ISSUE 1
VOLUME 3
2016
A NEWSLETTER of Armstrong Law Firm©
Leaders in Defending and
Counseling for Work Injury Issues.
ARMSTRONG
My Client Is…?
75 E Santa Clara Street; Suite 1200
San Jose, CA 95113
T: (408) 279-6400
F: (408) 279-6590
armlawfirm.com
Did you know that all parties including Third Party Administrators (TPA) are
delegated with the duty and obligation to identify the “full legal name” of their
client? In fact, this is vital to accurate and effective litigation to every workers’
compensation claim pursuant to 8 CCR §10550.
MPN Access Standards:
Are your providers sufficient?
The following question is asked on a daily basis when handling workers’
compensation claims – “Who is the client?” TPAs and defense attorneys alike
must ask themselves, “Who is my client?”
It is important that attorneys properly identify their client in order to determine
to whom a duty is owed. Furthermore, the importance of knowing who their
client is cannot be emphasized enough as it is the client that has the duty and
obligation to comply with any and all orders approved by a Workers’
Compensation Judge.
The Workers’ Compensation Appeals Board (WCAB) currently uses a
paperless case system in which to manage and identify the parties and their
representatives, if any. This system is entitled, “Electronic Adjudication
Management System”, also known as “EAMS.” In fact, a search of a claim’s
case number on EAMS should list all parties and their representatives involved
in the case. However, there is no identifier for third party administrators, who
are often identified as the “insurer” in EAMS.
In the case of Coldiron v. Compuware Corp. (2002) 67 CCC 289 (Coldiron I)
and 67 CCC 1466 (Coldiron II), the WCAB issued en banc decisions on the
issue of proper identification of one’s client. This eventually brought about the
codification of the regulation relevant to this issue, 8 CCR §10550, on
November 17, 2008.
The case started on January 13, 1995, when the applicant injured her back.
The case involved the employer Compuware Corporation hiring a TPA,
Gallagher Bassett, to provide administration of the claim. Gallagher Bassett
then hired defense counsel. The defense attorney’s understanding was that
Compuware, the employer, was permissibly self-insured and as such, identified
them as his client throughout the litigation proceedings. The defense attorney
would later to his surprise discover that his understanding was incorrect.
In fact, it was a few years later after the Findings and Award (holding
Compuware solely liable) that the defense attorney learned that his client was
actually Reliance Insurance, as Compuware was not permissibly self-insured.
Reliance Insurance was the entity that provided workers’ compensation
coverage for the applicant’s date of injury.
Further, Reliance Insurance uses a TPA to handle all the claims, so when a
defense attorney is hired by a TPA, such as Gallagher Bassett, he or she is
often not certain about whom the real client is. Is it the employer, permissibly
self-insured? Or is the employer covered by insurance and if so, which
insurance company is liable for the claim?
The Commissioners explain that the workers’ compensation system can only
effectively function if there is proper determination of the entity responsible for
providing benefits to eligible injured workers. If this determination cannot be
made as early as possible, before or at the start of formal litigation proceedings,
the injured worker may be unfairly prejudiced if there is a delay in
administering benefits.
Additionally, the TPA has the obligation and the duty to inform the Board and
its attorney, if any, at the earliest possible opportunity, namely at least at the
start of the litigation proceedings, who the TPA’s client is, whether it be a selfinsured employer or an insurance carrier. Providing this information in a
prompt manner will ensure certainty with respect to identifying the liable entity
for any benefits awarded to the injured worker.
Under Labor Code § 5813, the WCAB indicated a TPA could be held
responsible for sanctions for failing to provide this information. Sanctions can
also be enforced pursuant to 8 CCR §10550 for failing to provide this
information.
Therefore, the moral of the story from the Coldiron case for the TPAs and
attorneys, is the importance of being able to accurately answer the question
“Who is my client?” We should not assume that we have properly identified
the client before doing our own homework and due diligence. Failing to do so
may erroneously pin liability on the incorrect employer or insurance carrier for
an award for years to come. We must attempt as early as possible, to
accurately identify the client per direction of Board Rule 10550.
For further reading, please review Board Rule 10550:
§10550. Proper Identification of the Parties and Lien Claimants.
Whenever any party or lien claimant (or any attorney or other representative
for a party or lien claimant) either (i) files any Application for Adjudication,
Answer, stipulated Findings and Award, Compromise and Release, lien claim,
petition or other pleading with the Workers' Compensation Appeals Board or
(ii) states its appearance on the record at any hearing before the Workers'
Compensation Appeals Board (including but not limited to stating its
appearance on any pretrial conference statement, appearance sheet, or
minutes of hearing), the party or lien claimant, or its attorney or other
representative, shall comply with the following requirements:
(a) each party or lien claimant shall set forth its full legal name, and each
attorney or other representative shall set forth the full legal name(s) of the party
or parties he, she, or it is representing;
(b) if an adjusting agent or third-party claims administrator is appearing, it
shall disclose: (1) whether it is appearing on behalf of an employer, an
insurance carrier, or both; (2) the identity or identities of the party or parties it
is representing; and (3) if it is representing an insurance carrier, whether the
policy includes a high self-insured retention, a large deductible, or any other
provision that affects the identity of the entity or entities actually liable for the
payment of compensation;
(c) if an insurance carrier is appearing, it shall disclose: (1) whether it is
appearing solely on its behalf, or also on behalf the insured employer; and (2)
whether its policy includes a high self-insured retention, a large deductible, or
any other provision that affects the identity of the entity actually liable for the
payment of compensation; and
(d) if a lien claim is being filed or amended, or if a lien claimant is appearing,
the lien claimant shall state whether it is the original owner of the alleged debt
or whether it has purchased the alleged debt from the original owner or some
subsequent purchaser.
