State News : California

NWCDN is a network of law firms dedicated to protecting employers in workers’ compensation claims.


NWCDN Members regularly post articles and summary judgements in workers’ compensations law in your state.  


Select a state from the dropdown menu below to scroll through the state specific archives for updates and opinions on various workers’ compensation laws in your state.


Contact information for NWCDN members is also located on the state specific links in the event you have additional questions or your company is seeking a workers’ compensation lawyer in your state.


California

HANNA, BROPHY, MACLEAN, MCALEER & JENSEN LLP

  1-510-839-4804

According to People magazine, Q'orianka Kilcher has been charged with two felony counts of workers' compensation fraud.

Ms. Kilcher allegedingly injured her neck and right shoulder while filming Dora the Explorer and the Lost City of Gold, which was released in 2019. She saw the doctor a few times and then did not respond to the insurance company.  In October 2019, she allegedly requested authorization to see a doctor and told that doctor that she had been unable to accept work due to the severe neck pain. Despite this statement, it was found that she had worked as an actress on Yellowstone from July 2019 to October 2019. She apparently started receiving disability benefits five days after last working. 

There have been other instances of celebrities being accused of workers' compensation fraud.  For example, Brad Culpepper, a former NFL player, was suspected of workers' compensation fraud when he appeared on Survivor after his workers' compensation claim for injuries sustained while playing football. He was sued by his insurance company.

This just goes to show that anyone can be suspected of workers' compensation fraud if the facts are there.

Read more here:  https://highlights.hannabrophy.com/post/102hsre/even-actors-can-be-subject-to-workers-compensation-fraud

 

Independent Medical Review (IMR) is the process by which an injured worker may seek to overturn an adverse utilization review determination. Many among the Applicants’ bar in California will argue that only an employee may appeal the IMR determination. However, that is a misconception, likely driven by the rule that only an Applicant may seek IMR following a UR decision. Once an IMR determination is served, it is binding unless appealed timely on very limited grounds. LC 4610.6(h) outlines how to appeal an IMR determination and does not specify which party may file and it clearly does place any restrictions against any particular party seeking to appeal an IMR determination.

For the general practitioner, LC 4610.6(h) provides five grounds for appealing an IMR Determination within 30 days of service of an IMR determination. The determination of the administrative director shall be presumed to be correct and shall be set aside only upon proof by clear and convincing evidence of one or more of the following grounds for appeal:

(1) The administrative director acted without or in excess of the administrative director’s powers.

(2) The determination of the administrative director was procured by fraud.

(3) The independent medical reviewer was subject to a material conflict of interest that is in violation of Section 139.5.

(4) The determination was the result of bias on the basis of race, national origin, ethnic group identification, religion, age, sex, sexual orientation, color, or disability.

(5) The determination was the result of a plainly erroneous express or implied finding of fact, provided that the mistake of fact is a matter of ordinary knowledge based on the information submitted for review pursuant to Section 4610.5 and not a matter that is subject to expert opinion.

In the case of Jordan Stone v AchieveKids, Caps-Sig (2014 Cal. Wrk. Comp. P.D. LEXIS 663), the Board not only decided it was permissible for Defendant to appeal the IMR determination, the Board even granted Defendant’s appeal of an IMR determination.  Factually, the Stone case involved an initial IMR determination overturning utilization review’s denial a right knee cartilage transplant. Defendant appealed the IMR determination on the grounds that it was issued in excess of the Administrative Director’s powers described in LC 4610.6(h)(1) and that it contained plainly erroneous findings that were not subject to an expert’s opinion per LC 4610.6(h)(5).  

Defendant's IMR appeal was originally denied by the trial judge and reversed on appeal. The Board found that there was a "patent discrepancy" in stating that the requested surgery was not medically necessary in one section, but then stating that it was medically necessary in another section.  The issue was sent to an alternative/new IMR organization to conduct a neutral review. This is the appropriate remedy when an appeal of an IMR determination is granted (LC 4610.6(i)).

So, if you receive an IMR determination that overturns a UR decision look to the 5 grounds for appeal noted above.  If you have questions about how this can apply to your workers' compensation cases, email me or find your local Hanna Brophy attorney at www.hannabrophy.com.

