SB 899 - A Detailed Review, Part 1: TimeLine, Discovery

Sunday, April 25, 2004 | 0

This is the first in a series of articles extracted and edited from a new booklet attorney Michael Sullivan has prepared on the substantial changes to California workers' compensation laws instituted by SB 899. This first article looks at the various commencement dates of different provisions, and also the new medical-legal climate and rules.

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INTRODUCTION

Well, everybody, it looks like our government is at it again. SB 899 has presented itself as one of the most dramatic workers' compensation reforms in our State's history. We have now radical changes in a spectrum of areas. We have, in a very real sense, a whole new system.

This series of articles is intended as an initial look at these changes. There are some areas that cannot be well defined, since the statutes make reference to studies that have not yet been promulgated, or need to wait for rules and regulations to clarify how they will work. There are some areas which are simply difficult to understand and which will judicial scrutiny, or even clean up legislation. Accordingly, this booklet does not attempt to identify every issue or predict every implication of every change. Such an approach would at this point be premature. There are few who doubt that our community will be working this out over many years.

What is presented here is a careful outline of the changes made to the law. Each area is described separately. The statutory changes are clearly laid out. Although we do not editorialize or launch into detailed discussions of possible solutions or implications, we do point out possible trouble or gray areas.

Time is of the essence. SB 899 was passed as emergency legislation and many of its changes have been put into place right away. Therefore we do not have the luxury of reviewing this Bill at our leisure. Here we do give a clear opinion as to the commencement date of each provision. We also try to explain how claims adjusters should handle the specifics of the more immediate changes.

Finally, a disclaimer: This series is a first look only at a very complex and difficult change to and already complex and difficult area of the law. The booklet from which this series was derived was written within days of the approval of the reform Bill. Because this is so, it is a virtual certainty that interpretations of this reform will blossom and transform over time, even in the very short term. Therefore, the commentary here should not be utilized as legal advice for any given case or situation without consultation with a licensed attorney.

COMMENCEMENT DATES FOR NEW PROVISIONS

AB 899 is an urgency statute. That is, it passed in the legislature with the requisite number of votes to have its provisions take effect without any delay. Included within it is Section 47 of the Act, which says that ". . . any provision of law made by this act shall apply prospectively from the date of enactment of this act regardless of the date of injury, unless otherwise specified . . . "

The same Section specifies that the changes cannot be used to set aside any Findings and Order, or a settlement by way of Stipulation. So if a final Order is in place, it seems there is no turning back, regardless of what changes SB 899 presents.

The following is a listing of commencement dates for the various reform areas. The details are reflected in the subsequent text.

The following provisions of SB 899 take effect without delay; that is, prospective for any date of injury, as of April 19, 2004.

1. Labor Code section 4062.1 pertains to the unrepresented applicant. Changes in medical legal procedure are implemented prospectively without delay. This means that if the medical-legal procedure has not been initiated prior to April 19, 2004, the new scheme is to be used.

2. Labor Code section 4663 is the new standard for apportionment based upon causation. There is no reason why this should not apply to every date of injury as of April 19, as long as there is no Order or Award issued before that date.

3. Fee Schedule reform pursuant to 4603.2 takes effect right away. The fee schedule in effect at the date of the service applies irrespective of the date of injury.

4. Labor Code section 5402(c) demands the provision of care in delayed cases, until the acceptance or denial. This takes effect for all dates of injury immediately.

5. The limitation of temporary disability to 104 weeks in the two year period following commencement of the benefit applies only to dates of injury on or after the date the bill was signed.

6. The treating doctor's presumption is finally repealed in its entirety for all dates of injury.

7. The modified Labor Codes section 3202.5, which affirms the applicant's burden of proof and states that all parties are equal before the law, takes effect without delay.

8. The specific changes in the requirements for selecting a pre-designated physician under Labor Code section 4600(d) take effect right away.

The following provisions of SB 899 do not take effect until a later time.

1. LC section 4062.2

2. LC section 4616 provides for medical control of all dates of injury once a network of treating physicians is established. However this network may not be established until January 1, 2005.

3. Labor Code section 4660 makes radical changes to the concept of permanent disability. However, these changes are deferred pending the Administrative Director's publication of a new schedule. When that issues, the new schedule will apply only to those cases with a date of injury subsequent to the issuance.

