Thursday, January 18, 2018

Child Support in the News

WorkCompCentral recently reported Commission Was Improper Venue for Debate on Settlement Going Toward Child Support. The situation arose in Maryland, when an injured worker settled his entitlement to workers' compensation benefits. After the settlement, the insurance company did not deliver the settlement proceeds. It sent a check for a medical evaluation and for attorney fees, but no settlement proceeds.

The employer/carrier explained that it had instead sent the settlement proceeds to the Bureau of Support Enforcement. That action, it explained, was because of existing child support arrears. After the settlement was reached, the Circuit Court entered garnishment writs. The injured worker filed no papers or response in those actions until after the employer/carrier had sent the settlement funds to the Bureau. 

The injured worker then filed a "form" with the Maryland Workers' Compensation Commission. It essentially complained that the settlement proceeds had not been provided as stipulated. The amount due was $2,246.66. The Commission held a hearing, and the injured worker argued that his settlement proceeds were "exempt from garnishment" under the law. The insurance company did not agree with that perspective. 

Following the hearing, the Commission issued a final order and concluded that the statute relied upon by the injured worker did exempt the settlement from garnishment in part, but did not rule entirely in favor of the employee. It concluded that 75% of the settlement was subject to garnishment and 25% was not. Therefore it ordered that the injured worker be paid $421.99. 

The employer and carrier filed for review in the Circuit Court. In Maryland, there is this intermediate step between the workers' compensation adjudication and the appellate court system. The Circuit Court agreed with the 75%/25% distribution, but concluded that actually the 25% could be garnished and the 75% could not be. The effect of the employer/carrier's seeking Circuit Court review was an order compelling it to pay the injured worker $1,684.99.

That led the employer/carrier to the appellate process, In The Court of Special Appeals of Maryland. That court concluded that the issue was different than noted by the Commission or the Circuit Court. The Court explained how "personal injury" proceeds were partially exempted from child support, up to 25%. And, the Court complimented the "well thought-out" presentation of "difficult legal questions."

Then the Court explained that the legal questions presented did not matter. The Court noted that the injured worker did not raise those issues in the Circuit Court that originally entered the garnishment order. The appellate court explained that "only a circuit court has subject matter jurisdiction over garnishment." The use of "only" means that the jurisdiction is "exclusive." The Court noted that the injured worker did not participate in the garnishment proceedings, nor did he raise the exemption argument there. 

The Court explained that any exemption to garnishment would take affect only if it were plead. The Court said "An exemption would not apply automatically," but only if the employee took "action in the garnishment proceedings" to assert and prove entitlement to the exemption; the injured worker did not do so. The Court held that waiting until after those garnishment proceedings concluded, and then attempting to get the workers' compensation system to enforce or protect rights he failed to plead in the Circuit Court was procedurally inappropriate and flawed. 

The Appellate Court noted that the Commission is not a Circuit Court (which has exclusive jurisdiction, as a court of general jurisdiction); in fact, the Court noted "the Commission is not a court at all." The law did not convey on the Commission the power of a "court" and therefore it was acting without authority when it heard the complaint regarding child support to begin with. 

The WorkCompCentral story quotes practitioners noting that these disputes and issues have arisen before in Maryland. One laments that "employers and insurers are placed in a difficult spot when they learn that an injured worker owes child support," noting that anger may result. 

The same issues periodically arise in Florida settlements. Section 440.20(11)(d)1. includes a charge to the Judges of Compensation Claims regarding any settlement:
With respect to any lump-sum settlement under this subsection, a judge of compensation claims must consider at the time of the settlement, whether the settlement allocation provides for the appropriate recovery of child support arrearages.
And, as a result, the Judges of Compensation Claims routinely order payment of child support arrearages from settlements. Over the last 15 fiscal years, the OJCC has collected $162,740,517 in child support arrearage. Judges periodically hear from injured workers that reported balances are incorrect, that previous payments have not been credited correctly, etc. The answer from the OJCC is generally similar to the Appellate Court in Maryland, "sort this out in the circuit court." 

The determination of the amount of child support that is appropriate, or the accounting associated with payments, is an issue for the circuit court, which coincidentally is Florida's court of general jurisdiction. That is the place to argue about the imposition or amount of support amounts due. The OJCC merely enforces collection of what that court orders.

Of course, if an injured worker finds herself/himself in disagreement with a reported arrearage, a request could be made to have the Judge of Compensation Claims delay ruling on the settlement distribution. That delay could be used by the injured worker to seek clarification from court officials or the Department or Revenue regarding the accounting questions. That delay could be used by the injured worker to seek an order from the Circuit Court regarding the arrearage amount. 


Monday, January 15, 2018

The Pacific Hospital Drama Continues

In December, WorkCompCentral reported that "More than 14,500 patients had surgeries or other procedures performed at Pacific Hospital," which were “likely the result of a kickback payment.” That is an astounding allegation. 14,500 people have had their lives affected by people accused of criminal activity. 

The foundation of this particular story included disclosures in an order that was proposed in the prosecution of one of the physicians accused, a Dr. Philip Sobol. There is also discussion of Federal Bureau of Investigation (FBI) documents regarding the surgeries performed and referrals made by Dr. Sobol during the "time the kickback arrangement was in place.” Allegedly, an appreciable percentage of the total (2,800), about 90 "underwent a spinal fusion."