Read more here:  https://highlights.hannabrophy.com/post/102hw9p/defendants-may-appeal-adverse-imr-determination

 

 

2

Two workers' compensation bills currently working their way through the California Legislature contain potentially conflicting language regarding the time period during which a claim administrator may investigate a claimed injury.

AB 1751, which is currently pending in the Senate Labor, Public Employment, and Retirement Committee, would postpone the expiration of the COVID presumptions originally created in 2020 to January 1, 2025. If this legislation is not passed, the COVID presumptions are scheduled to sunset at the end of 2022. The current version of the bill provides that "if liability for a claim of a COVID-19-related illness [brought by an active firefighter or other enumerated employee] is not rejected within 30 days after the date the claim form is filed pursuant to Section 5401, the illness shall be presumed compensable." (LC § 3212.87 (f))

The bill also addresses COVID claims brought by other employees who test positive during a COVID outbreak. LC § 3212.88 (f) provides that "if liability for a claim of a COVID-19-related illness is not rejected within 45 days after the date the claim form is filed pursuant to Section 5401, the illness shall be presumed compensable."

These two provisions potentially conflict with language contained in SB 1127 which is currently pending in the Insurance Committee. This bill would amend LC § 5402 (b)(2) to shorten the investigation period for firefighters and safety officers. The relevant language states "for injuries or illnesses defined in Sections 3212 to 3212.85, inclusive, and Sections 3212.87 to 3213.2, inclusive, if the liability is not rejected within 75 days after the date the claim form is filed pursuant to Section 5401, the injury shall be presumed compensable under this division."  

The two pieces of legislation create different timeframes within which a claim must be accepted. 

AB 1751 is scheduled for a hearing in the Senate Appropriations Committee on August 8. SB 1127 is scheduled for hearing in the Assembly Appropriations Committee on August 3. 

The legislature is scheduled to adjourn on August 31. 

Read more here:  https://highlights.hannabrophy.com/post/102hu6w/pending-covid-presumption-extension-bill-ab-1751-conflicts-with-sb-1127

By:  Jeannette Herrera (Partner - Sacramento)

On June 29, 2022, the Senate Committee on Labor, Public Employment and Retirement voted 4 to 1 to pass Assembly Bill 1751, which extends the COVID-19 presumptions through January 1, 2025 for specified first responders and when there is an outbreak.  AB 1751 has now been re-referred to the Appropriations Committee.  Senate Bill 1159 initially enacted these presumptions.     

California Assembly Member Tom Daly (Anaheim) first introduced AB 1751 on February 1, 2022. 

SB 1159, enacted in September of 2020, created within the Labor Code a rebuttable presumption for COVID-19 illnesses contracted before July 5, 2020 (§ 3212.86), for specified peace officers and firefighters (§ 3212.87), and during an outbreak (§ 3212.88). AB 1751 would amend the expiration date of these Labor Code sections from January 1, 2023 to January 1, 2025.

Proposed AB 1751 would do nothing more than extend the expiration date of these sections by two years. Specifically, there are no other amendments other than to replace "2023" with "2025" in these three sections.

Like SB 1159, AB 1751 would place the burden on California employers to prove that specified employees did not contract COVID-19 at work. These presumptions can be disputed by, among other things, evidence of employer measures in place to reduce the risk of COVID-19 transmission and by evidence of an employee’s non-occupational risk of COVID-19 infection. The bill will go back to appropriations and then to the Senate floor before a final vote.

Learn more here:  https://highlights.hannabrophy.com/post/102hs6b/ab-1751-passes-in-committee-to-extend-covid-19-workers-compensation-presumptions

By:  Edward Hummer (Associate Attorney - Santa Rosa)

On March 21, 2022, the California State Senate's Committee on Labor, Public Employment and Retirement voted  4 - 1 to advance SB 1127, authored by Sen. Toni Atkins (D - San Diego). If passed, this bill would amend Labor Code Section 5402 to shorten the time within which to investigate a claim from 90 days to 60 days. If a claim is not denied within 60 days, it would be presumed compensable. The amendment would further reduce the investigation time for claims involving safety officer presumptions (Labor Code Sections 3212 through 3213.2) to 30 days. 

The bill would also amend Labor Code Section 4656 to provide first responders covered by the Labor Code Section 3212.1 cancer presumption with additional temporary disability benefits. The proposal would provide covered employees with up to 240 weeks of aggregate disability benefits for injuries occurring on or after 1/1/2023. 