4. Medical Provider Networks are not to be established before January 1, 2005. The Administrative Director is to publish Regulations for how this is to be done by November 1, 2004. With the exception of those cases that require continuing care under prior physicians, all cases regardless of the date of injury will be subject to treatment confined within the network. The transfer of all cases will be completed within a year.

5. The present form of Labor Code section 5814, which provides for penalties in the event of unreasonably late provision of benefits, becomes inoperative as of June 1, 2004. Therefore if an Award does not issue by that date, the new standard set out by the new section 5814 will rule. The old statute is formally repealed effective January 1, 2005.

1. Medical-Legal Procedure: A Whole New World For a long time Labor Code Sections 4060, 4061 and 4062 governed the medical-legal process in Workers' Compensation. While those sections remain in a truncated form, medical-legal procedure as we know it has changed radically. To put it succinctly, the dueling QME aspect of the process is now ended. In every case, only AMEs and panel QMEs will be allowed. The Labor Code section 4061 and 4062 sections are now eviscerated; they along with section 4060 make reference to a couple of new statutes. These are Labor Code sections 4062.1 and 4062.2. Labor Code section 4062.1 deals with unrepresented cases, and, put simply, demands the use of a panel physician in every case. Labor Code section 4062.2 deals with represented cases, and basically demands the use of a panel physician where an AME cannot be agreed upon.

A. Labor Code 4060.

Labor Code Section 4060 still applies to denied cases. The original language of this part of the Statute remains: "This Section shall not apply where injury to any part or parts of the body is accepted as compensable by the employer. However, where the parties used to select their own QMEs, now only panel QMEs and AMEs are allowed. If a medical evaluation is needed, and the applicant is represented by an attorney, then the procedures set up in Labor Code Section 4062.2 are utilized. Those are described below. If the applicant is not represented by an attorney, then the procedures in Labor Code Section 4062.1 are utilized. That is also described in further detail below.

Labor Code Section 4060 does demand in an unrepresented case that the defense provide the applicant with notice, either that a comprehensive medical evaluation is needed to determine compensability, or notice that liability is not accepted, and that the employee has a right to a medical evaluation. Also, Section 4060(e) indicates that the applicant is to be notified of his rights to speak to an I&A officer and to have an attorney. Specified language is utilized here. The notice to the applicant is to be accompanied by the form that is prescribed by the Administrative Director for requesting the assignment of a panel doctor.

B. Labor Code section 4061.

Labor Code Sections 4061 and 4062 still deal with accepted claims. They are dramatically scaled back, however, and ultimately make reference to Labor Code Section 4062.1 or 4062.2, which, again, are described below. Labor Code Section 4061 still deals with situations where temporary disability in an accepted case is coming to an end. It still provides that notices need to be sent to the applicant that permanent disability is not being paid, is being paid in a defined amount, or may be paid.

Labor Code Section 4061(c), which applies when the applicant is represented by an attorney, changes dramatically. No longer is an AME to be sought by the parties under this section. Rather medical evaluations are to be obtained only as provided in Labor Code Section 4062.2. Subsection (d) of Labor Code Section 4061 applies where an applicant is not represented by an attorney. If the parties do not agree on the permanent disability rating, the form is to be provided to the unrepresented applicant to refer him or her to a panel physician. Either party is allowed to request a panel physician in accordance with Labor Code Section 4062.1. The remaining provisions of Labor Code Section 4061, describing how a panel physician is to be handled, are left in place.

C. Labor Code section 4062.

Labor Code Section 4062 still complements its predecessor section, by dealing with situations where either the applicant or the defense objects to a medical determination made by the treating physician concerning any medical issues not covered by Section 4061.

Added here is a provision that issues covered by Section 4610 - the utilization review statutes - are not covered by Labor Code Section 4062, with one exception: New language here says that if the applicant objects to a decision made pursuant to Section 4610, to modify, delay or deny treatment recommendation, the employee is to notify the employer of the objection in writing within 20 days of receipt of that decision. Time limits as per the original language of the Statute may be extended for good cause or by mutual agreement. However, one is given to wonder as to the implications of the applicant's failure to object in a timely fashion.

No longer does this Statute require that the parties seek an AME. In fact, that entire language is eliminated. The Statute simply makes reference to Labor Code Sections 4062.1 and 4062.2 (which does require this discussion), and notes that no other medical evaluation is allowed to be obtained.

The entirety of Labor Code Section 4062.01 has been repealed. That provision was part of the 2003 legislation and appears to have been superfluous in regards to Labor Code section 4062.