On January 15, 2018, WorkCompCentral reported that the former owner of Pacific Hospital, and the mastermind of the fraud scheme, will serve just over 5 years in prison. He was charged with "overseeing a $500 million workers' compensation fraud scheme for 15 years." A press release from the U.S. Attorney's Office also provides details. 

There is frustration in various circles as this Pacific Hospital situation has been discussed. There are questions raised at various conferences regarding how such a widespread activity could have prevailed for so long. Many have mentioned that essentially "all the signs were there" and yet the procedures and the referrals continued. 

At a conference in October, one attendee claimed that limousines were provided to transport patients to Pacific Hospital for care. That one might be a red flag. If anyone is providing you a free limousine ride, there may be a few questions that come to mind before accepting. 

Another frustration cited by WorkCompCentral in December is locating those many patients who were involved. The FBI has purportedly been unable to locate some of those patients to "notify them of their rights as possible victims." As much as some of us follow the news in workers' compensation, and try to engage in conversation, apparently the scandal at Pacific is not coming to the attention of everyone potentially affected. 

Having failed to reach those patients using information obtained from Pacific, the FBI is currently seeking information "from third parties who maintained medical records for Pacific Hospital." Through that effort, the FBI hopes to send to each "a victim notification.” Despite these challenges, prosecutors express confidence that the "workers’ compensation carriers that paid for surgeries have been identified and notified." 

Certainly, there is confidentiality to consider. However, a subpoena or two to those companies might well produce the identities and locations of those victims. In the absence of a subpoena, those carriers might nonetheless drop a line to those injured workers directly and provide them with a few of the articles that have been published about the Pacific prosecutions. Perhaps those patients might be encouraged to come forward? 

The scope of this Pacific situation is significant. Dr. Sobol has agreed to a "plea agreement" regarding the 2,800 procedures that he performed, and will "pay restitution totaling $5.2 million." This is “to disgorge defendant of the kickbacks that he received from Michael Drobot,” who is "the former owner of Pacific Hospital." 

An important distinction is suggested by this statement. This is not $5.2 million to compensate the victims of the scheme. This is “to disgorge defendant of the kickbacks that he received." That could be a misstatement. But, if true that is an average kickback of $1857.14 (5,200,000/2,800) per surgery performed by Dr. Sobol. 

Allegedly, Mr. Drobot funded "the kickbacks" by profiting on another enterprise, the International Implants company. This distributed hardware, surgical implants" to Pacific Hospital. Mr. Drobot has reportedly been under investigation regarding that hardware, its manufacture, and the interesting relationship between Pacific and International. 

The WorkCompCentral report in December stresses that Dr. Sobol was not part of International, "and there is no evidence that he participated in any billing fraud with respect to the medical hardware." However, in the plea deal, Dr. Sobol "has agreed" to make the restitution payment in order to return funds to the "entities who were likely over-billed for medical hardware.” 

In addition, Dr. Sobol is likely to spend some time in prison following sentencing in 2018. Estimates are for a recommended prison term of 46 to 71 months. The doctor might spend close to 6 years in prison. That is interesting in light of this week's sentence of 63 months for the overseer of the entire scheme? It will be interesting to see if other medical care providers are likewise penalized for participation in this scheme. 

It is positive to see the criminal justice system addressing both the provider (Drobot) and recipients (such as Sobol) of the kickbacks. It is certain that some patients may never be found. The fact is that as time passes people move, change names, and become difficult to locate. It is entirely possible that the carriers that paid these medical bills might be as frustrated in finding these victims as prosecutors and the FBI has been. 

However, it seems that some effort should be directed to the attempt. These patients have been victimized by a criminal enterprise. That does not mean that any or all have been damaged. It is possible that the care delivered was absolutely the best possible, and the damage is all financial. But it is also possible that some or all of these patients would want to know of the motivations that influenced the selection of Pacific for their surgeries. 

If they are due nothing beyond knowing, they still deserve to know. Hopefully, the FBI and prosecutors experience greater success in locating them, or hopefully others with information strive to contact these patients.




Sunday, January 14, 2018

What is Ex Parte

Florida attorney conduct is governed by the Rules Regulating The Florida Bar (trivia note: the name includes "the" so that is capitalized). It is a topic studied by thousands each year in preparation for undertaking the Bar examination, and then read or referred to sporadically in the day-to-day of professional life. Admittedly, most lawyers do not regularly study nor consider the Rules. 

I periodically have lawyers express surprise that "ex parte" communication with judges is not addressed in the Rules in Florida. And, there is seemingly a fair amount of confusion about ex parte (ex par-tay) communication. The Wex Legal Dictionary provides a detailed definition, which includes two main ex parte concerns, one a matter of legal ethics and the other a matter of civil procedure, the process by which civil cases are processed. 

