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Taxpayers stuck with massive medical bills due to inadequate fighter insurance in California

By Zach Arnold | May 26, 2014

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To read our previous articles on the California State Athletic Commission, CLICK HERE.

December 13th, 2013 is proving to be one of the uglier days in the history of the California State Athletic Commission.

In the afternoon of Friday the 13th, a document dump on the Athletic Commission’s web site site revealed a temporary suspension for boxing manager/trainer Rodrigo Mosquera. Mosquera, along with one of his fighters, was suspended due to altered gloves being confiscated at a September boxing show promoted by Ed Holmes/All Star Boxing at Quiet Cannon in Montebello. On the same day that the temporary suspension was announced, athletic inspectors working the Golden Boy boxing event at Fantasy Springs (resort & casino) in Indio, California renewed Mosquera’s license. Mosquera would stay active until his meeting in front of the Athletic Commission last February. To top it off, Executive Officer Andy Foster recommended that Mosquera be given time served and continue his licensed duties. The Athletic Commission then proceeded to throw the book at Mosquera (and rightfully so).

At that same December 13th event at Fantasy Springs, boxer Angel Osuna was on his way to winning a 10 round fight. However, a freak accident involving a slip to the timekeeper’s table caused a subdural hematoma. Osuna was taken to a local hospital and underwent a craniotomy. He suffered some strokes. He has brain damage. Osuna also owes over a million dollars in medical bills.

The Desert Sun, which is the newspaper of Palm Springs, had a lengthy article on Osuna’s injuries and the role of the Athletic Commission. It is a gut-wrenching article to read. For the casual fight fan who doesn’t know the inner workings of Sacramento, it is heartbreaking and dispiriting to read. For those of us who know how things work at Consumer Affairs in Sacramento, the article is infuriating to read. The newspaper is so disgusted with what is happening in Sacramento that they published a second front-page article (on Monday) laying out the many ways the Athletic Commission has failed the fighters. None of the information is particularly new to Fight Opinion readers, but the readers of the Desert Sun are in for a big surprise.

Let me be the first to point out the irony of this kind of devastating article appearing in Palm Springs, where Athletic Commissioner Mary Lehman resides. The former boxer recently voted to give 59-year old Keela Byrd Byars her boxing license despite having no amateur boxing experience & a recommendation against issuing the license by Dr. Paul Wallace. Andy Foster then approved Byars for a four-round fight at last Friday’s Montebello card for Ed Holmes. Byars, weighing in at 203 pounds, faced 300-pound Bridgette Davis.

It is easy to see why many in the California boxing community are disenchanted and concerned right now about where things are headed on a regulatory level. It is also easy to see why so many things slip through the cracks — because the system is broken and needs an overhaul. Changes can & should be made to both the Labor and Business & Professions Code to help out boxers when they get hurt at events so they don’t end up in a situation like Angel Osuna.

The Desert Sun article lays out Osuna’s financial & medical situation in grim detail. The hospital he was taken to has billed him over one million dollars for medical care. He is in an extensive rehabilitation phase right now for recovery. It is impossible for any fighter, especially someone from Mexico who hasn’t made a lot of prize money, to pay the bills. What happened to Angel Osuna could happen to any uninsured and/or foreign fighter in California.

The current regulatory system is completely inadequate and static in responding to fluid, dynamic crisis situations in combat sports. Government regulators wouldn’t accept “you’re on your own, buddy,” as an acceptable answer to not fully insuring workers in a private business legally classified as ultrahazardous. But that’s exactly the message state regulators are sending to fighters in California.

There is approximately $5.6 million dollars sitting in the boxer’s pension fund. However, Angel Osuna can’t access any distributions from that pension fund because he supposedly didn’t fight enough rounds to qualify for an early distribution. However, take a look at the Business & Professions code section on the boxer’s pension fund. It does appear to allow for some room, should the Athletic Commission as a body decide, to give Osuna a distribution.