D. Procedures under Labor Code Section 4062.1.

This section applies if the applicant is not represented by an attorney. Of special note is the fact that this section does not specify that its procedures are limited to injuries after any specific date of injury. This is in contrast with Labor Code Section 4062.2. In its new form, that section describes procedural changes for those injuries which occur on or after January 1, 2005. Since emergency legislation was enacted, it appears that the medical-legal procedure for an applicant who is not represented by an attorney has been changed from April 19, 2004 onwards, for all dates of injury.

According to Labor Code Section 4062.1, either party can request the medical evaluation, whether the case is accepted or denied. The form prescribed by the Administrative Director that requests a panel of three qualified medical evaluators can be submitted by either side. However, the defense cannot submit the form unless the employee has failed to submit it him or herself within ten days from the defense tendering it to the applicant.

Once the panel of three doctors is submitted, the applicant has the first bite of the apple when it comes to picking the doctor. However, if within ten days the applicant does not select a particular physicians, the defense can do it. Thereafter the defense will set the appointment for the applicant as well. Either way, travel expenses must be forwarded.

Interestingly, there is a provision here giving the applicant an "out, when dealing with the independent evaluator. The evaluator has to give the applicant a chance to ask questions concerning the evaluation process and the evaluator's background. The applicant is then supposed to submit to the evaluation as requested. However, if the applicant has good cause to terminate the evaluation, the applicant may do so. Good cause is defined as "evidence that the evaluator is biased against the employee because of his or her race, sex, national origin, religion or sexual preference, or evidence that the evaluator has requested the employee to submit to an unnecessary medical examination or procedure. If the applicant declines to proceed with the evaluation, he or she has the right to a new panel of three qualified medical evaluators, and the process presumably starts all over again. This presents a bit of a conundrum, as one can imagine an applicant refusing over and over again to participate in these medical-legal evaluations. If the Appeals Board later determines that the applicant did not have the good cause necessary, the cost of the evaluation is deducted from the award.

Once a panel physician has been obtained, no further medical evaluation will be allowed to go forward, even if the applicant gets an attorney later on in the case. That is a change from the law enacted in 2003.

E. Labor Code Section 4062.2.

The former Section 4062.2 is repealed in its entirety. That specified how the parties were to handle providing information to doctors in the case. The new section lays out the rules for proceeding in every case where the applicant is represented by an attorney.

First, a written request to obtain an agreed medical evaluator is to be made. That written request is to name at least one proposed physician. Ten to 20 days are allowed for agreement to be reached. If this fails, either party can request the assignment of a three-member panel of qualified medical evaluators. The party submitting the request designates the specialty of the medical evaluator. However, they are supposed to provide information, including the specialty of the medical evaluator requested by the other party and the specialty of the treating physician. Copies are to be served on the other party.

Within ten days of the assignment of the panel, the parties are supposed to confer and see if they can agree on one of the names to be an agreed medical evaluator. If they cannot agree by the tenth day, each party is supposed to strike one name from the panel. Naturally, the question arises as to who has to make the first decision to strike a name. In any case, the third and remaining doctor will be the sole medical evaluator for the case. It is provided that if one party fails to exercise their right to strike a name within three working days of gaining the right to do so, the other party can select the QME on their own. Hopefully, regulations will clear this up.

As with unrepresented employees, a represented applicant is to be responsible for setting up the appointment. However, if the applicant fails to do so within ten days after the selection of the panel physician, the defense is to make the arrangements.

F. Labor Code Section 4062.3: Communication with Qualified Medical Evaluators.

This new section specifies how information is to be provided to any qualified medical evaluator. It is substantially the same as the former section 4062.2. Ex parte communication with a panel doctor or AME is prohibited, and essentially the same rules for communicating with these sorts of doctors applies.

Upon completing the evaluation, the medical evaluator is supposed to summarize the medical findings in a form prescribed by the Administrative Director. This is then to be served on the parties, and is to contain an answer to all contested medical issues. If after the medical evaluation is prepared either party objects to any new medical issue, they are to return to the original evaluator to the extent possible.

Under Labor Code Section 4062.5, if a QME selected from a panel fails to complete an evaluation within the time frames of Labor Code Section 139.2 (generally one month) a new evaluation can be obtained upon the request of either party.

Article by attorney Michael Sullivan. Mr. Sullivan can be reached by e-mail at mike@mikeslaw.com, or by phone at (310) 337-4480.

Click here to download Michael Sullivan's complete comprehensive review and summary.

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