State News

In an important reported decision, and one of first impression at the Appellate level, the Court in Collas v. Raritan River Garage, A-3103-17T4, (App. Div. July 19, 2019), held that the Judge of Compensation was correct in basing the counsel fee of petitioner on petitioner’s life expectancy, not limited to 450 weeks, as has been the practice in the New Jersey Division.

For many decades, judges of compensation have awarded counsel fees in dependency cases on a 450-week period, even though dependent spouses receive benefits until their death, unless they should remarry.  Counsel in Collas argued that basing the fee on the life expectancy of the dependent spouse makes more sense.  The Judge of Compensation reviewed two places in the statute where 450 weeks is referenced.  First N.J.S.A. 34:15-12(b) provides in total disability claims that compensation shall be for a period of 450 weeks, at which time compensation payments shall cease unless the employee shall have submitted to such physical or educational rehabilitation as may have been ordered by the rehabilitation commission, and can show that because of such disability it is impossible for the employee to obtain wages or earnings equal to those earned at the time of the accident.”   Otherwise the statute makes clear that total disability benefits continue beyond 450 weeks.

The other statute that discusses 450 weeks appears in N.J.S.A. 34:15-13 pertaining to dependency claims. That section states that “This compensation shall be paid, in the case of the surviving spouse, during the entire period of survivorship or until such surviving spouse shall remarry and, in the case of other dependents, during 450 weeks …If a surviving spouse remarries before the total compensation is paid, he or she is entitled to a payment of 100 times the amount of the weekly compensation immediately preceding the remarriage, whichever is lesser.  The statute makes clear that a dependent child may receive dependency benefits throughout attendance at a full-time college or university but no later than age 23.  The so-called marriage penalty does not apply to the surviving spouse of a deceased member of the state police or member of a fire or police department or force who died in the line of duty.

Raritan River Garage argued that it has always been the accepted practice in the Division to base the counsel fee of the prevailing dependent on a 450-week period.  Further, Garage argued that it is speculation to pay a counsel fee on an amount of years beyond 450 weeks because the spouse may remarry or die.  The Judge of Compensation disagreed and asked the following rhetorical question:  “Is a previously legislatively mandated 450-week period less speculative in terms of calculating [Collas’] true award than the life expectancy tables published in the court rules?”

The Appellate Division agreed that using life expectancy tables is no more speculative than using a 450-week period.  The Court also observed that there is no link in Section 13 governing dependency awards to the section of the statute governing counsel fees in N.J.S.A. 34:15-64.  That section authorizes the Judge of Compensation to award a counsel fee to a successful petitioner’s attorney “not exceeding twenty percent of the judgment.”

The Appellate Division also noted that the 450-week period does not distinguish whether a surviving spouse is 20 years old or 60 years old.  In this case, Ms. Collas had a life expectancy of 12.7 years.  The Court did not hold that the life expectancy calculation must always be used.  “We determine only that the use of the table method was a reasonable option utilized by the judge.  We recognize that using the table method will, in many cases, increase the potential size of a fee award.  We thus caution against a reflexive application of a twenty-percent award without full analysis.”

Attorney Rick Rubenstein, who argued this case successfully in the Appellate Division, was interviewed following this decision.  He addressed two issues that many practitioners are now considering in light of the Collas decision.  One is whether acceleration of one-third payments when there is a very large third party recovery in a dependency case should also be based on the life expectancy of the dependent spouse.  Mr. Rubenstein said that he believes that the logic of Collas would extend to this situation.  He noted that payments of one third to a dependent where there is a large third party recovery are not technically payments of compensation but rather contribution to counsel fees. If the counsel fee to a dependent spouse is based on the life expectancy of the dependent, the argument would be that the return of the counsel fee to the dependent spouse would be analyzed in the same manner.

The other issue which Mr. Rubenstein addressed is whether the rule in Collas may be applied by future courts to total disability claims.  He said it is possible but less likely than the decision in Collas. “Courts will likely see a distinction between the marriage penalty in Section 13, and the re-employment offset in Section 12, both on practical grounds and public policy grounds. There is no public policy promoting remarriage, or marriage, for that matter. There IS a public policy favoring rehabilitation and re-employment. That public policy is reflected in the base period of 450 weeks absent from the dependency statute, and also reflected in the “contingent” nature of 12(b) benefits. 12(b) is contingent upon no active income, qualification upon examination, and lack of rehabilitation which is an ‘aim’ of the Act.”                 

