Posts Tagged ‘California’

WCRI – Day One, Part One

Thursday, March 10th, 2016

Day One of the WCRI’s annual conference began with WCRI’s Chairman, Vincent Armentano, of The Travelers Companies, introducing new President and CEO John Ruser. He presented the first session (preliminary finding, subject to change) on the Impact of Fee Schedules on Case Shifting in Workers’ Compensation.

It should come as no surprise that there is substantial variation in fee schedules and prices across the states and that workers’ comp fee schedules and costs continue to be higher than group health costs, in some states significantly higher. Bottom line here: States where workers comp pays higher medical reimbursements have a much greater chance of a soft tissue injury being classified as work-related. Not so much for traumatic injuries, such as fractures. In otherwords, states that have higher reimbursement for workers’ comp than group health have greater incidence of cost shifting to worker’s comp. Follow the money.

Next up, Dr. Bogdan Savych on comparing worker outcomes across fifteen states. Interesting news: Between 9% and 19% (median is 14%) of injured workers “had no substantial return to work” (meaning returning to work for at least 30 days) three years post-injury. These, again, are preliminary findings and subject to change, but 14% is a huge number. This study, based on 6,000 injured worker interviews, raises many questions. For example, what role do differing state workers’ comp benefits play in this. Also, Savych divided the workers into six age cohorts. The older group had more injuries without substantial return to work. What role did their age play in that?

Alex Swedlow, President of the California Workers’ Compensation Institute, delivered a mesmerizing presentation on Independent Medical Review and Dispute Resolution in the state, which, if it were a country, would have the sixth highest GDP in the world. Not surprising, to quote Swedlow, “Size matters.” California’s been trying to control medical costs for decades, and it keeps trying. I can’t begin to cover the totality of  the Swedlow presentation, but here’s one takeaway: Ten percent  of California’s medical providers account for 85% of Independent Medical Review decisions. Again, follow the money.

Kudos And Thanks To Work Comp Central’s Greg Jones

Wednesday, December 9th, 2015

Work Comp Central’s Greg Jones has relentlessly followed and reported on the Michael Drobot case in Southern California, a case that fairly oozes greed and sleaze.

For the uninitiated, Michael Drobot’s Pacific Health Corporation owned two hospitals, Pacific Hospital of Long Beach and Tri-City Regional Medical Center in Hawaiian Gardens. For around 10 years, he paid kickbacks to a number of doctors for referring spinal fusion patients to Pacific Hospital of Long Beach for surgery. In February, 2014, Drobot pleaded guilty to making the kickbacks, which are illegal, and for charging California’s workers’ compensation system, the U.S. Department of Labor and about 150 workers’ compensation insurers somewhere in the vicinity of $500 million dollars for the surgeries over the ten year period. At that time, we wrote about this with Honor Sold, Trust Betrayed: Unbridled Greed in California.

Drobot is also charged with bribing state senator Ron Calderon for his help in easing one of the SB 863 requirements, which we don’t need to go into here. Calderon has pleaded not guilty, and that case is moving through the system.

Throughout this sordid business, Greg Jones has been there, providing a valuable service with his spot-on reporting, most recently last week with his story (subscription required) that a number of the doctors who took the kickbacks, at $15,000 a pop, also had filed “more than 15,000 liens with a total claimed value of $93.8 million.” To get that story, Jones had to wade through what must have been a steamer trunk full of documents.

Personally, I owe a debt of gratitude to Mr. Jones. He found two errors in my post of 30 November, Workers’ Comp Fraud: The Michael Drobot Case Grinds On. I had written that the kickback scheme involved both of the Drobot hospitals. That was wrong. They only happened at Pacific Hospital at Long Beach. Also, I had written that Drobot had pleaded guilty to bribing Calderon. He did not. He is charged with doing it, and both he and Calderon have pleaded not guilty. Before Work Comp Central ran my post, Greg found the errors and made edits to correct them, for which I am grateful.

The Drobot case is complicated and it represents the bottom of the workers’ compensation bird cage. However, the solid reporting of Greg Jones shines an arc light on the sorry mess and will help to improve the system so that in the future the Drobots of the world will think twice about this kind of criminality.

