WEAR AND TEAR

A big study on California cumulative trauma claims has just been released by the California Workers’ Compensation Institute (CWCI). These claims, known as CT claims, are essentially occupational wear and tear claims, including occupational disease claims.

As the report points out, California does not have the limitations on these claims that many other states impose, and “California has a relatively low burden of proof for CT claims…”.

The proportion of CT claims has been rising (“from about 8 percent of all 2005-2007 indemnity claims to about 18 percent of all 2015 indemnity claims.“)

In the last several years the buzz has been over whether employer and insurer stakeholders would try to take a legislative run at somehow limiting CT claims. I’ve heard various predictions and wish lists bandied about.

But the constituency for CT claims includes a number of politically powerful unions whose workers are susceptible to the effects of physical wear and tear or occupational disease on the job. That includes public safety unions, various service worker unions, building trades workers and on and on.

So putting together a viable coalition to make major changes in California CT law would be a difficult political feat, and it is not clear what significant concessions would be necessary to achieve that.

The interesting thing about the CWCI report, however, is that it does not paint a picture of CT claims as problematic overall. What emerges is that CT claims in the Los Angeles Basin are skewing the statewide numbers on CT claims.

The CWCI study claims that variables such as claimant demographics, type of medical condition or industry of the worker do not explain the increases in the frequency of CT claims or the costs associated with those claims.

The foremost variable was the regional experience in Los Angeles/Inland Empire/Orange County areas and the associated attorney involvement of claims there. For example, the percentage of non-CT claims was higher than CT claims in the Central Coast, the Bay Area, the Sierras, the Northern Counties and the Central Valley. But the percentage of CT claims vs. non-CT claims was higher in Inland Empire/Orange County and much, much higher in Los Angeles.

While it is true that the changes in apportionment law and the Benson case does often encourage the filing of cumulative trauma claims in addition to specific injury claims, those factors would not explain regional differences.

And it appears that the LA basin is particularly out of step with the rest of the state with respect to multiple body parts/systems. The report doesn’t allege that those are “skin and contents” type cases, but it may well be that a number of them are.

The reason for these regional differences probably relates to the persistence of alliances between doctors and attorneys in Southern California and the availability of physicians willing to treat on a lien basis. This is a strategy used by both some mainstream attorneys and fly-by-night firms.

Since workers with legitimate work-caused health issues may need treatment which is not proffered, figuring out how to place reasonable limits on liens has proved to be a thorny issue. This year AB 1160 (Mendoza) was enacted, creating some hoops for physicians treating on liens. And AB 1244 (Gray) was aimed at removing some fraudsters from the system. Yet, it may be that those enacted provisions will not move the needle much to the extent that a party adopts a strategy of filing a skin and contents CT as a gateway to running up big testing and treatment bills. It may be a while before we have that answer.

I do believe that applicant attorneys in some parts of the state are beginning to chafe at seeing things emerge so differently in the Southland. This regional difference has caused repeated public relations disasters and perhaps legislative or regulatory pressure to “throw out the baby with the bathwater”.

In any event, data mining in California workers’ comp is becoming increasingly sophisticated. So what drives regional differences will continue be a subject of focus.

Here is the link to the CWCI study:

http://www.cwci.org/press_release.html?id=552

Stay tuned. After the holiday I’ll be doing a recap of my take on the Top 10 2016 events in California workers’ comp, followed by my annual quiz for 2017 predictions.

Happy holidays to you readers.

Julius Young