Members present: Mr. Bagin, Mr. Beiriger, Mr. Buchen, Ms. Connor, Mr.
Gordon, Mr. Newby, Ms. Norman-Nunnery, Mr. Olson, Mr. Welnak, Mr. Rostan for
Staff present: Mr. John Conway, Mr. O'Malley, Ms. Knutson, Mr. Shorey,
Mr. Frank Conway
Ms. Norman-Nunnery indicated that she requested the audit due to
concern with the backlog of cases waiting for a hearing. The Council had
approved the hiring of new ALJ staff. The audit looked at the entire
hearing process to see if there were ways to make it more efficient.
Ms. Page indicated that cases were tracked from the time of receipt of
the application through hearing to the first closure on the computer
system (ICMS). All cases closed for the first time on the computer system
between July 1, 2000 and June 30, 2001 were analyzed. At any time, between
6,000 and 6,300 cases are pending. Ms. Page explained the steps involved
in processing an application for hearing. The audit revealed that 72% of
all applications for hearing are waiting scheduling or awaiting a hearing
(this is referred to as the bottleneck). No hearing was held for 74% of
litigated cases. Two-thirds of all litigated cases had at least one
hearing scheduled and hearings were held in only 30% of all cases. If the
hearing is cancelled four or more weeks in advance, the scheduling staff
attempts to substitute another case on that calendar. The case analysis
revealed that 57% of cancellations and postponements occurred on the day
of the hearing. The concern is that there is time and effort put into
scheduling hearings that are never held. Ms. Page indicated that part of
the audit process involved developing recommendations to alleviate the
"bottleneck". Recommendations included: increasing the use of
alternate dispute resolution (ADR) methods (including involving one
experienced ALJ in this process); develop process controls to identify and
monitor cases that are in one of the processing steps an inordinate amount
of time; and, to allow limited computer access for parties to review case
status information via the Internet. A specific recommendation involved
sending out information to an applicant sometime after the application for
hearing is filed. The information would state that 74% of cases resolve
without a hearing, how long it takes for the average case to be scheduled
for hearing and offering alternate dispute resolution as an option.
Mr. Bagin asked if there was information regarding what happened to the
cases when a cancellation or postponement was requested. Mr. O'Malley
indicated that most of them were settled on the courthouse steps. Mr.
Bagin commented that settlement in cases was a good thing and Mr. O'Malley
agreed. Ms. Page indicated that the audit did not investigate the ultimate
result in cases where a hearing was postponed. In general for
cancellations or postponements from the respondents are not granted. Mr.
indicated that there was a growing trend of postponement by
applicants because they are not ready for hearing. The applicant is still
receiving medical treatment and there is no final medical report. Mr.
indicated that the division is considering ways to address this problem.
Legal counsel in the hearing process represents over 90% of all
Mr. Newby asked Ms. Page why ADR would clear up the bottleneck. Ms.
Page indicated that there was that assumption because cases move faster
through the current ADR process. Older cases are scheduled for hearing
first. She acknowledged that if a large number of cases were diverted to
ADR, it could create a new bottleneck. Mr. Newby asked how a different
system would solve the problem if 60% of cases settle on the day of
hearing or are postponed if they are not ready. Ms. Page indicated that
readiness of cases is a big issue. There are cases going to the scheduling
queue that are not ready for hearing. By an ALJ looking at cases before
they are scheduled, some cases may be able to be resolved before a hearing
Mr. Gordon asked if most cases involved compensability as an issue or
nature and extent of disability. Mr. O'Malley stated that most cases
involve nature and extent of disability and liability as issues. While
there have been no recent studies, an old study showed that 40% of cases
involved liability as an issue along with nature and extent of disability.
In 60% of cases some benefits were paid and the applicant was requesting
more benefits. Mr. Gordon commented that ADR was not the way to go if
compensability was an issue, only with nature and extent issues.
Mr. O'Malley stated that the division planned to address the
recommendations of the audit. One ALJ experienced in worker's
compensation law and mediation would be devoted to a pilot project. A
letter will be developed to be sent out after the hearing application
comes in setting forth the injured worker's rights and options for
resolution of the dispute including ADR or tiebreaker examinations where
appropriate (i.e. where liability is not an issue). The goal would be to
resolve cases before a hearing if possible while not delaying the normal
hearing process. Mr. O'Malley indicated that there are ethical issues
involved where attorneys represent parties and any contacts by ALJs must
conform to the Code of Professional Responsibility.