 

 

Workers’ Comp Fraud: The Drobot Case Grinds On

Monday, November 30th, 2015

In late February, 2014, we wrote about the sordid tale of corruption perpetrated in southern California by Michael Drobot and his gang of thieves. Honor Sold, Trust Betrayed: Unbridled Greed In California describes the astonishing criminality of a large group of highly placed people whose job it was to care for others.

This from our original post:

Suppose you’re a doctor in California with a patient who complains that his back hurts a lot. Suppose further that Michael Drobot, the owner of California’s Pacific Health Corporation, will give you $15,000 if you refer your patient to his Pacific Hospital of Long Beach for lumbar fusion surgery, which may or may not be warranted. And what if Drobot’s Pacific Hospital were hundreds of miles away and that other qualified hospitals that wouldn’t pay you a kickback were much closer. What would you do?

The answer? Many doctors took the money and delivered up their patients to the Drobot surgical mill. Drobot paid the doctors in this scheme somewhere between $25 and $50 million.

Drobot’s two hospitals, Pacific Hospital of Long Beach and Tri-City Regional Medical Center in Hawaiian Gardens, billed thousands of mostly spinal fusion surgeries to California’s workers’ compensation system, the U.S. Department of Labor and workers’ compensation insurers. Over an eight year period, the hospitals were paid more than $500 million.

Drobot pleaded guilty in early 2014 to paying the kickbacks. He also pleaded guilty to bribing state Senator Ron Calderon to the tune of $100,000 for massaging the SB 863 legislation so that the fraud could continue for all of 2013. After his indictment in February, 2014, Calderon pleaded not guilty.

The wheels if justice have ground slowly but exceedingly fine in the nearly two years since. Former U. S. Attorney Andre Birotte, Jr., now a U. S. District Judge in California’s Central District, passed the baton to his replacement U.S. Attorney Eileen M. Decker. Last week Decker announced that Drobot’s CFO, James L. Canedo, and Paul Richard Randall, a “health care marketing recruiter” (he recruited doctors to refer patients in return for the illegal kickbacks) pleaded guilty to fraud, money laundering, conspiracy and other crimes. Also, two orthopedic surgeons, Philip Sobol of Studio City and Mitchell Cohen of Irvine, and Alan Ivar, a Las Vegas chiropractor who used to live in Southern California, have agreed to plead guilty to conspiracy and other charges.

There will certainly be more to come in this tale of sleaze.

The AI Robotic Tsunami: Coming To A Workplace Near You!

Wednesday, August 26th, 2015

In 2013, Oxford professors Carl Frey and Michael Osborne published what became a highly read and highly cited study suggesting that machines could replace 47% of America’s jobs over the next 25 years. To say that they got the business world’s attention is a little bit like saying Ted Williams was a pretty good ballplayer.

The study, which examined more than 700 US occupations, found that jobs in transportation, logistics, and administrative and office work are at “high risk” for automation. “We identified several key bottlenecks currently preventing occupations being automated,” said Dr. Osborne when the study was released. “As big data helps to overcome these obstacles, a great number of jobs will be put at risk.”

Consider transportation. As of July 17, 2015, more than 20 Google self-driving cars have logged more than 1.9 million miles around California streets and have yet to cause an accident, although they’ve been hit 14 times by other cars, 11 of those hits being rearenders. So, how long do you think it will be before the transportation industry latches onto the self-driving phenomenon as a way to cut costs and increase productivity?

And logistics? Even now, Amazon and other retailers are flying drones around their warehouses delivering material for shipment, work that, before Dronedom, actual human beings performed, albeit more slowly and, every once in a while, with a bit of breakage.

And can we ignore IBM’s Watson, or Rethink Robotic’s Baxter (The AI parents just have to give their artificially intelligent children human names, don’t they?)?

The productivity increase is awesome, indeed. But the trade-off is a human job.

Of course, someone has to keep the drones flying. And someone has to keep Google’s cars humming along. This is a point the good Drs. Frey and Osborne did not examine deeply in their 2013 paper- that as jobs are eliminated due to automation, other jobs, more complex in most cases, will be created. This from the paper:

Our findings imply that as technology races ahead, low-skilled workers will move to tasks that are not susceptible to computerization – i.e., tasks that require creative and social intelligence. For workers to win the race, however, they will have to acquire creative and social skills.