This decision is certainly a significant one for practitioners and will require employers, carriers and third party administrators to amend the traditional calculation of reserves for counsel fees in dependency cases.

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John H. Geaney, Esq., is an Executive Committee Member and a Shareholder in Capehart Scatchard's Workers’ Compensation Group.  Mr. Geaney concentrates his practice in the representation of employers, self-insured companies, third-party administrators, and insurance carriers in workers’ compensation, the Americans with Disabilities Act and Family and Medical Leave Act. Should you have any questions or would like more information, please contact Mr. Geaney at 856.914.2063 or by e‑mail at jgeaney@capehart.com. 

Dear Client:

          So, which “I” do you pick, do you check the IME box, or do you check the IRE box?

            Starting over, if you are dealing with an open workers’ compensation claim, in which liability has been accepted by the Employer/Insurer/Administrator, with either the issuance of a Notice of Compensation Payable (“NCP”), or a Notice of Temporary Compensation Payable (“NTCP”), that has “converted” to a liability-accepting NCP, under which an obligation now exists for continuous payment of workers’ compensation benefits in the form of temporary total disability benefits, required to be paid to compensate for wage loss-producing disability, and medical compensation benefits, subject to reasonableness, necessity, and causal relationship to the accepted work injury benefits will have to be paid, absent one of the following claim-resolving events occurring:

(1)               The Claimant dies, compensation benefits terminate by operation of both death and loss;

(2)               The Claimant voluntarily returns to work in their pre-injury capacities, and there is no continuing wage loss post-return to work, such that the Claimant’s compensation benefits are suspended;

(3)               The Claimant returns to work in a modified-duty capacity, with some reduction in return-to-work wages, such that the Claimant’s compensation benefits are modified, and temporary partial disability benefits are paid, subject to the 500 week limitation;

(4)               The Claimant executes a Supplemental Agreement, perfecting either a termination, suspension, or modification of the Claimant’s workers’ compensation benefits;

(5)               The Claimant signs a Final Receipt (almost never used), under which the Claimant agrees that all compensation benefits have been paid;

(6)               The Claimant is deported by virtue of not being able to prove legal immigration status;

(7)               The claim is settled under a Compromise and Release Agreement, perfecting some type of compromise of the indemnity and medical compensation benefits liability associated with the claim; and,

(8)               The Claimant’s compensation benefits are terminated, modified, or suspended by order of a workers’ compensation judge, with the employer/insurer carrying the burden of proving the entitlement to a change in the Claimant’s benefit entitlement status.

            Present tense, workers’ compensation benefits are now being paid on the claim, and if you are interested, as an Employer, or Administrator, or as a claims representative, to resolve the claim in avoidance of lifetime liabilities that might otherwise be imposed by the Pennsylvania Workers’ Compensation Act, 77 P.S. 1, et seq., what defensive resources are at your disposal?

            Given the blatant humanitarian nature of workers’ compensation statutes, effectuating the “grand bargain”, where the employee has statutorily sacrificed the right to sue for personal injury damages, requiring proof of negligence and/or fault, in exchange for the guarantee of compensation schedules, as to wage loss benefits, and medical compensation benefits, etc., the Pennsylvania Workers’ Compensation Act, as in almost all other states in the United States, provides Employers and their Insurers and Administrators with limited resources to challenge ongoing liability for workers’ compensation benefits, typically limiting the resources to the following challenges:

·         A claim denial, requiring the injured employee to prove compensability and disability;

·         The utilization review process, to challenge the reasonableness and necessity of ongoing medical treatment for the alleged work injury;

·         The independent medical examination, allowing the Employer/Insurer to request an IME of the Claimant, allowable every six months under Section 314 of the Act, typically focused on determining an injured employee’s recovery from the work injury, be it a full recovery, permitting a challenge to the ongoing entitlement to any workers’ compensation benefits being paid on the claimant, or to a recovery sufficient enough to allow an injured employee to return to work in some restricted-duty capacity, obviously subject to restricted-duty work either being available from the time of injury Employer, or alternative restricted-duty work being available, either through a Labor Market Survey (“LMS”) and/or Earning Power Assessment (“EPA”);

