out programs are required to submit the results of a self-administered worker-satisfaction survey. For 2009, of the four reporting 3201.7 programs, only one submitted results.The one carve-out program that reported results for 2009 found that 34 percent of injured workers surveyed were satisfied or very satisfied with their ADR/carve-out program. In 2008, a different ADR/carve-out program reported that overall 78.3 percent of injured workers surveyed were satisfied with the way their workers’ compensation claims were handled by their ADR/carve-out program..
The average pricing level for carve-out employers relative to the modified pure-premium rates was generally less than for all other employers, except in the manufacturing sector. The average reported loss ratio for policy years 2005 through 2007 is slightly less for carve-outs than for all other employers. In summary, the 2005 through 2007 Unit Statistical Reporting data for carve-out employers suggests the rates charged on these policies after application of schedule rating credits and debits appear to be comparable to those charged on other policies. The rates charged and loss experiences incurred on these policies were generally comparable to other policies. Read More...
DWC Disability Accommodation Regulations Are Effective Feb. 18
Tue, 31 Jan 2012 06:39:48 - Pacific Time
The Division of Workers' Compensation has adopted regulations on public disability accommodations, which were approved by the Office of Administrative Law and filed with the secretary of state on Jan. 19, 2012. These regulations will become effective on Feb. 18, 2012. The regulations provide guidance to the public on the division’s disability accommodations process, which is intended to provide individuals with disabilities equal access to the division’s activities, programs and services.
In 1990, the Americans with Disabilities Act ("ADA") was passed by Congress to combat discrimination against individuals with disabilities. The intent of the law is to protect individuals with disabilities from discrimination and to enable them to participate more fully in society. The law requires that reasonable accommodations be provided to individuals with disabilities at work and also that physical structures and programs be made accessible to individuals with disabilities to remove barriers to their participation. California has passed similar laws, including Civil Code sections 51 and 54 et seq. and Government Code section 11135 et seq., that protect disabled individuals from discrimination and denial of physical and programmatic access to public services and facilities.
This rulemaking action proposes regulations to set forth the procedure by which the Division of Workers’ Compensation will comply with its obligations. Under the new rules, the Division will provide reasonable accommodations to individuals with disabilities to promote equal access to and equal participation in the Division’s programs, activities and services. A request for a disability accommodation may be made in writing on an optional disability accommodation request form, or orally to a Disability Coordinator. Written notice of how to request a disability accommodation shall be posted and made available to the public. Upon submitting a request, the requestor must enter an interactive process to assist in determining what, if any, reasonable accommodation may be provided. The interactive process includes providing additional information and timely correspondence with the Division as needed to address the accommodation request.
A requestor may seek review of an accommodation decision within 15 calendar days of the date the accommodation decision is received. A requestor seeking review of an accommodation decision shall submit a request to the Division’s Statewide Disability Coordinator setting forth the disability accommodation requested, the accommodation decision to be reviewed, and the reasons for review, with any relevant documentation provided. Read More...
Liberty Mutual Annual Workplace Safety Index Shows Lower Costs
Tue, 31 Jan 2012 06:25:38 - Pacific Time
According to the 2011 Liberty Mutual Workplace Safety Index, the most disabling workplace injuries and illnesses in 2009 amounted to $50.1 billion in direct U.S. workers compensation costs. After adjusting for inflation, this year’s costs decreased 6.5 percent from 2008. The annual Workplace Safety Index identifies the top causes of serious non-fatal workplace injuries based on information from Liberty Mutual workers compensation insurance claims, the U.S. Bureau of Labor Statistics (BLS), and the National Academy of Social Insurance. Using injury event definitions developed by the BLS, researchers collect data about injuries that cause the employee to miss six or more days from work, and rank those injuries by total workers compensation costs. The latest Workplace Safety Index provides statistics for injuries that occurred in 2009, the most recent year for which data are available.
