State News

The Department of Labor has issued a Final Order (effective: 8/11/24) for the publication of the revised Healthcare Practice Guidelines (which govern treatment of workers’ compensation patients in Delaware for certain common classes of work injuries).

This Order repeals all prior Practice Guidelines and replaces them with the revised Practice Guidelines, as approved by the Workers Compensation Oversight Panel.

The revised Guidelines are available on the Department of Labor’s website, specifically: Health Care Practice Guidelines - Delaware Department of Labor.

The most significant changes are to the Chronic Pain Guidelines, including language limiting the use of narcotic medication.

It is important to note that neither ortho-biologics for spinal disorders, nor medical marijuana, were added to the Healthcare Practice Guidelines in connection with these revisions. It is expected that these issues may be addressed in the future.

Should you have any questions, please contact any partner in our Workers’ Compensation Department. 

Shenanigans Aren’t Limited to Politics

Claimant attorneys’ attempts to negate a carrier’s subrogation interest are to be expected but their methods of bilking carriers out of the amounts they are due can get as convoluted and Machiavellian as this year’s election. The Tyler Court of Appeals recently reaffirmed the importance of ensuring that carriers receive “first money reimbursement” in Old Republic Ins. Co. v. Debra Morris, et al. The plaintiffs in that case had attempted an end-run around the first money rule by settling with most of the third-party defendants pre-trial, and subsequently obtaining a verdict apportioning most of the responsibility to the employer. The plaintiffs argued that the “employer responsibility offset” (ERO)* should apply to all the funds received, including the pre-trial settlements, which in this case wiped out the carrier’s lien of more than $3 million. In a tremendous win for Old Republic, the appellate court held that the reduction of the carrier’s subrogation interest is limited to the amount that the employer’s fault actually costs the claimant after applying sections 33.012(b) and 33.013(a) of the Texas Civil Practice and Remedies Code.** In this particular case, that meant that the carrier’s subrogation lien was reduced by only $33,967.20.

*Texas Labor Code section 417.001 provides that a carrier’s subrogation interest is reduced by the amount by which the court reduces the judgment based on the percentage of responsibility for the injury that the jury/judge attributes to the employer. This is known as the “Employer Responsibility Offset” (ERO).
**Section 33.012(b) of the Texas Civil Practices and Remedies Code requires the court to reduce the amount of the claimant’s damages by a percentage equal to the claimant’s percentage of responsibility for the claimant’s injuries. Section 33.013(a) limits the claimant’s damages recovery from a particular defendant to the “percentage of the damages found by the trier of fact equal to that defendant’s percentage of responsibility” for the claimant’s injuries.

Copyright 2024, Stone Loughlin & Swanson, LLP

You Snooze, You Lose

DWC released the 2024 insurance carrier PBO results and 1/3 passed the test with flying colors! The DWC evaluated 130 carriers and placed them into a high, average, or poor regulatory tier based on the following categories:

• Timely payment of initial temporary income benefits (TIBs).  

• Timely reporting of initial payment data to DWC by electronic data interchange (EDI). (This measure was not factored into the tier placement.)

• Timely processing of initial medical bills.

• Timely processing of requests for reconsideration of medical bills.

• Timely reporting of medical data to DWC by EDI.

High tier performers are generally exempted from DWC Compliance & Investigations Audits, while average performers are included if selection criteria are met, and poor performers are included regardless of whether selection criteria are met. A carrier’s PBO tier rating is also one of the factors that DWC is required to consider when imposing sanctions on any carrier that commits an administrative violation.
 

Insurance Carrier Tier Assessments Overall Results
 

Congratulations to all you High Tier Performers out there!
 