·         A job offer in some capacity, offered by the time of injury Employer, after medical evidence establishes that the injured employee is capable of performing some level of work, be it pre-injury work, and/or restricted-duty work, typically regarded as modified duty work, or light-duty work;

·         The unilateral right to suspend or modify compensation benefits, if the injured employee returns to work, with the time of injury Employer, or alternatively, the injured employee finds work on their own, such that the injured employee is again earning income/wages, whether at pre-injury wage rates, resulting in a suspension of compensation benefits, although medical remains open, or at wages less than pre-injury, resulting in a modification of the wage loss benefits, dependent upon wages actually earned, with compensation benefits converting to temporary partial disability benefits, subject to a 500 week cap, in the event of conversion of temporary total disability benefits to temporary partial disability benefits;

·         The Impairment Rating Evaluation, utilizing AMA Guides to determine the whole person impairment rating, limited to the accepted work injury, of an injured employee who has received 104 weeks of temporary total disability benefits, often resulting in litigation over the “conversion” from temporary total to temporary partial disability benefits.

            Historically, Pennsylvania has always been a form-intensive, wage-loss disability state, with the IRE concept first being introduced into the statute as a result of statutory reforms in 1996, initially establishing an impairment rating threshold, for conversion purposes, of any impairment less than 50% of the whole person, with that threshold reduced, in 2018, to a statutory threshold of 35%.

            We know, what the heck?

            So, when do you employ the IME versus the IRE?

            Obviously, the IME is your initial resource in defending the claim, as it can be requested, either in defense of a claim or claimant-filed petition, and/or it can be requested in an accepted claim, where benefits are being paid, with IMEs being allowed every 6 months, for purposes of determining an injured employee’s ability to return to work, and recovery from the accepted work injury.

            In the above context, the IME almost always occurs before the IRE, and the claim may likely be the beneficiary of multiple IMEs, before the IRE question even arises.

            If there has been no change in benefit status, meaning that there is no IME evidence of a full recovery, to include no IME medical evidence of a claimant being able to return to available work, whether actual or fictional, excusing the linguistic license, as fictional is either the, LMS, or EPA, still requiring acceptance and adoption by mostly claimant-oriented Workers’ Compensation Judges, for purposes of suspending or modifying compensation benefits, then the IRE is a useful resource for determining if the Employer/Insurer/Administrator has a basis for seeking conversion of the injured employee’s compensation benefits from total to partial disability, potentially resulting in the partial disability benefits being capped at the 500 week statutory limit.

            However, there are some claims where you, as claim-bending claims representative, have an IME of full recovery, or it establishes the basis for either actual or fictional work, and the issue of challenging  the claimant’s compensation benefit status involves some form of defense petition, either a termination, predicated on a full recovery medical opinion, or a suspension or modification, based upon medical evidence of the ability to perform less than pre-injury work, and you have paid 104 weeks of temporary total disability benefits, potentially entitling you to request an IRE with the focused purpose of converting total disability to partial disability, then you have to ask yourself, “do I feel lucky, well do you?”

            Before you throw all your claims muscle against the IRE box the question arises as to how Workers’ Compensation Judges balance an IME medical opinion of a full recovery against an IRE medical opinion establishing some percentage of impairment for an accepted work-related injury?

            Since there are very few IREs that come back with a 0% impairment rating determination, essentially because it is extremely difficult to secure a 0% impairment rating in reliance upon the AMA Guides to impairment rating, absent an injured employee being in better physical shape and health than they were pre-injury, and that in 30 years of defending workers’ compensation claims, we have never witnessed such an occurrence, then the potential exists that the IRE establishing any impairment percentage, can potentially undermine a Workers’ Compensation Judge’s assessment as to the merits of medical evidence, through the IME medical report and IME’s doctor’s deposition that the injured employee has, in fact, fully recovered from the accepted work injury, the obvious footnote being that Termination Petitions, are rarely granted by Workers’ Compensation Judges, as the Termination Petition burden of proof is regarded as perhaps the highest burden of proof required for any petition under the Pennsylvania Workers’ Compensation Act, begging the question as to the next of requesting the IRE?

            Prove us wrong?