The first, concerned with legal ethics, is:
ex parte refers to improper contact with a party or a judge. Ethical rules forbid (with some exceptions) a lawyer from contacting the judge or the opposing party without the other party's lawyer also being present. A breach of these rules is referred to as improper ex parte contact
The dictionary addresses the second the procedure aspect as:

motions for orders that can be granted without waiting for a response from the other side. Generally, these are orders that are only in place until further hearings can be held
The second, "procedural" aspect is also addressed, mentioning ex parte, by the Rules Regulating The Florida Bar, in Rule 4-3.3 Candor Toward the Tribunal. That rule generally requires honesty, stating a lawyer shall not "knowingly" "make a false statement of fact or law to a tribunal." But, when a proceeding is "ex parte," the Rules place additional onus on the attorney, requiring
In an ex parte proceeding a lawyer shall inform the tribunal of all material facts known to the lawyer that will enable the tribunal to make an informed decision, whether or not the facts are adverse. Rule 4-3.3(c).
However, the Rules Regulating The Florida Bar do not seemingly address as "ex parte" the first aspect, the "improper ex parte contact," the prohibition on "contacting the judge or the opposing party without the other party's lawyer also being present." However, the Rules do address such communication with the judge in a broader context in Rule 4-3.5 Impartiality and Decorum of the Tribunal:
In an adversary proceeding a lawyer shall not communicate or cause another to communicate as to the merits of the cause with a judge or an official before whom the proceeding is pending except
(1) in the course of the official proceeding in the cause;
(2) in writing if the lawyer promptly delivers a copy of the writing to the opposing counsel or to the adverse party if not represented by a lawyer;
(3) orally upon notice to opposing counsel or to the adverse party if not represented by a lawyer; or 
(4) as otherwise authorized by law.
Thus, though Rule 4-3.5 does not use the term "ex parte," the rule prohibits such communication with a judge regarding a proceeding unless it is in a proceeding (at which all parties are present or were at least notified to be present) or if the opposing party(ies) or counsel are made aware [(3) "upon notice," or (2) "delivers a copy."]

The prohibition on ex parte communication is a burden on the attorneys in any "adversary proceeding." But, the judge is similarly prohibited. The activities of judges are further governed by the Code of Judicial Conduct. This judicially created set of parameters guides the adjudicator in many jurisdictions, though each jurisdiction's may be distinct from others in any number of ways. 

The Florida Code, Canon 3, provides
(7) A judge shall accord to every person who has a legal interest in a proceeding, or that person's lawyer, the right to be heard according to law. A judge shall not initiate, permit, or consider ex parte communications, or consider other communications made to the judge outside the presence of the parties concerning a pending or impending proceeding except that:

(a) Where circumstances require, ex parte communications for scheduling, administrative purposes, or emergencies that do not deal with substantive matters or issues on the merits are authorized, provided:

(i) the judge reasonably believes that no party will gain a procedural or tactical advantage as a result of the ex parte communication, and

(ii) the judge makes provision promptly to notify all other parties of the substance of the ex parte communication and allows an opportunity to respond. (Emphasis added). 
This judicial prohibition is broad, "A judge shall not initiate, permit, or consider ex parte communications." An ex parte communication received by a judge can be considered, however, under (a)(ii) if the "judge makes provision promptly to notify all other parties." Thus, a cure for improper ex parte communication (intended or inadvertent) is generally to notify the other parties of that communication. 

This communication is a cure for the prejudice that is potentially affected by the communication in the first instance. The prohibition is rooted in the adversarial nature of the American justice system. The prohibition is rooted in the Constitutional guarantees of "due process," which in a procedural sense means essentially "notice" (that proceedings not occur without a party knowing) and "opportunity to be heard" (that before ones rights or property are impaired the judge will listen to that person's viewpoints, arguments, and positions).

When an attorney or an unrepresented party to any "adversary proceeding" communicates with "a judge," that communication should be promptly copied or communicated to the other parties in a case. This is required of attorneys in Rule 4-3.5. Certainly, there may be some argument when communicating with "a" judge as opposed to "the" judge. The Rule specifically states "before whom the proceeding is pending." That is discussed further below. 

While non-lawyers are not governed by the Rules Regulating The Florida Bar, the same advice is sound for them also. While such unrepresented party might not violate any ethical rule with ex parte communication, it is nonetheless inappropriate considering the underlying due process concerns. When a party communicates with a judge, a copy of that should also be provided to all other parties or counsel. 

When a judge receives such an ex parte communication, from party or counsel, the best course of action would be re-communicating that to all parties or counsel involved in that "adversary proceeding." That re-communication is the best available tool to alleviate or ameliorate any prejudice that might flow from the ex- parte communication. At a minimum, that re-communication will put everyone involved on notice of the existence and substance of the communication. 

This Office cannot take sides in a dispute, or provide counsel or advice. However, there are often instances in which this Office can be of assistance to parties and attorneys. That is, in a general sense. This Office can explain how to e-file, can direct attention to resources on the OJCC website or otherwise. A great resource for such questions is the OJCC clerk's office, which can be reached by emailing AskOJCC@doah.state.fl.us.  

Certainly, no one at the Office of Judges of Compensation Claims can provide legal advice regarding either interpretation or application of the law or rules. Not only is it inappropriate for a judge or staff to provide legal advice or "advisory opinions," it is inappropriate for parties, lawyers, or their staff to even ask for such opinions. Unfortunately, such requests nonetheless are made often.

Lawyers or staff will call staff in a district office and request advice. Often this follows receipt of an order or notice, and the question is "what do I do now?" The answer to the question is usually simple "follow the notice or order." The caller's inquiry, however, is driven by some conflict, an inability or unwillingness to comply with the notice or order. These calls often include entreaties, explanations of conflicts, and all-too-often frustration. 