But, hang on a minute. Just when we begin to think that Fritz Lang’s “Metropolis” is a’comin round the corner like an out-of-control, self-driving 18-wheeler, Forrester Research released yesterday The Future of Jobs, 2025: Working Side-By-Side With Robots (the study may be purchased from Forrester for $499.00). Authored by Forrester analyst J. P. Gownder, the paper only looks out ten years, compared to Frey and Osborne’s 25. Even so, Gownder’s prognosis is nowhere as bleak as the Oxfordians’. They postulate a total job loss of 71 million. Gownder, using government data and many interviews with business execs, academics and pundits, suggests a net job loss of 9.1 million, or 7% of the workforce.  Where I come from, J. P., that’s a lot of jobs, but I take your point.

Notwithstanding the competing research, what we can say is that big change is not coming; it’s already here. This is an industrial era evolution. There have been many before. Remember that before the automobile, there was a thriving market for buggy whips.

This is one of the topics I’ll be covering on Thursday, October 29, in my Keynote Address to the Idaho Industrial Commission’s 2015 Annual Seminar on Workers’ Compensation. I’ll be discussing how artificial intelligence, along with two other emerging employment issues, is impacting workers’ compensation and how smart employers can deal with it successfully.

Meanwhile, here’s a little something for workers who awaken one day to find their newest work partner is no longer Homo Sapiens, but rather Ratus Robotus.

Workers who adjust survive.
Many of them even thrive.

News Roundup: New must-read blog, opiate epidemic, nurses impact on claim costs & more more

Friday, June 12th, 2015

We’re catching up on the news with a Friday roundup — but first and foremost, we issue a warm welcome to Dr. Jennifer Christian, who has a new blog. Here at Workers Comp Insider, we’re unabashed fans of Dr.C – we have no doubt that her blog will be one to follow. See her recent post: Why aren’t we saying and doing THESE THINGS about the ADA?

Quest Data Shows Rise in Positive Test Rates for Workplace Illicit Drugs – Caroline McDonald, Risk Management Monitor: “Organizations in the United States that tested employees for drugs saw a 9.3% jump in the number of positive drug tests for illicit drugs in the general workforce, to 4.7% in 2014 from 4.3% in 2013, according to data from Quest Diagnostics. These results may mark a rising trend, as 2013 was the first year since 2003 in which the overall positivity rate for about 1.1 million tests increased in the general U.S. workforce. The analysis shows a potential reversal of a decades-long decline in the abuse of illicit drugs in the U.S. workforce, Quest said.”
Related:
NPR – Emergency Rooms Crack Down On Abusers Of Pain Pills
MCN: A Changing Landscape: America’s Opiate Epidemic
Boston Health News: Much Massachusetts news on the #heroin #overdose epidemic and #opioid abuse
Paradigm: Two New Approaches to Curbing the Opioid Epidemic

Health care cost drivers, or, Here’s where you’re getting screwed – Joe Paduda of Managed Care Matters covers two recent studies in Health Affairs and their likely effect on workers comp costs: one indicating that orthopedic fees paid by private insurers are measurably higher in those markets with higher concentration and the second on hospital markups, the 50 hospitals with the highest charge to cost ratios.

Proving Value – Roberto Ceniceros, Risk & Insurance: “Sellers of workers’ compensation products that fail to grasp shifting marketplace dynamics or help buyers with the pressure they are under will increasingly lose to competitors.
You can see evidence of these changing dynamics in the challenges workers’ comp underwriters face. Their inability to earn adequate investment income is reshaping their view of the vendors they buy from.
Other buyers, including third party administrators and self-insured employers, are also re-evaluating their purchasing arrangements.”