            So, back to that “do you feel lucky?” question the truth is, that it is probably a 100% guarantee that an IRE establishing any percentage of impairment while a defense petition is being litigated on an IME medical basis, will result in a denial and dismissal of the Employer-filed petition, as Workers’ Compensation Judges view the examination conflict, between an IME and an IRE, as a claim-defeating imbalance.

            Keep in mind, given the humanitarian nature of workers’ compensation statutes, as well as general claimant-inflected orientation unanimously maintained by Workers’ Compensation Judges they, however noble or not, are looking for ways to find weaknesses in Employer-filed petitions, begging the question of why make it easy for them?

            Perhaps the better recommendation, is to continue aggressively pursuing the termination, or other Employer-filed petition, while filing your Request for Designation of an IRE Physician, for purposes of being bound by the IRE physician designation requesting, for potential future conversion of the claimant’s compensation benefits from total to partial disability.

            And the only reason why we did not say that at the outset of this missive, is that we really love commas, as well as conclusions.

ConnorsO’Dell LLC

            Trust us, we just get it!  It is trust well spent!

            We defend Employers, Self-Insureds, Insurance Carriers, and Third Party Administrators in Workers’ Compensation matters throughout Pennsylvania.  We have over 100 years of cumulative experience defending our clients against compensation-related liabilities, with no attorney in our firm having less than ten (10) years of specialized experience, empowering our Workers’ Compensation practice group attorneys to be more than mere claim denials, enabling us to create the factual and legal leverage to expeditiously resolve claims, in the course of limiting/reducing/extinguishing our clients’ liabilities under the Pennsylvania Workers’ Compensation Act.

            Every member of our Workers’ Compensation practice group is AV rated.  Our partnership with the NWCDN magnifies the lens for which our professional expertise imperiously demands that we always be dynamic and exacting advocates for our clients, navigating the frustrating and form-intensive minefield pervasive throughout Pennsylvania Workers’ Compensation practice and procedure.

         So you are an Employer, by definition under most workers’ compensation statutes a “master”, with your employees, likewise being designated as “servants”, to fuel the pecuniary fiefdom that you propagate.

              Yes, in business, for profit, with associated overhead for business expenses, to include payroll, benefits, yadda, yadda.

            Of course, for your protection, or for that of whatever corporation you have designed and constructed, you have procured the necessary insurance coverages, to include coverage for general liability purposes, potentially meaning whatever, obviously subject to contractual interpretations, as well as, of course, workers’ compensation insurance coverage, in order that your company is not personally or corporately liable for injuries sustained by employees in the course and scope of their employment, in the course of which they are expected to be performing associated tasks commensurate with your business or your corporation.

            You have to ask yourself is every allegedly employee-sustained injury covered by workers’ compensation statutes, and, by extension, workers’ compensation insurance coverage, requiring a threshold analysis as to whether the alleged injury has occurred within the four corners of what we consider the course and scope of employment.

            And the answer is, sometimes yes, as well as sometimes no, beyond obviously working with your broker, your insurance carrier, and either in-house or extraneous counsel.

            Let’s begin with some basics.

            Workers’ compensation statutes have been in place since a horrific accident in New York in 1911, the Triangle Shirtwaist Fire, resulting in 146 workers dying when trapped in a burning factory, with Pennsylvania’s workers’ compensation statute being enacted in 1915, and then evolving over several structural and procedural reforms, the last of which were in the 1990s, reforming indemnity (wage loss) and medical compensation benefits. 

            Having survived reforms, both positive and negative for Employers and insurance carriers, the purpose of workers’ compensation statutes is obviously humanitarian, as well as to act both as a safety net for injured employees, and to serve as a “grand bargain”, for businesses, Employers, and by extension, insurance carriers, as the exchange is that employees surrender their right to sue for civil or personal injury damages, with Employers being given the certainty of scheduled losses for both wage loss and medical benefits.

            So when does the analysis of “course and scope of employment” begin?

            Well, typically, at the first report of injury, as the Employer, and its insurer gather information regarding the claim, with the following considerations being necessary to implicate the occurrence of a work-related injury, resulting in wage loss disabling injuries, to include:

·         An employer/employee relationship;

·         A work-related injury occurring within the course and scope of employment;

·         That the work-related injury was not caused by non-work-related factors;

·         That the work-related injury has resulted in the Claimant being disabled from being able to perform either pre-injury work, or available modified-duty work;

·         That the Claimant is not impeachable on other grounds, to include fraud or dishonesty;

·         That the Claimant has not refused or failed to return to work; and,

·         That the Claimant is not fully recovered from the alleged work injury.