Thought the simple answer "follow the notice or order," is obvious, there is another answer that is perhaps less frustrating. When the "adversary proceeding" is in Florida workers' compensation, the other answer is likely a motion. This is set out in Rule 60Q6.115(1) which states
Any request for an order or for other relief shall be by motion and shall have a title describing the relief requested. The judge may treat any request for relief from an unrepresented party as a motion. (Emphasis added).
This is very broad. It applies to any request for "relief." That is, some outcome that is different from what is stated in that notice or order that has been received. That is, some outcome that is different from any other current situation in the "adversary proceeding." That is, when unhappy or dissatisfied with the way things are, or the direction in which things are headed, seek relief. That is, file a motion, and describe "the relief requested" (tell the judge what direction you prefer instead, and explain why). 

There are times (as mentioned above) when parties and attorneys decide to contact me directly regarding their issues, concerns, and questions. When those are general questions, when information on process is sought, then it may be appropriate to send me an email. I do my best to reply to such emails with information about our e-filing process, how the technology can be of assistance, and I always welcome suggestions on improving our agency and tools. 

But, sometimes those communications are case-specific, and inappropriately seek (seemingly at least) advice that is "what do I do now?" as in "in this case," and "at this moment," and that strays dangerously into legal advice. I can no more answer that question than any of the OJCC staff can. Similarly, when the inquiry becomes specific, about a particular case or filing, it may seem (at least) to be ex parte. Although I may not be "the" judge in a particular case, I am ever cautious that I am nevertheless "a" judge. As such, when I receive an inquiry that is case-specific, I may conclude that it is too specific to be addressed ex parte

In those instances, consistent with the Florida Code of Judicial Conduct, I often reply providing a copy to the sender and the other parties or attorneys involved. I have had questions regarding this. I have had attorneys explain to me my misunderstandings and misinterpretations, contending their communications to be appropriate and not ex parte. Some have even contended my re-communication breaches their confidence. 

But, they must remember that they are obliged to follow the Rules Regulating The Florida Bar, subject to their interpretation, while I must follow the Code of Judicial Conduct subject to mine. In that regard, I may conclude that re-communication to all involved in and "adversary proceeding" is either appropriate or necessary. In doing so, I am not breaching any confidence or trust. When attorneys communicate with me, they must understand that my obligations and interpretations in such regard may simply be different from theirs.

In this analysis of whether to communicate with the judge and whether to copy the opposing parties, one might ask (1) "is this something necessary and appropriate to communicate to a judge?" And, (2) "is there some reason not to provide copies of this communication to the other parties or counsel?" It seems that perhaps when the answer to question one is "yes," the answer to question two is most likely "no." If the answer to question two is "yes," one might be encouraged to reanalyze that conclusion as thoroughly as possible. What interest would secrecy serve?

If the repeated analysis of question two persistently leads to the outcome "yes," this might suggest that one might want to carefully reconsider question one. If it is appropriate and necessary to communicate to a judge, what purpose would be served by not communicating it also to the other parties in the "adversary proceeding?" If it is appropriate to communicate it to a judge, what justification is there for not sharing it with all parties involved?


Thursday, January 11, 2018

A Lawyer Discipline Story

A purpose of this blog is to memorialize things that people may know, but perhaps do not contemplate daily. I was shocked to catch a news story recently, involving an attorney who I remember from my time on the bench in Pensacola. This story is troubling, and stands potentially as a reminder to us all. Diligence and responsiveness is a critical element in the world of litigation. And honesty should just go without saying.

This attorney had enviable education opportunities at familiar and reputable educational institutions. There were opportunities to practice with some exceptional attorneys and law firms. There were obvious skills and abilities that showed promise for an outstanding future, when this lawyer was admitted to The Florida Bar in 2003. 

Following three complaints, and an investigation, the Bar and this attorney entered into a consent judgment (a plea to avoid a trial). The facts included three clients. The first wanted to sue a home builder. A lawsuit was filed and served, but was later dismissed by the judge for failure to prosecute. The lawyer elected not to tell the client that the suit was dismissed. The lawyer thereafter told the client that his issues were proceeding and being "worked on daily." In response to later status inquiries, the attorney said that "computer issues" were impeding communication and updates. 

Knowing that the case had been dismissed, the attorney nonetheless told the client that work was being performed to serve the defendants. The client first learned of the dismissal through the Bar grievance process. The conclusion was the attorney "failed to competently and diligently represent" the client," and "failed to adequately communicate with" the client. 

In 2010, another client had hired this attorney in a child support matter. This client also had trouble communicating with the attorney. The attorney was tardy in communicating regarding discovery responses. A court date was scheduled, which the client asked have moved because he was deploying to Afghanistan. The attorney advised the client of the "next court date," but "failed to mention that the 'court date' was the final hearing in the case. Due to the deployment, the attorney's staff advised the client that the case "may continue until your return." When no continuance could be agreed upon however, the attorney did not update the client and advise the hearing would proceed. 

The attorney then, "without the knowledge or consent of " the client accepted a "Stipulated Order" by which the client agreed to pay child support and attorney's fees to the former spouse. The client accused the attorney of misleading him, and of denying there had been any resolution. The client presented emails from the attorney that stated there had been no settlement, and that the case was "pushed back until I return." The grievance referee concluded that the attorney "misrepresented the status of the case," acted without the "client's knowledge or consent, created a financial hardship for" the client, and generally failed to communicate appropriately with the client. 

