What Is Subrogation?

The workers’ compensation system was established in 1911 by the California legislature to help provide relief for workers who were injured in the course and scope of their employment.  The system is what is called a “no fault” system, which means that the employee is not required to prove that the injury was the fault of the employer in order to recover for his or her injuries and ongoing disabilities.  In some cases, however, a third party’s actions or inactions may have contributed to the employee’s injury.  Under California Labor Code § 3850, et seq., an employer or the employer’s insurance company may exercise their right to subrogation in this instance.  Subrogation is the right of the employer and/or the insurance company to recover the amount paid under the workers’ compensation suit against a third party.  There are several ways that an employer may use subrogation to recover these expenses.

An employee may seek to recover against a third party whose negligent or even intentional conduct contributed to the accident causing the injury.  An employee may seek to recover, for example, from the equipment manufacturer for faulty safety systems or may sue a negligent driver for a car accident occurring during the course of the employee’s work.  If an employee files his or her own lawsuit against such a third party, an employer has a couple of options.  One option is to serve a Notice of Lien on all of the parties in the lawsuit.  This type of lien is considered a first lien against any recovery obtained by the injured employee.  This means that if the employee obtains a judgment from the lawsuit against the third party, the lien will be paid right after the employee’s attorney fees and legal expenses are paid.  Another option is to intervene in the law suit.  This means that your business will become a party to the lawsuit and will participate in the litigation.

If the employee does not decide to file his or her own lawsuit, your business or your workers’ compensation insurance company still have the independent right to file a lawsuit against a third party.  You should note that the statute of limitations will apply to your business, just as it would apply to the right of the employee to bring his or her own law suit.

If you have questions about subrogation or workers’ compensation, let us answer them.  Call us today for a consultation.

What Is Cumulative Trauma?

The legal system includes a variety of terminology that can seem confusing to non-lawyers, and the workers’ compensation system is no exception.  It is important to understand some of the basic terminology used in the workers’ compensation system to best defend your business.  One important different to understand is the difference between specific trauma and cumulative trauma.  Specific trauma is the kind of injury that typically comes to mind when you think of workers’ compensation, such as a broken arm in a car accident or a concussion from a fall from a ladder.  Cumulative trauma is a bit more nuanced.

Cumulative trauma, also referred to as a “repetitive stress injury,” is an injury sustained from repetitive stress or motions over time.  Carpal tunnel syndrome is the classic example of cumulative trauma, as it takes repeated motion, performed over time, in order to actually develop carpal tunnel.  Another example is the Chronic Traumatic Encephalopathy sustained by professional football players as a result of sustaining multiple concussions.  Cumulative trauma is a compensable injury under the workers’ compensation system, just like specific trauma.

Like specific trauma injuries, workers must bring a claim for cumulative trauma within a specific time frame.  Under California Labor Code § 5412, the worker must bring a claim within one year of discovering the claim or within a year of when the claim should have been discovered, had he or she been exercising reasonable diligence and care.

The California Workers’ Compensation Institute found that on average, cumulative trauma injuries were 53% more expensive than specific trauma cases.  In addition, workers claiming a cumulative trauma injury were much more likely to be independently represented by their own attorneys.  The institute also found that cumulative trauma is most prevalent in the manufacturing industry, which is attributable to the repetitive manual motions typically required of the workers.  Moreover, the study found that a worker claiming a cumulative trauma is ten times more likely to claim another injury.  With these types of statistics, it is clear that it is essential that you have a firm understanding on cumulative trauma and how to protect your business and your workers from these types of injuries and claims.

We have extensive knowledge in helping our clients understand cumulative trauma and the potential impact on their business.  Call us today for a consultation.

Schnore v. Progress Rail Services – Death Benefits and Workers’ Compensation

Work-related injuries are an unfortunate reality of owning your own business. No matter how careful you try to be and how many safety measures you implement to help protect your workers, a work-related injury is bound to happen eventually. Hopefully, when it does occur, the injury will be minor and the employee’s recovery quick and relatively painless. Unfortunately, in some tragic cases, a work-related injury could result in the death of the employee. When this occurs, the surviving spouse or dependents will still be eligible for workers’ compensation benefits. The California workers’ compensation system requires almost all employers to purchase workers’ compensation insurance to cover this very sort of scenario. However, the system is only set up to cover the employees of the business. Independent contractors are not covered under workers’ compensation insurance or benefits. However, the California labor code does not specifically define what it means to be an independent contractor. In a recent case, the California Court of Appeals was faced with a case involving the death of a worker and the classification of independent contractor versus worker.

