California: Commonly Missed Regulations and Rules

Familiarity with the Labor Code and the WCAB/DWC regulations is a fundamental necessity for practicing workers’ compensation law in the State of California. Given this fact, it is surprising how many attorneys show up on the day of trial without knowing the applicable Labor Code section or regulation upon which their position is based. Set forth below are just a few examples.

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I. 24 PT Visit Cap Not Applicable for Postsurgical Injured Workers

The twenty-four visit cap for physical therapy (PT) is generally applicable for dates of injury on or after 1/1/2004, per Labor Code § 4604.5(c)(1). However, it is not uncommon for claims adjusters to summarily deny a surgeon’s Request for Authorization (RFA) for physical therapy for an injured worker after he or she has had surgery, relying on this twenty-four visit cap per Labor Code § 4604.5(c)(1). This summary denial by the claims adjuster is often done without putting the RFA through Utilization Review (UR), even though there is a plethora of Medical Treatment Utilization Schedule (MTUS) regulations dealing with postsurgical PT visits depending on which body part is involved and what type of injury has been sustained. (For the MTUS in general, see 8 Cal. Code Reg. §§ 9792.20-9792.26. For Postsurgical Treatment Guidelines specifically, see 8 Cal. Code Reg. § 9792.24.3.)

Once the postsurgical PT has been denied by the claims adjuster and the applicant attorney files a DOR on the issue, it is also not uncommon for the defense attorney to back up the claims adjuster’s denial and try to defend that action at an expedited hearing. It behooves both parties, in these types of cases, to thoroughly review all applicable code sections, regulations and case law, so that they can provide the WCJ with all of the relevant information upon which to base a decision. In a situation like this one, Labor Code § 4604.5 (c)(1) does provide for a twenty-four visit cap for PT, chiropractic and occupational therapy. If an injured worker has not had surgery, it might be perfectly viable for a claims adjuster to summarily deny additional PT visits after the injured worker had reached their 24 visit cap, without putting the physician’s RFA through UR.

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However, the code section does not stop at Labor Code § 4604.5(c)(1). There’s an additional section, Labor Code § 4604.5(3), which provides as follows:

“(3) Paragraph (1) shall not apply to visits for postsurgical physical medicine and postsurgical rehabilitation services provided in compliance with a postsurgical treatment utilization schedule established by the administrative director pursuant to Section 5307.27.” (Emphasis added.)

Accordingly, if a claims adjuster denies a physician’s RFA for postsurgical physical therapy, because the injured worker has reached the 24 visit cap for PT, they are in violation of Labor Code § 4610(e), which provides that only a licensed “physician may modify, delay, or deny requests for authorization of medical treatment for reasons of medical necessity to cure and relieve.” At expedited hearing, in these cases, the judge will most likely determine that since no UR has been attempted on the valid RFA, the WCAB has jurisdiction to decide and will decide the medical treatment issue presented. (See Dubon v. World Restoration, Inc. (2014) 79 Cal. Comp. Cases 313.)

As stated above, there are MTUS regulations specifically on point with regard to PT visits after an injured worker has had surgery. It is not within the claims adjuster’s purview to make a judgment call on this issue and to apply the MTUS regulations to determine whether postsurgical PT is warranted or not. Only a licensed physician can do that. (See Noteworthy Panel Decision (NPD) Lambert v. State of California Department of Forestry and Fire Protection/Cal Fire; SCIF, 2016 Cal. Wrk. Comp. P.D. LEXIS 492)

II. Parties Must Attempt “Meaningful” Settlement BEFORE Filing DOR

Premature filings of Declarations of Readiness to Proceed (DOR)s are a frequent occurrence at the WCAB. In the NPD of Beltran, v. Pepperdine University, 2015 Cal. Wrk. Comp. P.D. LEXIS 621, the parties arrived at a 2nd Mandatory Settlement Conference (MSC) without having had any meaningful settlement negotiations since the 1^st MSC. Rather than set the matter for trial, the WCJ took the matter off calendar and reminded parties of WCAB Regulation 8 Cal. Code Reg. § 10414(d) which states,

“(d) All declarations of readiness to proceed shall state under penalty of perjury that the moving party has made a genuine, good faith effort to resolve the dispute before filing the declaration of readiness to proceed, and shall state with specificity the same on the declaration of readiness to proceed. Unless a status or priority conference is requested, the declarant shall also state under penalty of perjury that the moving party has completed discovery and is ready to proceed on the issues specified in the declaration of readiness.” (Emphasis added.)