The attorney later testified that he had communicated with the client before entering the agreement "including the increase in child support and payment of his former wife's attorney's fees." The attorney testified that thus there was "permission and approval to execute the Stipulated Order." The client "emphatically denied these statements." The referee concluded that the attorney "made false statements to The Florida Bar at the grievance committee hearing." And, that the attorney "engaged in misrepresentation, fraud and deceit." 

In a third case, the attorney was hired regarding a business dispute. That client's goals did not proceed as hoped, and the client was later sued by a landlord intertwined in the dispute. Eventually, "a settlement was reached in the suit with the landlord," but at significant cost to the client. The litigation of the original issues was then to proceed, but repeated attorney promises of filing a complaint failed to materialize. The referee noted various unfulfilled promises to file a lawsuit, over a period of months. 

In 2015, The Florida Supreme Court accepted and adopted the "the uncontested report of the referee." The attorney was "suspended from the practice of law for ninety days" and ordered to pay the costs incurred by the Bar in prosecuting the case ($4,467.65). After the suspension, the attorney was "placed on probation for two years," and ordered to attend an ethics education program. 

Reflect on that. The ability to practice law is interrupted (as is the income from working), a significant cash penalty is imposed, and further education is ordered. This was not an insignificant penalty.  Some might argue that when a lawyer tells lies a disbarment is called for. However, this outcome was a significant penalty, but it afforded the attorney something that many people never get, a second chance. It is likely that everyone wishes for a second chance at some point. 

In 2016, more issues arose. The attorney then sought a "Disciplinary Revocation," which is effectively being disbarred.  Noting the prior complaints, suspension and probation regarding "issues of client neglect and misrepresentation to clients about the status of their cases," the attorney acknowledged additional, more recent, allegations. These included failure "to notify judges, clients, and opposing counsel of his suspension; and acceptance of at least one new client during his suspension," and "failure to cease the practice of law during" suspension. In effect, the second chance offered an opportunity and the attorney failed either to appreciate it or comprehend it. 

In this "revocation," the attorney agreed to "pay restitution" of almost $5,000, and to reimburse The Florida Bar for the costs of the disciplinary case. In July 2016, The Florida Supreme Court entered an order granting that voluntary disbarment and ordering the attorney to pay $3,821.85 in costs to The Florida Bar. And that, one might think, would be the end of the story. But, none of that disciplinary investigation or action received much publicity. 

What did generate some publicity was the news story in November 2017, about 18 months after the effective disbarment. The November story notes that in August, 2017 the attorney plead "no contest" in a criminal case. That case alleged that the attorney continued to practice law after being voluntarily disbarred, even accepting a $5,000 retainer from a client. Before the attorney was sentenced, another person accused the attorney of charging "several Gulf Power Co. bills to" a disabled client, and removing funds from that client's checking account.

By the November 20, 2017 criminal sentencing, the former attorney had repaid the money regarding these latest actions. He was reportedly sentenced to "30 days in jail and three years of probation." And that, generated some news coverage. 

The legal profession is stressful and challenging in a variety of other ways. There are demands on time and finances. Few people hire a lawyer with the admonition "this is really not that important, just take your time." No, people come to lawyers when they are in need of help, now. And, the vast majority of them will be markedly uninformed or misinformed (television is our bane) as to how the legal system actually works. 

This story illustrates some critical points. The most important is not to take other people's money. Perhaps tied for first is do not lie. Those two are simple, direct, and primary. But, as important is that people need diligent representation. Their goals and needs have to be addressed. That does not mean they must "win"; every case has winners and losers, and it is not possible for everyone to "win." Winning is a point, but the main point is diligence; moving the client's case forward toward conclusion. 

Finally, it is critical to remember clients enter the legal world with questions, concerns, and too little foundational understanding. Lawyers have to communicate with clients, persistently, consistently, and repeatedly. The client needs to know what is happening, what is not happening, and why. The communication has to be honest and forthcoming, it has to be informative but not overly technical. Because memory is what it is, and because schedules are busy, many believe that communication should be in writing. 

The legal profession has been diminished by the actions of this attorney. The actions and inactions described are a matter now of public record. That is the point. I have omitted identification in this post, but these facts are all easily checked. The point of this post is not to embarrass a person. The point is to remind the rest of us that we stand for a noble profession, represent people in need, and have obligations to both the people and profession. 

Tuesday, January 9, 2018

Mediation Cost in Florida is Value

In Florida workers’ compensation most PFBs must be mediated before they may proceed to final hearing. In an effort to provide greater detail regarding mediation efforts of the OJCC, a Settlement and Mediation Statistics Report was first published in August 2010. The OJCC has published that report annually since. They are available at www.fljcc.org under the “Publications” and then “Reports” tabs.

The volume of State mediations held each year steadily decreased since 2002-03. Four exceptions have now been noted: 2008-09 (+3.95%), 2013-14 (+2.13%), 2015-16 (+1.83), and 2016-17 (+2.39). The volume of 2016-17 mediations remains significantly lower than in 2002-03. However, the overall rate of decrease in mediations does not match the rate of decrease in PFB filings over that period. This suggests that as PFB volume fell, OJCC mediators were able to act upon a greater percentage of the remaining volume, but the overall volume of mediations held nonetheless has decreased by almost half over the last fifteen years. 

