Changes to Drug Formulary Starting January 1, 2018

After a worker sustains a work-related injury, he or she will receive a treatment from a large range of providers, depending on the type of the injury. The type of treatment can range from psychological treatment to surgery to chiropractic treatment. Often, the treatment often includes prescription medication to treat and address any number of conditions that may have arisen from the work-related injury and subsequent treatment. In recognition of the widespread use of prescription medication in treatment of work-related injuries in the workers’ compensation system, the California legislature has created new laws with requirements to adopt a new drug formulary.

Drug formularies are used in both health insurance and workers’ compensation insurance fields. A drug formulary is, quite simply, a list of medications. The list will provide what types of mediations are approved and covered under the insurance and what type are not. Just because a worker is prescribed a medication that is not on the approved list of a drug formulary does not mean that the medication will not be covered under workers’ compensation, merely that the worker may have to take additional steps to have the cost of the medication covered. The purpose of a drug formulary is to attempt to cut costs to the workers’ compensation system and in some other states has seen other benefits such as a reduction in the number of opioid prescriptions.

Assembly Bill 1124 mandated the adoption of an evidence-based formulary by the DWC. After an initial comment period, the DWC has modified the proposed regulations in order to make them more clear and to add more detail. The comment period ended on August 2, 2017. There are many changes the DWC is considering making. These changes include:

  • Making the effective date for the new formulary January 1, 2018;
  • Changing drug designations from “preferred and non-preferred” to “exempt and non-exempt;”
  • Phased implementation for the formulary;
  • Clarification of particular dispute resolution processes; and
  • Updated the drug listings.

When treating an injured worker, a medical provider may reference the drug formulary, or he or she may not. It is up to the insurance company to determine whether or not the drug is on the exempt or non-exempt list and whether the company may require additional steps from the injured worker before covering the cost of the medication.

If you have questions about your business whether it is required to cover the cost of certain medication for injured employees, contact me today at (714) 516-8188. We can discuss your business and your responsibilities.

Liens and Angelotti Chiropractic

When a worker sustains a work-related injury, he or she is entitled to seek medical treatment for the initial injury as well as an on-going basis. Workers’ compensation is meant to cover the costs of the treatment, including equipment, therapy, surgery, prescription medication, and a number of other costs. A provider who has supplied services, products, or medicines to an injured worker in a workers’ compensation case can file a lien against the workers’ compensation benefits of the worker. This allows the provider to make sure he or she gets paid. In 2012, a bill came into effect that required lien holders to pay an “activation fee.”  The purpose of this fee was an attempt to clear the large backlog of small liens that were bogging down the system, as well as discouraging providers from filing small claims by making the fee large enough as to render the lien worthless. A case called Angelotti Chiropractic v. Baker challenged the constitutionality of the activation fee. The case claimed that the activation fee was a violation of the Equal Protection clause of the United States Constitution because large institutional lien holders such as union trusts and health care plans were exempt from having to pay the activation fee. The plaintiffs alleged that this was unfair, and either all or no lien holders should have to pay the fee. The court ultimately agreed.

In November 2013, the court approved the request for a preliminary injunction, which prevented the DWC from collecting the activation fee for the liens from before 2013 as well as preventing enforcement of a provision of the new law that would have allowed for dismissal of liens by December 31, 2013 if the activation fee had not been paid.

The Ninth Circuit United States Court later determined that the activation fees were, in fact constitutional. The court dismissed the injunction put in place by the trial court. The court determined that any affected lien claimant who filed a declaration of readiness or attended a lien conference between November 9, 2015 and December 31, 2015 must pay the activation fee. It also determined that pursuant to labor code 4903.06(a)(5). After December 31, 2015, activation fees were no longer accepted by the DWC. Providers should note that the fee for filing liens was completely unaffected by this case.

If you have questions about how workers’ compensation claims are paid, you need an experienced attorney to discuss it with you. Contact us today at (714) 516-8188 for a consultation to discuss your business and how workers’ compensation will impact your business.

Costs Workers’ Compensation Benefits Are Meant to Cover

Every employer does his or her best to make the working conditions at his or her place of business as safe as possible for customers and employees. Unfortunately, even with the most meticulous of precautions, injuries will happen. When an employee suffers a work-related injury, that worker may file a workers’ compensation claim. There are some specific costs that workers’ compensation is meant to cover.

First, workers’ compensation benefits are meant to cover the cost associated with the medical attention required to addressed the worker’s injury. These costs can vary wildly. Naturally, the immediate costs such as emergency room bills, ambulance costs, or just the immediate bills associated with receiving medical attention fall under this category. However, additional costs associated with on-going care may also be covered. This could include prescription medication, chiropractic care, or physical therapy. Surgery, specialist treatment, and durable medical equipment all are also meant to be covered by workers’ compensation.