Particularly concerning to employers and claim administrators is a provision in the bill that would add Section 5414.3 to the Labor Code. This proposed section would impose a penalty for "unreasonably" denying first responder claims subject to the Labor Code Section 3212 through 3213.2 presumptions. The penalty would be five times the amount of the benefits "unreasonably delayed", with a $100,000.00 cap. The determination of whether a claim denial was "unreasonable" would be left to the WCAB. 

A similar proposal introduced in the California Assembly in 2021 died in committee. The 2021 proposal was evaluated by the CWCI and the RAND Corporation. Both evaluations determined that shortened investigation times and faster claim decisions did not meaningfully assist workers and may actually lead to more provisional claim denials. 

The legislation is opposed by a coalition of business interests including the Family Business Association. The opponents argue that the legislation does not provide sufficient time to investigate claims, creates new penalties that make taxpayer funded presumption claims dangerous to investigate, and increases costs because it more than doubles temporary disability benefits. 

The next hearing on the proposed legislation went forward on April 4, 2022 in the Senate Appropriation Committee. 

Learn more here:  https://highlights.hannabrophy.com/post/102hlsf/committee-approves-proposal-to-shorten-investigation-time-for-workers-compensatio


By:  Jeannette Herrera (Partner - Sacramento Office)

The California Supreme Court declined to review the appellate court decision holding that the derivative injury doctrine does not preclude a lawsuit alleging an employer business negligently exposed a worker to COVID-19 that is alleged to have resulted in a subsequent death of a family member. As such, Plaintiffs may proceed to litigate the issues in civil court. 

Earlier, the Court of Appeals reasoned that the workers' compensation exclusive remedy provisions did not apply because the derivative injury doctrine does not apply to the subject claim. They discussed that the spouse may have had a claim regardless of the employee being injured. 

This case represents a blow to employers seeking protection under the workers compensation exclusive remedy rule.  However,  the event Kuciemba decision in another district found the opposite. There's is no final decision on the merits of the underlying claim here yet,  but we will be sure to keep you updated. 

Learn more here:  https://highlights.hannabrophy.com/post/102hn3n/ca-supreme-court-declines-to-hear-sees-candies-case

By:  Kelly Hamilton (Office Managing Attorney - Redding) 

We've all been there . . . you file a Petition for Reconsideration and advise your client that we will have an answer within 60 days.  Then, on day 59, the WCAB issues a "grant and study" order, which essentially gives them an indefinite time period to issue a decision.  You are then in limbo potentially for years.

There has now been a Petition filed with the 2nd DCA arguing that the practice is unconstitutional on its face.  They further argue that it violates the "compensation bargain" of California workers' compensation because it denies a speedy delivery of benefits.  It is noted that some of the "grant and study" orders were issued within 10 days of the filing of the Petition for Reconsideration.

The article states that there have been over 500 "grant and study" orders issued in the last three years.  In part this is due to the reduced number of commissioners, having been short anywhere from one to three commissioners. Currently there are six commissioners and there must be three on a panel to issue a decision.

Read more on the Hanna Brophy website:  
https://highlights.hannabrophy.com/post/102hkbe/2nd-dca-to-evaluate-constitutionality-of-grant-study-orders


By:  Michael Mazzoni (Associate Attorney - Fresno

The Centers for Medicare and Medicaid Services (CMS) has released an updated Workers’ Compensation Medicare Set-Aside (WCMSA) Reference Guide (Version 3.5, January 10, 2022), and has explicitly targeted [in Section 4.3 of the memo] the usage of non-submit, non-CMS approved Medicare Set Aside [MSA] products which have gained popularity in recent years. Practitioners have utilized these MSA products to provide for allocation for future medical expenses in workers' compensation settlements. However, the new memo causes pause for many, who now fear that CMS may view these allocations as “potentially” improperly shifting the claimant’s future medical treatment to Medicare in contravention of 42 C.F.R. 411.46. 

Section 4.3 states as follows:

"A number of industry products exist with the intent of indemnifying insurance carriers and CMS beneficiaries against future recovery for conditional payments made by CMS for settled injuries. Although not inclusive of all products covered under this section, these products are most commonly termed “evidence-based” or “non-submit.” 42 C.F.R. 411.46 specifically allows CMS to deny payment for treatment of work-related conditions if a settlement does not adequately protect the Medicare program’s interest.

