California: WCAB Applies Neri Hernandez to Home Health Care Services Cases

The WCAB has issued two noteworthy panel decisions involving home health care services in light of Neri Hernandez (en banc). In each of these decisions, which involved critically injured workers, the WCAB has signaled in very strong terms that it will not tolerate a defendant's bad-faith or frivolous delays in providing or failing to provide medical treatment.

(Editor's Note: Citations below link to Lexis Advance.)

Case #1

WCAB finds defendant, which failed to comply with its duty to conduct a reasonable and good faith investigation to determine whether home health care service benefits were due, is liable for the maximum $10,000 penalty for unreasonable delay of medical treatment

In Gonzalez v. Consolidated Disposal Services, 2014 Cal. Wrk. Comp. P.D. LEXIS – (Appeals Board noteworthy panel decision), a WCAB panel headed by Commissioner Sweeney issued a key decision involving home health care services in light of Neri Hernandez (en banc) and unreasonable delay in providing medical treatment whereby the defendant was found liable for the maximum $10,000 penalty under Labor Code § 5814.

Work Environment and Industrial Exposure

Margarito Gonzalez had worked as a trash bin repairman, removing trash by hand and scraping trash bins with a metal spatula. He breathed in dust every day on the job. There were pigeons at the worksite eating from the trash. He suffered significant cumulative trauma to his respiratory system (in the form of life-threatening cryptococcal and pneumococcal pneumonia), psyche, back, hips, and knees during the period 1993 through 3/15/2005.

Cryptococcus is a fungus in the soil usually associated with bird droppings. The fungus can hide in the cavities of the lung. It can change a person’s immune system, weakening the ability to fight infection. Modern medicine can control cryptococcal lung disease but it can’t cure it.

Drug Side Effects

Gonzalez is required to take the anti-fungal medicine, Fluconazole, for the remainder of his life to prevent a reoccurrence of infection. The side effects of the medication include fatigue, dizziness, loss of appetite, and loss of balance. Gonzalez’ weight has dropped from about 145 pounds to 114 pounds.

Debilitating Effect of Lung Disease

Gonzalez’ lung disease accelerated his need for bilateral hip replacement surgery. Gonzalez has relied on both a walker and wheelchair for over eight years and is unable to perform many activities of daily living. One physician, who had observed Gonzalez using a walker, testified in his deposition that it “looks like the wind would knock him over.” The WCJ agreed in his Report that Gonzalez was “feeble looking.”

Home Attendant Care

Gonzalez’ wife, son, and daughter-in-law never leave him alone for he needs 24/7 health care services ever since his hospitalization in 2005. His attendant care includes, but is not limited to, grocery shopping, food preparation, bathing, grooming, going to the bathroom, transportation to medical appointments and other appointments, dressing, laundry, ambulation assistance, medication management, and assistant getting in and out of bed.

Without his family Gonzalez could not survive. Commissioner Sweeney noted the severity of Gonzalez’ illness and the effects of Fluconazole as explained by WCJ Rodney Johnston in his Report, in that Gonzalez “would die if not provided assistance” and that Gonzalez’ family provided medically necessary services to keep him “clean, safe, and alive.” WCJ Johnston also pointed out that even defendant’s own expert testified as to Gonzalez’ need for care.

AME/PQME Process vs. Utilization Review

The WCAB found that Gonzalez reasonably required home health care services on an industrial basis and that the defendant waived its right to object to the treating physician’s request for home health care, when:

1. Defendant objected to the treating physician’s request for home health care not based on medical necessity, but rather on the basis that the treatment was not needed on an industrial basis.

2. The utilization review (UR) undertaken by defendant over one year after the treating physician requested home health care and after the defendant had already initiated the agreed medical examiner/qualified medical evaluator process in Labor Code § 4062(a), was an improper procedure to resolve the dispute over the industrial causation of the need for medical treatment because UR can only be undertaken to determine the medical necessity of treatment, and the objections to the treating physician’s finding of industrial causation of the need for medical treatment must be determined under Labor Code § 4062(a).

3. Since the defendant did not timely object to the treating physician’s request for home health care under Labor Code § 4062(a), the defendant waived its objection and the applicant was entitled to submit the issue of the defendant’s liability for home health care services to the WCAB.

4. Although the defendant relied on Simmons v. State of California, Department of Health (2005) 70 Cal. Comp. Cases 866 (Appeals Board en banc opinion) (defendant allowed to initiate AME/PQME process after UR), to support its position that it was appropriate to compel the applicant to return to an agreed medical examiner since UR was inappropriate, the WCAB found that Simmons was distinguishable in that, there, the issue of whether the applicant’s need for medical treatment was industrial arose after the defendant submitted the medical necessity issue to UR, whereas, here, the dispute over the industrial causation of need for treatment and the defendant’s attempt to have the applicant re-evaluated by an agreed medical examiner arose before the defendant submitted the issue to UR.