Copyright 2024, Stone Loughlin & Swanson, LLP

Moral of the Story: Don’t Fall Asleep During the Hearing

A total of three Appeals Panel decisions have been published since the beginning of September. System participants can breathe a sigh of relief, knowing that even when your judge zones out during the hearing, the Appeals Panel has your back:

In Appeal No. 241147, the Panel remanded the case because the ALJ recounted a mechanism of injury in his/her decision that was nowhere in evidence. The ALJ wrote that the claimant slipped and fell backwards five feet and had pliers in his back pocket. Instead, the claimant testified that he felt a sharp pain in his left shoulder while sanding an airplane. 

Similarly, in Appeal No. 241172, the Panel reversed a 0% IR and rendered a decision that the IR was 5% because there was no certification in evidence from any doctor certifying the claimant with a 0% IR.

And in other news, the Appeals Panel continued to demonstrate its usefulness by reforming a finding of fact in Appeal No. 241035 to correct the parties’ stipulation to an anomaly of the tooth position of fully erupted teeth to numbers 9, 23, and 24 and not tooth 10 or 25.
 

Copyright 2024, Stone Loughlin & Swanson, LLP

Never Fear: Some DWC Staff Aren’t Letting the Grass Grow Under Their Feet

State agencies are required to review rules every four years and either readopt, readopt with amendments, or repeal the rule. So this month, DWC went out on a limb and readopted all sections in Chapters 126 (General Provisions Applicable to All Benefits), 127 (Designated Doctor Procedures and Requirements), and 128 (Benefits – Calculation of Average Weekly Wage). Well done, guys and gals.

DWC is accepting public comments on a proposed rule amending Rule 120.2 to update its Austin address and OIEC’s and DWC’s website addresses. If you’re looking to shake things up a little bit, you can let the DWC know you take issue with their changes of “shall” in the rule to “must” or “will.”

The DWC also renamed Rule 147.10 “Commutation of Impairment Income Benefits.” In case you were diverted by all the election shenanigans, this was necessary because in April 2024, the DWC inadvertently named this section Rule 147.11 (the horrors). 

DWC also made DWC Forms 001 (Employer’s First Report of Injury or Illness), 002 (Employer’s Report for Reimbursement of Voluntary Payment), and 006 (Supplemental Report of Injury) more attractive… and removed references to outdated violation language that the Legislature removed from the law… in 2005.
 

Copyright 2024, Stone Loughlin & Swanson, LLP

DWC to Shake Things Up?

DWC is looking for input on the proposed Medical Quality Review Audit Plan for the year 2025. The plan is to conduct one audit to evaluate the quality of designated doctor (DD) reports and the necessity of additional testing or referrals ordered by DDs to resolve the issue in question. 

Meanwhile, the 2024 Annual Audit Plan was to evaluate the feasibility and impact of adopting a more current version of the AMA Guides to the Evaluation of Permanent Impairment. The 4th edition was published in 1993 and since then, the 5th and the 6th editions have been published, with updates to the 6th edition published yearly since 2021. There are two months to go in 2024 so we will await the results of this study with bated breath. (Okay, okay, to be fair, the DWC did acknowledge in its 2025 announcement that this study was dependent on revisions to the musculoskeletal chapters, which were just finalized on September 12, 2024 and effective December 1, 2024.)  Regardless:
 

Copyright 2024, Stone Loughlin & Swanson, LLP

                                                   Simon Law Group, P.C.

                                 701 Market Street, Suite 340, St. Louis, MO  63101

                                                             314-621-2828

                     MISSOURI WORKERS’ COMPENSATION CASE LAW UPDATE

                                                    July 2024 – September 2024

Claimant Only Needs One Qualifying, Preexisting Disability Combined With the Primary Disability for Fund PTD Liability

Eckardt v. Treasurer of Missouri as Custodian of the Second Injury Fund, Case No. ED112132 (Mo. App. 2024)

FACTS: In the course of 40 years as an aircraft mechanic, the claimant sustained seven work injuries. Claimant was first injured in March 1998, injuring his right knee, resulting in two knee surgeries and, eventually in 2014, a right knee total arthroplasty. On September 6, 2001, he sustained a second injury, which resulted in two left knee surgeries. The third injury was on January 13, 2010, and resulted in surgeries on the left wrist and left shoulder with post-surgical complications. In November 2012, he injured his right shoulder and received treatment for a right shoulder strain and impingement. The fifth and sixth injuries occurred prior to January 4, 2013, resulting in chronic, severe bilateral carpal tunnel syndrome, and he had surgeries on his right wrist on February 8, 2013 and left wrist on March 1, 2013. Despite his multiple injuries and difficulties performing his job duties, the claimant testified that he continued to work.

