Workers’ Compenstation – Page 2 – S | M | S – Siegel, Moreno & Stettler, APC – Workers' Compensation Subrogation and Property Subrogation

What you need to know about workplace exposure

COVID-19, Workers' Compenstation / admin

What you need to know about workplace exposure Following is a summary of my thoughts on the COVID-19 outbreak, claims filed as a result of alleged workplace exposure and the delay period for treatment and investigation upon filing of the claim. I also present some relevant Labor Code and Code of Regulation provisions, and a brief assessment of the timeliness of an investigation during the delay period. This is by no means a complete assessment, as it is merely a birds-eye view of this unique situation. CLAIM DELAY AND LABOR CODE/CCR SUMMARY The relevant Labor Code and Code of Regulation provisions are as follows: Labor Code §5401 (in part): (a) Within one working day of receiving notice or knowledge of injury under Section 5400 or 5402, which injury results in lost time beyond the employee’s work shift at the time of injury or which results in medical treatment beyond first aid, the employer shall provide, personally or by first-class mail, a claim form and a notice of potential eligibility for benefits under this division to the injured employee, or in the case of death, to his or her dependents. Labor Code §5402 (in part): (a) Knowledge of an injury, obtained from any source, on the part of an employer, his or her managing agent, superintendent, foreman, or other person in authority, or knowledge of the assertion of a claim of injury sufficient to afford opportunity to the employer to make an investigation into the facts, is equivalent to service under Section 5400. (b) If liability is not rejected within 90 days after the date the claim form is filed under Section 5401, the injury shall be presumed compensable under this division. The presumption of this subdivision is rebuttable only by evidence discovered subsequent to the 90-day period. (c) Within one working day after an employee files a claim form under Section 5401, the employer shall authorize the provision of all treatment, consistent with Section 5307.27, for the alleged injury and shall continue to provide the treatment until the date that liability for the claim is accepted or rejected. Until the date the claim is accepted or rejected, liability for medical treatment shall be limited to ten thousand dollars ($10,000.00). Labor Code §4610(i) addresses timeframes for UR determinations. This subsection also addresses prospective and current requests as well as addressing retrospectively. An emergency situation could result in any of these types of requests and further, requires a shorter timeframe for response of 72 hours in the event the condition is an imminent and serious threat. 8 CCR §9812 indicates in part that indemnity benefits are due within 14 days of the employer date of knowledge. In the event the claim is placed on delay, a delay notice shall be issued informing the employee that discovery is needed and the claim is on delay. 