Injured Workers Speak Out on Workers’ Compensation Reforms

Injured Workers Speak Out on Workers’ Compensation Reforms

Several workers who had been injured on the job testified at a hearing in Oakland June 29 before the Division of Workers’ Compensation. The state is seeking to modify some of the ‘reforms’ enacted in 2003 which have had a severe impact on injured workers who face delays in medical treatment, denial of compensation, and a bureaucratic nightmare dealing with a system that is biased towards employers and insurance companies. Many speakers complained that there was little notification of the public hearing and that they only heard of the opportunity to testify from the injured workers’ advocacy group VotersInjuredatWork.org (VIAW).

VIAW spokesperson Peggy Sugarman wrote of the proposed changes that, “Senate Bill 899 severely limited penalties against insurance companies and self-insured employers by putting a cap on the amount of money that they would have to pay for violating Labor Code §5814 — the section that was supposed to deal with the unreasonable delay of payment of compensation. Prior to SB 899, penalties for unreasonable delay were based on all past and future benefits in the particular category where the delay occurred. Now, the maximum penalty is capped at $10,000. However, SB 899 also created a new section, Labor Code §5814.6, that would penalize insurers and employers up to $400,000 for repeated violations of §5814.”

Also up for modification are provisions of SB 228, which became law Jan. 1, 2004. The bill enacted Utilization Review procedures that allow insurance companies and self-insured employers to send medical care recommendations to another physician to review. It allows up to 14 days to modify, delay, or deny the physician’s request. Sugarman explained that the state set up Utilization Review Standards by regulation, but had not yet implemented a process provided by SB 228 to impose penalties for violations of the process. She said that, “The lack of oversight and enforcement up until now has proven catastrophic for many workers over the last 2-1⁄2 years.”

“The glacial speed with which the administration has allowed judicial findings of unreasonable delay to flourish with relative impunity is troubling,” Sugarman said. “We saw how they rushed to implement a permanent disability rating schedule that cut benefits to workers.”

Latrice Holley said after she was injured on the job, “My employer did everything possible to delay payments.” She said she received a portion of the payment due but her insurance company delayed paying her doctor for four years. “There should be a bigger penalty for insurance companies, and workers should get that money as a bonus since we have to do all the work to fight for our case,” Holley said. Under the law, the penalties assessed will go to the state to fund the Return To Work program that was established in AB 749 in 2002.

Holley also asked the Board to strike language from the proposed new regulations that say no penalties for issues before 2004 should be imposed. Acting Administrative Director Carrie Nevans said the Board was not empowered to change the wording of the new regulations.

Injured worker Paula Morgan said, “I have a 9-1/2 year case. The insurance company and my employer have delayed, deferred, and denied and now my current physician will no longer take Workers’ Comp cases.”

“It’s been a horrid experience,” Morgan said. “I’ve been discriminated against and mistreated but the insurance companies can do this with impunity. There are no penalties for their delays. Give them the same treatment the rest of us have: obeying the law!”

Saying that she was on the verge of losing everything because she was unable to work or get Workers’ Compensation, Shahidih Musawwii said that her temporary benefits were terminated illegally when the insurance company claimed her injury was from a prior incident. “They fabricated reports on numerous instances,” she said. “I consider the judge to be obstructing justice in my case. She’s prevented me from presenting my side but allowed the insurance company to present fraudulent information.” She said a member of the Workers’ Comp Appeals Board (WCAB) pressured her to accept an evaluation from a doctor she’d never seen. The utilization review process allows physicians who never see the patient, and aren’t required to be licensed in California, to recommend dismissals of Workers’ Comp claims.

Musawwii said her experience was “very humiliating.” She angrily said she thought the Workers Comp Appeals Board was corrupt and that, “I’m ashamed that in America we face this discrimination. We’re persecuting injured workers for being injured.” She also pointed out that she has more medical problems now as a result of delays in getting treatment. “The penalties for the delays aren’t enough,” she said.