Next, lost wages also may fall under workers’ compensation. An employee may be unable to work after a work-related injury. This inability could be temporary or permanent, and be partial or total. There are specific formulas provided by the law to assist in determining the amount of disability and how much an injured worker may be entitled to receive in the long-term.

In the worst-case scenario, workers’ compensation will also cover funeral costs and death benefits for a worker who passes away as a result of a work-related incident. Death benefits can extend to a deceased worker’s surviving immediate family, and the amount that the family will stand to receive from workers’ compensation is set by statute.

Conversely, there are costs that workers’ compensation and workers’ compensation insurance will not cover. Workers’ compensation insurance will not assist your business with the costs associated with finding, training, and paying a replacement employee. The burden of having to fill the gap left by an injured worker falls on your business. Penalties for OSHA violations, as well as law suits under 132a are also not covered by insurance. Although a laudable goal, workers’ compensation will also not help your business improve safety conditions at your business following the injury.

Understanding what workers’ compensation and insurance are meant to cover will help you make a plan for your business’s future. Contact me today at (714) 516-8188 to talk about your business and let me help you prepare for the future.

How and When Workers’ Compensation Benefits Are Paid

The workers’ compensation system is designed to help employees when they get injured at work.  Employees will be entitled to receive a variety of different type of payments, including temporary disability, permanent disability, and medical costs.  Understanding when and how these payments are made can be immensely helpful to getting a better grasp to how the workers’ compensation system works.

Temporary disability is either temporary total disability, i.e. when the employee is not able to work at all during recovery, or temporary partial disability, meaning the employee can work, but not work a full schedule while recovering.  Temporary disability payments are two thirds of the gross wages the employee receives, although there is a cap set by state law.  The temporary disability payments begin after the employee’s medical provider determines that the employee is unable to work for at least three days.  Payments are made directly to the employee, and are made every two weeks.

Permanent disability means that the employee has a lasting disability that permanently reduces the employee’s earning capacity.  The employee may be entitled to permanent disability payments even if he or she is able to return to work.  After a doctor determines that an employee’s injury has become “permanent and stationary,” meaning the employee’s injury has reached the maximum level of recovery, the amount of permanent disability must be determined according to very particular formulas.  The percentage of permanent disability will be converted to a specific dollar amount, based on average weekly rages at the time of the injury.  The permanent disability payments are made directly to the employee, and must be paid within fourteen days after temporary disability payments end.

Medical payments are typically handled directly between the health care provider and the workers’ compensation insurance company.  The medical provider will bill the workers’ compensation insurance company directly for the cost of medical services and devices.  If the worker’s claim is accepted, the medical provider is not permitted to bill the injured worker for the balance of services rendered if the workers’ compensation insurance company does not provide as much payment as they usually receive.  The employee will only receive copies of the bills from the medical provider if he or she specifically requests to receive them.

The timing and method of workers’ compensation payments can seem overwhelming.  Call us today at (714) 516-8188 and let us help you understand the system.

Settling a Claim for Permanent Disability

It is increasingly common for law suits to be settled out of court.  This also holds true with workers’ compensation cases.  The workers’ compensation system is uniquely suited for settlement before a case ever sees a court room, and employers should keep in mind the benefits and potential risks of settlement.  Permanent disability presents unique issues in terms of settlement.

There are two main ways to settle a permanent disability claim.  The first is called “compromise and release.”  This method means that the employee agrees to take a one-time lump sum payment in exchange for agreeing that the case is forever settled.  After the compromise and release settlement is accepted by the workers’ compensation judge, the employee is then directly responsible for any and all future medical expenses.  No additional claims can be made for reimbursement through the workers’ compensation system for the injury.  An employee will often choose this option if he or she also has health insurance that would assist with medical costs.  The other type of settlement is called “stipulation with request for award.”  In this type of settlement, the employer and employee come to an agreement about the type of injury, the extent of the injury, and the medical care that is required for treatment.  The employee then receives periodic payments based on the degree of injury that the parties have already agreed to.  In addition to the periodic payments, the employee may still seek to have his or her medical expenses reimbursed through the workers’ compensation system in the future.  It is less common for employees to choose this type of settlement, however it is often required if the employee still works at the employer with the same insurance company

Employers should also be aware of some of the wrong reasons to settle a claim, or the wrong time to settle a claim.  Especially for permanent disability, it is not appropriate to finalize a settlement when it is not completely certain that the employee’s disability has become permanent and stable.  The employer should carefully scrutinize medical records to make sure that an employee’s injury is now indeed stable.  An employer should also avoid the temptation to settle a claim just to get it out of the way.  A claim is stressful for any employer, but it is important to make sure that a claim is valid before agreeing to pay permanent disability benefits.