The top five injury causes - overexertion, fall on same level, fall to lower level, bodily reaction, and struck by object - accounted for 71.7 percent of the total 2009 cost burden. Overexertion maintained its first-place rank. This event category, which includes injuries related to lifting, pushing, pulling, holding, carrying, or throwing, cost businesses $12.75 billion in direct costs and accounted for more than a quarter of the overall national burden. Fall on same level ranked second as a leading cause of disabling injury. With direct costs of $7.94 billion, this category accounted for 15.8 percent of the total injury burden. Fall to lower level ranked third at $5.35 billion in costs. Bodily reaction, which includes injuries resulting from free bodily motion such as bending, climbing, reaching, standing, sitting, and slipping or tripping without falling, ranked fourth at $5.28 billion. Struck by object took the fifth-place ranking at $4.64 billion.
The remaining five injury causes in the top 10 each accounted for less than 5.0 percent of the direct cost of disabling injuries in 2009. Highway incident represented 4.3 percent of the total injury burden at $2.18 billion; caught in/compressed by (injuries resulting from workers being caught in or compressed by equipment or objects) accounted for 4.1 percent of the total injury burden at $2.04 billion; struck against object accounted for 4.0 percent at $2.01 billion; repetitive motion, with related injuries, accounted for 3.9 percent of the cost burden at $1.97 billion; and assault/violent act accounted for 1.2 percent at $0.59 billion. Overall, the top 10 cause categories comprised 89.3 percent of the entire cost burden of disabling work-related injuries in 2009.
The overall real (inflation-adjusted) direct costs of disabling workplace injuries decreased 4.6 percent between 1998 and 2009. However, fall on same level, fall to lower level, bodily reaction, struck by object, and assault/violent act increased by 34.2, 10.2, 9.4, 5.9, and 3.4 percent, respectively. During this same period, the real cost of disabling caught in/compressed by injuries decreased 1.1 percent; overexertion injuries decreased 9.9 percent; and struck against object, highway incident, and repetitive motion also showed cost declines, dropping 13.4, 19.8, and 40.0 percent, respectively. Read More...
Serious and Willful Misconduct Award Upheld
Mon, 30 Jan 2012 06:27:22 - Pacific Time
The only issue presented in this case before the Court of Appeal was whether the Employer’s failure to provide a spotter for the excavator at the time of Claimant’s injury amounted to serious and willful misconduct. The injury occurred at a construction site near the intersection of Highway 50 and White Rock Road in Sacramento County. The Employer, C.C. Myers Inc., was engaged in the construction of a bridge linking the eastbound and westbound lanes of Highway 50 for future widening of that roadway. Claimant, Bruce Lockwood, and three others were engaged in placing steel shoring plates along the walls of a hole that had earlier been excavated at the worksite. The shoring plates, weighing approximately 850 pounds, were being moved from a stack to the holes using an excavator with its bucket removed. The foreman on the jobsite, Kenneth Barth, stood near the hole and assisted in positioning the plates between vertical I beams already installed in the holes. This process was repeated many times as each plate was installed in the hole, with the excavator moving along a consistent path from the stack of plates to the hole. The crew had been held over to complete the installation of the plates in preparation for another crew to install rebar in the holes the next day. At the time of the accident, the crew had been on the job for 13 and one-half hours and it was starting to get dark. During one of these operations the excavator ran over claimant's foot causing injuries so severe that an amputation of his leg was required just below the knee.
The excavator was equipped with a horn and backup alarm that were working on the day of the injury. Although co-workers heard the backup alarm. Claimant testified there was a lot of noise at the time from the traffic overhead and the machine itself and he did not remember hearing the alarm prior to the injury.
Claimant received compensation benefits, a $58,862.50 permanent disability award, an filed a petition for increased benefits based on serious and willful misconduct. He alleged various acts of Employer amounted to such misconduct, including not having a spotter on hand for the excavator, allowing the operator to use his cell phone while operating the excavator, using the excavator as a crane, and failing to have adequate first aid at the jobsite. Witnesses testified that use of a spotter was a common practice in the industry, and if a spotter had been on hand, he would have stopped the excavator before it drove over Claimant’s foot. Claimant succeeded in obtaining the S & W award after reconsideration. The Board indicated that, under the circumstances presented, "use of a spotter . . . was part of the employer’s duty to provide a safe place to work."
