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Workers’ comp reform: A silver lining?

By Colleen S. Casey

Colleen S. Casey
Colleen S. Casey

On April 19, the governor signed into law a package of legislation designed to reform the workers’ compensation system. As I studied the new statutes, I mentally reviewed the cases I worked on over the past year and wondered how these new laws would affect my clients.

Michael, a high school student, watched helplessly when his mother was gunned down by a disgruntled former employee. (The names of the individuals have been changed.) The insurance company claimed the mother’s death was not industrial and that it was not liable for the workers’ compensation death benefit. The workers’ compensation judge ultimately awarded Michael his mother’s death benefit.

Kara Johnson is a firefighter and the mother of two young children. She was recently diagnosed with an aggressive cancer. Defense counsel Ken Jones persuaded his client to accept her workers’ comp claim, in accordance with the presumption of industrial causation for firefighters under Labor Code §3212.1. He expedited the paperwork so she could spend her time fighting the cancer rather than the workers’ comp case.

Sean is a college athlete who severely injured his back pulling a child into a boat during his summer job as a lifeguard. The claims adjuster accepted his workers’ comp claim and arranged for his spinal surgery to be performed in Ohio, so he could live with his parents while recuperating. He was back at school in time for the fall semester.

In each of these cases, I was grateful the system worked. In each case, the injured party received the intended benefits and the employer was shielded from tort liability that could have destroyed it financially. Again, I wondered, how would the clients have fared under the new reform.

My concern was compounded by the fact that the legislature mandated that the new statutes were effective immediately, for all injured workers, regardless of their date of injury. This caught most of us by surprise. It is generally recognized that the law in effect on the date of injury governs the delivery of workers’ compensation benefits. (Aetna Cas. & Surety Co. v. Industrial Acc. Com. (Charlesworth), (1947) 30 Cal.2d 388.) It is also contrary to the long-held notion that any new law that substantially affects existing rights must be deemed substantive in nature and must be applied prospectively. (Landgraf v. USI Film Products, (1994) 511 U.S. 244.) However, as the court explained in Graczyk v. WCAB, (1986) 184 Cal. App. 3d 997, since the body of workers’ compensation law is “wholly statutory . . . and is not derived from common law,” the “repeal of the statute destroys the inchoate right” (Graczyk, supra at pps. 1006-1007). Therefore, the courts may well deem it permissible for urgency legislation, such as SB 899, to be effective immediately, regardless of date of injury.

There are two problems with this. The first is that both judges and attorneys need to learn the new law at the same time they are applying it. The second problem is that cases in progress have been worked up in reliance on application of the old law. Changing course in midstream would require that we reanalyze the case strategy and discovery methods for each client. The challenge appeared daunting at first.

However, after reviewing the new set of statutes, we were relieved to discover that the task was not as overwhelming as we originally thought. The legislature was primarily concerned about the delivery of effective medical treatment to injured workers while keeping the cost of that treatment within a reasonable limit. In fact, we discovered that there were many ways that injured workers and their employers could benefit under these new laws.

To maximize the efficiency of medical care, the presumption of correctness that previously belonged to the primary treating physician was transferred to a book of guidelines created by the American College of Occupational and Environmental Medicine (ACOEM) (Labor Code §4604.5). The intent was to move away from anecdotal experience and subjective opinion on how to best treat industrial injuries and to move toward a scientific approach using uniform evidence-based methods with a proven track record.

To that end, Labor Code §4604.5(b) now mandates that the recommended ACOEM guidelines “shall reflect practices that are evidence and scientifically based, nationally recognized, and peer-reviewed.” It is a worthy goal; however, a significant percentage of these ACOEM guidelines do

not meet this legislative standard. ACOEM admits at page 491 of its text, “Unfortunately many, if not most, of the treatments and tests we provide, and many of the hypotheses on which we base concerns regarding risk and exposure, have not been rigorously evaluated” (Occupational Medicine Practice Guildelines, 2nd Edition, (2004) edited by Lee S. Glass). ACOEM has assigned to each of their guidelines a letter grade, similar to those we received in school, to allow the practitioner a means to evaluate the quality of the research-based evidence for each of their recommendations.

As a result, the ACOEM guidelines’ presumption of correctness may not be as difficult to rebut as had been originally thought. If a treating physician prescribes a form of treatment that is not consistent with that recommended by ACOEM, (especially if that guideline has been assigned a C or D grade), the doctor may present her own scientific evidence as to why her prescribed treatment is reasonable and necessary to cure or relieve from the effects of the industrial injury (Labor Code §4600). A judge will then decide whether the presumption of correctness of the ACOEM guideline on that issue has been successfully rebutted. The injured worker is thus guaranteed a thorough substantiation that he or she is getting the most effective treatment possible.

A second benefit is that employers must now provide immediate medical care for a claimed injury, up to $10,000, even if the employer ultimately has grounds to deny the injured workers’ claim (Labor Code §5402(c)).

I spent a significant amount of time in the past year attempting to convince claims adjusters to approve a particular treatment, such as arthroscopic knee surgery, during the period in which they had to investigate whether they would accept or deny the claim. In all of these cases, the adjusters eventually authorized the surgery, but in the meantime, my client spent up to three months in pain and in a temporary disability payout status waiting for medical authorization. The new law corrects this situation.

And what about the other scenarios I mentioned earlier? Would they have ended differently if handled under the new law? I do not think so.

Michael would have received his mother’s death benefit.

The industrial causation presumption statutes for emergency personnel are still in the Labor Code, so Kara would have received the benefits to which she was entitled.

And there is still no bar to out-of-state medical treatment, so Sean would have had his spinal surgery in Ohio and still made it back to California in time for school.

In the end, it is the quality of the people who participate in this process that makes this system work. And the system does work. And it will continue to work under the new set of reforms. Employers will continue to be protected from direct third-party liability and legitimately injured workers will continue to receive the necessary medical treatment and benefits which will enable them to return to the workforce.

Clearly, the effective delivery of benefits to injured workers is determined by the hard work, courage and passion of the individuals behind the system. Those same individuals continue to be involved in this process. They continue to care about their work. They continue to dedicate their professional lives to this workers’ compensation system of which we are all proud to be a part.

Colleen S. Casey, an applicants’ attorney with Jones, Clifford, Johnson & Johnson LLP, is a former commissioner of the Workers’ Compensation Appeal Board.

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