Movement to Shift the Cost of Industrial CT & Occupational Disease Medical Expenses to Federal, State & Local Programs As Well As Union Trust Funds, Private Health Plans & Providers Continues

Efforts to pass AB 221 in the current legislative session may have been abandoned, but the campaign in California to eliminate or curtail cumulative trauma claims—and the availability of medically necessary treatment—marches on.

AB 221, which was introduced at the beginning of the current legislative session by Assembly member Adam Gray (D-Merced), proposed to curtail alleged workers’ compensation fraud in cumulative trauma claims by eliminating the compensability of certain medical treatment liens, as well as shifting  the cost of industrial medical treatment onto private health plans, self-insured health and welfare benefit plans, and private providers, as well as federal, state, and local government facilities and programs.

It is noteworthy that the provisions contained in AB 221 were originally contained in a version of AB 1244, which had also been proposed by Assemblyman Gray in the previous year’s legislative session. Boehm & Associates opposed these very same provisions last year, and Assemblyman Gray removed the provisions from that bill before it was passed.

The same provisions aimed at eliminating the employer’s liability for medical treatment re-emerged as the centerpiece of new bill AB 221. Those provisions included amending Labor Code Section 4600 to provide that neither the employer nor the employee would bear liability for the payment for medical care unless:

  • The employer authorized the treatment;
  • The employer accepted the claim and the body part;
  • A judicial finding indicated that the injury was compensable; or
  • An evaluating AME or QME determined the injury to be industrial.

It also provided for the amendment of Labor Code Section 5005 to state that the employer would not be liable for payment of medical lien treatment for a cumulative trauma or occupational disease injury unless the new provisions of Labor Code Section 4600 were met, or the case resolved by way of compromise and release for $25,000 or more, “exclusive of the cost of past and future medical treatment.”

In May of this year, the Assembly Insurance Committee did not pass AB 221. Boehm & Associates appeared at the hearing on the bill and expressed its opposition. Boehm also offered concrete evidence that valid, bona-fide CT claims can and do settle by way of Compromise and Release for less than $25,000.00. This frequently occurs with certain injuries, such as carpal tunnel or hernia injuries.

In June 2017, Assembly member Gray was quoted as stating that, although AB 221 failed to move forward in the current legislative session, he has no intention of dropping the issue.

Other developments in the past two months suggest that the movement to curtail or eliminate CT and occupational disease claims continue to move forward by way of striking the compensability of medical treatment liens.

In June, the Rand Corporation issued a report entitled, “Provider Fraud in California Workers’ Compensation: Selected Issues.” The report suggests that CT claims are likely contributing to fraud in the worker’s compensation system, noting that the top 10% of lien filers statewide are responsible for more than 75% of the liens, and that “almost half of all workers’ compensation liens are CT-related.”

The Rand report notes that “employers are almost twice as likely to deny postemployment CT claims as CT claims filed during the employee’s tenure and more than seven times as likely to deny postemployment CT claims as non-CT claims of all types.” The study also notes that nearly 40% of CT claims in this state are filed in southern California and that such claims rely heavily on lien-based treatment.

The Rand report recommends that employers who deny post-termination CT claims be permitted to retain control of medical treatment despite the denial of liability.

Public discussion has also addressed other moves to eliminate or curtail CT claims. It has been suggested that a higher causation standard (such as a 51% predominant cause standard) for post-termination CT claims should be legislated. It has also been argued that post-termination CT claims should be banned altogether.

Clearly, the issue of CT and occupational disease injuries and associated medical treatment has not receded from public debate despite the fate of AB 221.

Whether CT and occupational disease claims are curtailed or eliminated—or whether the treatment liens are attacked as an avenue to reduce the pursuit of these claims—legitimately diagnosed medical conditions will continue to require medical care. In some instances, the condition will require catastrophic care.

If any of the provisions noted above become law, it is highly foreseeable that, ultimately, the responsibility for this medical care will fall on the taxpayer, with Medi-Cal, Medicare, the Veterans Administration, state hospitals, and county facilities and indigency programs footing the bill. Worse still is the fact that these entities will be prevented from recouping the cost of this industrial care under the proposed provisions.

Boehm & Associates will continue to defend the recovery rights of its clients, and to monitor developments in this regard.

We will keep you posted.