Home Health Care Services: The Neri Hernandez Effect

The WCAB found Gonzalez was entitled to 24 hours a day home health care services for seven days a week from 1/20/2012 and continuing, and, in light of the 6/12/2014 decision in Neri Hernandez v. Geneva Staffing, Inc. (2014) 79 Cal. Comp. Cases 682 (Appeals Board en banc opinion), it returned the matter to the WCJ for further proceedings on various issues, including the number of hours and the nature of home care services regularly performed by Gonzalez’ wife and son before the industrial injury, if any, the issue of when the defendant’s liability for home health care services began, and the issue of Gonzalez’ claim for reimbursement for out-of-pocket self-procured medical treatment expenses. As explained by the WCAB:

1. Newly enacted Labor Code §§ 4600(h), 4603.2(b)(1) and 5307.8, apply to all requests for home health care services and payments for services where no final decision on the request for services issued prior to 1/1/2013, including Gonzalez’ claim for home health care that was decided by the WCJ on 6/28/2013.

2. Pursuant to Labor Code § 4600(h), the defendant is liable, subject to Labor Code § 5307.1 (if services are covered by the official medical fee or Medicare schedule) or Labor Code § 5307.8 (if services are not covered by the official medical fee or Medicare schedule), for home health care services prescribed by a physician, and may become liable for home health care services provided 14 days prior to the receipt of a prescription.

3. The treating physician’s 3/29/2010 dated and signed letter, which identified Gonzalez and his physician and stated that Gonzalez needed care by his spouse and family, constituted a “prescription” for home health care services within the meaning of Labor Code § 4600(h).

4. To determine when the defendant’s liability period began, the applicant must not only prove the defendant’s receipt of the prescription but must also show the date of actual receipt.

5. Gonzalez’ family members testified that they provided Gonzalez with help since 2009 and his bilateral hip replacement suggested his need for home health care services well before the treating physician’s 3/29/2010 request, yet the defendant never further investigated or made a request for further information before it received the 3/29/2010 letter.

6. Labor Code § 4600 requires that defendants do more than simply respond to a demand for medical treatment, and requires defendants to make “some degree of active effort to bring the injured employee necessary relief.”

7. The defendant is liable for Gonzalez’ home health care services beginning at least 14 days prior to the date of receipt of the 3/29/2010 letter and possibly earlier if it is shown, on remand, that the defendant received another “prescription” before the 3/29/2010 letter based upon the evidence, including the hip replacement, that Gonzalez needed home health care services at an earlier time.

8. Since the schedule for home health care services has not yet been enacted pursuant to Labor Code § 5307.8, the injured worker bears the burden to demonstrate a reasonable hourly rate for the type of services provided and the number of reasonably required hours based on substantial evidence.

9. Here, Gonzalez met the burden of proving that he was entitled to home health care services 24 hours per day, seven days per week, at the rate of $9.00 per hour.

10. Under Labor Code § 5307.8, the defendant is not liable for services “regularly performed” and provided to the applicant before an industrial injury.

11. Although the medical evidence supported a finding that Gonzalez needed full time care, he must, on remand, provide specific descriptions of the tasks performed before, if any, and after injury, and the defendant has no liability for tasks performed before the injury.

12. Labor Code § 5307.8 does not address whether payment is to be made to the applicant or services provider although it allows applicant’s attorney’s fees and refers to Labor Code § 4906, thereby contemplating payment directly to the applicant.

13. If the type of services provided to the applicant are subject to the fee schedule and fall under Labor Code § 5307.1, it is likely the provider would have a lien claim.

14. Once the applicant or provider seeks payment under Labor Code § 5307.8, the defendant is entitled to receive the documentation specified in Labor Code § 4603.2(b)(1) before issuing payment, including itemization of the services and charges, copies of all reports showing the services performed, the prescription or referral by the primary treating physician, and any evidence of the authorization.

15. Once the parties have determined the defendant’s net liability for past services, the payment to Gonzalez or his spouse and son is appropriate, and, with respect to future services, the parties must determine whether the payment is to continue to Gonzalez’ spouse or son or to be made to Gonzalez himself.

