California: Home Health Care: When Neri-Hernandez Meets Patterson

Senate Bill 863 was implemented over four years ago, but this paradigm shifting package legislation left the workers’ compensation community with quite a few challenging questions. New rules regarding reimbursement of home health care services is only one of the issues still facing the WCAB in recent months. In particular, cases have grappled with when is it appropriate for defendants to terminate these services once they’ve been approved.

I. SB863 – Changes to Home Care – The Basics

As part of the sweeping legislation of SB863, several Labor Code sections regarding Home Health Care services were amended or created as follows:

Lab. Code § 4600(h): Employer not liable for home health care services provided “more than 14 days prior to the date of the employer’s receipt of the physician’s prescription” for said services.

Lab. Code § 4600(h): Applicant has the burden of proving that the Insurance Company received the physician’s prescription for services and that the services provided were reasonable and necessary.

Lab. Code § 4603(b)(1): Applicant must provide “an itemization of services provided.” 

Lab. Code § 5307.8: “No fees shall be provided for…any services provided by a member of the employee’s household, to the extent the services had been regularly performed in the same manner and to the same degree prior to the date of injury.”

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II. WCAB Neri-Hernandez en banc as a Roadmap

In the case of Neri-Hernandez v. Workforce Staffing (2014) 79 Cal. Comp. Cases 682, 2014 Cal Wrk Comp LEXIS 77 (Appeals Board en banc), the WCAB set forth a road map for parties to use when litigating an issue dealing with the provision of home health care services, pursuant to the new rules set forth above.

The WCAB held:

“The prescription required by section 4600(h) is either an oral referral, recommendation or order… directly by a physician to an employer and/or its agent; or, a signed and dated written referral, recommendation or order by a physician for home health care services for an injured worker.”

The WCAB further held:

“Under some circumstances, an employer may receive an oral communication or a document which is ambiguous, so that it is not clear whether [it] was a ‘prescription’ sufficient to trigger the liability period. In that case, or under other circumstances when an employer receives other notice that home health care services may be needed or are being provided, an employer has a duty under section 4600 to investigate… In addition to the judicially announced obligation to do more than passively sit by, an employer has a regulatory duty to conduct a reasonable and good faith investigation to determine whether benefits are due. (See Cal. Code Regs., tit. 8, § 10109.)”

Practice Tip: Defendants should be mindful of their duty to investigate applicant’s need for medical treatment, and document those investigation attempts, including investigation of the need for home health care services, pursuant to 8 Cal. Code Reg. § 10109, which states as follows:

“(a) To comply with the time requirements of the Labor Code and the Administrative Director's regulations, a claims administrator must conduct a reasonable and timely investigation upon receiving notice or knowledge of an injury or claim for a workers' compensation benefit.

“(b) A reasonable investigation must attempt to obtain the information needed to determine and timely provide each benefit, if any, which may be due the employee.

“(1) The administrator may not restrict its investigation to preparing objections or defenses to a claim, but must fully and fairly gather the pertinent information, whether that information requires or excuses benefit payment. The investigation must supply the information needed to provide timely benefits and to document for audit the administrator's basis for its claims decisions. The claimant's burden of proof before the Appeal Board does not excuse the administrator's duty to investigate the claim.

“…

“(d) The claims administrator must document in its claim file the investigatory acts undertaken and the information obtained as a result of the investigation. This documentation shall be retained in the claim file and available for audit review.”

Unfortunately, many claims administrators and even many attorneys are not aware of this regulation, and believe that the applicant is solely responsible for pursuing any benefits to which they may be entitled. This misperception often leads to unfortunate results. (See the case of Romano Trust v. Kroger Co., 2013 Cal. Wrk. Comp. P.D. LEXIS 125, where the WCAB noted, “This breach of defendant's affirmative statutory and regulatory duties exemplifies defendant's efforts to ‘evade liability through a see-no-evil, hear-no-evil, passive approach to claims administration in a catastrophic, life-and-death case,’ as aptly described in applicant's Answer to the Petition for Reconsideration.”)

III. When Neri-Hernandez Meets Patterson

In the case of Patterson v. The Oaks Farm (2014) 79 Cal Comp Cases 910 (Significant Panel Decision), a nurse case manager’s services were abruptly terminated by defendant, despite the fact that there was no change in the injured worker’s condition, which required those services in the first place.

In response, the WCAB affirmed the WCJ’s decision and held that:

“An employer may not unilaterally cease to provide approved nurse case manager services when there is no evidence of a change in the employee's circumstances or condition showing that the services are no longer reasonably required to cure or relieve the injured worker from the effects of the industrial injury…”

Since this case was issued in 2014, parties have wondered whether this holding is exclusively reserved for nurse case managers or whether it applies to other types of medical treatment as well.