Unless a proposed amount is submitted, reviewed, and approved using the process described in this reference guide prior to settlement, CMS cannot be certain that the Medicare program’s interests are adequately protected. As such, CMS treats the use of non-CMS-approved products as a potential attempt to shift financial burden by improperly giving reasonable recognition to both medical expenses and income replacement.

As a matter of policy and practice, CMS will deny payment for medical services related to the WC injuries or illness requiring attestation of appropriate exhaustion equal to the total settlement less procurement costs before CMS will resume primary payment obligation for settled injuries or illnesses. This will result in the claimant needing to demonstrate complete exhaustion of the net settlement amount, rather than a CMS-approved WCMSA amount."

While the wording of Section 4.3 does not prohibit or ban the use of non-submit or evidenced based allocations, it appears that CMS is aggressively placing the industry on notice by stating that “as a matter of policy and practice” a claimant will need to show that the entire settlement is exhausted, minus procurement costs, before CMS will pay for claim related treatment if the settlement does not include a CMS-approved WCMSA.  Therefore, it is clear that the memo is designed to discourage usage of these non-submit MSA's.  

However, there are instances where non-submit MSA's may be necessary, depending on the facts of the case, including lack of recent medical treatment, threshold issues, etc.  This means that some claims are ineligible to obtain a CMS-approved WCMSA amount and nothing in Section 4.3 (or any other section in the revised WCMSA reference guide 3.5) addresses that particular issue.  

The practitioner should still be free to consider the non-submit option if that works. However, they should be aware that CMS has the non-submit MSA in their crosshairs, and must work with their clients and vendors in crafting detailed and creative settlements which make sure a full accounting is done on the allocated MSA treatment when spent, and that the parties are showing that Medicare's interests are adequately being taken into consideration.


 

By: Peter Liu (Partner - Los Angeles

New WCAB Rules in effect today.  

Most important change is the meet and confer prior to the Mandatory Settlement Conference and the requirement of filing of Pre-Trial Conference Statement (PTCS) by the close of the MSC, which would arguably mean that the PTCS needs to be e-filed prior to the hearing for the telephonic MSCs the WCAB is currently conducting.  

The new rules also specify how hearings can be set for electronic hearing, the procedure if a party objects to electronic hearings, and requirement that if a party intends to appear electronically that good cause petition is filed.  

For now, it appears hearings will continue to be electronic and trials can be electronic if good cause is shown.  

See the details here, new regulations.

Kelly Hamilton - DWC Announces New TTD minimum/maximum rates for 2022.
Although there had been a prior notice that there would be no change to the temporary total disability  (TTD) rates for 2022, that notice had been rescinded as the final State Average Weekly Wage (SAWW) information had not been compiled.  This has...Read more
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Michael Mazzoni - EEOC May Recognize Long-Haul COVID-19 as a Disability, Creating Additional Hurdles for Employers
The U.S. Equal Employment Opportunity Commissions recognition that long-haul COVID-19 may be considered a disability under the Americans with Disabilities Act is expected to increase employers potential liability, and could affect the...Read more
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Edward Hummer - COVID-19 Leading Cause of Work-Related Death in California
On Friday, the California Workers Compensation Institute (CWCI) issued a report finding that COVID-19 was the leading cause of job-related death claims in 2020, accounting for more than 55% of workers' compensation death claims. The report...Read more
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Edward Hummer - Amicus Brief Asks Court of Appeal to Reject Employee's Civil Suit for Wrongful Death of Spouse Caused by COVID-19
A recent Los Angeles County Superior Court case has garnered the attention of several employer-backed groups.  In Matilde Ek et al. v. See's Candies Inc. et al. the plaintiffs allege that Matilde Ek contracted COVID-19 while on the job at See's...Read more
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Michael Mazzoni - Growing Use of off Label Neurological Drugs for Injured Workers Poses New Risks
Managing pain can be a difficult task for injured workers who don't want to be subject to long-term opioid use, and the risks that those drugs pose.  Doctors are much more careful in prescribing opioids, especially in light of the opioid crisis...Read more
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