In Schnore v. Progress Rail Services, a widow brought a claim for death benefits under the workers’ compensation system. Her husband died after suffering a fatal cardiac arrhythmia while driving a truck belonging to the defendant. The widow claimed that she was entitled to death benefits and her husband had been an employee. By contrast, the employer contended that the husband was an independent contractor, and therefore that the widow was not entitled to benefits under workers’ compensation. The court looked to the controlling case on the subject, S.G. Borello & Sons, Inc. v. Department of Industrial Relations. In that case, the California Supreme Court set out a specific set of factors that will assist in determining if a worker is an employee or an independent contractor. In this case, the court considered the fact that the defendant was the one who established the pick up and drop off points for the deceased’s freight loads. The court determined that this method of control was key and that it suggested the deceased was an employee. The widow’s argument was also helped by the fact the trailer used by the deceased was a specialized trailer, which also suggested employment instead of being an independent contractor. The court accordingly rejected the employer’s independent contractor defense and ruled in favor of the widow.

Making a determination about worker classification can be crucial for your business. Call me today at (714) 516-8188. We can talk about your employees and your business.

Why Do We Have Workers’ Compensation and How Does it Benefit My Business?

The workers’ compensation system is firmly entrenched in both federal and state laws in the United States. At its core, workers’ compensation is a form of protection afforded to the employee to make sure that he or she receives compensation for a work-related injury. The first employer liability laws were passed in the United States in 1855, and by 1949, every state had created and enacted its own workers’ compensation statutes. The first employer liability statutes made it possible for an employee to sue the employer for injuries resulting from the employer’s negligent or intentional conduct. Today, workers’ compensation is a “no fault” system. This means that the employee is not required to prove any negligence on the employer’s part before being entitled to workers’ compensation benefits. Although it seems at first glance like it might not be “fair” that an employee does not have to prove the injury was a result of wrongful conduct by an employer, this can actually benefit your business. Having to prove fault can make a case last much longer and make it much more complicated. Protracted litigation is not good for your business, so removing the negligence issue can greatly benefit an employer. Workers’ compensation also means that the employee relinquishes the right to sue the employer. An injured employee may file a claim for workers’ compensation to receive medical treatment and, in some cases, salary replacement. In exchange, however, the employee cannot then also file a law suit. This keeps the employee from being able to “double dip,” meaning he or she cannot get paid twice for the same injury. This provision is good for your business because, again, it will help keep you out of court. If you do end up in a workers’ compensation dispute, California has a special court system set up for workers’ compensation, which helps to speed the process. Workers’ compensation will also benefit your business because it provides a powerful incentive to make sure your employees are properly trained and safe. It also encourages the frequent review and revision of safety protocols, and hopefully reduces the number of injuries suffered by your employees.

If you have questions about workers’ compensation and your business, contact me today at (714) 516-8188. I can help walk you through the process and answer your questions about your business.

Violent Acts and Workers’ Compensation

Work-related injuries can happen despite any and all precautions taken by an employer. Even the most careful preparations can fail to protect all employees from all types of injuries. The workers’ compensation system has been designed such that different injuries may receive different treatment with different types of requirements. One example of narrow or particular requirements is in the case of a work-related injury resulting from violent act.

Workers’ compensation is designed to address an injured worker’s work-related injuries. However, even if the injury is sustained due to willful violence from another worker, the injury is still compensable. For example, if an employee is assaulted by another employee while at work, those injuries will fall under the category of compensable work-related injury. Similarly, if the employee is assaulted by a client or customer, those injuries are also compensable under workers’ compensation. Simply because the assault should not occur during the course of employment or does not directly involve what is an employee’s job duties does not take it out of the realm of a compensable injury. For example, in a 2015 case, the WCAB found that a violent act included a situation when an employee sustained injury after being punched in the back of the head by another co-worker. Similarly, another case found it was a violent act where an employee was injured during a store robbery.

California labor code 3208.3 is one provision that addresses work-elated violent injury. Subsection (b)(2) specifically talks about psychiatric injury that is a result of a violent act. The statute provision states that if the psychiatric injury is resulted from being the victim of a violent act, the employee “shall be required to demonstrate by a preponderance of the evidence that actual events of employment were a substantial cause of the injury.”  A recent case addressed this provision. Larsen v. Securitas Security Services involved a case where a security guard was hit by a car when she was walking through the parking lot, performing her regular duties. Among physical injuries, she also claimed psychiatric injuries arising from the violent act of being hit by the car. The WCAB agreed and pointed out that the injured employee was not required under 4660.1 to prove that the violent act was criminal in nature.

If you have questions about what qualifies as a violent act and how to protect your employees, you need to discuss it with an experienced attorney. Call me today at (714) 516-8188 and let me help you and your business.

