California Workers' Compensation Chapter 4 PDF

Chapter 4 Participants in the System Key concepts: x Employees x Employers x Insurance Carriers x Claims Administrators x Physicians x Attorneys Employees As the California workers’ compensation system has evolved, required coverage has been ex...

Chapter 4 Participants in the System Key concepts: x Employees x Employers x Insurance Carriers x Claims Administrators x Physicians x Attorneys Employees As the California workers’ compensation system has evolved, required coverage has been expanded to include all employees, including farm workers, many domestic and household employees, and state prison inmates in some instances. Federal, maritime, longshore workers, and railroad em- ployees are covered under separate systems. To receive compensation, an employee who sustains a work-related specific injury, occupational illness, or cumulative trauma must inform the employer about the injury or illness within 30 days of the date of injury. The employer must furnish the employee with an Employee’s Claim for Work- ers’ Compensation Benefits (DWC 1) claim form within one working day of learning of the injury. The employee’s claim is initiated after the employer learns of the injury from any source. The em- ployee must complete and return the form to the employer. A dated copy must be provided to the employee. Employees have the right to predesignate a personal physician to provide treatment in the event of an occupational illness or injury. Chapter 6 contains additional details on predesignation. If the employer or the employer’s insurer does not have an MPN, employees may be able to change their treating physician to their personal chiropractor or acupuncturist following a work- related injury or illness. In order to be eligible to make this change, employees must give their em- ployer the name and business address of a personal chiropractor or acupuncturist in writing prior to the injury or illness. If no personal physician has been predesignated, the claims administrator generally has the right to select the treating physician within the first 30 days after the employer knows about the injury or illness. After the claims administrator has initiated employees’ treatment with another doctor during this period, the employees may then, upon request, have treatment transferred to their personal chiropractor or acupuncturist. Note: If the DOI is January 1, 2004, or later, a chiropractor cannot be the treating physician after the first 24 chiropractic visits unless the employer has authorized additional visits in writing. The term “chiropractic visit” means any chiropractic office visit, regardless of whether the services per- formed involve chiropractic manipulation or are limited to evaluation and management. After 24 chiropractic visits, if the employees still requires medical treatment, then they will have to select a new physician who is not a chiropractor. This prohibition does not apply to visits for postsurgical physical medicine visits prescribed by the surgeon or physician designated by the surgeon, under the postsurgical component of the DWC’s evidence-based medical guidelines (see Chapter 7). 20  Chapter 4 Employers Employers are obligated to: x Provide a safe and healthful workplace for their employees x Carry insurance to meet their obligations under workers’ compensation law or to provide the DIR with proof of self-insurance x Provide information about workers’ compensation to their employees, including infor- mation on where and how to file a claim and on how to predesignate a personal physician x Maintain records of occupational injuries and diseases x  Report immediately to the Division of Occupational Safety and Health (DOSH), better known as Cal/OSHA, any death or serious injury. A serious injury is defined as an injury that results in more than 24 hours of hospitalization for something other than observation, loss of a body part, or any serious degree of disfigurement. x  Provide the claim form (DWC 1) within one working day of the employer’s knowledge of the injury x  Complete an Employer’s Report of Occupational Injury or Illness (“Employer’s First Report” Form 5020), within five days of being notified by the employee of an occupational injury or illness. Insured employers must send the completed form to their insurer, and self-insured employers must send the form directly to the Division of Labor Statistics and Research. Employers are prohibited from: x Discriminating against workers for their health and safety activities or for filing a workers’ compensation claim x Terminating an injured worker during the period of temporary disability, unless the em- ployer can prove that the termination was due to a “business necessity” x With few exceptions (which may include legal, nonmedical, and business necessity rea- sons), an employer cannot refuse to reinstate an injured worker, unless the worker can no longer perform the essential functions of the job or based on a medical opinion that pro- vides reasonable fear of re-injury. The Americans with Disabilities Act and the California Fair Employment and Housing Act place further responsibilities on the employer to pro- vide reasonable accommodations for individuals with disabilities and prohibit discrimina- tion based on an employee’s prior involvement in any workers’ compensation claim. Insurance Carriers and Claims Administrators In the workers’ compensation system, the insurer acts on behalf of the employer and assumes most of the liability for the insured employer making benefit payments, collecting medical records, reim- bursing for medical expenses, and, in some cases, paying penalties. Insurers cannot assume liability for some penalties, however, such as the penalty for serious and willful misconduct by the employ- er. Insurers are required to provide employers with written notice before canceling policies. They must also give employers an opportunity to present evidence when they wish to contest a claim. Insurers employ claims administrators and other personnel to administer claims. In the majority of claims, claims administrators who make key decisions about the payment of benefits are important recipients of any physician’s report about a worker’s injury. Self- insured employers may elect to manage their own claims, or they may hire