$10,000 Maximum Penalty, Attorney’s Fees and Costs

The WCAB affirmed the WCJ’s award of penalty under Labor Code § 5814 and attorney’s fees pursuant to Labor Code § 5814.5, for the defendant’s delay in providing home health care services to Gonzalez. As emphasized by the WCAB, Gonzalez became ill in 2005, almost nine years ago, and underwent bilateral hip replacement more than seven years ago, and his family has been providing home health care services since 2005 to keep him “clean, safe, and alive”.

The WCAB found that if an employer receives notice that home health care services may be needed or are being provided, the employer has a duty under Labor Code § 4600 and 8 Cal. Code Reg. § 10109 to conduct a reasonable and good faith investigation to determine whether the benefits are due.

Here, the evidence, including the testimony from the defendant’s own expert, established that Gonzalez was unable to care for himself and he would die if he was not provided with in-home assistance on a full time, daily basis. The evidence further showed that Gonzalez’ family was providing medically necessary services to help him survive. In addition, the defendant admitted that it didn’t conduct any investigation after receiving the treating physician’s 3/29/2010 letter requesting home health care services.

Thus, the WCAB found that the defendant did not have a “good faith” belief regarding its liability and it failed to comply with the statutory and regulatory obligations to investigate and to offer medical treatment, and was, therefore, liable for the maximum $10,000 penalty under Labor Code § 5814(a), in addition to attorney’s fees under Labor Code § 5814.5. The WCAB further found that the WCJ could also impose liability for attorney’s fees and costs under Labor Code § 5813.

Parting Words and Warnings

The WCAB deemed it was unfortunate that it was constrained by the limits of Labor Code § 5814(a) to the $10,000 maximum penalty. It admonished the defendant that “a bad-faith or frivolous delay in providing or a failure to provide medical treatment may result in a sanction for each bad-faith or frivolous act or failure to act…and a defendant’s breach of its duties under Rule 10109 may result in audit penalties” (citing 8 Cal. Code Reg. §§ 10111.1(c)(6), (d)(1), 10111.2(b)(1), (2); Romano v. The Kroger Co. dba Ralph’s Grocery Co., 2013 Cal. Wrk. Comp. P.D. LEXIS 125).

The WCAB also warned the parties to adjust a number of deferred issues “expeditiously and in good faith” and if either party fails to do so, the WCAB recommends that the WCJ consider and impose sanctions and payment of attorney’s fees and costs. The WCAB instructed the defendant to make payment as soon as possible on the medical treatment expenses for which it has liability “or face further penalties” unless it has a reasonable and genuine question as to liability or amount.

Read the Gonzalez noteworthy panel decision.

Case #2

When the employer receives notice that home health care services may be needed, the employer has the duty to investigate, and may not sit idly by and wait until it receives an official request; the defendant must make at least a partial payment when it is clear benefits are owed

In Lobo v. County of San Bernardino, 2014 Cal. Wrk. Comp. P.D. LEXIS – (Appeals Board noteworthy panel decision), a WCAB panel headed by Chairwoman Caplane found that the applicant established he was entitled to home health care services and that his home caregiver was entitled to reimbursement of $17.50 per hour for services provided. However, in light of Neri Hernandez (en banc), the WCAB returned the matter to the WCJ for further proceedings.

Life-Threatening Conditions

Albert Lobo, while employed as a deputy sheriff corporal from 1/1/1990 to 4/24/2010, sustained injury to his bilateral upper extremities, bilateral lower extremities, and internal system in the form of respiratory, renal, gastrointestinal, heart and diabetes. He also claimed injury to psyche as a compensable consequence. In 1/2010 he contracted a lung infection and developed pneumonia. He was hospitalized on 4/24/2010 and went into septic shock. He suffered multiple cardiopulmonary arrests with resuscitation and multi-organ failure and became comatose. He then developed disseminated intravascular coagulation, which led to clots in all of his extremities. Gangrene set in. Both of his legs up to his knees, his left arm above the elbow, and all of his finger of his right hand were amputated. He was hospitalized for eight months. His weight decreased from 170 pounds to 80 pounds. He was not expected to live. But he survived and was discharged from the hospital in November 2010.

Home Attendant Care

Lobo’s girlfriend Halimah Shenghur cared for him. She learned how to do wound care and general nursing care, including bathing, feeding, giving shots and medication, hygiene, the use of a diaper or commode, treating bed sores, turning him in his bed, helping him relieve his constipation due to his medications, helping him with muscle spasms, transferring him from his bed to a wheelchair, and cooking for him. In addition for caring for Lobo, Shenghur worked a regular job, 40 hours a week. Shenghur asked the defendant for home health care services in September, October, November and December of 2011. She did this by calling and emailing the defendant’s adjuster. A meeting was held with the adjuster on 11/17/2011 but Shenghur was never paid for her time caring for Lobo.