How do nurses impact workers’ comp claim costs? – Melissa Hillebrand, PropertyCasualty360.com: “Medical and total loss dollars are reduced by double digit percentages when nurses become involved on a workers’ compensation claim, according to a report from Liberty Mutual Insurance and its wholly owned third-party administrator, Helmsman Management Services.
Based on the findings from an internal study of 42,000 claims, a nurse’s participation in the workers’ comp process decreases a claimant’s future medical costs by 18% and overall costs by 26%. The study, “The N Factor: How Nurses Add Value to Workers’ Compensation Claims,” pulled data points across four categories.”

South Dakota Supremes Declare Horseplay Compensable: Bob Wilson, Bob’s Cluttered Desk: “Workers’ compensation is no stranger to stupid stories. Lord knows we have seen our fair share of inane dumbassery. This story – make that this court decision – would be one of them.”

Overview of California Workers’ Compensation SystemConference Chronicles presents a recap of Dave Bellusci’s overview of California’s workers’ compensation system from the Workers’ Compensation Insurance Rating Bureau of California’s (WCIRB) perspective. Dave is the WCIRB Chief Actuary.
Related: Dave DePaolo offers his perspective on the WCRIB goings-on on two posts: The Whole Person and The Value Image.

Cognitive Therapy, Cognitive Dissonance – Michael Gavin, Evidence Based: “”One of the most frequent recommendations I see resulting from our peer-to-peer discussions on chronic pain claims is Cognitive Behavioral Therapy (CBT). CBT is a short-term, goal-oriented psychotherapy treatment that takes a hands-on, practical approach to problem-solving. Its goal is to change patterns of thinking or behavior that are behind people’s challenges and, thus, change the way they feel about and deal with those challenges.
Despite the growing body of evidence regarding the effectiveness of Cognitive Behavioral Therapy, it still seems to cause a great deal of cognitive dissonance in our industry. We want to mitigate chronic pain symptoms for injured workers so they can take fewer medications, have a higher quality of life, and perhaps even return to work. But we’re resistant to the idea that 6-12 CBT sessions can actually help with those goals, despite what the evidence suggests.”

Heat Hazard – Claire Wilkinson, Terms + Conditions – offers a variety of links to the growing risk posed by excessive heat and drought in various parts of the globe and in various industries.
Related: California Employers Take the Heat . . . of new Revised Heat Illness Standards

Other noteworthy news

WCRI, Inside Baseball in California, Patient Records in New Jersey and Who’s Managing What Care

Thursday, February 26th, 2015

The WCRI Annual Issues and Research Conference gets underway a week from today in Boston. The conference and Lynch Ryan are each in their 31st year, but, truth to tell, the first WCRI conference could have been held in a telephone booth (not The Tardis).

We wrote about this conference a couple of weeks ago, so no need to cover old ground. However, it is worthwhile to mention how valuable the conference has become. It’s a serious event attended by serious professionals. Sorry- not much partying. Las Vegas it aint. And this year its style is even more cramped what with more than eight feet of snow hanging around. But the walkway around the Charles is cleared, so you can bring your running shoes. I, on the other hand, coffee in hand, will be happy to wave goodbye to you as you head out the hotel door for that morning run. The older I get the more I subscribe to Winston Churhill’s view of exercise: he said he got enough of it carrying the coffins of his athletic friends.

Unfortunately, we just learned that the WCRI has “reluctantly” decided to cancel its Opt Out session, because “at least one of the presenters felt that the time allotted for the session was too short for the objectives to be well-met.” This is truly unfortunate given the momentum the Opt Out movement is gaining nationally. You would have thought the presenters could have raised this issue a lot earlier. Nonetheless, I’m sure there will be much opt out discussion among attendees outside of the sessions. WCRI is offering to refund registration money for those who choose to “opt out” of Boston due to the cancellation. Regardless, I hope to see you in Boston.

Inside Baseball In California
When looking for something a bit out of the ordinary, California workers’ comp never disappoints. Work Comp Central’s Greg Jones reports this morning that:

A Southern California applicants’ law firm claims in court filings that Knox Ricksen “hacked” the computer network of a vendor it uses to sign up new clients to gain access to an estimated 2,000 confidential and privileged documents.