In 2016-17, approximately sixteen thousand (16,079) mediations were held by state mediators, at an average cost of approximately $169.39, a minimal decrease from the 2015-16 figure of $173.45. The cost savings in recent years is due to the legislative action reducing the number of state mediators. The cost will adjust upwards unless the volume of mediations increases or the mediator positions again decrease. 

Many private mediators charge hourly rates well in excess of these figures, commonly two hundred fifty dollars ($250.00) per hour or more. Anecdotal evidence also supports that some private mediators charge minimum time commitment (such as a two-hour minimum) for all mediations convened. Therefore services comparable to those delivered by the OJCC mediators, from private mediators, would likely cost an average of approximately five hundred dollars ($500.00) or more. 

Thus, the cost-efficiency of State mediation is obvious, averaging about sixty-eight percent (67.7%) of the cost of one hour of private mediation. Notably, this cost is included in the overall OJCC budget. The overall cost per claim for the OJCC, including the mediation process, is far below the Circuit Court filing fees for other civil matters. Furthermore, if the volume of mediation increases, the cost of each mediation decreases, because the aggregate cost of the state mediation program remains constant regardless of volume, within reason. 

There are multiple issues that influence state mediation efficiency. The OJCC is compelled to mediate cases within 130 days of petition filing. However, there is also a statutory prohibition on noticing mediations until 40 days after the petition is filed. In giving notice of mediation, the OJCC must be conscious of the constraints of due process, that is, reasonable notice for mediation. 

It has become practice to strive to provide parties with 30 days’ notice of mediation. While some shorter notice period could fulfill constitutional requirements, attorneys, adjusters, and workers have schedules, and providing less notice could be calamitous on the ability to plan, and to effectively engage in productive mediation. Therefore, there is a 70 day period (40 days in statute, plus 30 days’ notice) excised from the 130 day mediation requirement. Effectively, the mediation process must occur within a 60 day  period or “window." 

History supports that a great many mediation appointments are cancelled by the parties. This may be because the claimed issues are resolved in some compromise, the benefits are outright provided as claimed, or that the claims are dismissed. Resolution is likely positive. But, when such resolution occurs within 30 days of the scheduled mediation, it may prove difficult for a state mediator to schedule some other case for that resulting vacancy. The shorter the notice of such cancellation, the more difficult it is to use that time effectively. Thus, the statistics reflect capacity to conduct more mediations, and history supports many more have been conducted in prior years. However, the late cancellation is affecting efficiency. 

As a direct consequence of efforts to comply with the 130 day statutory parameter, all of the State mediators have averaged below 130 days between PFB filing and first mediation in each of the last nine fiscal years (2008-09 through 2016-17). This represents 100% average statutory compliance by the OJCC state mediators in nine consecutive years. 

The statutory requirement to send cases to private mediation may have assisted with facilitating more timely mediations in recent years. However, the action of sending a case to private mediation imposes a significant cost to the particular E/C ordered to private mediation. 

It is important that the current filing volume situation is nearing system capacity. The OJCC needs to increase that capacity, or there will be an increase in the volume of cases being referred to private mediation at the expense of the employer/carrier. Those referrals will be precipitated despite the actual capacity to conduct more mediations, and the frustration of efficiency caused by late cancellation. 

Sunday, January 7, 2018

California on My Mind







It is intriguing to experience the processes and procedures used by various states' workers' compensation systems. I recently had the opportunity to discuss the California system, and conclude that there are many distinctions between Florida and California. One that is striking is the degree of maternalism described in the California, with conferences and discussions through which judges provide advice and guidance for attorneys, shepherding cases to determination. The plethora of those "conferences" are likely culture or tradition. 

But, a statutory distinction of note is the venue of workers' compensation disputes. In Florida, the venue generally lies in the county in which the accident or injury occurs. This is in Section 440.25(4)(d) "in the county where the injury occurred." Despite the simplicity of this language, there is room in Florida for confusion. Periodically, petitions are filed stating a particular county, but which are not accurate. Mistakes are made on petitions. And, there are times when the parties to the case later agree to have venue transferred. But, the county of accident is our Florida default. 

Something more than 20 years ago, California transitioned to a more permissive venue procedure. A California attorney recently described it to me as "open venue" suggesting that venue may essentially be wherever one wants it to be. I tool a look at California Title 8, §10409 to explore this venue process. The California code indeed provides discretion in selecting venue. The code says the person filing a "case opening document shall designate venue." However, the venue is not precisely "open" as in unfettered. The selection is to be "based upon":
(1) the place of the employee or dependent's residence at the time of filing . . . ; (2) the place where the injury allegedly occurred . . .;or (3) the place where the employee's attorney maintains his or her principal place of business . . ..
This is not exactly "open." The attorney confided that "principle place" affords more discretion than I might think though. But, if one had unfettered choice, possibly every California claim would be filed in the Yosemite National Park District (as if anyone would need an excuse to visit that natural wonder?). 

So the injured worker could find herself or himself litigating entitlement to workers' compensation benefits at some distance from home. That can happen under the more constrained Florida definition also. Keep in mind a great many people travel in their work (truck drivers leap to mind as an example, but many people travel and could be injured far from home). One might live in Key West and yet suffer an injury while on a trip in Pensacola (an 830+ mile, 12 hour drive). 