If your business is facing a workers’ compensation claim, you need an experienced attorney to help you examine your settlement and trial options.  Contact us today at (714) 516-8188 for a consultation to discuss your business and your options.

State Compensation Insurance Fund

Under California law, almost all employers are required to maintain workers’ compensation insurance.  This insurance will cover the costs of medical treatment for an employee who sustains injury while working on the job.  California law provides harsh criminal and civil penalties for those employers who fail to abide by this requirement.  In some cases, though, an employer may have difficulty obtaining insurance.  Some companies provide services that are considered “high risk,” and so insurance companies are reluctant to provide insurance to those companies. 

To address this problem, the California State Labor Department created the Workers’ Compensation Joint Underwriting Associations.  The purpose of the WCJUA is to provide a resource for those high risk employers who have a hard time purchasing workers’ compensation insurance.  The primary WCJUA in California is called the State Compensation Insurance Fund (SCIF).  The SCIF may provide workers’ compensation insurance to those businesses that are otherwise unable to obtain coverage on the open market.  SCIF is a non-profit organization and provides the same services as other workers’ compensation insurance providers.  Although the SCIF was established by the California state legislature in 1914, it is not a branch of the California government.  SCIF provides insurance to all types of employers, but is an especially crucial resource for those employers who are unable to purchase insurance elsewhere.  The types of employers who are typically in need of insurance through SCIF are new business owners, business owners with poor premium payment history, or those in a high risk industry.  Typically, in order to be considered hard to place or high risk, an employer must have been rejected by at least three other open-market insurance companies.

There are some drawbacks to the system.  Employers should be aware that even though the state has made it possible for them to buy insurance despite being high risk, the premiums will still be higher than they otherwise would be if they were not engaged in a high risk industry.  The underwriting guidelines for the SCIF are also exceptionally strict and subject to heavier state regulations.  The application is long and meticulous, taking up to a month to obtain an insurance policy.  Finally, out of state work is often excluded from coverage.  If a business has branches in other states, the business may have to purchase insurance in that state as well.  However, on the plus side, the SCIF makes it possible for high risk businesses to comply with the state law requirement to carry workers’ compensation insurance.

Workers’ compensation insurance is a complicated issue and can become further complicated if your business is difficult to place. Call me today at (714) 516-8188 and let me talk with you about your business and workers’ compensation.

AB 1244

The workers’ compensation system is instrumental for both employees and employers.  For employees, it creates a no-fault system wherein an employee may receive compensation for a work-related injury without having to prove that the injury is the fault of the employer.  For employers it creates a system wherein the employer is protected from most tort claims.  The system is crucial to the way our employer-employee relationship and law functions.  Unfortunately, there are some that seek to exploit the system for their own financial gains.  The state of California has made many efforts in recent years to combat growing fraud that exists in the workers’ compensation system.  One of these efforts may be seen in Assembly Bill 1244.

On January 1, 2017, AB 1244 went into effect.  Under AB 1244, the administrative director would be required to immediately suspend certain physicians or medical providers from participating in the workers’ compensation system under certain circumstances.  Providers who have been indicted for a felony or misdemeanor involving fraud or abuse of the workers’ compensation system, the Medi-Cal program, or Medicare shall be suspended from participating in the workers’ compensation system.  These medical providers or physicians would also not be allowed to file liens for any treatment provided to the injured workers.  The California Department of Health Care Services also maintains a “Medi-Cal Suspended and Ineligible Provider List” which contains doctors, nurses, pharmacies, chiropractors, and medical equipment vendors who are not permitted to participate in the workers’ compensation system due to a previous fraud conviction. 

Other providers who are not currently suspended also need to be aware of the suspended providers list.  Certain actions taken by providers who are not currently suspended could lead to that provider also landing on the list.  Actions such as a pharmacy filling a prescription and then billing for the medication if prescribed by a suspended physician, providers billing for treatment prescribed by a suspended physician, or a clinic employment and submitting claims for treatment rendered by a suspended physician could all end up with a suspension for the previously not-suspended provider.

The law is constantly changing, and it is essential that your business is up-to-date on the latest developments. Call me today at (714) 516-8188 for an appointment to discuss your business’s future and the way it may be impacted by the new laws

Common Reasons Claims Are Denied

The claims process for workers’ compensation can be notoriously complex and difficult to navigate. Each employer should make every available effort to smooth the claims process before it starts by providing adequate training to employees, including managers, and making sure that there are definite procedures in place for the process. Despite best efforts, claims can be denied. Understanding common reasons behind an initial claim denial can assist in smoothing the process.

 

One of the most common reasons for denial of an initial claim is filing a claim after termination .  In California, the statute of limitation on workers’ compensation claim is one year from the date the employee suffered the injury. If the injury was cumulative, meaning it was sustained little by little over time, this could be an exception. If the claim is filed after the statute of limitation has passed, the claim will probably be denied.