In the case of Kumar v. Sears, 2014 Cal. Wrk. Comp. P.D. LEXIS 502, a WCAB panel applied this rationale to home health care services, and ordered continuation of home health care services for the injured workers since the “defendant made no showing that the provision of home healthcare as required by the February 9, 2012 Order is no longer reasonable because of a change in injured worker’s condition or circumstances.” (See also Warner Bros. v. WCAB (Ferrona) (2015) 80 Cal. Comp. Cases 831 (writ den.) and Pour v. Swift Freight USA, 2017 Cal. Wrk. Comp. P.D. LEXIS 176; 2017 Cal. Wrk. Comp. P.D. LEXIS 296.)

IV. Evidence Required at Trial on this Issue

A similar fact pattern of termination of home health care services occurred in the WCAB panel case of Garas v. RXI Plastics Inc., 2017 Cal. Wrk. Comp. P.D. LEXIS 90. In that case, Mr. Garas requested a liver transplant, which was granted as reasonable and necessary to treat his industrial injury. The liver transplant was performed on 7/17/2014.

Per the stipulations of the parties, defense initially provided home health care services, but then terminated said services after timely utilization reviews “and failure of Dr. Sadler to provide information requested in U.R. letters.”

In finding in favor of applicant, the WCJ wrote, “…in accordance with the rationale and spirit of Patterson, it was inappropriate for defendant to refer this continuing need for home health care to utilization review at such a short juncture without any apparent change in circumstances.”

In his Report and Recommendation after defendant filed a Petition for Reconsideration challenging his decision, the WCJ wrote:

“[H]ere, applicant was being provided with 24 hour home health care post liver transplant. Defendant decided to have the prescription for renewal reviewed by Utilization Review and pursuant to the non-recommendation of UR chose to completely cut applicant off from all care and refused any negotiation regarding a reduction of hours (per discussions at time of the expedited trial). The WCJ found it difficult to comprehend how any reasonable person, adjuster, or reviewing agency, could find that a patient with such a significant surgery could be determined not to need any weaning down of continuing home care after only weeks of having been authorized for round the clock care.”

The WCAB reversed the WCJ, citing a lack of evidence in the record to support the WCJ’s finding. The WCAB reminded that WCJ that a decision “must be based on admitted evidence in the record” (Hamilton v. Lockheed Corporation (2001) 66 Cal. Comp. Cases 473, 478 (Appeals Board en banc) and must be supported by substantial evidence. The WCAB returned the case to the trial level to develop the record, including the following issues:

> Applicant’s current medical condition that would warrant the need for home health care services;

> The type of home health care services initially provided by defendant;

> The type of ongoing home health care services that are currently reasonable and necessary;

> Evidence of an agreement by defendant to provide home health care services; and

> Evidence “as to the circumstances that led to defendant’s determination that it would no longer provide care.”

Practice Tip: Before proceeding to a hearing on reimbursement for home health care service, make sure you have all evidence necessary to sustain your burden of proof. Since there are so many items necessary to prove in a case like this, a checklist of issues to prove with a corresponding reference to the evidence submitted would be helpful. A partial example of which, would be the following:

> Applicant’s current medical condition (Report of Dr. No dated 11/16/2016 – Exhibit “3”)

> Services required to be provided (RFA of Dr. No dated 9/1/2016 – Exhibit “1”)

> Itemization of services provided by spouse, including a declaration under penalty of perjury that said services had not been “regularly performed in the same manner and to the same degree prior to the date of injury.” (Affidavit of spouse dated 3/1/2017 – Exhibit “4” – to be supplemented by testimony at trial)

V. Be Mindful of Privacy Issues

As with all workers’ compensation cases, the parties should respect the injured workers’ right of privacy. In the panel decision of Zamudio v. Starco Enterprises, 2017 Cal. Wrk. Comp. P.D. LEXIS 151, the defendant requested and was granted an Order by the WCJ to perform a home health care assessment in the injured workers’ home and to allow the attorney for defendant to be present during the assessment pursuant to Labor Code Section 4052.

The applicant had no issue with the home health care assessment, but felt uncomfortable hosting the defense attorney in the privacy of her home. The WCAB agreed with the applicant and felt compelled to reverse the Order with regard to allowing the defense attorney to be present during the home health care assessment. The WCAB explained this action to be necessary, otherwise, the “privacy and sanctity that applicant feels in her home may be irrevocably altered, with no ability for her to rectify the harm caused through reconsideration.”

VI. Conclusion

Litigation of home health care services is a completely different paradigm than litigation of other types of “medical treatment.” Parties should thoroughly research the current case law, Labor Code Sections and relevant regulations to ensure that they sufficiently developed the record on the various issues so as to meet their respective burdens of proof in court.

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