third-party 21  Chapter 4 administrators (TPAs) to manage their caseload. Many insurers also employ medical case managers who assist the insurance carrier or payor in managing medical and other as- pects of the case, including attending physician’s appointments, making contact with the employee, having knowledge of the injured worker’s job description, and participating in return-to-work arrangements. Their major role is providing a communication conduit be- tween the parties (employer, insurance carrier, physician, and injured worker). Increas- ingly, employers/insurers perform or contract for bill review or utilization review to assist in medical cost containment and management. Claims Administrator Claims administrator is the term for both the insurance companies and the individuals responsi- ble for managing the workers’ compensation claim. Most individual claims administrators work for insurance companies or TPAs handling claims for employers. Some claims administrators work di- rectly for large employers that handle their own claims. Individual claims administrators are also referred to as the “claims examiner” or “claims adjuster.” Workers’ compensation claims adminis- trators are required to meet minimum training and experience requirements to practice in Califor- nia. Typical tasks of a workers’ compensation claims administrator include: x Determining liability based upon the physician’s report and other factors x Initiating and controlling delivery of accurate and timely compensation, medical and sup- plemental job displacement benefits as prescribed by law, including delivery of benefits and all legally required notices to all parties x Determining whether to approve requests for medical treatment or send to utilization re- view x Determining accurate and adequate estimates on assigned claims x Reviewing and analyzing case documentation and plan proactive case management strate- gies x Preparing case resumes for policyholders x Calculating and negotiating settlements x Writing correspondence and reports. As stated previously, workers’ compensation is a statutory benefit with no arbitrary limits on the frequency, duration, or extent of services. A claims administrator in group health must determine whether medical services fall within the contractual limits of the policy. In workers’ compensation, the claims administrator must determine whether the medical services rendered are “reasonable and necessary” to “cure and relieve from the effects of an occupational injury” and whether they are likely to produce the efficient recovery of function and return to work. Communicating with the Claims Administrator Workers’ compensation claims administrators need frequent contact with physicians because in- formation regarding possible transitional work, job modification, return to work, and prognosis for permanent impairment is critical to the fair and efficient provision of disability payments. This contact with the claims administrator can have real advantages for the physician by provid- ing direct access to the person paying the bills and allowing authorization for the reimbursement of 22  Chapter 4 treatment by clearing up any misunderstanding and avoiding resultant delays. It is important to remember that claims administrators have an incentive to ensure prompt and effective medical treatment so that claims are resolved as quickly as possible, but there must be clear documentation from the physician about treatment goals and progress toward those goals. Consider the claims administrator an important resource for any technical questions relating to the workers’ compensation aspect of the claim. Clear and timely communication and response to any requests by the claims administrator are critical to the success of the claim: the injured em- ployee’s prompt access to appropriate care, benefits, and return to work and health. Other Providers of Medical Goods and Services Other providers of medical goods and services are those that provide services that are reasonably required to cure or relieve the injured worker from the effects of his or her injury, including clinical laboratories, diagnostic nuclear medicine, radiation oncology, physical therapy, physical rehabilita- tion, psychometric testing, home infusion therapy, outpatient surgery, diagnostic imaging goods or services, or pharmacy goods and hospital treatment, including nursing, medicines, medical and sur- gical supplies, crutches, and apparatuses, such as orthotic and prosthetic devices and services.. Physicians Physicians play a critical role in the evaluation and care of injured workers. Their evaluations, plans, and reports form the basis for the provision of workers’ compensation benefits. For a full dis- cussion of the role and duties of the physician, see Chapter 6. Attorneys Any party involved in a workers’ compensation claim (including lien claimants) may be represented by an attorney. Insurance companies and self-insured employers usually have litigation units in which defense attorneys defend the claims made against the insurer. If an injured worker hires an attorney, that attorney is known as the applicant’s attorney. The fees that an applicant’s attorney can charge an injured worker are generally limited to a per- centage of an employee’s award and are determined by the workers’ compensation judge or WCAB when the claim is decided. Attorneys are compensated by fees deducted from the worker’s award of benefits, typically from permanent disability, unless the WCAB decides that no compensation is payable. Attorney fees may also be awarded from an employee’s retroactive temporary disability award or as a separate fee following an award of a penalty against an employer for unreasonable delay or refusal to pay compensation. An attorney may also be paid for appearing at an employee’s deposition when set by the employer. Attorneys and physicians are prohibited from taking fees from injured workers on their claim without an order from the Appeals Board. Hearing representatives (who are not licensed through the State Bar of California) may also represent a party before the Appeals Board but may not re- ceive an award for attorney’s fees from the Board for their work. They must also notify the WCAB in writing that they are not licensed attorneys. 6 6 Longval v. WCAB (1996) 61 C.C.C. 1396. 23