MICHAEL SULLIVAN & ASSOCIATES BLOG

Pursuant to Labor Code § 5500.5(a), liability for a cumulative trauma (CT) injury is limited to the employer(s) that employed the worker during the one-year period immediately preceding the date of injury (LC 5412, or the last date of injurious exposure, whichever occurs first. That means multiple employers or insurers can be liable for a CT injury.

For cases in which multiple defendants have liability for a CT claim, LC 5500.5(c) allows the applicant to elect against any one or more of them. If the applicant makes an election against a defendant, he or she is required only to prove the claim against the named defendant. Liability for the nonelected defendant isn't determined until supplemental proceedings are instituted. Only the elected defendant has complete discovery rights, and the rights of nonelected defendants are deferred to contribution proceedings.

As stated in Labor Code § 4610(a), utilization review is the process a defendant uses to "prospectively, retrospectively, or concurrently review and approve, modify, or deny, based in whole or in part on medical necessity to cure and relieve, treatment recommendations by physicians, ..." (emphasis added). UR is the process to determine only whether a request for treatment is medically necessary. It does not determine other issues.

LC 4610(l) states, "Utilization review of a treatment recommendation shall not be required while the employer is disputing liability for injury or treatment of the condition for which treatment is recommended pursuant to Section 4062." Accordingly, California Code of Regulations 9792.9.1(b) states that UR "may be deferred if the claims administrator disputes liability for either the occupational injury for which the treatment is recommended or the recommended treatment itself on grounds other than medical necessity." So a defendant is not required to submit a treatment recommendation to utilization review when a claim is denied or when it is disputing liability for reasons other than the reasonableness of the proposed care.

It has long been recognized that an applicant's ability to participate in vocational retraining is a significant factor in assessing the worker's permanent disability. (LeBoeuf v. WCAB (1983) 48 CCC 587, 597.) In 2004, the Legislature enacted Senate Bill (SB) 899, and among the provisions was a requirement that permanent disability give consideration to an applicant's "diminished future earnings capacity," rather than the "ability to compete in the open labor market" (Labor Code § 4660(a).) The Labor Code was amended to require permanent disability to incorporate the "impairments published in the American Medical Association (AMA) Guides to the Evaluation of Permanent Impairment (5th Edition)" (LC 4660(b)). Prior to SB 899, permanent disability generally was rated based on work restrictions reported by doctors, but now, it is generally rated using impairments assigned by doctors under the AMA guides.

Under former Labor Code § 5909, a petition for reconsideration was deemed denied by operation of law unless the Workers' Compensation Appeals Board (WCAB) acted on it within 60 days from the date of filing. Effective July 2, 2024, LC 5909 states:

• "(a) A petition for reconsideration is deemed to have been denied by the appeals board unless it is acted upon within 60 days from the date a trial judge transmits a case to the appeals board.
• "(b)(1) When a trial judge transmits a case to the appeals board, the trial judge shall provide notice to the parties of the case and the appeals board.
• "(2) For purposes of paragraph (1), service of the accompanying report, pursuant to subdivision (b) of Section 5900, shall constitute providing notice."

LC 5909(c) specifies that the statute will be repealed as of July 1, 2026. The Court of Appeal has explained that LC 5909 was amended as a short-term fix to the WCAB's need for resources, and gives it the additional time to act on petitions it needs to resolve normal human errors or administrative irregularities. (Mayor v. WCAB (2024) 104 Cal. App. 5th 1297.)^[1]

On Nov. 5, 2024, the WCAB issued a significant panel decision, Reed v. County of San Bernardino, applying the time limits to act on a petition for reconsideration and explaining when a petition for reconsideration is appropriate.

Medicare is a secondary payor. That is, it does not have primary payment responsibility for its beneficiaries when another entity is responsible for paying for medical care before Medicare. Workers' compensation is a primary payor for work-related illnesses or injuries. Medicare will not pay for a beneficiary's medical expenses when payment has been made or can reasonably be expected to be made by a workers' compensation insurer.

Medicare, however, may pay for medical services when the primary payor has not made or cannot reasonably be expected to make payment for them promptly. Those Medicare payments are referred to as “conditional payments,” because Medicare pays under the condition that it is reimbursed when the beneficiary gets a workers' compensation settlement, judgment, award or other payment. Medicare is required by statute to seek reimbursement for conditional payments related to the settlement.

The 2024 California legislative season is over. The Legislature had until Aug. 31, 2024, to pass bills, and Gov. Gavin Newsom had until Sept. 30, 2024, to sign or veto them. The bills signed by the governor take effect Jan. 1, 2025.

The 2024 legislative session was fairly quiet as it relates to the California workers' compensation process. Aside from the electronic signature provision, it is probably more notable for the bills that were vetoed than those signed into law.

Labor Code 4610(i)(1) normally requires a utilization review (UR) determination to be made within "five normal business days from the receipt of a request for authorization for medical treatment and supporting information reasonably necessary to make the determination, but in no event more than 14 days from the date of the medical treatment recommendation by the physician." But LC 4610(i)(3) requires an expedited review when the employee faces an "imminent and serious threat to his or her health, ... or the normal timeframe for the decision-making process ... would be detrimental to the employee’s life or health or could jeopardize the employee’s ability to regain maximum function." In those situations, the UR decision must be made in a timely fashion "not to exceed 72 hours after receipt of the information reasonably necessary to make the determination."

For more than 30 years, the Workers' Compensation Appeals Board (WCAB) relied on Shipley v. WCAB (1992) 7 Cal. App. 4th 1104 to decide petitions for reconsideration, even if it did not act timely on a petition pursuant to former Labor Code § 5909. That statute stated, "A petition for reconsideration is deemed to have been denied by the appeals board unless it is acted upon within 60 days from the date of filing." Based on Shipley, the WCAB generally held that if a petition was not considered within the time limit of LC 5909 due to the WCAB's own inadvertent error, it still may decide the merits of the petition, even if the 60-day time period has elapsed.