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Articles emphasizing practical knowledge you can't find in practice guides

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Profiles of people who changed workers’ compensation law.

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• Warren Schneider
• Marjory Harris





John Parente, Esq. is Past President and
Board Member of the California Workers' Compensation Defense Attorneys'
Association. In practice since 1976, he is a
partner with Parente & Christopher in San
Francisco, and a certified specialist in workers’ compensation law. In this interview, he shares his views on the recent changes to California’s workers’ compensation law.

HARRIS: We’re going through a transition now where the old cases are being finished up and the new ones have begun. What do you see on the legal
landscape five years from now? Will there still be a professional workers’ compensation bar?

PARENTE: Yes. The present system with lower permanent disability, apportionment and medical control is very similar to the system that existed when I started in comp
in 1974 as a claims examiner while finishing law school. While there were minor
changes in the law over the years, the changes came from judicial interpretation.
Of course the big fees of the past few years will be reduced but the profession will

HARRIS: Do you see diminished future earnings capacity (DFEC) being litigated
in many cases?

PARENTE: I hope not. I think it would be a great mistake for the applicants’ bar to indiscriminately litigate this issue. It should be reserved for those cases that
deserve extra compensation. We all know that the AMA Guides are lacking when it
comes to severe spinal injuries and it appears appropriate to utilize DFEC in those
situations. However, indiscriminate use could lead to a backlash that would
eliminate the use of DFEC.

HARRIS: Who will enforce the laws if the applicants’ attorneys go? Do you think
the insurers will? Or the Administrative Director?

PARENTE: Assuming arguendo that applicants’ attorneys leave the system, my best guess is that the State would feel compelled to take the role of Big Brother and
make sure the injured worker is protected. In fact, I think that they would welcome
that situation.

HARRIS: Will self-insurance expand? Should restrictions be lowered so many more employers can be self-insured?

PARENTE: Traditionally, self-insurance is tied to the cost of workers’ compensation
insurance. With the rates currently going down, I think it will slow the tide toward
self-insurance. The one exception is the very high risk professions such as movers
and roofers. If the proposed law is passed that would allow groups of employers
in the same industry to ban together to self-insure, it would definitely attract those

HARRIS: Looking back over the many years you have practiced workers’ compensation law, what changes are most striking? What would you like to see changed?

PARENTE: The most striking to me was the extent of changes that occurred as a
result of judicial interpretation rather than statutory changes. During the years that I
have practiced, apportionment was almost totally eliminated. Rating of disabilities
changed from objective standards to subjective complaints. We were told that
guidelines for work capacity couldn’t be applied to upper extremity injuries, but
they were and medical treatment was allowed to go unchecked.

HARRIS: The old system we both started under was much simpler. Did we throw the baby out with the bath water when the 1989 micromanagement came in?

PARENTE: I believe that there was a certain attitude in the ’89 reform that the
lawyers were the reason for the problems in workers’ compensation. To be perfectly
honest, some lawyers were problems. But rather than dealing with the problems,
the legislature and groups that influence the legislature enacted a law that was
unworkable. It was simply a matter that the people who had the power to enact the
law didn’t have a clue as to how the system worked or what was necessary to
correct the problems that existed. It could have been done very simply with
reasonable attorneys from both sides with reasonable judges and employer and
carrier groups.

HARRIS: Are we repeating the mistakes of 15 years ago, putting in place a new system without any study of what may happen downstream? I am speaking of litigation, but the question could cover other areas, too.

PARENTE: I don’t think that we have created a new system. I think that in the long
run the use of the AMA Guides is a good thing. It focuses attention on physical
injuries and gets away from the subjective-only claims that were a tremendous drain on the system. I think that some adjustment will need to be made in the
future to make sure that injured workers are adequately compensated. I also think
that we have had a standard in California that prevents double recovery. The rules
of apportionment had to be changed to make the system fair especially in cases
of prior awards to the same part of the body. Don’t forget, the AMA Guides have been used in Longshore cases for a long time and the recoveries can be substantial.

HARRIS: Do you think the MPNs will seem like money centers, cash cows the
docs will milk? How can you control costs with this new approach?

PARENTE: UR is here to stay. I see no problem with a carrier or employer using
UR against its own MPN. I think the MPNs will probably operate much the same
as most of the PPOs out there. The doctors will make their living off of the volume.

HARRIS: How can you know what to provide by way of vouchers? The PD cannot be determined as quickly as the statute and regs requires – just an estimate.
Will the MPN treaters be doing detailed AMA Guides reports?

PARENTE: I really don’t know what to say about vouchers. I think that it will become
an administrative activity. It you don’t pay enough at first you pay the balance when
you finally find out the true or final disability. As to MPNs and the AMA Guides. We
will have to wait and see. My feeling is that most treating physicians will not want
to spend the time necessary to conduct the comprehensive examination necessary
or take the time to write the report. However, it can turn on the financial. If the doctors are paid a fair fee to perform the evaluation and write the report, they will
do it.

HARRIS: It looks like total chaos right now, not the “we fixed the broken system” view the Governor takes, so far removed from the daily fracas. Do you think the system has been reformed, in the true sense of the word?

PARENTE: I think that we have made a major step toward reforming the system.
It will depend on how the changes play our and the interpretation given by the
courts. So far, there has been a dramatic change in medical treatment from both the ACOEM Guidelines and Utilization Review. In the long run this may bring cases to conclusion sooner. It is too soon to see how the AMA Guides will play out. Obviously, apportionment has had a dramatic impact on Awards. While I am aware that some changes will be required in the future, I hope that they are well thought out with the idea of only correcting apparent problems without ruining the intent of the original legislation.

To contact John Parente, call (415) 364-3660 or email him at john@plclaw.net.
For more information, click here.

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Interview with John Parente:
A Defense Attorney's Take on
the New Law

> Proving PD Under New LC §4660
> Determining DFEC with "SEDEC"
> How to Review Subpoenaed Records
> + Excel Organizers
> Interview with Jettie Pierce Selvig
> Interview with John Parente
> Smoking Gun