Coincidentally, the latest installment of the Hot Seat last Friday (click link to view the program) focused on ethical challenges in workers' compensation. And one of the topics that arose was the potential for conflict between the best interest of an attorney and the best interest of the injured worker or employer. These two are important; the employee and the employer are the purpose of workers' compensation. It is for and because of them that workers' compensation exists. Workers' compensation does not exist "for" the rest of us. Contrarily, judges, lawyers, doctors, rehabilitation experts, adjusters, case managers and more exist only because workers compensation exists. 

I stress this for our agency staff and judges periodically. I am persistently surprised that some of us sometimes forget our mission. The Florida Office of Judges of Compensation Claims (FLOJCC) exists because there are injured workers, employers, insurance companies, lawyers and more. And, to put finer point on it, because there are disagreements among those. Our mantra should always be clear, the public is NEVER an interruption of our day at the FLOJCC; you are the PURPOSE of our day at the FLOJCC. More on that in a coming post. 

Our discussion on the Hot Seat included discussion of attorney interaction with clients. I am saddened to hear of attorneys presenting at our offices for mediation, not knowing their client. We periodically have an attorney question our security officers: "which one is my client?" Certainly, an attorney may represent a great many people, and may not be able to recall them all on sight. But in the world of the ubiquitous digital camera, one might take a "selfie" during the client intake interview and alleviate the challenge of not recognizing the client months or even years later at a scheduled event?

I was told that in California, however, there was a perception that injured workers were never meeting their attorneys. Well that discussion led me to another conversation, and later to explore California Labor Code § 4906, which was recently (2016) amended. Some in California feel that this section is unique in the United States. This law purportedly requires a face-to-face meeting between attorney and client. That surprised me somewhat. California has mandated that injured workers and their attorney must meet. Whether there was a real pattern of "never meeting" or whether that was merely a perception, it appears the California Legislature at least thought the potential was real. 

Under section 4906(g) fees for representation of injured workers are limited to "a reasonable amount," subject to judicial approval. And, the attorney must provide the client a "disclosure form" regarding attorney fees. As an aside, the "reasonable" determination is seemingly less complex than that legislated by the Florida Supreme Court in Lee Engineering v. Fellows, 209 So.2d 454 (1968), and later re-legislated in Castellanos v. Next Door. 192 So.3d 431 (2016). In California, the relevant considerations for reasonableness are:
the responsibility assumed by the attorney, the care exercised in representing the applicant, the time involved, and the results obtained.
As mentioned above, the injured worker has to be provided with a disclosure regarding fees and the attorney/client relationship. It has to be:
signed by the employee and the attorney and filed with the appeals board and sent to the employer, or insurer or third-party administrator, if either is known, by the attorney within 15 days of the employee’s and attorney’s execution thereof. 
Thus, everyone involved in the case will be included in the communication, and should be on the same page. Presumably because there is a chance for litigation to occur a great many miles from where an inured worker lives, secondary to the "open" venue statute, the disclosure must state "the exact location of the district office of the appeals board at which the employee’s case will be filed." The employee has to be informed both the location of filing and that "he or she may be required to attend conferences or hearings at this location at his or her own expense.” 

That requirement suggests that perhaps an injured worker or two may at some point have expressed confusion or regret when confronted with a lengthy commute for trial. The drive from Cole, California (north) to San Diego (south) is 782 miles and 11 hours according to Google; not as far as the Key West to Pensacola trip, but a long drive indeed. California is a very long state. While it might be a scenic drive, trips of such duration are expensive. And, such a trip might be uncomfortable for someone with an injury or impairment. 

Were there attorneys that did not clearly express the venue selection, and thus led to complaints that led to this disclosure requirement? Or, were disclosures not heeded by workers who were then more focused on immediate issues like medical care and replacement income following an accident? Does human nature just focus us on immediate concerns over something like a hearing that is months away?

But the disclosure requirement I found most curious is the face-to-face. The employee "may not" sign the required disclosure until she or he: 
has met with or personally spoken with an attorney licensed by the State Bar of California who is regularly employed by the firm by which the employee will be represented, and has been advised of his or her rights . . . . 
That seems to suggest a phone call might suffice ("spoken with"), but I am told that is not the perception of others. Some perceive a face-to-face requirement. There are anecdotal stories of workers never meeting their attorney, we hear some in Florida. In one case years ago, a worker challenging a settlement fee at hearing vociferously argued when the attorney announced his appearance at hearing. The worker loudly interrupted with "that's not my attorney (pointing at counsel), THAT IS! (pointing to the back of the hearing room at counsel's paralegal)." 

The California law is intriguing. Should venue be defined, or "open?" If "open" how open? (maybe all winter hearings would be in the lovely, sunny Keys?) Should attorneys be free to select venue to their convenience? Is injured worker acquiescence to venue 800 miles from home in the best interest of expedient proceedings, an effective and impartial adjudication system, the worker or the employer? Whose interest is served? And, what does it tell us when a legislature must require disclosure of venue and mandate lawyers to personally meet their clients? 

I think, this morning, that if I were representing workers today, I would personally meet every client. That is professional, and appropriate, even if not statutorily mandated. And, I think we would end our consult with a selfie. That would help me remember them at later events, and would dispel any mis-remembering that we met and talked. But, it says something that state law in California mandates meeting. I will be reflecting on that in coming days.