Psychiatrist Fraud in Workers’ Compensation Cases

The workers’ compensation system is designed to cover a large variety of work-related injuries. These injuries could range in type from a broken finger to repetitive stress injury to psychiatric injury. Unfortunately, some types of injuries are more likely to be a source of a fraudulent claim or unnecessary treatment, such as soft tissue injuries. Psychiatric injuries can also be a source of fraud, both in the case of the injured worker and the psychiatrist.

One red flag for fraud on the part of the psychiatrist is a very short amount of time spent with the patient. A real psychiatric assessment should take no less than a couple of hours. A quick “in and out” could be a red flag that the psychiatrist is simply trying to move the patients through without providing actual care or careful diagnoses

Another red flag could be a lack of using common and accepted diagnostic tools. For example, there are widely used and accepted tests to look for malingering. A psychiatrist in a workers’ compensation case should be on the look-out for malingering, and a failure to attempt or recognize this type of fraudulent behavior on the part of the patient could be a sign of fraudulent behavior on the part of the psychiatrist.

Finally, employers should be on the look-out for the type of assessments and also that a differential diagnosis actually demonstrates a disability. Although a diagnosis of psychiatric injury absolutely can result in temporary or permanent disability, this is not always the case. Employers need to be vigilant for a situation wherein a worker has a psychiatric injury diagnosis that may be long term but still is very high functioning.

California has been cracking down on fraud and taking steps to end fraud both on the part of workers and medical providers. In a recent case, a psychiatrist named Jason Hui-Tek Yang was suspended from participating in the workers’ compensation system after he was convicted for involvement in an insurance fraud conspiracy. The conspiracy involved referring patients for unnecessary treatment in order to bill the workers’ compensation system. It was determined that Yang had over 2,000 active liens worth over $13,000,000.

Fraud in the workers’ compensation system can come in many forms. If you have questions about how to protect your business, call me today at (714) 516-8188. We can discuss your business and what we need to do to make sure you are protected.

Teachers and Workers’ Compensation

The workers’ compensation system is designed such that an employee may receive proper compensation for injuries that “aris[e] out of and in the course of employment.”  The whole system is designed around the idea that if an employee is injured because of actions taken on behalf of an employer, the employer should assist in taking care of the cost of the employee’s health care and compensate him or her for temporary or permanent disability arising from such an injury. The real issue can come into play, however, when deciding whether an injury really did arise out of and in the course of employment, as happened for one teacher.

This was precisely the central issue in an unpublished case styled Grawe v. Culver City Unified School District. There, the applicant was a school teacher. She sought a determination that she had sustained an 82% permanent disability due to hypertension and psoriatic arthritis. The AME found that “it was medically probable that applicant developed viral cardiomyopathy as a result of contracting respiratory tract infections because of being exposed to communicable viruses from her students.”  As a result of the repeated virus illnesses, the applicant’s hypertension was triggered and exacerbated. In other words, the applicant claimed because she got so many colds from her students as a teacher, she sustained a permanent disability. Her claim was that but for this repeated exposure, she would not have become permanently disabled, thereby making this a work-related injury entitling her to workers’ compensation benefits for her permanent disability. The court looked to the reasoning from a case called LaTourette v. Workers’ Compensation Appeals Board and Long Beach Community College District. The court there held “When an employee engages in a special activity that is within the course of employment, an injury suffered during the activity . . . also arises out of the employment.”  It was essential that the employee was at an increased risk compared to the general public of that danger. The court in Grawe determined that the teacher was, indeed, at increased personal risk for repeated viral infections because of being exposed to her students. Her claim was, accordingly, upheld.

If you have questions about these new regulations, contact me today at (714) 516-8188. We can review your business and make sure that you are in compliance with the reporting requirements.

Timeliness of IMR

When an employee sustains a work-related injury, a complicated set of procedures is set into motion. An employee must receive treatment, an employer must complete paperwork, take witness statements, and submit a claim to its workers’ compensation insurance provider. While an employee receives medical treatment, his or her expenses for medical appointments, continuing treatment, and prescription medication will be submitted to the workers’ compensation insurance company. The claim will then go through a process called “utilization review,” wherein the insurance company will decide if the course of treatment is medically necessary. If the insurance company decides that the treatment is not necessary, it may modify or even outright deny the request for treatment. In such a case, the employee may then request an Independent Medical Review, or “IMR.”  During an IMR, the employee’s medical file is submitted to an independent medical professional who will then review the file and make a determination whether the utilization review made the right decision as to whether the treatment should be modified or denied.