8 CCR §9767.5(f) requires that for non-emergency services, the MPN shall ensure that an appointment for the first treatment visit under the MPN is available within three business days of a covered employee’s notice to an MPN medical access assistant that treatment is needed. 8 CCR §9767.1 addresses the definition of emergency services. 8 CCR §9767.5 address in part, access standards for injured worker for emergency services. INJURY In general, an illness that arises from COVID-19 exposure will need to meet both elements below to be considered compensable and result in WC benefit eligibility: Illness must arise out of the course and scope of employment. Illness must arise out of or be caused by conditions particular to the work and not an ordinary disease of life to which the general public is exposed. In the case of COVID-19, it is critical to understand the unique job that an employee was performing if/when exposed. Healthcare professionals, first responders (EMT), hospital workers, and lab technicians often have a lower threshold for connecting the cause/source to the course and scope of their work. As you are aware, once a claim has been reported, it can be placed in a delay status, which affords the applicant the opportunity for treatment up to $10,000.00 while the claim is on delay. My particular conversation largely resolved around the need for timely investigation of potential COVID-19 exposure cases. In many instances, the emergency services rendered for an individual suffering from symptoms could consist of anywhere from a basic physician visit, to Emergency Room visits complete with medications and diagnostic studies, all the way up to the extreme cases of ICU admission, ventilator intubation and even death. Therefore, the $10,000.00 treatment allowance could be met and exceeded very quickly. Many potential scenarios have been posed by clients, which prompted this memo. First, a scenario was posed where an applicant alleged a workplace injury due to COVID-19 exposure, timely and properly reports the claim and seeks out medical treatment within in the MPN. In that particular scenario, assuming an evaluation is timely set with an appropriate physician and the applicant has only mild symptoms, it will still be a fairly quick progression of medical treatment to hit a $10,000.00 cap. Further, it is possible the cap will be met within 90 days, even if treatment is condensed to a few weeks to a month for recovery. The applicant would be afforded multiple evaluations. The evaluations would not be spread out 30-45 days as other injuries would afford as monitoring would need to be completed every few days. Testing for COVID-19 will consist of any detection blood test as sanctioned by the US government. This will result in at least one blood draw in addition to the test. Next, there will undoubtedly be multiple diagnostic tests for breathing and airway concerns. Per the US department of Health and Human Services, multiple tests include volume capacity, diffusion capacity, blood gas, pulse oximetry, and an x-ray of the lungs. There will also be general medications dispensed for flu-like symptoms, pain and general comfort. Simple pulmonary testing will run a few thousand dollars in total, along with lab work. Thus,