            Sounds simple enough.

            If it were that simple, no one would be reading this.

            Case in point, being one recently defended by our firm, involving an employee showing up for work early, routinely doing so until one day when the employee claimed an injury, while not actually performing any work for the Employer, and not even being scheduled to work at that time.

            From the Claimant perspective, the argument is, well, I was at work, so it must be work-related.  If that were all that there was to it, with the self-insured or insured, somebody might be writing that employee a check, and paying medical bills.

            It not only does not work like that, it is not supposed to work like that, and it should not work like that.

            It should require an injury occurring while an employee is actually performing work or services for the Employer that causes or contributes to a physical, psychological, or occupational injury disabling the employee from being able to continue performing that work or service, at which point, logically, there should be mechanisms and procedures to protect both employee and Employer from the potential liability imposed.

            Merely being present at a work location does not mean that you are actually working, and should not mean that you are, therefore, entitled to compensation for an accident resulting in injury.

            The caveat to that storyline is that there might well be other liabilities that the Employer is sensitive to incurring, particularly potential liability for personal injury damages, not subject to a schedule, or to any dollar limitation, although obviously requiring evidence of negligence, fault, and cause.

            So if the employee is injured when not scheduled to work, is not actually performing any work, is not scheduled to be paid when allegedly injured, does the employee have a right to workers’ compensation benefits, and/or is the Employer liable under comp law?

            Well, it depends upon what the meaning of “work” is!

            In our view, popular or not, although legally sound, is that, no, the employee is not working, and that the injury is, therefore, not compensable under workers’ compensation law, with there being zero guarantee that the allegedly injured employee will accept the logic of our analysis, particularly when counseled by representation vested in the contingent fee recovery that necessarily requires the employee to pursue and recover compensation benefits.  Absent other considerations, we would recommend a vigorous defense calculated on denying and dismissing the injury claim.

            Concern about liabilities not subject to a schedule or statute might actually result in Employers considering acceptance of an otherwise non-work related injury, in avoidance of potential personal injury liability.

            We get it, that makes business sense, as hard as it is to swallow such a bitter pill.

            Anyone actually following this?

            The point being that the mere fact that someone is an employee, that you are an Employer, and that your employee is claiming injury, does not, in and of itself, mean that the alleged injury is either work-related, and/or has occurred within the course and scope of employment.

            Seems logical, although logic is not always the predicate for making decisions regarding claim disposition and resolution.

            And if looking for the easy answer, it is not within reach.

            And so what do we do?

            Well, we serve, we protect, we defend, and we seek out and expose claim-defying facts to insulate your company, your business, your commercial purpose from liability.

            Trust us; we completely understand how important business continuity and risk management is to a successful company, corporation, place of employment, as well as the practical exercise in the power of work, and experience. 

            We do this with grace, dignity, respect, and the utmost professionalism.

            And, no less importantly, we do it because it needs doing!

            So if in need of defense counsel in Pennsylvania, you know who to call!

ConnorsO’Dell LLC

            Trust us, we just get it!  It is trust well spent!

            We defend Employers, Self-Insureds, Insurance Carriers, and Third Party Administrators in Workers’ Compensation matters throughout Pennsylvania.  We have over 100 years of cumulative experience defending our clients against compensation-related liabilities, with no attorney in our firm having less than ten (10) years of specialized experience, empowering our Workers’ Compensation practice group attorneys to be more than mere claim denials, enabling us to create the factual and legal leverage to expeditiously resolve claims, in the course of limiting/reducing/extinguishing our clients’ liabilities under the Pennsylvania Workers’ Compensation Act.

            Every member of our Workers’ Compensation practice group is AV rated.  Our partnership with the NWCDN magnifies the lens for which our professional expertise imperiously demands that we always be dynamic and exacting advocates for our clients, navigating the frustrating and form-intensive minefield pervasive throughout Pennsylvania Workers’ Compensation practice and procedure.

