More Leno on SJDB Vouchers

Saturday, December 31, 2005 | 0

Proposed SJDB Voucher Penalties

Insurers, employers, and third party administrators who fail to provide a Notice of Potential Rights, the SJDB voucher, or payment for supported voucher training may find the oversight expensive if the proposed DWC penalty regulations are implemented. These proposed regulations provide for the following penalties related to the voucher:

(5) $ 2,500 for each penalty award finding by a Workers' Compensation Administrative Law Judge of for a violation of Labor Code section 5814 for a failure to provide, or to deny responsibility for, provide the Notice or to provide the a supplemental job displacement benefit voucher, as required by section 10133.51(b) and section 10133.56(c), respectively, of Title 8 of the California Code of Regulations, in a timely manner to an eligible employee.
(6) $ 1,000 for each penalty award finding by a Workers' Compensation Administrative Law Judge of for a violation of Labor Code section 5814 for a failure to make timely payment to an injured worker as reimbursement for payment for services provided for a supplemental job displacement benefit voucher, or where the failure to pay the training provider causes an interruption in the employee's retraining.

Note that these penalties are assessed based on a finding by a WCALJ and not the DWC Audit Unit. That means the applicant can ask for the penalty assessment - we suspect this would result in more frequent penalty assessments since discovery of the oversight will rest with an applicant's attorney and not a DWC auditor who is looking at just 1-2% of the claim files. These proposed regulations may be in place as early as this Spring so claim operations that do not have a system in place for the SJDB Voucher need to develop and implement a process ASAP.

SJDB vouchers - More FAQs

Can the SJDB voucher be settled in a Stipulation with Award? This question has been raised by several claims examiners who note that a Stipulation is little more than a C&R with an Order for future medical care.

According to the new voucher regulations (section 10133.52), the voucher can only be settled via a Compromise & Release agreement - the language is specific. The parties therefore cannot include a resolution of the voucher liability within the agreement language is a Stipulation. When the parties are resolving a claim via a Stipulation with Award and want to simultaneously settle the voucher liability, it appears that it will be necessary to complete a separate C&R agreement to resolve the voucher issue.

Can the parties use the DWC Form RU-122 to settle the voucher? This question keeps coming up, perhaps due to the lack of information about this new benefit.

The answer, in a word, is "No." Remember that the Rehabilitation Unit does not exist for 2004 cases and the RU-122 is one of the Rehab Unit's forms. The Unit has no jurisdiction whatsoever on the SJDB voucher so it cannot approve a voucher settlement agreement, irrespective of the form used. RU-122s completed on 2004 (or later) cases will be returned to the submitting parties.

The RU-122 also cannot be used as a settlement document and submitted to the WCAB. The voucher is not rehabilitation so use of a rehabilitation form is inappropriate. If the parties wish to settle the voucher, it will be necessary, as noted above, to complete a C&R and submit the document to a WCALJ for approval. Pursuant to CCR section 10133.52, there is no other acceptable vehicle for resolving voucher liability.

How long does an injured worker have to use his/her voucher? Counselors (VRTWCs) have raised this question for clients considering some long term training options.

There is no statute of limitations for the voucher. This may sound crude (my apologies) but the voucher "expires when the funds do or the applicant does, whichever occurs first." L. C. section 5410 does not apply to the SJDB voucher because the voucher is not rehabilitation. There is also no language in L. C. sections 4658.5 or 4658.6 to suggest that the Legislature intended to limit the time period during which the voucher can be used. Applicants therefore do not need to be concerned about training programs (e.g., a college degree program) extending beyond five years from their date of injury. Insurers and employers, on the other hand, will have concerns about the reserve and payment implications for injured workers who elect to use their vouchers more than five years after their date of injury.

Are we obligated to send a Notice of Potential Rights and the voucher when the applicant returns to full time work (whether modified or regular duty) but is not yet P&S? We do not yet have final work restrictions so how can we know if the applicant needs a permanent modified job is entitled to the voucher? This is a common recurring question from claims examiners, perhaps because there is so little guidance in the regulations and we have no case law to establish structure for this benefit.

There are actually three issues here. The first is when the Notice of Potential Rights (NoPR) is due. The NoPR is due within 10 days of termination of TTD payments. The obligation to send the notice has no relationship to the existence of work restrictions - the obligation is incurred when you stop paying TTD. The easy way to remember is: "Stop TTD, send the Notice - no exceptions." Remember that sending the NoPR does not commit you to anything; it is simply an explanation to the injured worker regarding the benefits and conditions that might apply if the injured worker (1) has PD, (2) needs job accommodation, and (3) the employer cannot provide job accommodation.

The second issue relates to the obligation to send the "Notice of Offer of Modified or Alternative work (DWC Form AD 10133.53)." Here you would need to know the applicant's work restrictions and it is quite true that the work restrictions are not available and the physician will not supply them until the applicant is P&S. Unfortunately, L. C. section 4658.5 specifically requires the offer of mod/alt work to be issued within 30 days of the termination of TTD so the regulations do not address situations where the applicant is released and returns to full time work (which may be modified or transitional work) prior to P&S. You do not have final work restrictions and you do not know if the applicant will need permanent job accommodation or will be able to return to regular duty. However, the regulation requires the insurer/employer to issue the 10133.53 form within 30 days or incur liability for a voucher, even if the applicant eventually returns to full duty or the employer can offer a permanent job modification. Since we have no case law on this issue, the best I can recommend is to issue the 10133.53 with language clearly stating that the "Current assignment is being provided on a temporary basis and the need for permanent job modification or return to regular duties will be re-evaluated upon provision of final work restrictions by the treating physician." Please note that this procedure and language cannot guarantee the employer will be exempt from liability for a voucher; it is simply an option for the employer who does not feel comfortable offer a permanent job modification (or reassignment) where the medical need has yet to be established.

The final issue is the voucher. Remember that the voucher is not due until the case resolves at the WCAB so the defendant does not incur an obligation to send the voucher at the time the applicant is released to return to work. You therefore do not have to worry about the voucher - or its value - until you have an approved C&R, Stip, or F&A.

Can we use a functional capacity evaluation (FCE) to get the work restrictions that need to be accommodated? Many physicians are now dropping work restrictions and using only the "whole person impairment" language. Employers, of course, are still asking claim examiners for work restrictions because whole person impairment language is useless for assessing return to work options.

A functional capacity evaluation (FCE) cannot provide work restrictions but it can provide measured work capacity or ability, which is even more useful is assessing return to work options than work restrictions. FCEs would be especially useful to employers who need to worry about potential FEHA return-to-work issues and the documentation of "fitness for duty" and job accommodation assessments. FCEs can also be useful to treating physicians who may be asked to participate in the return to work evaluation.

A series of three FCEs can be useful to examiners who are having problems with the P&S determination for an injured worker. The FCE assessments are typically done at two week intervals. If the applicant's performance is essentially unchanged among the three evaluations, the applicant should be determined to be P&S. Further treatment is justified where the applicant shows improvement or results vary significantly between evaluations.

Contributed by vocational rehabilitation expert Allan Leno, Leno & Associates, (818) 370-8859, allanleno@leno-assoc.com.

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