California Labor Code 4610.6 provides several different time requirements for IMRs. Subdivision (d) provides that for any medical dispute not involving the drug formulary, the IMR must be conducted within thirty days of receipt of the request for review and the supporting documentation. A recent case styled Baker v. Workers’ Compensation Appeals Board, Sierra Pacific Fleet Services, et al. took on the issue of timeliness of IMRs and the impact that the failure to conduct the IMR in accordance with the statute’s timelines could have. In that case, the worker was injured after falling over some tools at work. He injured his knee, neck, and shoulder. His physician prescribed certain medication, but a utilization review recommended they be denied. On March 19, 2014, the worker requested an IMR. The administrative director failed to uphold the denial until July 21, 2014. The worker appealed this determination and the workers’ compensation judge ordered a new IMR. The new IMR again upheld the utilization review. The worker again appealed. The WCJ determined that the IMR determination was untimely under 4610.6, but that did not mean that the IMR was de facto invalid. The higher court agreed, and held that “an untimely IMR determination is valid and binding on the parties.”

The workers’ compensation process can be complicated. If you have a question about your case and the IMR process contact me today at (714) 516-8188.

Frances Stevens v. Outspoken Enterprises and Home Health Care

Workers’ compensation is designed to and does cover a wide variety of treatment and types of care for workers who have sustained a work-related injury. Workers and providers can apply for payment for treatment associated with the care, and in some cases this will include home health care. Home health care may be required where an employee sustains an especially severe injury. In Frances Stevens vs. Outspoken Enterprises, Inc. (State Compensation Insurance Fund), the issue was whether it was proper for the Administrative Director to deny the plaintiff’s request for home health care based on an Independent Medical Review.

In this case, the plaintiff employee sustained a work-related injury. After being examined by her own physician, the physician recommended and requested home health care services. The employer requested an Independent Medical Review of this determination. The IMR applied the 2009 Medical Treatment Utilization Schedule Chronic Pain Medical Treatment Guideline and denied the plaintiff’s request to have the cost of her home health care covered under worker’s compensation. The court in a May 2017 opinion noted that there was extensive evidence that her need for home health care was “compelling,” and included extensive expert testimony to that effect. The court determined that the Administrative Director was wrong in applying the guideline and sent the case back to the lower court for further determination. The court stated that if the lower court decided the Administrative Director was wrong in denying the home health care after reviewing the available evidence, it may be appropriate to have a new IMR conducted.

The court ultimate determined that the 2009 Medical Treatment Utilization Schedule Chronic Pain Medical Treatment Guideline was not a “medical treatment necessity standard,” but rather was a standard for Medicaid reimbursement, and the decision was outside the Administrative Director’s authority, pursuant to labor code section 5307.27. The court went on to point out that it was contrary to labor code section 4600(h) and California case law. The court held that the guideline should not have been “summarily applied.”  Instead, the request should have been evaluated within the requirements of 4610.5(c)(2) and the MTUS.

 

If you have questions about the workers’ compensation system and whether your business is obligated to cover certain types of care, you should discuss this with an experienced attorney. Call us today at (714) 516-8188 for an appointment to talk about your business.

Employee Misclassification Mistakes and Why It’s Important

Owning a business is complicated and has many “moving parts.” Getting everything done to make your business run smoothly can often require using resources outside of your business and hiring help for temporary or small jobs. With so many complex business relationships, it can sometimes be easy to lose track of who is your employee and who is just an independent contractor. This seems like a fine distinction, but it is essential that you get it right for purposes of complying with the California workers’ compensation statutes, as California businesses are required to carry workers’ compensation insurance for their employees.

One common mistake made by employers is believing that a written contract will control the determination of whether a worker is an employee or an independent contractor. This is definitely not true. This makes sense, as allowing a written contract to be completely controlling in whether a worker is an independent contractor or an employee would allow unscrupulous employers to classify all workers as independent contractors to avoid paying certain taxes and workers’ compensation insurance. Instead, a number of other factors, such as the nature of the work that the worker performs for the business is much more important to the classification determination. A related mistake is allowing an employee to make the determination as to whether he or she wants to be classified as an independent contractor or an employee. A worker’s preference has no bearing on whether the worker is properly classified.

A business can also make a mistake by trying to control the time, place, and manner the work is completed when dealing with a worker already classified as an independent contractor. If a business attempts to exercise to much control over the manner in which the work is done, the classification could be incorrect. The less control a business exercises over a worker, the more likely it is that worker has been properly classified as an independent contractor.

Getting the classification of workers right is essential for your business. The California labor code provides harsh penalties for businesses that have been found to misclassify employees in an attempt to get out of paying for workers’ compensation insurance. These penalties can run thousands of dollars per violation, and get steeper if the employer has a history of misclassification.

Proper classification of workers is an essential step for businesses and should be done with mindfulness. Contact us today at (714) 516-8188 to talk about your policies and your business.

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