Mr. O'Malley stated that the division would focus on active case
management. This involves carefully screening applications for hearing and
not putting the cases in ready for hearing status unless the application
clearly states the benefits claimed and medical support is provided for
those claims. This should help alleviate the problem of scheduling
hearings where the applicant is not ready for hearing. Sometimes employees
are lead astray by the attorney who files the application to take some
kind of action on the case. The employee is then upset because the hearing
is not held quickly. The goal would be to have a more efficient use of the
Mr. Gordon indicated that in some states the applicant must certify
that he is ready to go to hearing with consequences if later that is not
the case. Mr. O'Malley responded that the division had considered that
as an option. He stated that in California a certificate of readiness must
be filed and if later the attorney is not ready to proceed to hearing, the
application is dismissed with prejudice and the attorney is reported to
the state bar. In order to keep a balance, it was felt that it was better
to not be too heavy handed.
Mr. Gordon stated that the mentality among some attorneys was to file
the application to get in line for a hearing. Mr. O'Malley indicated
that that was still a problem, but not as bad as in the past, and that the
division hoped to address it through case management.
Mr. Newby asked if a hearing was cancelled, was there a presumption
that the ALJ time was wasted. Mr. O'Malley responded that ALJ need some
cancelled hearings to allow time to write orders, review compromises and
perform other administrative duties. If the ALJ had to hold a hearing in
every case, the orders would never get written timely. The division is
aware that a large number of cases settle and that is built into the
Ms. Page raised the issue of cancellations that occur when the ALJ is
out on the road. Ms. Norman-Nunnery indicated that the division would work
on other administrative pieces to make more efficient use of time.
Offering the injured worker an option to resolve the dispute more quickly
was just one part of the process. The goal was to schedule hearings more
effectively. Ms. Knutson explained that the time on the road is used to
prepare cases for the next day, hold telephone conferences/mediations,
review files to see if a compromise is appropriate, and review files where
the hearing was held and begin drafting orders.
Mr. Bagin questioned who was complaining about the process and the
nature of the complaint. It was his understanding that the applicant
attorneys do not want the time between the filing of the hearing
application and the scheduling of the hearing compressed too tightly. Ms.
Norman-Nunnery indicated that the goal was to not allow cases with a high
likelihood of resolving before hearing, into the scheduling process. Mr.
stated that primarily applicants make for expedited hearings.
Sometimes the request comes through the state legislature. In that case,
an attorney must write a letter indicating that the case is ready to go
forward before an expedited hearing is scheduled. The applicant
an expedited hearing due to economic hardship and sometimes the attorney
is not ready to proceed.
Mr. Newby suggested that if the parties must certify that they are
ready to proceed to hearing the division might be better able to
prioritize hearings. Mr. Buchen indicated that there might be more
objections to certification and perhaps the division should not postpone a
case unless there is an emergency.
Mr. John Conway indicated that the division appreciated Ms. Page's
work in looking at the data, along with Dale Cattenaugh's expertise as a
former director of the legislative audit bureau. The purpose was to help
find areas in programs that might be subject to legislative audit. The
audit was internal within the department. The report was recently received
and the division was just beginning to develop a formal response and work
plan. Earlier resolution of cases would result in savings of not only ALJ
and scheduling time, but court reporter time and witness time as well. The
division will be putting together a formal response to the audit that will
be presented to the Council. Ms. Norman-Nunnery indicated that the
division could incorporate comments from today's meeting into the plan.
Mr. Bagin commented that an aspect of scheduling hearings that resulted in
settlements at the courthouse steps is part of the nature of the process.
Mr. John Conway indicated that sometimes attorneys are looking at the
files for the first time at the courthouse steps. Ms. Norman-Nunnery
indicated that the division would try and make sure that the injured
worker was an active participant in the process.
Ms. Connor indicated that the division needed to look at respondent
time frames also. After the hearing application is received, respondents
need to assign legal counsel. Mr. O'Malley indicated that while the
initial thought was to contact the applicant early on, with issues of
liability involved, it might be best to wait until an answer is filed. Mr.
Gordon suggested that a question be posed on the hearing application and
the answer as to whether the parties would agree to ADR. Ms. Connor asked
whether any thought was given to extending the filing deadline from 15 to
30 days. Mr. O'Malley indicated that that idea was discussed as well,
but that there must be agreement. Mr. O'Malley assured the Council that
a more detailed plan would be presented to the Council before the division
would go forward with implementation.
Mr. O'Malley outlined the division's preliminary response. The
division would develop process controls including a tickler system to kick
out a list of older cases. This would involve an information technology
(IT) project. In addition, the issue of publishing hearing cases on the
web was discussed. The names of employees should not be on the schedule to
keep identification confidential. The information would be disclosed to a
party only and could not be used by attorneys to solicit clients. The
information would need to be safe guarded so that someone could not
identify a name and release a date. The injured worker would be able to
look at his/her own claim records. Ms. Norman-Nunnery indicated that the
IT staff was looking at confidentiality and security issues so that the
division could do what was in the best interest of the system and the
parties. Ms. Norman-Nunnery extended her thanks to Ms. Page and indicated
that Mr. O'Malley and Ms. Knutson would follow up on the