In the suit, the plainiffs’ law firm, Reyes & Barsoum, says it has a vendor, HQ Sign-up Services Inc., whose job it is to “sign up” customers for the firm. The suit alleges that the defense law firm Knox Ricksen hacked HQ Sign-up, gaining access to claimant information which HQ Sign-up would forward to lawyers at Reyes & Barsoum. This would give Knox Ricksenan unfair and illegal advantage in the legal proceedings. People, I did not title this Inside Baseball for nothing!

This little dust-up shines a light on the dog-eat-dog adjuducative business that is California workers’ comp. It’s not pretty and it never has been. I wonder what opt out legislation would do for California?

Patient Records In New Jersey
Now we balance the cesspool into which California’s workers’ comp courtroom wars sometimes descend with workers’ comp law as it should be practiced. John Geaney, a man for whom I have great respect, is an executive committee member and shareholder with New Jersey’s Capehart Scatchard. John began publishing a client newsletter in 2001. A few years ago it morphed into a blog, which Lexis Nexus awards as one the nation’s Top 25 workers’ comp blogs. John’s blog should be required reading for all workers’ comp professionals in New Jersey. For that matter, it’s instructive wherever you are.
Today’s blog post concerns the right of injured workers to have access to their medical files. In my experience, there are some claims adjusters that resist this. However, doing so can worsen the situation and alienate the injured worker. Transparency is good for everyone. This blog post is well worth reading.

Who’s Managing What Care
In his Quick Tips blog post of today, Barry Thompson takes no prisoners as he derides what has become of “Managed Care,” which Barry has renamed “Manipulated Cost.” His is a tale told in anger, and he asks, “Where’s the outrage?” Good question. In the early 1990s, I gave a presentation at NCCI’s Annual Issues Conference and titled the presentation Managed Care: Who Manages, Who Cares? ‘Twas ever thus. It seems that the question is still begging for an answer.

Honor Sold, Trust Betrayed: Unbridled Greed in California

Wednesday, February 26th, 2014

“What is here?
Gold? Yellow, glittering, precious gold?”

— Timon of Athens by William Shakespeare
Suppose you’re a doctor in California with a patient who complains that his back hurts a lot. Suppose further that Michael Drobot, the owner of California’s Pacific Health Corporation, will give you $15,000 if you refer your patient to his Pacific Hospital of Long Beach for lumbar fusion surgery, which may or may not be warranted. And what if Drobot’s Pacific Hospital were hundreds of miles away and that other qualified hospitals that wouldn’t pay you a kickback were much closer. What would you do?
It is illegal under both California and Federal law to pay doctors for referring patients to hospitals. Yet, according to Andre Birotte, Jr., U.S. Attorney for the Central District of California, this is precisely what Drobot was doing on a massive scale in California from 2003 through 2008. The kickbacks amounted to between $20 million and $50 million. That was chump change compared to what Drobot netted from the surgeries. On Friday, Birotte announced that Drobot had pleaded guilty to paying the kickbacks in what amounted to a $500 million dollar fraud conspiracy and now faces up to 10 years in prison.
Drobot began building his health care empire in the mid-1990s. He bought a number of hospitals, but Pacific Hospital was his jewel in the crown. It was his “spine center,” and, according to U.S. Attorney Birotte, it is where doctors, who apparently think the Hippocratic Oath a mere suggestion, would refer patients for questionable lumbar fusion surgery at $15,000 per surgery. That is, unless the referral was for a cervical fusion, in which case the kickback was only $10,000. Needless to say, there were more lumbar fusions.
Workers compensation paid for all of this. More than 150 insurance companies were “ripped off,” according to Eric Weirich, Deputy Commissioner of the California Insurance Department’s Enforcement Branch.
The Los Angeles Times has been covering the Michael Drobot saga for the last 6 years. Drobot’s Pacific Health Corp. got itself out of big trouble in 2012 when it agreed to pay $16.5 million dollars to the government to avoid criminal conspiracy charges. From 2003 to 2008 it recruited homeless people, drove them to one of Pacific Health Corp’s hospitals and then charged Medicare and Medicaid for services never performed. The whole thing makes “ambulance chasing” look like a PBS donor acknowledgement.
But that little traipse into the dark side pales in comparison to the spinal fusion scheme.
In 2012, California SB 863 threatened to put more than a little crimp in Michael Drobot’s hose of money. Up until SB 863, Pacific Health Corp was paid highly inflated prices for both the surgeries and the surgical hardware, because it could charge duplicate invoices for the surgical implant hardware. The provisions of SB 863 would have severely limited duplicate payments beginning 1 January 2013. If Dobrot couldn’t collect the duplicate payments he wouldn’t be able to pay the kickbacks to get the patients he needed to keep the scheme going. He desperately wanted those provisions to be mitigated to some degree. To do that, he needed help.
He got it from friends in high places – the California Legislature. It’s a little murky as to method, but prior to final passage, SB 863 was changed to allow half the duplicate payments to continue, status quo, for all of 2013. The authorities have been looking into this, and U.S. Attorney Birotte has begun to reel in the fish.
The day before he indicted Michael Drobot, Birotte indicted state Senator Ron Calderon and his brother, former Assemblyman Tom Calderon, on 24 charges, including bribery and money laundering. Ron Calderon is alleged to have been paid more than $100,000 in bribes by Michael Drobot and in an FBI sting operation that Calderon thought was a film studio. If convicted, he faces up to 400 years in prison. And that’s the blood in the water that California’s media sharks now circle. Here’s an LA Times infographic of the Calderon family’s tree of connections and alleged corruption.
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However, as that great TV salesman, Ron Popeil, used to say, “But wait! There’s more!”
An FBI affidavit leaked to, of all places, Al Jazeera America, is making life uncomfortable for at least four other legislators, including Senate President Pro Tem Darrell Steinberg. Look deeply enough at this and one begins to think that Teapot Dome was nothing more than a benign business deal gone bad. (See the full associated Al Jazeera story: State Compensation Insurance Fund’s lawsuit against Michael Drobot)
Notwithstanding all of this, I keep coming back in my mind to those doctors, those chiropractors, those medical professionals who sold their souls and endangered their patients for all that “yellow, glittering, precious gold.” I ask, “Where is the outrage?” At some point, one hopes that U.S. Attorney Birotte turns his eyes to them.

