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In case you missed it… The Brad Blog

Schwarzenegger's Workers' Comp 'Reform' Killed My Client

By Ernest A. Canning

Originally Published on 5/21/2013


FOR IMMEDIATE RELEASE: Thursday, May 22, 2013

Contact: Steve Hopcraft 916/457-5546,; Twitter: @shopcraft


Excerpts Below

…SB 899…Thanks to the law's massive reduction in prohibitive penalties that could have been assessed for bad faith refusals to furnish vital, life-sustaining medical treatment --- the new penalties are a drop-in-the-bucket compared to what it had cost to keep him alive --- Charles is no longer with us...

…He had sustained what appeared to be a rather modest injury to his left shoulder and neck while employed by Ralph's Grocery Co. …

On Aug. 20, 2005 Charles underwent what appeared to be routine surgery in the form of a left shoulder arthroscopy. …

After a brief period of modest improvement, Charles experienced increasing pain and stiffness --- to the point that he couldn't raise his arm above shoulder level and had to sleep in a chair. When he saw his therapist, she noted pustules at the surgery site that were exquisitely painful to the touch. …

During the next few days, Charles began running a fever. He was driven to Ventura County Medical Center (VCMC) by a friend, losing consciousness on the way there. When he again awoke, inside the hospital's intensive care unit, to his horror, Charles learned that he had acquired methicillin-resistant staphylococcus aureas (the extraordinarily aggressive antibiotic-resistant staph infection known as MRSA). Worse, Charles learned that he had come dangerously close to dying. The blood-borne MRSA caused both renal and pulmonary failures as well as heart problems and retinal hemorrhages. The MRSA also produced a lesion on Charles' 8th cervical vertebrae that resulted in a permanent and complete paralysis from the level of his chest to his toes. He was left with some residual function in his hands, severe pain in his neck, but no sensation whatsoever in his torso and lower extremities.

From Nov. 30, 2005 to the date of his death, May 2, 2008, Charles was essentially bedridden, incapable of being transported without the assistance of at least two individuals, the use of a special, motorized wheelchair with a tilt and a wheelchair accessible van. His condition was such that he required access to a broad array of physicians, including specialists in physical medicine and rehabilitation, infectious disease, cardiologists, orthopedists, neurologists, pulmonary specialists, a podiatrist and psychiatrists. His paralysis was so extensive that he lacked complete muscle control over his breathing. …

Although its position was at odds with the opinions of multiple treating and evaluation physicians, the employer, relying upon its own evaluating physician, disputed the causal relationship between the surgery and the MRSA infection. Since the conditions Charles suffered included MRSA-related pneumonia, the employer's internist postulated that Charles could have acquired an airborne MRSA.

… MRSA infections occur in the community at large, but they are far more frequent in a hospital setting. Of all areas within the hospital, the report noted, the highest rate of MRSA infections occurred in orthopedic surgery. And, of course, there were those pustules at the surgery site, which, as found by the VCMC physicians, contained high concentrations of MRSA.

During the time that this issue was litigated, Medi-Cal stepped up to the plate, covering Charles' lengthy hospitalization at VCMC (Nov. 30, 2005 to July 1, 2006) during which medical bills in excess of $1.1 million were generated.

…a Workers' Compensation Judge issued an Oct. 26, 2006 amended findings and award, expressly finding that the MRSA infection and its horrific, life-threatening sequelae were industrially related. The court ruled that the employer was legally obligated to furnish medical care to cure or relieve the above conditions and to pay or adjust the bills for all of the outstanding treatment.

Despite the award and despite (or perhaps because of) expert testimony that a delay in authorizing treatment of even seemingly minor infections could produce end organ failure and death, the employer, operating through its claims administrator, flat out refused to meet its affirmative obligation to ascertain and provide vital, life-sustaining care. Amongst the most disturbing actions was its refusal to authorize a BiPAP without which the administrator knew that Charles could stop breathing and die.

…Charles' in-patient care at Northridge Hospital was approximately $24,000/day, the outpatient facility cost was $25,000/month.

…Instead, on multiple occasions, the claims administrator refused to honor Dr. Feiss' prescriptions for referrals to other physicians, for diagnostic testing and for the appointment of a nurse case manager. When Charles was forced to resort to his own devices via the purchase of a wheelchair accessible van, the claims administrator refused to pay for it.

“We have rarely encountered a case in which a defendant has exhibited such blithe disregard for its legal and ethical obligation to provide medical care to a critically injured worker," a unanimous three-commissioner panel of the California Workers' Compensation Appeals Board wrote in their April 16, 2013 decision [PDF] in The Romano Trust vs. The Kroger Co.. "Sedgwick CMS, acting as claims administrator for The Kroger Company/Ralph's Grocery Company, demonstrated a callous indifference to the consequences of its delays, inaction, and outright neglect.”

That callous indifference entailed not only unreasonable refusals and delays in authorizing treatment but refusals to pay for authorized treatment --- something which, according to one witness, was so stressful for Charles that he protested in the only way open to him --- by refusing medications and food. "They want me to die," Charles told the witness. “So I'll die.”

Dr. Rosen's warnings about the catastrophic consequences of lack of access to appropriate care came to fruition. … the claims administrator then sought to "escape liability through a see-no-evil, hear-no-evil passive approach to claims administration in a catastrophic, life-and-death case." In essence, the claims administrator pretended not to know that Charles had been hospitalized for the very conditions that the Worker's Compensation Appeals Board had determined to be industrially-related.

Even before passage of the 2004 "reform," injured employees were prevented from suing their employers or their carriers for a bad faith refusal to provide medical care. …

Under pre-SB 899 law, the remedy when an employer or carrier unreasonably delayed or refused to provide a benefit was a penalty equal to 10% of the value of the entire class of benefits. Thus, under the old system, a bad faith refusal to authorize the BiPAP would entail a penalty equal to 10% of the value of all expenditures for medical treatment necessary to cure or relieve the injury over the life of the file.
Under the old system, the size of the unreasonable delay penalty was proportional to the severity of the injury. A 10% penalty for an unreasonable refusal to furnish medical treatment in a finger injury case would be negligible. In a catastrophic case, where the value of medical care might exceed $10 million, a 10% penalty against medical care could be quite substantial. Moreover, under the old law, each separate and distinct act of unreasonable delay carried with it an additional 10% penalty. Here, the court found that there were eleven (11) separate and distinct instances in which the claims administrator unreasonably delayed or refused to provide vital medical care.

Add up eleven 10% penalties against a $10 million life time medical exposure, and you're suddenly talking real money. …

… Now the penalty entails a maximum of 25% of the amount of the unreasonably delayed item, not to exceed $10,000 --- a penalty that is negligible when measured against the perverse economic incentive that exists where death would put an end to the employer laying out some $24,000 for every day Charles Romano survived inside a hospital.

… bad faith refusal to authorize this vital, life-sustaining device would be $500.

…perhaps even criminal…

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