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Workers' Compensation Defense/Subrogation-The August 2007 supplement to the Workers’ Compensation Laws of California

The August 2007 supplement to the Workers’ Compensation Laws of California has been issued. Pertinent highlights are as follows:

Administrative Penalties- The AD has specified the amounts of, and procedures for, imposing penalties in amounts up to $400,000.00 against employers and insurers who knowingly and unreasonably delay or refuse payment of compensation to injured workers with a frequency that indicates a general business practice.

See 8 Cal. Code Reg. §§ 10225-10225.2, effective 5/26/07.

Medical Treatment Utilization Schedule-The AD has adopted new rules that essentially leave the ACOEM Guidelines in place. New acupuncture guidelines that supersede the ACOEM Guidelines on acupuncture were also adopted.

See 8 Cal. Code Reg. §§ 97292.20-97292.23, effective 6/15/07.

Utilization Review Enforcement-The AD has adopted new rules that set forth timelines and conditions to be met whenever a request for authorization of medical treatment will be delayed, modified or denied. The rules provide for a routine investigation to be initiated at each claims adjusting location at least once every five years and at each utilization review organization at least once every three years. Target investigations may be conducted based on information indicating the possible existence of a violation of utilization review laws or regulations. The AD may assess penalties of up to $50,000.00 against claim administrators that do not comply.

See 8 Cal. Code Reg. §§ 9792.11­9792.15, effective 6/7/2007.

Pre-Designation of Personal Physician-The AD has specified that a “personal physician” includes a medical group, if the medical group is a single corporation or a partnership composed of licensed doctors of medicine or osteopathy, which operates an integrated multi-specialty medical group providing comprehensive medical services predominantly for non-occupational illnesses and injuries.

See 8 Cal. Code Reg. §§ 9780, 9783, effective 2/21/2007.

Official Medical Fee Schedule; Physician Fee Schedule-The AD has established maximum allowable reimbursement amounts for certain procedures (procedure codes 99201 through 99205 and 99211 through 99215) for physician services, set forth in the February, 2007 Addendum to Table A of the OMFS Physician Services Fees for services rendered on or after February 15, 2007.

See 8 Cal. Code Reg. § 9789.11.

Official Medical Fee Schedule; Pharmaceuticals-The AD has set forth a maximum reasonable fee for a pharmacy service or a drug not covered by a Medi­Cal payment system, in other words for so-called “repackaged drugs”. The regulation applies to all pharmaceuticals dispensed or provided on or after March 1, 2007.

See 8 Cal. Code Reg. § 9789.40, effective 2/28/07.

Spinal Surgery Forms-Changes were made in May 2007 to both the application for Spinal Surgery Second Opinion by physician list and Objectiion to Treating Physician’s Recommendation for Spinal Surgery.

See 8 Cal. Code Reg. §§ 9788.11, 9788.31, effective 5/23/2007 and 5/21/2007, respectively.

Workers' Compensation Defense/Subrogation-Dianne Benson v. The Permanente Medical Group, PSI

Dianne Benson v. The Permanente Medical Group, PSI;

Athens Administrators OAK 297895; OAK 326228

(WCAB En Banc 12/13/07)

Wilkinson who? In a watershed decision, the WCAB has decided that the principle of awarding a combined permanent disability based upon two successive industrial injuries becoming permanent and stationary at the same time, is no longer the standard.

Dianne Benson was found to have a 62% permanent disability based upon the combined effects of a specific injury and a cumulative trauma injury. The total award was 62%. The AME in the case, apportioned 50% of the overall permanent disability to a specific injury, and 50% to a cumulative trauma.

The En Banc opinion gives great deference to the adoption of Labor Code Section 4663 and the repeal of Section 4750. This, according to the court, was a major shift in the rules of apportionment. A new “causation regime” was created which requires all potential causes of permanent disability to be separately addressed and considered when apportioning disability pursuant to Labor Code Section 4663. Thus, separate permanent disability awards are to be granted in the case of successive industrial injuries.

The court held that each separate injury requires a separate discussion by the medical expert in order to determine the causative sources of disability. There will be instances where an expert cannot parcel out with reasonable medical probability the approximate percentages to which each successive industrial injury contributes to the overall permanent disability.

In Ms. Benson’s case, her award of 62% permanent disability was worth $67,016.25. After reconsideration, she was awarded two separate awards of 31%, each worth $24,605.00, for a total award of $49,210.00. This represents a roughly 23% reduction in the value of her award.

We believe this decision will have a chilling effect on the filing of cumulative trauma claims be applicants. However, for the aggressive defendant, it will provide legal basis for filing a cumulative trauma claim where reasonable medical basis exists.

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