Pike’s Pique: The Stress of Behaving Badly

Monday, July 29th, 2013

John Pike may be the most (in)famous campus cop in America. He was video taped on November 18, 2011, at the University of California, Davis, spraying seated demonstrators with pepper spray. His demeanor was remarkably casual, as if he were spraying bushes for an infestation of bugs. He is now the subject of a meme that has spread across the internet, with images of Pike spraying Christina, in the famous painting by Andrew Wyeth, among other things. While we live in a culture where many are famous for being famous (the Kardashians come to mind), Pike is famous for one moment of his policing career.
An internal investigation by the university recommended that Pike be demoted. New police chief Michael Carmichael – the original chief had resigned – rejected that recommendation, deciding, in July of 2012, to fire Pike. There were a number of problems with Pike’s behaviour: he used an unapproved pepper spray that was three times stronger than the university’s preferred brand and he violated university protocol by spraying people in the face at close range.
Enter Workers Comp
Pike has filed a stress claim under the California workers comp statute. The state used to be famous for its lenient criteria for stress claims: only 10 percent of the stress had to be work related for a claim to be compensable. (How could work not comprise at least 10 percent of what is wrong in one’s life?) Over time, California tightened up the compensability guidelines, which now total six (as outlined by the Kenton Koszdin Law Office):
1.The employment must be six months or more. Check
2.The employee must have a psychiatric condition that is listed in DSM IV. Probably a check.
3.The employee must prove that the actual events of employment are the predominant cause of the psychiatric condition (51% or more). Definitely a check.
4.A psychiatric condition that is substantially caused (35%–45%) by good faith, non discriminatory personnel action(s) is not compensable as a work-related injury. Examples of good faith personnel actions are criticism of the employee’s work or attendance, change in work assignments, and decision about raises or promotion. The employer has the burden of proof on this issue. DNA.
5.A psychiatric injury that is caused by the litigation process is not compensable. Examples of psychiatric injury caused by the litigation process are an employees reaction to the denial of their claim, dealing with an abusive claims adjuster, or having their benefits terminated.DNA
6.A stress claim or mental–mental psychiatric injury claim filed after termination or notice of termination is not compensable unless the employer know of the injury or medical records of treatment for the psychiatric dated prior to the termination exist. He filed on June 10, presumably before the notice of termination.
A Mental-Mental Claim
Pike must prove compensability of the notoriously difficult “mental-mental” claim. In many states, there must be a physical injury that precedes the mental disability. In this case, the physical injury was limited to the protesters; the university settled their claims for $1 million. In the immediate aftermath of the incident, Pike in his new-found infamy has been subject to harassment, threats and humiliation. He is the principal subject of a meme that has spread throughout the internet. Stressful? Certainly. Compensable? Possibly, but by no means a certainty.
Pike’s former employer will try to show that he violated policy in spraying the students, including the use of an unapproved spray. Pike will undoubtedly try to show the ambiguity of the university’s policies, perhaps a lack of training specific to the circumstances he faced.
In the meantime, Pike has lost a job that paid in excess of $100,000 per year. He has achieved indelible fame for a single, ill-advised work-day decision. He is without a doubt suffering from work-related stress – stress of his own making – but the compensability of that stress is another matter altogether. We await the results of the August conference with great interest.