Cousineau, Waldhauser & Kieselbach is proud to announce Jennifer Fitzgerald, Tom Kieselbach and Jim Waldhauser have been selected as 2019 Minnesota Super Lawyers.  Elizabeth Cox and Whitney Teel have been selected as 2019 Minnesota Rising Stars.

Super Lawyers, a Thomson Reuters business, is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high degree of peer recognition and professional achievement. Peer nominations and evaluations are combined with third-party research, and selections are made on an annual, state-by-state basis. Designation as a Super Lawyer is awarded annually to only 5% of the licensed, active lawyers in Minnesota. In 1998, Super Lawyers launched Rising Stars in Minnesota to recognize the top up-and-coming attorneys in the state — those who are 40 years old or younger, or who have been practicing for ten years or less. Designation as a Rising Star is awarded annually to no more than 2.5% of licensed, active lawyers. For more information, visitwww.SuperLawyers.com.

Another chapter in the never-ending stop-loss saga came to a close on June 24, 2019 when the State Office of Administrative Hearings (SOAH) finally issued its long-awaited decision in the stop-loss cases.
 
The stop-loss cases involve the “stop-loss exception” to the Division’s former Inpatient Hospital Fee Guideline which was in effect from August 1, 1997 through March 1, 2008.  This rule stated that the hospital is entitled to reimbursement of 75% of its charges if the services provided by the hospital are both “unusually extensive” and “unusually costly.”  The issue in these cases is how to interpret and apply the terms “unusually extensive” and “unusually costly” services. 
 
To give you an idea how long it’s taken SOAH to issue a decision, the hearing in the Vista stop-loss cases ended February 24, 2016 and the briefing finished October 7, 2016 when the parties filed their proposed findings of fact and conclusions of law.  Most of the non-Vista stop-loss cases were tried in 2014.  The record has been kept open in those cases while the Vista cases were tried.
 
SOAH’s Decision and Order consists of two parts.  The first part contains the legal conclusions common to all of the cases.  The second part consists of attachments listing all of the stop-loss cases with the case-specific decision for each case. 
 
SOAH’s decision addressed a total of 532 stop-loss cases.  The stop-loss exception was held to apply in only 14 cases; it was determined that no additional reimbursement was owed to the provider in 461 cases; and, it was determined that, under the per diem methodology, additional reimbursement was owed to the provider in 57 cases. 
 
To view a copy of the Decision and Order, click here.
 
Copyright 2019, James M. Loughlin, Stone Loughlin & Swanson, LLP

This month the Texas Division of Workers’ Compensation readopted in full the old law rules found at Chapters 41-69 of Title 28, Part 2 of the Texas Administrative Code.

For those who may not know, old law claims are claims with dates of injury prior to January 1, 1991.  This means that the most recent old law claims are over 28 years old.  The old law statutes and rules are continued in effect for these claims. 
 
The readoption of the Division’s old law rules was done pursuant to Texas Government Code §2001.039, which requires a state agency to review each of its rules every four years and to readopt, readopt with amendment, or repeal the rule. 
 
Public comments submitted during the review proposed amending the medical fee guidelines for old law claims.  The Division noted that any suggested amendments may be considered in future rulemaking.
 
Amendments to the medical fee guidelines were proposed for old law claims because, according to prior statements by the Division, the only fee guideline applicable to old law claims is the1996 Medical Fee Guideline, which contains set reimbursement rates for services that are now over 23 years old. 
 
Therefore, none of the Division’s current fee guidelines apply to old law claims.  However, it is not uncommon for carriers to reimburse providers in old law claims using the current fee guidelines.
 
Copyright 2019,James M. Loughlin, Stone Loughlin & Swanson, LLP

The Texarkana Court of Appeals held this month that a claimant failed to exhaust her administrative remedies at the Division of Workers’ Compensation where the allegations in her lawsuit against the carrier were not first presented to and ruled upon by the Division.
 
The claimant filed suit against the carrier’s third-party administrator and her employer for fraud, fraudulent inducement, gross negligence, and violations of the Deceptive Trade Practices Act and Texas Insurance Code. The gist of her allegations is that she was denied full benefits as a result of misrepresentations and mishandling of the claims process by the carrier.
 