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Tips for Taming Work Comp Subpoenas

Workers' Compenstation / admin

Tips for Taming Work Comp Subpoenas Legal copy services are a fact of life in the legal world. No attorney practicing today can live without them, unless we could dedicate our whole day to the minutiae of document preparation and dissemination. They are an essential service that we rely on. But let’s face it. They run a business and will always try to bolster their bottom line. Since there are strict rules as to which party pays for legal copy services and when, the ledgers get a little muddy. Lawmakers have stepped in to try and streamline the industry, but there are always ways to figure out how to sidestep regulations. Following, I’ve prepared a list of the current tricks employed by copy services and how you can spot them, outmaneuver them, and prevent getting gouged. But first, a little background. A number of years ago, I drafted a two-part article series about the perils of copy services and their subpoena and billing practices and how to mount a successful defense against them. It resulted in one well-known provider in Northern California writing a “white paper” in response to my article, which was filled with some small counter arguments and not much more. In the years subsequent to those articles, a lot has changed in the world of copy services and their practices. The most notable change was the passage in 2012 of California SB 863. SB 863 and its impact on subpoenas SB 863 implemented a fee schedule for copy services. This ended, for the most part, the “wild west” of service fees. In my opinion, SB863 and the implementation of a copy service fee schedule was implemented at least in part, to prevent unnecessary copy service charges that typically occur throughout the life of the claim. Signed in August of 2012 and later codified in Labor Code §5307.9, SB 863 ultimately resulted in a fee schedule that went into effect on 7/1/15 (see also 8 CCR §9980-9983 for more information). The fee schedule did a number of things: Placed a flat fee on copy costs for pages below 500 Added a per page cost above 500 pages Cancelled other subpoena costs Created flat fees for records from certain agencies Gone were the days of $300+ bills for a Certificate of No Records. Useless charges for “base rate”, phone calls, mileage, pagination, bates stamping were ghosts of billing abuses past. And the defense side rejoiced. But not me! I chose to operate on the assumption that like other billing phenomena in the Workers’ Compensation world such as positional MRI’s and re-packaged and compound medications, providers would simply find another way to recoup that lost income. I was right. I’ve compiled a list of tricks I have noticed that copy services are pulling in light of SB 863, which in all seriousness really was a hit to their bottom line. Read: Is the claim contested? Trick #1- Subpoenas issued immediately upon representation SB 863, codified by 8 CCR §9982(d)(1) established a waiting period of 30 days for the defendant to provide records upon request and also discusses “allowable services”. In the event the applicant’s attorney sends a letter of representation and makes a request for records from the defendant, the defendant is not liable for charges associated with records provided during this waiting period by the carrier, claims administrator, or party that is not a professional photocopier. The first “trick” I wish to address is the subpoena immediately upon filing of an Application of Adjudication or simply when applicant’s attorney sends their boilerplate introduction letter and makes a general request for records. I have been told on more than one occasion that it is commonplace for most of the larger copy service companies to have a de facto “desk” at many applicant attorney’s offices, where they come by multiple times a week to inquire about new claims to be filed and immediately proceed with multiple subpoenas to parties such as employer, carrier, known physicians, private treating physicians and others. I would argue that contrary to many copy service providers’ claim that a subpoena issued by them starts this 30 day clock, the Code does not specify this. Further, this would defeat the purpose of the fee schedule. If a subpoena is issued during this timeframe and the defendant provides the records to applicant’s attorney directly, can the copy service cancel their subpoena and hit you with a $75.00 charge? I would argue no! By issuing immediate subpoenas, they anticipate that: The defendant will not comply with a 30-day requirement Parties served with their subpoenas will automatically comply, thus “justifying” their billing and They can establish a pattern of additional subpoenas, which we will discuss below. Trick #2- Ongoing/updated subpoenas Any defense attorney or claims examiner who has worked for longer than a week at an active desk has experienced this. New applicant’s attorney? Here’s your subpoena. New primary treating physician? Here’s your subpoena. The defendant issues a subpoena for a particular location? Here’s a subpoena for the same location. Ongoing medical care? Here’s your updated subpoena. The most common arguments that I hear are four-fold. The first argument I usually hear is that the original request for records in the boilerplate form sent by applicant’s attorney at the start of the claim creates an ongoing requirement for a file and serve. I concede that this argument may have some merit, yet we must jump into the weeds to dissect it. With an ongoing duty, I am not aware of a set “required time” to comply with ongoing file and serves. I recommend every 45 days the claims examiner provide updated reports and upon the receipt of a DOR. However, I always argue upon receipt of an updated subpoena for ANY location in which the defendant has records, that we treat that subpoena as a request for records from the applicant and comply with the request within 30 days. I always make it a point to demonstrate to the WCAB that