There is over $680,000 sitting in the much-maligned Neurological Fund. However, the interpretation of Consumer Affair lawyers is that the money in the neurological fund can only be used by commission doctors for medical testing. In the latest encumbrance report issued by the Athletic Commission, approximately $2,000 has been spent for some device requests for Dr. Christopher Giza. The rest of the money is sitting in a bank account where Benefit Resources, a third party, is managing the assets. They’re making money. And promoters in the future will likely be paying $175 an event from ticket sales to go to the Neuro Fund. Money has been deposited to the Neuro Fund since 1994. It’s been 20 years and nobody still has any clue on how to manage or spend the money being collected.

Promoters are required to get $50,000 worth of insurance to cover fighters. Promoters will do whatever they can to avoid getting their bond hit. They’ll pay $300 cash to a doctor to stitch a fighter if it means avoiding a $500 hit against the bond. $50,000 may cover a trip to the Emergency Room to cover some physical damage but it’s not going to cover the costs to treat a brain injury. What do you think is the number one concern when it comes to injury in boxing? Concussive brain damage.

Additionally, fighters are considered independent contractors and therefore don’t have workers’ compensation protections nor do they have access to disability or unemployment compensation. They don’t work for an employee.

Mix this toxic financial stew together and what you have is a situation where a lot of poor fighters are vulnerable in a sport legally classified as ultrahazardous. Angel Osuna has no financial resources. He was signed up through Medicaid/MediCal once he went to the hospital. According to a recent article in the Sacramento Bee, approximately 30% of California residents now are on Medicaid. Who finances the bill for Medicaid? The taxpayers.

And what will happen to Angel Osuna? He will more than likely have to declare bankruptcy and then there will be a possible fight between the state of California and the hospital that treated Osuna over money. And everyone will lose in this situation because nobody has been proactive in reforming a faulty regulatory system that is more worried about “large incentive committees” to put on more shows. FIFA has been hammered with negative press coverage over the treatment of stadium workers in both Brazil and Qatar. The Desert Sun just gave the state Athletic Commission a taste of that medicine and more medicine may be forthcoming.

Charity in the fight business often does not exist. There was a fundraiser last April at Fantasy Springs. Meanwhile, the Athletic Commission continues to deposit cash into bank accounts that could make for very tempting administrative slush funds if no one is guarding the hen-house.

There must be a progressive call to action right now in the Sacramento Legislature to help fix matters at the Athletic Commission so that fighters like Angel Osuna don’t fall through the cracks. It should not be the responsibility of the state’s taxpayers to pick up million-dollar medical bills due to the fact that fighters are not adequately insured while fighting in a dangerous sport.

Developing the right battle plan

Positive changes can be made by lawmakers in Sacramento, who can make amendments to both the California Labor and Business & Professions Code in a much quicker fashion than dragging through the California Code of Regulations process that we often see in sluggish fashion at Athletic Commission meetings. There’s no reason why bi-partisan legislation to help establish new financial protections for fighters in the state cannot be implemented. There’s a way to do it without creating exorbitant extra costs to event promoters.

Step 1. Establish a catastrophic insurance policy for promoters

The deductible could be $50,000. Right now, the current system requiring promoters to get $50,000 minor medical coverage (max) for fighters isn’t good enough to cover major injuries.

Step 2. Establish quasi-workers’ comp protections

Actors and actresses are independent contractors. Fighters are independent contractors. Fighters don’t have the Screen Actors Guild protecting their back. Fighters, as independent contractors, aren’t protected by disability or workman’s compensation. Many entertainers are looked at by the IRS as employees. Therefore, many actors & actresses are covered by workers’ compensation and disability. The state Labor code should classify fighters in a similar category.

Have insurance company underwriters bid on a process to determine what would be more cost-effective; a catastrophic insurance policy for promoters on top of the minor medical policies in place or a system where fighters can be linked up to the state’s disability fund via a carved out legislative amendment.

Step 3. Change the rules & regulations regarding ring structure & timekeepers

There should be at least a two, perhaps three feet cushion from the edge of the ring apron to the ropes.

