The Wimpy Syndrome: A 60-Second Seminar in Workers’ Compensation Claims Handling

Have you ever heard of the “Wimpy Syndrome”? It occurs every few years when our state legislature considers workers’ compensation reform. The Wimpy Syndrome is named after a fictional cartoon character prominently featured in the original Popeye the Sailor comic strips of the 1930’s.

J. Wellington “Wimpy” is a gourmet of the finest hamburgers money can buy, but alas, poor Wimpy is often flat-broke without a dime to his name. Undeterred by his financial problems Wimpy sets out to approach managers of fine dining establishments where he proffers his famous catch phrase, “I will gladly pay you Tuesday for a hamburger today.”

Whenever we have major reform in workers’ compensation, proponents on behalf of injured workers demand that new laws provide immediate and swift relief.  In exchange, they offer offsetting relief to employers to go into effect at some future date.  In other words, “they will gladly pay the employer Tuesday for a hamburger today.” Unfortunately, history has taught us a valuable lesson. Despite injured workers receiving immediate benefits, employers don’t always receive the promised offset, or if they do, a longing waiting period usually intervenes, at which time such relief is often challenged in court by applicants’ bar.

The last major reform to the workers’ compensation system occurred in 2012 under SB 863. The revisions in this legislation provided immediate relief to injured workers by providing a voucher valued at $6,000, of which $500 cash could be claimed without the necessity of submitting any receipts or explanation. In addition, the state created a “Return-to-Work Fund” where anyone with a voucher became eligible for a one-time cash payment of $5,000.  In exchange, our Independent Medical Review (IMR) system was created, scheduled to take effect six-months later on 7/1/13 for all dates of injury.  Its intent was to reduce employer litigation costs over Utilization Review disputes. As a further concession, IMR was made available only to injured workers as it prohibited employers from appealing their own UR decisions. Although the applicants’ bar gladly accepted voucher and UR reforms, they raised a constitutional challenge to IMR, but only in those cases where IMR failed to override UR. It was the Wimpy Syndrome all over again.

Prior to SB 863 the last major reform was SB 899, signed into law by Governor Schwarzenegger on an emergency basis in 2004.  That bill granted injured workers immediate relief, such as being eligible for up to $10,000 in medical care while a claim remained under investigation.  In addition, a compensability investigation was required to be completed within 90 days or the injury would be deemed work-related.  Also, if an employer failed to offer a job to a worker whose injury resulted in permanent disability, the amount of disability money would be increased by 15%.  Lastly, a new “whole person” rating system was introduced to significantly raise PD values. These laws all took effect immediately upon the governor’s signature.  In exchange, employers were allowed to create MPN networks but not until six-months later.  Also, apportionment laws were re-written to take into consideration pathology and past PD awards.  As anticipated, applicants’ bar accepted the immediate increase of benefits but challenged the constitutionality of MPN networks and apportionment laws despite previous concessions. Once more, the Wimpy Syndrome was blatantly obvious.

It is anticipated that we will soon see the applicants’ bar introduce legislation seeking to immediately increase the maximum PD rate, which is currently only $290 per week.  In exchange applicant attorneys will undoubtedly offer some sort of concession to employers to take effect on some future unknown date, where it will later undoubtedly be challenged in the courts. The defense community must be vigilant as not to be tricked again. Watch out for the Wimpy Syndrome.  Any reform package must take effect immediately for both sides.

In our next blog we will discuss a recommended compromise to anticipated legislation amending the $290 per week PPD rate.