The Employer appealed, and the Court of Appeal in the unpublished opinion of C.C. Meyers Inc. v WCAB and Bruce Lockwood sustained the S & W award. On the limited facts presented in this matter, the Court of Appeal concluded that the Board could reasonably have inferred that the forman, Barth, turned his mind to the particular danger posed by use of the excavator under the unique circumstances presented and affirmatively chose to proceed without a spotter in order to avoid further delay. However, in refusing to award attorney fees the Court conceeded that "this was a close case. We cannot say there was no reasonable basis for the petition by Employer and we therefore deny Claimant’s request for attorney fees." Read More...
Contractor Faces 57 Felony Counts
Mon, 30 Jan 2012 06:27:14 - Pacific Time
Frances Ann Doherty, 51, of Millbrae was arrested, booked and arraigned in San Francisco Superior Court on 57 felony counts related to payroll theft and workers' compensation insurance premium fraud. Her bail has been set at $750,000. This arrest is a result of a joint investigation headed by Investigators from the San Francisco County District Attorney's Office and Detectives from the California Department of Insurance.
According to investigators, Doherty is the owner of Doherty Painting and Construction, a painting contracting company that was awarded numerous public contracts with the City and County of San Francisco, San Francisco Unified School District and other public agencies. Contractors on public work projects are required to pay their workers the prevailing wage and report to the public agency on a weekly basis that the appropriate wage was paid. The investigation revealed Doherty allegedly reported on 23 different public projects that her employees had been paid the prevailing wages on each and every project, with some projects lasting several months. Through the investigation, it was determined that the Doherty Painting workers were only paid a fraction of the wages that they were entitled to. The investigation further revealed that Doherty allegedly provided fraudulent information to public agencies that were doing compliance audits in an effort to conceal the prevailing wage violations.
Doherty also allegedly provided fraudulent employee payroll information to Redwood Fire and Casualty and Zurich Insurance companies from September 2006 through June 2009, which ultimately allowed her to pay lower workers' compensation insurance premiums to these carriers. The amount of premium paid on a workers' compensation policy is determined by the amount of employee payroll, the type of work each employee performs, and the safety record of the employer, commonly known as the experience modification factor. These factors combined will determine the risk to the insurance company and its exposure to loss. If an employer fraudulently reports their true payroll based upon these factors, the insurance company will not receive adequate payment for the risk incurred. A company such as Doherty Painting who is allegedly suspected of committing workers' compensation insurance premium fraud will have an unfair advantage over competitors in bidding for jobs, especially in the public works arena because public works projects typically are awarded to the company with the lowest bid.
The estimated loss to Redwood Casualty and Fire and Zurich Insurance is approximately $108,000. The estimated total loss in regards to insurance premiums and wages is approximately $700,000. Read More...
Past Week News Archive
Firefighter Loses Post Injury Discrimination Case Against LA County: Fri, 27 Jan 2012 11:17:45 - Pacific Time: Read More...
No Subrogation When Employer Has Exclusive Possession Of Accident Site: Fri, 27 Jan 2012 11:15:29 - Pacific Time: Read More...
Man Convicted on Five Fraud Counts in Yolo County: Thu, 26 Jan 2012 07:25:32 - Pacific Time: Read More...
Warehouse Gets $256K in Cal-OSHA Citations: Thu, 26 Jan 2012 07:22:41 - Pacific Time: Read More...
Probe Finds City Workers' Compensation Settlements are "Exceedingly Large": Wed, 25 Jan 2012 06:12:07 - Pacific Time: Read More...
Guidewire Software Closes $115M IPO: Wed, 25 Jan 2012 06:12:00 - Pacific Time: Read More...
Hearing Representative Escamila Continues Battle Against Suspension: Tue, 24 Jan 2012 06:22:39 - Pacific Time: Read More...
WC Cost Increases Due to Recession: Tue, 24 Jan 2012 06:22:32 - Pacific Time: Read More...
New Federal Regulations Will Require Employers to Demonstrate Compliance With Safety Laws, Wage and Hour Laws and Anti-Discrimination Laws: Mon, 23 Jan 2012 05:56:33 - Pacific Time: Read More...
CSHWC Study Discusses Impact of AMA Guides Adoption: Fri, 20 Jan 2012 05:56:39 - Pacific Time: Read More...