If you are using an 18 foot by 18 foot ring with a 22 foot perimeter, the platform should be extended to a perimeter of 24 feet so that there is three feet of apron room for seconds, athletic inspectors, and camera operators to walk on without slipping and falling off the ring.

Furthermore, there should not be any tables next to the ring apron. It should be the athletic inspectors & seconds in chairs along with the photographers but that’s it. The tables should be behind a ringside barricade. The fact that a fighter can slip and fall outside the ring and hit his head on a timekeeper table is inexcusable. This isn’t Madison Square Garden 1984.

Step 4. Consumer Affairs should hire a full-time worker to allocate pension distributions

They have plenty of money there in Sacramento to pay someone for a full-time $35,000 a year position to spend 8 hours a day cross-referencing social security numbers/TINs on past fighter licenses and using state investigative tools, just like private eyes, to track down retired fighters. The longer DCA prolongs the process of hiring someone who can get distributions out quickly to those entitled to them, the larger the suspicions grow about what is happening with the money in the Raymond James account.

There should be distributions being approved by the Athletic Commission at every single meeting. The fact that we only see occasional distributions is alarming and cause for concern.

Step 5. Establish written benchmarks on how to spend Neurological Fund $

B & P code section 18711 states that costs for medical examinations of fighters related to neurological examinations should be covered by the cash in the Neurological Fund. Why is this currently not happening? There should be an itemized expenditure sheet detailing how neurological fund money is being spent on what the code says it should be spent on.

And yet, look at provision (d) of 18711:

(d) The commission may use no more than 30 percent of moneys from the State Athletic Commission Neurological Examination Account, upon appropriation by the Legislature, to fund special neurological examinations and new diagnostic imaging and testing to be used in relation to the examinations required by this section.

There needs to be a specific plan, in writing, on what kind of specialized equipment the Athletic Commission intends to purchase for future neurological examinations. That plan also needs to demonstrate benchmarks on when there will be efforts to get appropriation on such expenses from the Legislature and just how many fighters will get examined.

The May 2014 document dump from the Athletic Commissions shows that there is around $2,000 listed as expenses on the encumbrance report for purchases related to future testing that Dr. Christopher Giza wants to experiment with in Southern California. There must be a battle plan of action to immediately outline how the money in this fund is going to be used.

There is a dramatic crisis of confidence with the Athletic Commission & Consumer Affairs in Sacramento. You can’t argue to the public at large that you are in the health & safety business when you are approving a 59-year old female with no prior boxing experience to fight a 300-pounder. You aren’t going to win any hearts & minds over when boxers like Angel Osuna don’t have insurance protections that firewall him from a million dollars in hospital bills. If promoters can’t insure fighters to cover their medical costs, taxpayers are the ones most vulnerable to pick up the bill when a catastrophic incident occurs.

If the Desert Sun articles aren’t a wake up call for Sacramento to take action before the situation deteriorates any further down the road of future & pending litigation, then Consumer Affairs should release the Athletic Commission from under their regulatory umbrella. The status quo is simply dysfunctional. The lawsuits are ripening. And guess who will have to pay the legal bills, settlements, and trial costs on behalf of Consumer Affairs? The taxpayers of California, not the bureaucrats.

Topics: Boxing, CSAC, Media, Zach Arnold | 3 Comments » | Permalink | Trackback |

3 Responses to “Taxpayers stuck with massive medical bills due to inadequate fighter insurance in California”

  1. rst says:

    “…suspended due to altered gloves…”

    There is something wrong with Boxing.
    Gosh loves the sport,
    but there is something wrong with the bidness.

    • rst says:

      Well, the good thing about medical bills in california is its actually a money maker now that the rest of the country has to pay for it.

      Charge up 150,000,
      california pays 15 and the rest is all profit.

  2. […] when a boxer like Angel Osuna gets hurt and stuck with a million dollars in medical bills, there is no sense of urgency anywhere in Sacramento to push through a new catastrophic insurance […]


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