Thursday, January 4, 2018

Single Payer, Outliers, and Conclusions (11)

People are talking about workers' compensation, perhaps more today than ever. This is the tenth in an 11-post series (links to the first nine are at the end of this post), that attempts to overview various perspectives heard from system observers and participants. The point is that discussion is good, and if this series generates debate and interaction, all the better.

Single payer 

In a single-payer system, all persons’ healthcare is covered, regardless of the cause of needing care. In such a system, work-relatedness would be irrelevant. The pathway to single-payer would require some method of generating sufficient revenue to cover costs. Revenue could be generated through mandatory insurance premiums in a voluntary marketplace or through taxation in a more socialized structure. In any revenue model, the single-payer process could have serious implications for workers’ compensation. 

There are perceived advantages and disadvantages of involvement in workers’ compensation systems. Service providers such as physicians and therapists may perceive economic benefit or detriment in participation, and may structure individual practices and participations thereon. Participating providers may be inclined to tailor opinions or conclusions in a manner to maximize economic advantage, resulting in the “cost-shifting” discussed herein. 

In the 1990s, several states authorized employers to alter the manner in which workers’ compensation medical care was delivered, labeling the alternative “24 hour coverage. In some ways, this alternative was similar to the “opt-out” or “carve-out." A main purpose of this alternative was to eliminate coverage and treatment distinctions between work and non-work accidents and injuries. An employer was empowered to provide 24 hour medical care and disability coverage in lieu of the more limited work-coverage. The plans enjoyed little acceptance among employers. Perceived detriments to acceptance included distinctions in medical coverage detail, and inconsistency of provision of health coverage. 

Medical coverage distinctions include the ability of employers to provide care in capitated or otherwise controlled delivery systems such as health maintenance organizations (HMO), preferred provider organizations (PPO), and inconsistency of regulatory definition and operation between health insurance and workers’ compensation constructs. These distinctions were perceived as challenging for an employer within any jurisdiction, but were perceived as more problematic for large employers with employee populations in multiple jurisdictions. Without adoption of the “24 hour option” many such employers operated health insurance programs across various states with a single program.

With the twenty-first century advent of “mandatory” health insurance for all Americans, there have been questions regarding whether 24-hour coverage viability is enhanced. That discussion is of course cautioned by the potential for repeal of mandatory insurance. However, the concept of distinction-less provision of medical care remains contemporary. In 2014 Vermont unsuccessfully attempted to implement a mandatory single-payer system; Colorado unsuccessfully attempted to mandate such a system in a 2016 referendum. Despite these failures, some economists believe that “single payer” is an inevitability for American health care. 

The distinctions regarding work causation would be at least sidelined and perhaps eliminated in a single-payer system. Regulatory structures concerning delivery of care, reporting, billing, and more could be implicated in such a transition. Financial concerns could also be important. In the event single-payer were funded through individual taxation, as proposed in Colorado, individual workers would become responsible (through payroll deduction taxation) for funding care for work injuries, contrary to current structures, at least in form. Such a program would seemingly cost-shift medical expense from industry to labor. Some argue that the costs of workers’ compensation are already borne by labor, at least in part, as those costs similarly with other expenses limit the funds available or deployable as wages; this belief holds that without the expense of workers’ compensation, wages would increase. 

Outliers

There is concern regarding disparity in cost and effort in the administration, processing and adjudication of workers’ compensation claims in various systems. Summit attendees perceive that a small percentage of claims consume a disproportionate share of resources, both financial and otherwise. The attention paid to these “outlier” cases is seen as a distraction for system managers, regulators and service providers. 

Summit attendees see this disparity as affecting the experience of others, whose claims perhaps do not receive the attention they would otherwise. However, some contend that if the resource demand of these “outliers” diminished, resources would not necessarily be reassigned, but instead the total volume of personnel and resource would be proportionately decreased. This, they argue, would result in either lower insurance rates or higher carrier profits, but would be unlikely to enhance the experience of any injured workers. 

Conclusion



Without committed resources, a diverse, dynamic and exceptional volunteer group identified and prioritized these 29 critical points that challenge American workers’ compensation. Recognizing that time and change are inexorable, there is general consensus that challenges will consistently present in various forms. It is believed that these points bear consideration by systems, legislators, regulators, and vendors. However, it would be better still if these points, and the systems themselves, received the consideration of the critical system participants, all employers and employees. It is for these constituencies that the systems exist, and it is for them that Summit attendees contend these systems must both persevere and improve through continuous critical self-examination and analysis. 

Other posts in this series:

Conversations
(2) Benefit adequacy, Regulatory complexity, Delays in treatment even if compensable

(3) System failures, Incentive is different in WC and group health, Systems are persistently adversarial

(4) Staffing and training of the workers’ compensation professions, Permanent partial compensation, Opt out movement

(5) Injured workers beliefs - not informed or uninformed assumption, Treatment protocols, a benefit or a burden, Perceptions and education

(6) Vocational rehabilitation, Ability versus disability, Methodology of claims handling

(7) Medical ignorance, The critical point in a claim, People who are acting inappropriately

(8) Misclassification, Unrealistic expectation of full recovery and youth, Federalization

(9) A new national commission?, Employee participation in the conversation, Occupational disease

(10) Lawyers in the system, Competition between states, Roles and delineation

(11) Single payer, Outliers, Conclusions