Court Reverses WCAB Award for 24-Hour Nursing Care

Thursday, February 3, 2011 | 0

By Richard M. "Jake" Jacobsmeyer
Shaw, Jacobsmeyer, Crain & Claffey

The California 2nd District Court of Appeals has provided us with some guidance, not a lot but a little, on what is becoming a thorny issue in many workers’ compensation cases that of attendant care expenses.

In State Farm v WCAB (Pearson), the Court reversed an award in excess of $1,000.000 for retroactive care and a continuing award for 24-hour care at licensed vocational nurse rates of $30 per hour for applicant’s spouse ($720 per day). Unfortunately, while the Court is justifiably critical of the lack of substantial evidence to support the Workers' Compensation Appeals Board's decision, it does not provide as much guidance as we would have liked to sort out such issues on a day-to-day basis.

The applicant in this case, Francisca Apparicio, sustained two injuries in 1995 and 1999. In 2006 the parties entered into stipulations for an award of 100% permanent disability, but deferred the issue of payment for attendant care services for applicant’s spouse. Later that year, the workers' compensation judge issued an order denying the claim for attendant care based on a lack of substantial evidence to support the claim.

Applicant appealed and the WCAB remanded for further development of the record. The WCJ ordered the parties to submit the matter to an independent medical examiner, Dr. Donna Barras. Applicant attorney unilaterally arranged for an examination and review of selected records by Dr. Barras who provided an opinion supporting the need for 24-hour care. Defendant was not aware the exam had taken place until after the report was received and objected to the admissibility of the report on the basis of the ex parte communication with the independent medical examiner.

The trial judge deferred ruling on the issue and Dr. Barras was deposed and reviewed additional records, still arriving at substantially the same conclusion. At trial, defendant again objected to the report of Dr. Barras and argued the evidence did not support a need for LVN services on a 24-hour basis.  However, the WCJ awarded essentially all of the benefits demanded by applicant with the exception of the hourly rate which was set at $30 per hour rather than the $35 suggested by the IME. Defendant appealed the case on both the admissibility of the report of Dr. Barras and substantial evidence to support the decision.

The Court of Appeals agreed with defendant on both grounds. Citing the recent decision in Alvarez v. Workers’ Comp. Appeals Bd. (2010) 187 Cal.App.4th 575 as well as the specific provisions of Labor Code § 5701, the Court noted the conduct of applicant was not even close to what was statutorily required. ADR § specifically directs all communication to an IME appointed pursuant to Labor Code § 5701 be funneled through the WCJ unless otherwise ordered.  The Court was also unimpressed with the WCAB’s rational that defendant had a subsequent opportunity to present Dr. Barras with the information it wished to have reviewed and also to cross examine the doctor:

“…The prohibition against ex parte communications is a strict rule, and no showing of prejudice is required to invoke the appropriate remedy.  (Id. at p. 589.)  The applicant and lien claimant violated these requirements in a substantive manner.  Dr. Barras should have been disqualified, the reports and opinions of Dr. Barras should have been stricken, and a new medical examiner should have been selected.”

In light of the recent Alvarez decision, striking the IME report was probably an easy call in this case. However the Court was equally unimpressed with the W.C.A.B.’s award on substantial evidence grounds noting the evidence relied upon by the WCJ and the WCAB to support the award was inadequate:

“… A first problem concerns the evidence supporting the finding that Pearson monitored and assisted Apparicio 24 hours per day, seven days per week.  Apparicio provided evidence of caregiver services provided by Pearson in a list which set forth the daily average times that he provided services.  These times do not total 24 hours per day, except for the final item, “assist [Apparicio] at night,” which was listed as “24 hrs.”  An award of compensation based on Pearson’s alleged caregiver services 24 hours per day, seven days per week is therefore unreasonable…

A second problem with the evidence of caregiver services Pearson allegedly provided is that many of those services do not constitute treatment which the employer is required to provide the injured worker…

Apparicio’s list of caregiver services provided by Pearson included numerous categories of caregiver services which do not appear to have qualified as medical treatment reasonably required by section 4600.  The matter must be remanded to the WCAB to redetermine which of the caregiver services Pearson provided were “medical treatment” under section 4600 which the employer was required to provide or for which the employer was liable for reasonable expense incurred on behalf of the employee in providing treatment…”

The Court also remanded the case for a re-determination of the hourly rate to be paid.  The court noted many of the services provided did not rise to the level of LVN services and some were did not even qualify as medical services.

 “First, a $30 hourly payment for services which are not included under section 4600, subdivision (a) is unreasonable and is an act in excess of the powers of the appeals board (section 5952, subdivisions (a) and (c)).

Second, the hourly rate of compensation was excessive for categories of services Pearson provided which were not LVN service…”

On remand the WCAB ordered the record to be developed further with new, unbiased medical evidence, determine which services identified by the caregiver actually qualify as “medical treatment under Labor Code § 4600 and finally identify a rate of payment for the services that are considered medical treatment based on the level of service.  Presumably this will mean different services may be paid at different rates depending on what level of specialty is required.

While it would have been helpful if the Court had provided specific examples of what it considered to be medical treatment and what it did not, such a fact finding determination has been left to the WCAB to perform. It is unlikely the defendant is going to skate entirely on the provision of attendant care services but with some diligence should be able to substantially mitigate the overall cost. It certainly seems unreasonable on its face to award the applicant’s spouse reimbursement at LVN rates when the spouse has not obtained the necessary training or skill to qualify for such a pay scale in the open labor market.

When such claims are made, it is imperative, in my judgment, that defendants must be prepared to present their own expert testimony on what is a reasonable cost and a reasonable level of services rather than letting the applicant dictate the development of the record and end up being stuck with the result.  In this case the defendant has dodged a bullet, as much due to the misconduct of the applicant attorney as to the defendant’s handling of the case. 

To read the opinion, go here:
http://www.workcompcentral.com/pdf/2011/misc/Apparicio01262011.pdf

Richard M. "Jake" Jacobsmeyer is a founding partner of the Shaw, Jacobsmeyer, Crain & Claffey law firm in Oakland.