The claimant sustained his seventh and primary injury on October 3, 2015, which resulted in a cervical disc herniation at C3-4 and he underwent surgery in July 2016.

At the hearing, on behalf of the claimant, Dr. Volarich opined he was PTD as a direct result of the October 3, 2015 work-related injury in combination with his pre-existing medical conditions from his prior injuries.

The ALJ issued an Award in favor of claimant for PTD benefits against the Fund. The ALJ concluded the claimant met his burden to show he was PTD due to a combination of his primary and qualifying preexisting injuries which resulted in the following disabilities: right knee-50% (80 weeks); left knee-50% disability (80 weeks); left shoulder-40% disability (92.8 weeks); left wrist-45% disability (78.75 weeks); and right wrist-40% disability (70 weeks).

The ALJ noted the only preexisting injury that did not reach the statutory threshold was the right shoulder injury, which was 47.5 weeks or 2.5 weeks short of the statutory minimum.

The Fund appealed the Award. The Commission reversed the ALJ’s Award. The Commission found “no credible or persuasive evidence in the record that [claimant] is PTD due to the primary injury in combination with only preexisting disabilities that qualify under [Section] 287.220.3.”

HOLDING: The Court of Appeals found the Fund liable for PTD. The Court stated that it was undisputed that claimant was PTD and the sole issue on appeal was whether his PTD qualified for Fund liability. To make a compensable claim against the Fund, a claimant must meet two conditions. First, the employee must have at least one qualifying preexisting disability, which must be medically documented, equal to at least 50 weeks of PPD and meet one of the four listed criteria in the statute; second, the employee must show he sustained a subsequent compensable work-related injury that resulted in a PTD when combined with the preexisting disability.

In this matter, Dr. Volarich may have considered all of claimant’s disabilities, but his final determination that claimant was PTD does not rely on claimant’s preexisting nonqualifying right shoulder injury. All of his other disabilities sufficiently combined to cause the PTD absent the right shoulder injury.

The Court concluded the evidence supported the statutory requirement for Fund liability because the claimant demonstrated he had sustained a “subsequent compensable work-related injury, that when combined with the preexisting disability, . . . results in a permanent total disability”. The Court instructed the Commission to grant the claimant PTD benefits to which he is entitled to from the Fund.

Also, the Court concluded that Section 287.220.3(2)(a)a(ii) which defines a qualifying preexisting disability included occupational diseases such as carpal tunnel syndrome. The Court stated that pursuant to longstanding principles of statutory interpretation, they recognized the legislature’s intent as evidenced by its decision not to exclude such coverage when it had sufficient opportunity to do so. The Court concluded that Section (ii) refers generally to a “compensable injury”, and they found it does not exclude from such injury the specific category of occupational diseases, defined as compensable in Chapter 287 as a whole. In this matter, the claimant’s preexisting bilateral carpal tunnel syndrome qualified under Section 287.220 because it was the result of compensable injuries.

Air Ambulance Update

Last week SLS attended the National Workers’ Compensation Defense Network (NWCDN) meeting in Denver as the Texas member.  The group is comprised of one vetted law firm member from each state.  We were invited to be the Texas member 17 years ago and continue to work with the group in support of Texas employers and insurance carriers who insure them.  Jane Stone gave a short presentation about these disputes to the employers and decision-makers present at the meeting.  