Home Health Care Services: The Neri Hernandez Effect

In light of the decision in Neri Hernandez v. Geneva Staffing, Inc. (2014) 79 Cal. Comp. Cases 682 (Appeals Board en banc opinion), the WCAB returned matter to the WCJ for further proceedings regarding when the defendant’s liability for home health care services began, which, if any, home health care services were performed before the applicant’s injury and which occurred afterward, and whether the different amount of home health care services was reasonably required prior to the receipt of the agreed medical examiner’s 5/2/2011 report. The WCAB found that:

1. The 5/2/2011 letter dated and signed by the agreed medical examiner that identified both the applicant and physician, stated that the applicant needed home care 12 hours per day, seven days per week and described the type of care needed, was a “prescription” for home health care services within the meaning of Labor Code § 4600(h).

2. Medical records dated 11/22/2010 reflecting that the applicant had prior home health care and supervision, although not in evidence, could support a finding of an earlier “prescription” for home health care services.

3. While the defendant “received a prescription” as required by Labor Code § 4600(h), the record required further development regarding the actual date the defendant received the prescription to prove when the defendant’s liability period (i.e., 14 days before the date the prescription was received) began.

4. Since the schedule for home health care services has not yet been enacted pursuant to Labor Code § 5307.8, the applicant bears the burden to demonstrate a reasonable hourly rate for the type of services provided and the number of reasonably required hours based on substantial evidence, and, while Lobo established that he was entitled to home health care 12 hours per day, seven days per week based on the agreed medical examiner’s 5/2/2011 letter, an earlier prescription with a different recommendation could be found to exist such that Lobo may be entitled to a different amount of hours for the period prior to the receipt of the agreed medical examiner’s 5/2/2011 letter.

5. Because, under Labor Code § 5307.8, the defendant is not liable for services “regularly performed” and provided to the applicant before the industrial injury, the applicant must provide evidence regarding home health care services, if any, performed before the injury and those performed afterward.

Penalties and Sanctions: A Warning

Although the issue of penalties and sanctions for the defendant’s delay in providing home health care services was not before the WCAB, the WCAB reminded the defendant of its obligation to provide benefits and stated that the defendant has a statutory and regulatory duty under Labor Code § 4600 and 8 Cal. Code Reg. § 10109 to conduct a reasonable and good faith investigation to determine whether benefits are due. Furthermore, under Neri Hernandez, when the employer receives notice that home health care services may be needed, the employer has the duty to investigate, and may not “sit idly by and wait until it receives an official request.” The defendant must make at least a partial payment when it is clear benefits are owed.

According to the WCAB, the testimony of Lobo and his caregiver regarding the “highly personal and intimate life-saving care” provided to him suggested that the defendant should have known that Lobo required home health care services even prior to receiving the agreed medical examiner’s 5/2/2011 report. “We cannot fathom how defendant’s adjuster…remained indifferent in the face of their pleas for help,” wrote Chairwoman Caplane.

The WCAB admonished the defendant that unreasonable delays and refusals to provide appropriate medical care to Lobo may result in penalties under Labor Code § 5814 as well as Labor Code § 5813 sanctions. The WCAB further admonished defendant that a bad-faith or frivolous delay in providing medical treatment or a failure to provide medical treatment may result in a sanction for each bad-faith or frivolous act or failure to act, and that a defendant’s breach of its duties under Rule 10109 may result in audit penalties (citing 8 Cal. Code Reg. §§ 10111.1(c)(6), (d)(1), 10111.2(b)(1), (2); Romano v. The Kroger Co. dba Ralph’s Grocery Co., 2013 Cal. Wrk. Comp. P.D. LEXIS 125).

Home Modification Disputes Not Subject to UR

The WCAB affirmed the WCJ’s finding that Lobo, being a multi-level amputee and confined to wheelchair as result of his industrial injury, was entitled to reimbursement for home modifications based upon the testimony of a construction worker in charge of performing modifications on Lobo’s home. The WCJ found the construction worker’s testimony more persuasive than the testimony of the defense expert, and the fact that certain modifications were not approved by the defendant’s utilization review was not an adequate basis to deny reimbursement for the modifications, as home modification disputes are not subject to utilization review.

Reconsideration vs. Removal

The WCAB also held that the defendant’s filing of a petition for reconsideration gave the WCAB the authority to address all of the issues, including those issues not specifically raised in the petition. Although some of the issues raised by the defendant in its petition for reconsideration regarding the applicant’s entitlement to home health care were not the subject of final orders by the WCJ, the WCAB had the authority to address those issues upon granting reconsideration.

Read the Lobo noteworthy panel decision.

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