~ Kristina C. Lee, Esq.
~ Gary R. Lopez, Esq.
More and more, we are seeing applicants challenge MPNs by
claiming there are no or insufficient number of physicians
within a network. To determine if your network is sufficient,
look to Labor Code section 4616 and Title 8, California Code
of Regulations section 9767.5. Generally the dispute revolves
around whether there are sufficient numbers of a certain type
of physician within a certain geographic distance.
The first question to ask is from where am I measuring?
Labor Code section 4616 (a)(1) provides that “…The
provider network shall include an adequate number and type
of physicians…to treat common injuries experienced by
injured employees based on the type of occupation or
industry in which the employee is engaged, and the
geographic area where the employees are employed.”
Emphasis added.
Regulation 9767.5 (a)(1) and (2) speaks of a distance “of each
covered employee's residence or workplace.” In Robles v.
WCAB (2013) 78 CCC 168 [writ denied], the Court denied
review of a case where the WCAB determined that
defendant’s MPN was in compliance in providing sufficient
number of examiners in the specialty of applicant’s choosing
when distance was measured from applicant’s place of
employment, not his residence. They noted that to the extent
that a Regulation exceeds the scope of the Labor Code, the
statute is controlling. If your search is turning up few
physicians, check from both the employee’s residence and
place of employment.
The second question to ask is whether the selected physician
is going to be the Primary Treating Physician (PTP)
responsible for directing applicant’s care or a Secondary
Treating Physician. The access standard for specialists is not
as restrictive. Regulation 9767.5 indicates that “(1) An MPN
must have at least three available primary treating physicians
and a hospital for emergency health care services….within 30
minutes or 15 miles of each covered employee’s residence or
work place.” There is no number specified for specialists.
Per subsection (2), “An MPN must have providers of
occupational health services and specialists who can treat
common injuries experienced by the covered injured
employee within 60 minutes or 30 miles of a covered
employee’s residence or workplace.”
A specialist may be selected as a PTP. This situation
occurred in Escobar v. PRN Ambulance, 2015 Cal. Wrk.
Comp. P.D. LEXIS 186 when applicant selected a
chiropractor to be his PTP. The WCAB applied the more
restrictive access standard of 30 minutes or 15 miles
applicable to a PTP. See also Lescallett v. Wal-Mart, 2015
Cal. Wrk. Comp. P.D. LEXIS 196 where applicant was
allowed to treat out of network with a pain manager.
The next question to ask is whether you are dealing with a
rural area or a non-rural area where there is a health care
shortage. Labor Code section 4616 (a)(2) provides that
“Medical treatment for injuries shall be readily available at
reasonable times to all employees. To the extent feasible, all
medical treatment for injuries shall be readily accessible to all
employees. With respect to availability and accessibility of
treatment, the administrative director shall consider the needs
of rural areas, specifically those in which health facilities are
located at least 30 miles apart and areas in which there is a
health care shortage.”
Regulation 9767.5 (b) provides that “If an MPN applicant
believes that, given the facts and circumstances with regard to
a portion of its service area, specifically areas in which there
is a health care shortage, including non-rural areas and rural
areas in which health facilities are located at least 30 miles
apart, the accessibility standards set forth in subdivisions
(a)(1) and/or (a)(2) cannot be met, the MPN applicant may
propose alternative standards of accessibility for that portion
of its service area…” The alternative standard is to be
reviewed and approved by the Administrative Director. So
before you decide that you cannot meet the access standard,
you should check with your MPN or Medical Access
Assistant to see whether the area in question has an
alternative access standard and what that standard might be.
The final issue that will be discussed here that should be
considered is whether there are a sufficient number of
physicians within the appropriate geographic distance
available. Regulation 9767.5 provides that an MPN must
have at least three available physicians of each specialty to
treat common injuries experienced within the access
standards and “have at least three available primary treating
physicians… [within a defined geographic area].”
Although earlier cases such as Escobar talked about the
requirement to provide three chiropractors within the access
standard and Lescallett argued that there were not an
adequate number of pain managers within the access
standards, the more recent case of Soto v. Sambrailo
Packaging, 2016 Cal. Wrk. Comp. P.D. LEXIS, seems to
have arrived at a different conclusion. In Soto, although
defendant did not have three orthopedic surgeons in the
designated geographic area which was the preferred specialty
chosen by applicant to be the PTP, the Appeals Board cited to
Labor Code section 4616 (a)(1) and 4616.3(d)(1) and held
that “the Legislature requires that an MPN make available an
adequate selection of physicians of specialties or expertise
appropriate to the particular injury or condition in question to
undertake the role of primary treating physician. If the MPN
provides access to an appropriate selection of physicians, it
will satisfy the access requirements applicable to the selection
of a specialist or physician with appropriate expertise to
provide medical treatment.”
The Appeals Board also
clarified that the standard, that applicant had not met, was
whether defendant had refused or neglected to provide
medical treatment through its MPN. So in cases where
applicant is arguing that there are not three providers of his or
her chosen specialty, where appropriate, as in Soto, you may
take the position that there are “an adequate selection of
physicians of specialties” within the applicable access
standard “appropriate to [treat] the particular injury or
condition.”
SMALL FIRM ♦ BIG RESULTS