Many DORs are filed with the simple notation, “Settlement negotiations attempted and failed, Board intervention required.” This most likely would not meet the standard set forth above, and could result in a contempt citation and/or sanctions.

In addition, when engaging in meaningful settlement negotiations prior to the MSC, it is a good idea to prepare a proposed permanent disability (PD) rating accurately reflecting the injured worker’s permanent disability. It is difficult to imagine how one can enter into meaningful settlement negotiations without calculating a proposed PD rating.  In addition, most litigators do not realize that Labor Code § 5502(d)(3) requires “each party’s proposed PD rating” be noted on the Mandatory Settlement Conference Statement.

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III. Trial Priority Settings

It is a good idea to not only be familiar with the Labor Code and WCAB/DWC Regulations (such as the WCAB Rules of Practice and Procedure - 8 Cal. Code Reg. §§ 10250–10959), but to also be familiar with the DWC/WCAB Policy and Procedure Manual which can be found at this link:

http://www.dir.ca.gov/wcab/WCAB_Policy_ProcedureManual/Policy_andProcedure_Manual.pdf

Although the two sets of rules have similar names, they are two totally separate sets of instructions on various aspects of workers’ compensation litigation. The DWC/WCAB Policy and Procedure Manual deals with internal courtroom management issues that are aimed at helping judges run their courtroom, but the rules are also of keen interest to practitioners. For instance, there is an entire Section 1.35 dealing with “Trial Priorities.” Every day, each judge is usually assigned several different cases to try, and parties are often not clear on which case has priority. Section 1.35 provides the answer as follows:

“PROCEEDING PRIORITIES

Cases set on the trial calendar shall be subject to the following priorities:

1. Cases set for Expedited Hearing;

2. Cases which are returned to the calendar for cross-examination of the disability evaluation specialist;

3. Continued cases in which testimony has been received (The judges are encouraged to have these cases set on the first available opening in their calendar with notice waived.);

4. Cases in which the applicant is not working and is receiving no benefits and/or in which the applicant or any witnesses have traveled from out of state or a significant distance within the state to appear;

5. Cases that were previously set for trial but did not commence;

6. Cases in which no benefits have been furnished but the applicant is working;

7. All other cases.”

See also the NPD of Vu v. City of Richmond, 2016 Cal. Wrk. Comp. P.D. LEXIS 446.

IV. Penalties – Labor Code § 5814 or Labor Code § 4650?

Lastly, applicant attorneys have been known to argue that defendant’s unreasonable delay in payment should be subject to both a Labor Code § 5814 penalty, as well as a Labor Code § 4650 penalty. Defendants then respond by attempting to present evidence that the delay in payment was not unreasonable. Both parties ignore the fact that you can not get both a Labor Code § 5814 penalty, as well as a Labor Code § 4650 penalty for the same unreasonable delay.

Labor Code § 5814(a) provides:

“(a) When payment of compensation has been unreasonably delayed or refused, either prior to or subsequent to the issuance of an award, the amount of the payment unreasonably delayed or refused shall be increased up to 25 percent or up to ten thousand dollars ($10,000), whichever is less. In any proceeding under this section, the appeals board shall use its discretion to accomplish a fair balance and substantial justice between the parties.”

Labor Code § 4650(d) provides in part:

“(d) If any indemnity payment is not made timely as required by this section, the amount of the late payment shall be increased 10 percent and shall be paid…”

In the NPD of Hernandez v. Robert L. Brown Construction, Farmers Insurance/Truck Insurance Exchange, 2016 Cal. Wrk. Comp. P.D. LEXIS 264, the WCAB noted, “…Moreover, section 5814(d) provides that the payment of any increased award under that section ‘shall be reduced by any amount paid under subdivision (d) of Section 4650 [regarding payment of permanent disability indemnity] on the same unreasonably delayed or refused benefit payment.’” It is clear from this Labor Code Section that if Labor Code § 4650 penalty has been imposed, the defendant will get credit for this payment, if a Labor Code § 5814 penalty is imposed for the exact same delay.

V. Conclusion

Labor Code sections, regulations and case law are constantly being revised and updated. It is incumbent upon the prudent practitioner to make sure they are relying on the most relevant authority to support their position, prior to any workers’ compensation trial, hearing or conference.  This may be stating the obvious to the majority, but there is a significant minority that needs to be reminded that it is necessary to know the rules and regulations supporting whatever request one makes upon behalf of their client.

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