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March 31, 2004 8:40 PM
Insurance Companies' Cost Injured Workers Their Homes, Cars and Their Dignity

 Injured workers told a State Capitol news conference today that workers’ compensation insurers unreasonably delayed undisputed medical and disability payments that cost the workers their cars, homes, personal assets, and their dignity. The injured workers and their advocates called upon the Legislature and the governor to reject the insurance companies demand that penalties for unreasonable delays be reduced as part of a legislative compromise. “The insurance companies use delay and denial to drive injured workers into poverty and despair so they give up,” said Art Azevedo, president of the California Applicants Attorneys Association, whose members represent injured workers. “It costs injured workers their cars and homes, their dignity, and often their sanity. But it lets insurers keep making money on what should have been paid out in benefits. The governor’s proposal fails to address denial and delay, and would make things worse.”

Hanford City Councilmember Dolores Gallegos told reporters that the insurance company’s denial of her injury has cost her plenty. “I lost my car, my home, and almost two years of my life,” said Gallegos, a high school computer teacher for 11 years. “The insurance company tried to make it look as if I was not injured, even though the employer’s own doctor had confirmed the diagnosis of my family physician of a work-related carpal tunnel syndrome. They denied and delayed and ran me around, hoping, that I would drop my case. I’m sure that with many injured workers these tactics are successful.”

Refusal to recognize and pay injured workers’ claims promptly contributes to the length of workers’ compensation cases. The results of audits conducted by the Division of Workers’ Compensation show that delays are endemic in the administration of claims by both insurers and self-insured employers.

Over the past decade, audits have consistently shown that one in five audited files has benefits owed but unpaid; one in thee makes the first temporary disability payment late and one out of four show that the first permanent disability payment was late.

Recent changes to the audit process have seriously eroded the ability of unreasonably late payment penalties to correct these problems. In virtually all of the recent audits, no penalties are assessed for violations uncovered in the audit. The audit process should be amended to include reasonable penalties to provide the needed incentive to correct the consistently poor performance of claim adjusters. 

With no “bad faith” right to sue in workers’ compensation, the only way to protect workers is to preserve and strengthen penalties as a disincentive against unreasonable delay. 

The state commission on Health, Safety & Workers’ Compensation conducted a review of cases where delays were alleged. They found that, in cases where penalties were awarded, the average delays were: 

483 days (16 months) for the payment of temporary disability – the “paycheck” on which the worker depends; 
610 days (20 months) for a delay in providing medical treatment 
Another injured worker, Jill Gambaro, told the news conference that she contracted severe carpal tunnel syndrome after 20 years as a legal secretary. “I was injured four years ago. Since that time, I have had to battle non-stop with the insurance company for benefits I am entitled to by law. I have seen 6 doctors, all of whom have confirmed my work-related injury. I have been to the brink of homelessness and panic has become a common state of mind. Injured workers have no recourse to stop this outrageous insurance company behavior. The governor and the legislature must increase, not decrease, penalties on insurers.”

Harvey Wells, from Templeton, has suffered financial loss due to his employer’s denial that it used toxic chemicals that could have caused Harvey’s injuries. “My claims for illness and disability caused by chemical exposure have been denied by the employer and insurance company. Yet the Department of Health Services and Cal-OSHA were both present when the very chemicals that supposedly didn’t exist, were found in the workplace in a locked storeroom. I had all my benefits denied, which has caused me to suffer financial loss. I have been found to be 100% disabled, but as yet have received no benefits. I’ve had to refinance my house, borrow money on credit cards and pay for my own medical insurance.”

The injured workers charged that the changes proposed by the governor in his legislation would make things worse, not better. 

Source: http://www.caaa.org 

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