July 16, 20200

It was an unusual 4th of July, with most firework shows canceled, and most backyard gatherings reduced to our immediate quarantine bubbles, though if your experience was anything like mine, people managed to light up the sky throughout the night despite the lack of sanctioned firework shows.  During what will go down as a historically difficult year for Americans, we do well to remember not just our eventual independence, but the strength, resolve, interdependence, and shared vision necessary to bring together a group of revolutionaries in the founding of this country.  That a group of individuals with such varying and often diametrically opposed ideas on how to best achieve shared goals was able to eventually form a constitution and nation should give us all hope whenever we are faced modernly with difficult times.  We here at Mullen & Filippi hope that for at least one day this year the most stressful decision you and your family had to face was whether to have plain or deli mustard on your hot dogs.  With any luck, by this time next year, after all the sacrifice, we’ll be able to once again celebrate our liberties more freely!


In the case of Richard Todd v. Subsequent Injuries Benefit Trust Fund, the Appeals Board in a very clearly written decision clarified the method for determining whether there is Subsequent Injuries Benefit Trust Fund liability under Labor Code 4751, holding that prior and subsequent disabilities are to be added rather than reduced by combination if they are not overlapping.  Labor Code 4751 establishes SIBTF liability, and the WCAB reiterated that the section was enacted to incentivize employers to employ persons who are permanently and partially disabled.  The WCAB also noted that there is no specific statute of limitations for an SIBTF claim so long as an employee files within a reasonable time of learning that the Appeals Board has awarded permanent disability such that there is a substantial likelihood of entitlement to SIBTF benefits.

The WCAB also went through the elements of SIBTF liability, noting that there is SIBTF liability when there is 1) a pre-existing permanent partial disability due to an industrial or non-industrial injury; 2) a subsequent compensable injury resulting in additional permanent partial disability amounting to, not adjusted for ace or occupation of the employee, 35% of total disability or 5% of total disability (again not adjusted for age or occupation), if the affected body part is a corresponding hand, arm, foot, leg, or eye; 3) the combined preexisting and subsequent permanent partial disability is greater than the subsequent permanent partial disability alone; and 4) the combined pre-existing and subsequent permanent partial disability is equal to 70%.

Once that threshold is met, the applicant is entitled to receive compensation for the remainder of the combined permanent disability existing after the last injury.  The SIBTF must pay the total award less the amount due to applicant from the most recent (subsequent) injury (and less credits under Labor Code 4753).   So if an applicant has overall disability of 80%, and the most recent injury resulted in 50% permanent disability, SIBTF will owe the value of the 80% less what was paid for the subsequent injury of 50%.  In determining whether an injured worker meets the threshold, the WCAB then opined that the Combined Values Chart (and the Multiple Disabilities Table that preceded it under the 1997 rating schedule) is applicable only when determining disability from a single injury and is not to be used when determining if an injured worker has the overall disability of 70% necessary to trigger SIBTF liability.

Employers and carriers are often not privy to SIBTF issues as they are generally looking at disability on their claim only and considering outside disability only in the context of apportionment.  That said, it can be very helpful in negotiating settlement of a particular injury to know whether the applicant might be entitled to SIBTF funds and whether concerns about the SIBTF case might be inflecting settlement negotiations.


The California Workers’ Compensation Institute (CWCI) indicates that while the raw amount of claims was up in 2019 to 85,882 from 83,903 in 2018, the frequency of claims measured per 100 covered employees fell to 3.68 from 3.72 in 2018.  Raw claim volume is 19.4% lower than the level in 2005, which would appear to reflect the impact of the workers’ compensation reforms of 2012 in addition to other economic factors.  The full report can be read here:  https://www.cwci.org/press_release.html?id=774


The DWC has proposed changes to its Medical Legal Fee Schedule, including a proposal that comprehensive evaluations be paid for at a flat rate of $2,105 and that follow-up examinations be paid for at a flat rate of $1,316.25, inclusive of record review of up to 200 pages as to both.  The proposal also allows for any record review over 200 pages be paid at $3 per page up to 2,000 pages, and at $2 per page for records reviews of over 2,000 pages.  Most multipliers have been done away with in the proposals, though multipliers are proposed for interpreters, AMEs, and certain medical specialties such as oncologists, toxicologists, and psychiatrists and psychologists.

The proposal has proven contentious as one can see by a review of the some 241 pages of public comments from providers and other stakeholders available at the DWC’s forum where the DWC invited public comment.  The link is here if you need some light summer reading:  https://www.dir.ca.gov/dwc/ForumDocs/2020/Med-Legal-Fee-Schedule/Index.htm.

Many practitioners have bemoaned the overall shortage of QMEs and the frequently poor quality of the analysis in reports when complicated issues are presented by a claim.  If many of the comments from QMEs in the forum are to believed, the new proposals may not do as much as one would hope to encourage more doctors to serve as QMEs and issue carefully considered and detailed reports.


Unfortunately, in response to a surge in new infections, California has again instituted statewide indoor closures for restaurants, bars, wineries, movie theaters, family entertainment centers, zoos and museums, and cardrooms.  There have been additional indoor closures of fitness centers, places of worship, offices outside of critical infrastructure sectors, salons, and malls in 30 counties.  The DWC has not updated its prior COVID related procedural changes or guidance and local WCABs continue to hold hearings telephonically across the state.

The Appeals Board did recently, by en banc decision, rescind the emergency rules allowing WCJs and arbitrators an unlimited extension of the time within which to issue reports in response to petitions for reconsideration, removal, or disqualification.  The previous WCAB rules setting those timeframes will become effective again for all petitions filed on or after 9/1/2020.  The update effects judges primarily in terms of anxiety inducing time limits, but it is a sign that the WCAB is trying to return practice and procedure to ordinary timeframes one step at a time.  Parties remain advised to consult the DWC website frequently for any updates.


This month, Stacey Madsen, Associate Attorney in our Redding office, discusses the always important and often vexing issues with fraud in the workers’ compensation system in California.  Noting that estimates from the National Insurance Crime Bureau suggest that workers’ compensation fraud costs between $1 billion to $3 billion a year, she provides a history of the Workers’ Compensation Fraud Program established in 1991, discusses granular claim fraud and systemwide vendor fraud,  and provides information about the Department of Insurance’s fraud database.  She also discusses the effect of fraud on settlements and remedies available in instances of fraud and provides useful advice and resources to anyone dealing with “red flag” claims.


We love to hear from our clients, so it never hurts to remind you all that our transition to a central mailing location is complete.  Any and all mail should now be sent to 1435 River Park Drive, Suite 300, Sacramento, CA 95815.  From there it will be efficiently routed to our various offices statewide.  Similarly, referrals can now be made electronically through a dedicated email address at referrals@mulfil.com.

Another huge congratulations to Bob Sherman on his retirement after 39 years with Mullen & Filippi.  Bob joined the firm in 1981, when the firm had around 20 attorneys in 5 or 6 offices.  Between 1981 and 2020, Bob witnessed, and then oversaw, amazing growth in the firm.    He penned the firm’s mission statement, stating strongly our firm’s dedication to excellent legal representation and customer service, as well as high ethical standards.  The statement is still available for your reading pleasure at https://www.mulfil.com/about/.  In his time as an attorney, senior partner, manager of the Stockton and then Sacramento offices, and member of the Management Committee, he lived the mission statement’s tenets.  He will be missed by his co-workers and clients and we extend him our warmest congratulations and best wishes for his retirement.

This Bulletin was written by Jim Cotter, Associate Partner in our Walnut Creek office.


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