Retired Jocks Dig for Gold in the California Hills

Monday, February 25th, 2013

We have long noted how the generous benefit structure in California encourages professional athletes to file claims long after their careers are over. These athletes need not play for teams based in California: just playing a few games in the state over the course of their careers opens the door for generous lump sum payouts and, more important, lifetime medical benefits. There is indeed “gold in them thar hills.”
Marc Lifsher of the Los Angeles Times does a great job summarizing the impact of California comp law on professional athletes. Since the 1980s, $747 million has been paid out to 4,500 players. That is apparently just what’s been paid – the $3/4 billion may not reflect what’s been reserved for future medical payments.
California’s statute is uniquely generous. It allows anyone injured while working in California to file a claim in the state. Even if the worker has been paid under another state’s comp system, the door remains open. Professional athletes may settle out claims for a few hundred thousand dollars, but they may also secure lifetime medical benefits: given the concussed brains and frequent musculoskeletal injuries that are a routine part of professional athletics, the lifetime medical bills may be enormous. Finally, California has a worker-friendly definition of cumulative trauma, so a professional athlete need not prove a specific body part was injured during a game in that state.
Athletic Attorneys
A number of the lawyers specializing in these claims are former athletes. Mel Owens, a former Los Angeles Rams line backer, represents a number of out-of-state athletes filing claims. “California is a last resort for a lot of these guys because they’ve already been cut off in the other states,” he says.
Lifsher describes the situation of journeyman tight end Ernie Conwell, who played for two out-of-state teams, including the New Orleans Saints. During his 11 year career, he underwent 18 surgeries, including 11 knee operations. He filed for comp benefits in Louisiana and received $181,000 to cover career-ending knee surgery in 2006. He also received $195,000 in injury-related benefits as part of the players’s collective bargaining agreement. But the claim in Lousiana only covered his knee injury. So he filed a claim in California to deal with ongoing health problems that affect his arms, legs, muscles, bones and head. A California judge awarded him $161,000 plus future medical benefits. The payer in this case, the New Orleans Saints, has appealed.
Wrong Solution to a Real Problem
There is little question that retired players face formidable physical and mental challenges resulting directly from their athletic careers. But the question on the table is whether California is an appropriate forum for delivering extended benefits for professional athletes. Part of the rationale for continuing this gratuitously generous program is the fact that athletes pay state taxes on their incomes for contests in California. But given the fact that income taxes have nothing whatsoever to do with comp, this is a specious argument. The taxes paid do not support California’s workers comp system.
Ultimately, the solution to the problem of long-term injuries to professional athletes must be removed from California and relocated to where it belongs: in the labor agreements between professional sport teams and their athletes. The first step in this process requires an act by the California legislature to shut off the spigot, so that out-of-state athletes are no longer allowed to file comp cases in the Golden State. Immediately following this, the players will have to put the issue of life-long benefits for retired players on the bargaining table. This may seem obvious to those of us on the outside, but there is a reason why it may not happen: collective bargaining tends to focus on the needs (and greeds?) of today’s players. Once out of the game, players – other than those joining a broadcast network – simply disappear.
As is so often the case, it’s all about the money: money the owners want to preserve as profits; money the current players want in their own pockets. While management and labor are undoubtedly sympathetic to the former players, the latter are out of the limelight, struggling day by day to function with compromised bodies and brains. They paid the price. Someone should step up and negotiate a reasonable settlement. It’s time for this particular form of California scheming to come to an end.