Representing the California Coalition for a Workers Memorial Day, Steve Zeltzer complained that, “We have a problem with the whole procedure. Workers Comp judges represent the insurance companies and aren’t going after insurance companies that violate the law. The problem is that the insurance industry really runs the Workers’ Comp system.” Zeltzer, a member of Stationary Engineers Local 39, pointed out that the Fraud Assessment Commission in the Department of Insurance is headed by William Zachry, who works for Safeway. [Zachry is one of six members of the commission, representing Self-Insured businesses. The other members represent the State Compensation Insurance Fund, Labor, Insured Employees, and Insured Carriers. Zachry has been Vice President, Corporate Workers' Compensation with Safeway Inc. since 2001.]

“We need an independent agency to go after insurance company fraud,” Zeltzer said. “Workers Comp was deregulated under SB 899 and now insurance companies are refusing to pay injured workers, basically shifting costs to taxpayers by forcing injured workers to go to public hospitals.”

“The systematic disregard by insurance companies and the delays cause injuries to get worse,” Zeltzer said. He cited the case of an elevator worker for Gallagher and Bassett who committed suicide because he was unable to deal with the pain of his injuries. “Workers have to wait years to get treatment. Are there penalties for that?”

Former attorney Nina Bartholomew said that many injured workers are struggling to survive. “Many can’t get attorneys to represent them, can’t get through to the WCAB, and when they do they get false information.” She said that there needs to be an 800 number staffed by attorneys who can help injured workers. “There needs to be an independent agency outside the WCAB,” she said. “There’s no guidebook to help injured workers deal with the system. If you want to know how much insurance company fraud there is, then have an 800 number where injured workers can comment.” Bartholomew said the law placed the burden on injured workers and that injured workers who are defrauded don’t benefit from the penalties paid because of the fraud. “What you are proposing here is ineffective and disgraceful,” she said.

Also testifying was Tom Condit, the California Peace and Freedom Party’s candidate for Insurance Commissioner. He said that there was no systematic reporting to the Department of Industrial Relations of the health and safety violations that lead to worker injuries.

“Most accidents on the job aren’t accidents at all but foreseeable consequences of conditions at the workplace,” Condit said. “We need enforcement and documentation of violations of labor standards.”

Representatives from the insurance industry also testified and urged the board to go slow with any changes to the utilization review provisions. They said they were concerned there might be unnecessary medical procedures done that the utilization review would check. Jason Schmelzer of the California Manufacturing and Technology Association said, “The utilization review should be used to help get workers back to work. It shouldn’t be used as a way to delay treatment.” Another industry representative urged the board to move forward with solutions to rein in the “gamesmanship” in the system. She said many orthopedic surgeons were on the verge of dropping out of the system because of insurance companies stalling in approving treatments.

Peggy Sugarman of VIAW cited the example of Robert Sedam, a helicopter mechanic injured on the job. She said that Sedam’s doctor was concerned that, “Sedam's life was in danger because of the potential for a blood clot. He adamantly felt that it was a compensable consequence from the surgeries for the industrial injury and sought approval for monitoring of his condition on an industrial basis. Dr. Salazar again reported on 2/1/06 that he believed that the anticoagulation was industrial and asked again for some decision on the matter. In fact, AIG, the carrier in this case, had been paying for Coumadin [a blood-thinning medication] despite their failure to authorize a specialist for his life-threatening problems. However, AIG suddenly, and apparently without following any utilization review procedures, denied the medications on 2/22/06.”

Ms. Sugarman continued: “An expedited hearing was scheduled for June 20, 2006 but Mr. Sedam was unable to attend. He died of a blood clot earlier this month. The workers' compensation judge told Mrs. Sedam that, because of the 240-week limitation, she was not entitled to any death benefits for her or her two children.”

“As I approach almost 30 years of experience in the California workers’ compensation system, I am frankly appalled at the behavior of these defendants,” Sugarman added. “My opponents will undoubtedly argue that our evidence is only anecdotal. While we have absolutely no access to a wide range of data nor any ability to fund a study, we can only provide proof of our allegations and hope that you take your responsibility seriously to regulate the behavior of these claims administrators.” She called for the Board to resist the pleas of insurers to lower the penalties. “Perhaps some serious oversight will be the needed incentive to get carriers to conduct utilization review programs with integrity and with an eye towards what we all want: Providing prompt and appropriate medical treatment to cure and relieve from the effects of the industrial injury. To do anything less flies in the face of the original bargain.”

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