The California Applicants’ Attorneys Association is urging the Ventura County District Attorney’s Office to file criminal charges against third-party administrator Sedgwick Claims Management Services and one of its adjusters for allegedly causing the death of an injured worker.
In May, the Workers’ Compensation Appeals Board referred Sedgwick CMS to the Division of Workers’ Compensation’s Audit Unit for unreasonably delaying or denying treatment for a patient who was dying from an infection he contracted after undergoing surgery for a compensable work injury. In the decision, Romano v. Kroger Co., the WCAB said that Sedgwick demonstrated “blithe disregard for its legal and ethical obligations” and a “callous indifference to the catastrophic consequences of its delays, inaction and outright neglect.”
An investigation by the Audit Unit could lead to civil penalties of up to $100,000 upon finding after a hearing that Sedgwick as a general business practice refused to comply with known and legally indisputable compensation obligations.
The Appeals Board also upheld penalties imposed against Sedgwick by a workers’ compensation judge of up to $110,000 for 11 instances of unreasonably delaying medical care.
But Jill Singer, president of the Central Coast chapter of CAAA, said monetary penalties are insufficient because in most cases, the fines are relatively small and viewed by insurance companies as a cost of doing business.
“They do what they want and there are few consequences,” she said. “It enrages me.”
Singer said what happened to Charles Romano was particularly egregious.
Romano injured his shoulder on Dec. 20, 2003, while stocking shelves at a Ralph’s grocery store in Camarillo. After undergoing surgery in August 2005, he contracted methicillin-resistant staphylococcus aureus (MRSA) that caused lung and kidney failure and left him paralyzed below the shoulders.
When Romano sought treatment for the infection at the Ventura County Medical Center, Medi-Cal—California's version of Medicaid, the federal health insurance program for the poor—picked up the tab because Sedgwick refused to authorize treatment. After being discharged, he was forced to self-procure additional treatment at Country Villa Oxnard Manor, and later St. John’s Regional Medical Center.
A workers’ compensation judge on Oct. 25, 2006, ruled that the MRSA infection was a compensable consequence of his work injury and ordered Sedgwick to pay all reasonable expenses.
The WCAB said Sedgwick ignored the judge’s order and continued to delay and deny treatment. The third-party administrator even refused to authorize treatment at Community Memorial Hospital, where Romano died on May 2, 2008, from cardiorespiratory arrest, respiratory failure and pneumonia that were all caused by the MRSA infection.
Singer said she hopes bringing the case to the attention of the district attorney will send the message that CAAA will pursue any and all possible courses of action against insurance companies or third-party administrators for behavior that borders on “reckless disregard.”
“This is just ridiculous,” she said. “For every one story we know, there are thousands out there that may not quite rise to this level, but are close.”
Singer, who is an associated with Gordon Edelstein Krepack Grant Felton Goldstein LLP, said she has had clients whose injuries were made worse because of unnecessary delays and denials, including one injured worker who ended up with end-stage liver damage.
In addition to Sedgwick, Singer also said the claims adjuster who handled Romano’s case, Theresa McDivitt, should also be held accountable for her actions.
“The adjuster had callous indifference and reckless disregard for approving necessary medical treatment and went so far as to deny a court order,” she said.
The WCAB decision says McDivitt on several occasions denied or refused to authorize treatment “without consulting with a medical professional and without referring the request for treatment to utilization review.”
In one case, the Appeals Board said McDivitt refused to authorize a bi-level positive air pressure machine because Romano’s paralysis was affecting the muscles that control his breathing based on her own interpretation of the medical records. In another case, Sedgwick didn’t approve Romano’s hospitalization in April 2008 for potential heart failure because the adjuster said she had no clue as to why he was being hospitalized.
“Ms. McDivitt studiously avoided information that might lead to the provision of benefits, a tactic that may have saved her employer some money in the short run – at great cost to Mr. Romano – but which clearly violated the demands of (Labor Code) Section 4600,” the board said.
Singer said she is not aware of any other case in which a district attorney has been asked to investigate a carrier or a claims adjuster for criminal charges stemming from denying care.
She said she doesn’t know what charges Sedgwick or its adjuster could face, but involuntary manslaughter would appear to be the type of criminal action that could be possible.
“We just want him to look into it because it merits looking into,” she said. “Whatever case of criminal action he determines, if he decided to prosecute, is entirely up to him.”
Singer said she planned to present the district attorney with a copy of the Workers’ Compensation Appeals Board decision following a press conference scheduled for Wednesday, June 19, at the DA’s office today.
Miles Weiss, a deputy district attorney in Ventura County, said referrals for prosecution typically come from law enforcement agencies. When private citizens or other groups raise complaints, they are evaluated on a case-by-case basis to determine whether there is a “colorable reason to open an investigation.”
While Weiss wouldn’t comment on the specific facts pertaining to Romano, he said it is possible that the statute of limitations has already expired for filing criminal charges. He said the statute of limitations for most felonies is three years, with the exceptions being a four-year statute of limitation for fraud and no limitations for murder charges.
“However, really the first analysis is of the crime at issue,” he said. “Then the analysis is of whether the crimes are viable for prosecution.”
Sedgwick did not respond to calls or emails on Wednesday.
The WCAB decision in Romano v. Kroger is here.
ABOUT THE AUTHOR
Greg Jones is the Western Bureau Chief with WorkCompCentral, a news, education and information services provider whose team of professional journalists cover political, regulatory, legal, medical and business issues impacting workers' compensation throughout the nation. Visit us at www.workcompcentral.com.
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