Entrustment: Risk on the Road

Wednesday, October 3rd, 2012

When risk managers scan the virtually infinite horizon of risk, they often overlook the single greatest exposure in the working world: driving cars and trucks on the roads of America. Today we approach the issue through the back door, wherein an individual killed in an accident was deemed not be in the course and scope of employment. It might be the backdoor, but it still leads to the same conclusion.
Linda Gadbois was a cook for the California prison system. She suffered a work-related injury and was sent to a doctor. When this doctor proved unsatisfactory, she was allowed to choose another medical provider from a list. After completing her appointment in May of 2008, she headed back to work. She was involved in an accident: Gadbois was killed; the other driver, Kenneth Fields, was seriously injured. Under the theory that Gadbois was “in the course and scope” of employment, Fields sued Gadbois and the state of California, her employer. No need to ask why: the state’s pockets were significantly deeper than those of the late Gadbois.
Going to Work
Field’s case rested on the interpretation of the “coming and going” rule: was Gadbois, leaving a medical facility after work-related treatment, inside or outside of employment? The court noted that she had requested the second treatment on her own. Her employer did not require her to drive to the appointment, nor was she required to drive as part of her employment. As a prison cook, the essential job functions were limited to her cooking: how she got to work was not her employer’s concern.
As a result, the fifth district appeals court concluded that the state was not liable for any injuries Gadbois caused while on her way to work. Field’s suit against the state was dismissed; the status of his suit against Gadbois is not known, though presumably he collected up to the limits of her personal auto insurance policy.
It is worth noting that Gadbois’s death was not compensable under workers comp. Gadbois was paid for the day of her death in accordance with a death benefit policy that covers all workers who die on a regular work day, whether at work, on the way to work, or on paid vacation or leave. Gadbois received her full salary for the day of the accident, but received nothing from workers’ comp. Had she received death benefits under comp, Fields would have had a stronger case.
Drivers: Good, Bad and Indifferent
While the specific circumstances proved Gadbois to be the exception, many people do drive in the course and scope of employment: obvious examples would be tradesmen, salespeople on the road and people whose customers are visited in their homes. But the circle of drivers must be expanded to include any and all employees who run errands or perform any aspect of their jobs in company cars or in personal vehicles.
Some employees do this company-related driving on a regular basis; others only sporadically. But any employee driving “in the course and scope” of employment is a representative of the employer. Whether consciously or not, the employer has endorsed the driving skills of employees whose work involves driving. Even if the employee is in a personal vehicle, the employer has, in effect, entrusted them with the keys. This “entrustment” may well comprise the riskiest part of the working day.
Basic Management
How should employers manage this risk? It’s really quite simple. Any and all employees who drive – or who might possibly drive – while working should be required to submit annual copies of their driving records. If there is a cost in obtaining the records, the employee should be reimbursed. The employer should review the records carefully and place restrictions on any employees with marginal or poor driving records. Indeed, the employer may well find that some employees who drive while working do not hold valid licenses. If these unlicensed drivers have accidents while working, the employer is on the hook for anything that happens.
In addition, employees should be required to report any moving violations, on or off the job. A speeding violation on the weekend might not preclude an employee from driving during work, but a formal warning would be appropriate.
Finally, prudent employers should have written policies on limiting the use of cell phones while driving and, needless to add, prohibiting texting. These policies should be enforced, with appropriate documentation and disciplinary action for any violations.
The risks of driving permeate our lives. When we drive in the course of work, the risks are shared by employee and employer alike, even if the latter is oblivious to the exposure. For the savvy manager, a well organized approach to the risks of driving goes a long way toward containing the ever-present perils of the open road.