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What you need to know about premises liability

Subrogation, Workers' Compenstation / admin

What you need to know about premises liability The 21st century’s new “gig economy” has opened endless new opportunities for individuals to market and profit from their personal skills and assets. Firms like Uber, TaskRabbit, Airbnb*, to name a few, leverage emerging technology to connect customers to products and service providers on a microscale. This results in increased convenience for customers, lower prices and a share in what has become the future of commerce. But with these advances come questions about insurance coverage and liability. Here, we’ll look at Airbnb and discover what the company’s liabilities are when they broker short-term rentals between homeowners and guests. Consider this hypothetical: Your insured retails high-end pots and pans. Most of their business comes from large hotels and restaurant chains. Your insured has no brick-and-mortar store, per se, so most sales are done in the field. Employees of your ensured regularly travel to other cities to meet with buyers in person. Generally, these employees stay in national chain hotels. But recently, your insured has noticed that they can save considerable amounts on lodging expenses by housing multiple employees in Airbnbs at the same time. Your insured sends a group of employees to Palm Springs and books a three bedroom house they found on Airbnb. While in residence at the Airbnb, one of the employees (we’ll call her Belinda) slips on loose, improperly secured tile in the bathroom and suffers serious injuries. Assume for the purposes of this scenario that Belinda was in the course and scope of employment at the time of the injury and her workers’ compensation claim is accepted. Your options for subrogation here are murky at best. Do you try to collect from the homeowners insurance? Does Airbnb have any liability? Let’s untangle this subrogation journey. California Law of Negligence Our first stop is to see if there was negligence involved in the cause of the accident. To help determine this, let’s look at the California law of negligence. Most simply, the subrogating carrier is required to show: A duty of care (see below) was owed ✔ There was a breach of that duty ✔ The breach of that duty caused the claimant’s injuries ✔ The claimant suffered legally recognized damages ✔ Check! All of the negligence requirements are met, but by whom? Understanding Duty of Care Property owners owe guests a duty of care to maintain premises in a reasonably safe manner. Additionally, they must warn anyone who enters their property or is staying in their home of any known hazards. When a person lawfully on the premises is injured by an unsafe condition that they were not made aware of, or that the owner should have fixed, the owner could be liable for the injury. These unsafe conditions can include, but are not limited to: Slippery surfaces Defective locks Dog bites Here the property owner owed a duty of care to make sure the bathroom tiles were properly secured and not a hazard. Their breach of duty could be actual or constructive knowledge of the loose bathroom tile. If they knew about the loose tile, or should have known about it with exercise of due care, and failed to remedy it, then they breached their duty to Belinda. That loose tile caused her to fall and the fall resulted in her injuries and thus the carrier’s subrogation damages. Liability looks pretty solid on the homeowner. However, in each particular case you are going to want to make sure there aren’t any contracts that affect the liability of the parties, especially with the added complication of involvement of Airbnb. When looking at premises liability in California, consider: Who owned the property? Who possessed it? Who controlled it? Who had a duty to maintain it? The homeowner obviously answers “me!” to all those questions. Control is interesting, though, because you could make the reasonable leap in thinking that Airbnb was in control of the premises at the time of the accident. The home was part of their inventory and they do market the property and make a profit from its rental. But did Airbnb control the premises at the time of Belinda’s unfortunate accident? Airbnb’s premises liability policy Airbnb acts as an agent to secure bookings for rental properties, but is not the owner or operator of the premises and therefore does not “control” it. When guests are at the premises, they are covered under the homeowners’ insurance policy. However, to be a good partner to their hosts, Airbnb offers “Host Protection Insurance.” This is an insurance policy that is in effect whenever a host is renting their home to guests. It’s free to hosts and provides a million dollars per occurrence for injury to guests or damage to the host’s property. Airbnb has this great insurance plan, so you can just recover your subrogation claim from them? Not so fast. There are a number of scenarios for recovery: In California, homeowners don’t have to carry homeowners insurance unless the property has a mortgage. So, if there is no homeowner’s insurance policy in effect, the injury coverage would default to the Airbnb Host Protection Insurance. This is the tidiest scenario, but uncommon. If the Airbnb does have homeowners insurance, there could be varying levels of coverage from property to property. If the homeowner only has earthquake insurance, for example, the claim would again fall on Airbnb’s insurance. If the host has homeowner’s insurance that covers guests’ injuries, Airbnb’s Insurance plan stipulates that the homeowner’s insurance be tapped first and completely before it kicks in. It’s important to note, too, that Airbnb’s insurance does not cover intentional injuries or damage to the premises. How do you collect? Collecting on a case involving an Airbnb can be complicated since there are so many factors and overlapping coverage issues and scenarios involved. The first step to determining where to look for collection would be to determine the amount and type of homeowner’s insurance existed in effect during the rental period. If you’re lucky and the homeowner

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Increasing the Odds: Strategies for Mediation as a Workers’ Compensation Subrogator