There are over 3,000 air ambulance fee disputes currently pending in the Texas workers’ compensation system.  The average amount in dispute in each case is over $50,000 for a total at stake of at least one hundred fifty million dollars plus interest. These disputes have gathering at the Division of Workers’ Compensation since 2012 while the parties continue to litigate the threshold issue of whether the federal Airline Deregulation Act of 1978 preempts the Texas Workers’ Compensation Act’s reimbursement standards for medical care.

The ADA prohibits states from regulating the price, route or service of an “air carrier.” The air ambulance companies argue that the ADA preempts Texas’ workers’ compensation laws that govern the amount of reimbursement owed to health care providers and therefore, they are entitled to their full billed charges for transporting injured workers. The air ambulance companies’ billed charges are significantly more than the amount paid by the insurance carriers which in most cases is 125% of the Medicare rate. 

The air ambulance companies’ billed charges are generally 600% to 1,200% of the Medicare rate.  For the sake of comparison, the Division’s fee guideline payment adjustment factors range from 125% of the Medicare rate for the Medical Fee Guideline to 235% of the Medicare rate for the Ambulatory Surgical Center Fee Guideline.  In 2015, an ALJ at the State Office of Administrative Hearings issued a decision finding that 149% of the Medicare rate was fair and reasonable reimbursement for the air ambulance services at issue but on appeal that amount was determined to be too high.
   
The Division of Workers’ Compensation has abated all of the pending individual fee disputes while the preemption issue is litigated. However, the Division recently issued decisions in the Air Evac fee disputes. The Division awarded $0.00 additional reimbursement on the grounds that it cannot determine the proper payment amount because of the federal injunction Air Evac obtained that enjoins the Division from applying its “fair and reasonable” reimbursement standards against Air Evac.

This preemption issue has been litigated in other states but none more than Texas. The litigation in Texas over the preemption question has been going on for over ten years. The issue has been litigated to the Texas Supreme Court and Fifth Circuit Court of Appeals which reached different conclusions.  The Fifth Circuit held there is preemption while the Texas Supreme Court held there is not. 

Case law holds that Texas courts  are not bound by the Fifth Circuit but only higher Texas courts and the U.S. Supreme Court. Therefore, the ALJ  overseeing the air ambulance disputes currently pending at the State Office of Administrative Hearings recently issued a ruling that he would follow the Texas Supreme Court’s decision and apply Texas’ “fair and reasonable” reimbursement standards for workers’ compensation to determine the amount of reimbursement to which the air ambulance providers are entitled.

The ALJ has now set two groups of cases for hearings on the merits in April and May 2025.  The air ambulance providers are expected to appeal the ALJ’s final decision when issued so the air ambulance litigation in Texas is far from over.

Copyright 2024, Stone Loughlin & Swanson, LLP  

Networks Score Big

Everyone remembers the anxiety waiting for a report card brings.  Insurance carriers and employers are no different, and the news is good for those that take advantage of the benefits provided by networks. According to TDI’s Division of Workers’ Compensation, what we at SLS have seen regarding the effectiveness of networks certified under Chapter 1305 of the Texas Insurance Code is confirmed by the numbers. Networks tend to be more cost efficient than non-network claims. The cost differences appear to be driven in part by lower hospital utilization and lower prices per service. Despite lower costs, network claims as a whole have higher satisfaction levels with health care, faster return-to-work and better functional outcomes.  Network claims tend to receive initial non-emergency medical care faster than non-network claims, which studies have shown may assist in controlling health care costs and reducing missed time from work.  Injured workers’ early return to physical function and productivity is the goal of the workers’ compensation system– and it is working!
 

Copyright 2024, Stone Loughlin & Swanson, LLP  

Is Interest Interesting?

Well, not really. However the DWC has set weekly benefit rates for fiscal year 2025.  For dates of injury beginning October 1, 2024 through September 30, 2025, the state average weekly wage is $1,218.62.  Keep in mind that the rate applied to any particular claim is set as of the date of injury.
 

Copyright 2024, Stone Loughlin & Swanson, LLP