 

Another reason could be that the documentation backing the claim is inadequate or inaccurate. An employee needs to provide as much detailed and compelling medical documentation as possible. This includes not only the initial diagnosis, but also how this injury impacts the employee’s ability to work. Just because an employee provides documentation that he or she is injured, even if that injury seems significant, this is not enough. A key component of a workers’ compensation claim is determining an employee’s level of disability. Inadequate documentation supporting a workers’ compensation claim will likely result in the claim being denied.

 

A dispute between the employee and the employer is another common reason for claim denial. An employer may contest a workers’ compensation claim for a number of reasons. For example, an employer may dispute that an injury actually occurred in the scope of employment or that an injury occurred at all. In such a situation, it may be necessary for the employee to gather even additional evidence to resolve the dispute from the employer. Employers should be vigilant for a lack of documentation or other possible signs of fraud, and not be afraid to request additional proof. Workers’ compensation claims may increase an employer’s insurance premiums, so an employer needs to make sure that any potential claims are valid.

 If you have questions about your business and the workers’ compensation claims process, contact me today at (714) 516-8188. The claims process can be complicated, and you need an experienced attorney to walk you through it.

Types of Benefits Awarded

Workers’ compensation provides a safety net that is often essential to the financial stability of employees who have sustained work-related injuries. Workers’ compensation allows an employee to receive benefits from his or her employer or the employer’s insurance carrier in order to cover the medical costs or living expenses. To this end, employers are required to carry workers’ compensation insurance to make sure employees are taken care of. Workers’ compensation in California provides for a variety of different types of benefits, depending on the injury.

Total Temporary Benefits are the type of benefits that are paid when an employee’s work-related injuries are so severe that he or she is completely unable to work, or where the employer is not able to provide accommodations to allow the employee to return to work under necessary temporary restrictions. This type of claim is paid at the rate of two thirds of an employee’s weekly earnings, up to a maximum of $1172.57  in 2017.

Temporary Partial Disability is designed for injured employees who are able to return to work, but not to the extent to which he or she worked before sustaining an injury. For example, if an injured employee is only able to work part-time instead of full-time, he or she may apply for this type of benefit. In such a case, an employee would be entitled to benefits that are proportionate to his or her disability, and he or she would be entitled to two thirds of the difference between what the employee made before the injury and after the injury.

Permanent partial disability is available once an employee has reached the maximum recovery and is able to return to work, but with limitations. The amount of disability paid to the employee is determined according to a statutorily scheduled amount. The length of the disability payments will be determined by the percentage of the disability.

Total permanent disability can also be available, although it is rare. If an employee is completely disabled, such as no longer has the use of arms or legs or has gone blind, then he or she may  receive disability payments for life. Finally, death benefits could potentially be available if an employee dies as the result of a work-related injury.

Workers’ compensation is a vast system, and you need an experienced attorney to walk you through it. I have extensive experience assisting my clients and their business in all stages of workers’ compensation claims. Contact me today at (714) 516-8188 to talk about your options and your business.

Regional Overview of California Workers’ Compensation Claims

Workers’ compensation is a system designed to make sure that employees who sustain work-related injuries are able to get the treatment they require. When handled properly, it can also help protect employers from liability. Different industries have different rates of workers’ compensation claims, as some types of jobs involve an inherently higher level of danger. Just as the frequency of claims varies from profession to profession, it also may vary by region.

A report released by the California Workers’ Compensation Institute determined that employees in California’s Central Valley have a different claims experience that those workers in other areas. The study determined that the time lag between when the employee notifies the employer of the work-related injury to the notification of the administrator to the initial treatment of the employee are significantly shorter than other regions in the state. The study went on to find that after twenty four months have elapsed after the initial injury, Central Coast claims average more medical visits for the purpose of rehabilitation, evaluation, management, or chiropractic care. The biggest difference, though, was in the surgery rate. Central coast workers’ compensation claims after 11.2 percent more medical payments for surgery than the rest of the state. However, the claims in the Central Coast seem to run significantly faster than in the other regions. The average claim lasts 325 days, which is two and a half months shorter than in other parts of the state. This is consistent with the fact that claims are addressed more quickly in this region over all. In 2015, the Central Coast accounted for 7.7 percent of all work-related injury claims in the state. Over the span of the last eleven years, the Central Coast accounted for an average of 6.7 percent of all workers’ compensation claims.

A large proportion of the claims reviewed in the study were agricultural claims. Almost eighteen percent of the claims involved in the study were agricultural claims. Despite this overall percentage, in the Central Coast, only 2 out of 10 job injury claims were related to agriculture.

 If you have questions about your business, workers’ compensation, and whether your business is taking the proper steps, contact me today at (714) 516-8188. I am highly experienced in guiding my clients through this area of law.

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