Subrogation, Workers' Compenstation / admin

Increasing the Odds: Strategies for Mediation as a Workers’ Compensation Subrogator Mediation as a subrogator is like playing a two-player game as a third player. The game is designed for two players, and those two players don’t understand how you fit into their game and they don’t really want you there. Your pieces to the game, however, hold a lot of power if you place yourself in the right position for mediation. BY CHALSIE KELLER AND KELSEY DANIEL As a subrogator, you will likely be ignored for a good portion of the mediation. This is because the mediator tends to focus on the Injured Worker and Defendants as the parties to the case, thinking they are the most important players to the mediation. The mediator usually has a plan to come to you at the end of the negotiation with the singular goal of reducing your recovery as much as possible to get a settlement within the bounds of the “deal” they have already worked on with the Injured Worker and Defendants. Even worse in some cases, the mediator may view you as another source of money to contribute to the overall settlement. The solution to controlling the outcome of the game, is to place yourself in the best position to negotiate with all parties. This usually translates to “leave your options open” and “get creative.” DIFFERENT TYPES OF SETTLEMENT Subrogation is a unique situation in the civil arena because the goal may not always be to get as much money from the settlement possible. Sound crazy? The other parties to the case may think so too. Approaching mediation from this perspective can give you great leverage to getting the best overall recovery for the claim. A settlement where the Subrogator takes less direct money in reimbursement does not translate to an overall lower recovery. Although it seems contradictory, the opposite is often true. A settlement where the Subrogator agrees to recover less direct money from the overall settlement in exchange for a stipulation to credit, or a third party compromise and release, can be a much better bargain than receiving a larger amount of direct money from the settlement. When the underlying claim is left open, the carrier faces high exposure that an even exceed the estimates at the time of settlement. Closing off a “bleeding” claim can be much more beneficial than cash in hand. To use this leverage to your best advantage, knowledge of the status of the workers’ compensation claim, and the different settlement options available to you based on that status, are key. Different states have different rules governing each of these options, but most allow a carrier to obtain some sort of credit that makes all of these strategies options for the Subrogator. There are three major types of settlement options: Direct Cash Only; Direct Cash with Claim Credit/Closure, and; Claim Credit/Closure Only Let’s use the following example to better understand each option and how they would play out in this scenario: The worker’s compensation claim total estimated cost is $90,000. $70,000 in benefits have been paid to date. $20,000 in benefits are in reserves for the permanent disability rating and future medical care Identified by the Panel Qualified Medical Evaluator. The civil subrogation team has discovered the third party civil defendants have a $100,000 policy available to recover from in the subrogation case. Both the injured worker and the Subrogator have filed suits and made a claim for the $100,000 policy. Direct Cash Only Direct Cash Only settlement simply means your subrogation recovery value only comes from whatever money you are able to recover from the third party subrogation case. This kind of settlement agreement generally arises when there is insufficient insurance available to recover from the Defendant. When this occurs, you have three people fighting for the same money (the Subrogator, the Injured Worker and the Injured Worker’s Plaintiff Attorney). In our scenario, the Defendant’s policy limits were $100,000. If the defendant’s offer their full policy for settlement, each party (the Subrogator, the Injured Worker and the Injured Worker’s Plaintiff Attorney) could equally splitch the $100,000 giving them cach $33.333.33. Your recovery from this scenario is the value of the direct cash you are settling for, $33,333,33. You can choose this option for settlement with both an open or closed Workers’ compensation claim. However, if your claim is closed, your recovery ends there. Insufficient funds from a Defendant, usually due to low policy limits, is a prime example of why it is so important to communicate with the Subro Team (claims representative, subrogation representative, subrogation attorney) to keep the underlying workers compensation claim open. If the claim is open, you can petition your State’s appeals board for credit for the net recovery of the injured worker (jurisdiction permitting) and recover an additional $33,333.33 in claim credit. This credit is required to be spent on the claim, with itemized proof by the injured worker, before the carrier is obligated to pay our benefits under the claim. This effectually closes the claim in many scenarios. If you have an agreeable injured worker and Plaintiff attorney, you can choose the next option for settlement, Direct Cash with Claim Credit Closure. Common Fund Doctrine and Interpleader As an additional element of concern with low policy limit cases, and in states where the Subrogator has a first right of recovery, the Subrogator’s damages alone will often exceed the policy limits, or will at least exceed what the plaintiff attorney thinks you are entitled to recover. An argument that will likely be made is that the Plaintiff attorney put forth more effort and therefore procured the settlement. This contention, when applicable in your jurisdiction, is commonly referred to as the Common Fund Doctrine. The doctrine stands for the premise that where one creates a fund to which others have a claim, that one is entitled to first recover their costs of litigation and attorney’s fees. It is an equitable principal designed to prevent unjust enrichment. Some states

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