In a prior related proceeding, the Austin Court of Appeals had already determined that the Division has exclusive jurisdiction over the claims in her lawsuit.  The claimant subsequently entered into a benefit dispute agreement agreeing: 1) that the carrier was relieved of liability because she did not file a claim within one year of her injury, and 2) her recovery was barred under the Texas Workers’ Compensation Act because she elected to pursue a remedy and recover under the laws of another jurisdiction.
 
Following the agreement, the claimant filed suit again, bringing the same claims but arguing that because of the agreement she had exhausted her administrative remedies and could now proceed with her lawsuit.  The issue before the Texarkana Court was whether she had, in fact, exhausted her administrative remedies.
 
The Texarkana Court noted that the agreement addressed only issues of compensability. It did not address the extent of the injury, preauthorization, medical necessity, or administrative violations.
 
The Court held that the claimant’s complaints needed to be raised with the Division and a review of the agreement shows that they were not.  According to the Court, nothing in the appellate record shows that the claimant either exhausted administrative remedies under Chapter 413 or provided the Division with notice of administrative violations.
 
The Court’s opinion includes a detailed discussion of the Division’s exclusive jurisdiction, including the Texas Supreme Court holding that the Texas Workers’ Compensation Act “provides the exclusive procedures and remedies for claims alleging that a workers’ compensation carrier has improperly investigated, handled, or settled a claim for workers’ claim for benefits.”
 
Steele v. Murphy & Beane, Inc., No. 06-19-00008-CV, 2019 WL 2998278 (Tex. App.—Texarkana, July 10, 2019).
 
Copyright 2019,James M. Loughlin, Stone Loughlin & Swanson, LLP

The Tyler Court of Appeals recently held that the Division has exclusive jurisdiction to determine whether administrative costs qualify as workers’ compensation benefits that the carrier is entitled to recover as part of its subrogation lien. 
 
The Act provides that the net amount recovered by the claimant in a third-party action shall be used to reimburse the carrier for benefits that have been paid for the compensable injury.  The Act defines benefits to include medical, income, death, or burial benefits based on a compensable injury.
 
According to the decision, the carrier allegedly paid a third-party administrator a flat-fee of $5,354,500.00 to assume liability for medical costs on a catastrophic claim. The TPA paid actual medical costs of $2,259,378.58.  The carrier allegedly filed an affidavit in the claimant’s third-party action claiming a lien in the amount of $5,587,479.18. This amount allegedly included the $5,354,500.00 paid to the TPA as well as “hundreds of charges for bill and utilization review.”
 
The claimant’s survivors brought suit against the carrier alleging various fraud claims, all premised on the assertion that a carrier’s administrative costs are not recoverable as part of its subrogation lien.  The carrier filed a plea to the jurisdiction which the trial court denied.   The carrier then filed a petition for writ of mandamus which the Tyler Court of Appeals granted.
 
The Court held, “It is axiomatic that the DWC, tasked with regulating and administering the business of workers’ compensation and monitoring insurance carriers, attorneys, and other representatives for compliance with the Act, should be the decision maker with regard to whether benefits have been inflated and administrative costs have been wrongfully included in a subrogation claim.”
 
The Court explained that because the fraud claims arise out of the carrier’s allegedly improper investigation, handling, or settling of a claim for worker’s compensation benefits, the Division has exclusive jurisdiction over those claims and the claimant’s survivors were required to exhaust their administrative remedies with the Division.
 
Therefore, the Court held that the fraud claims, should be abated pending the Division’s resolution of whether the carrier is entitled to seek administrative costs as part of its subrogation claim, and if not, whether the carrier committed an administrative violation by allegedly doing so.
 
In re Old Republic Risk Mgmt., No. 12-19-00144-CV, 2019 WL 2462486 (Tex. App.—Tyler, June 12, 2019).
 
Copyright 2019,James M. Loughlin, Stone Loughlin & Swanson, LLP

We’ve heard reports that Brook Army Medical Center (BAMC) will not release medical records to a carrier unless the claimant signs a DD Form 2569, Third Party Collection Program/Medical Services Account/Other Health Insurance.
 
What is a DD Form 2569, you ask?  It states in part, “ACKNOWLEDGMENT:  I hereby agree to pay for any service not covered in whole or in part by my third-party insurer.”  BAMC’s current policy is reportedly that it will not accept a standard HIPAA-compliant medical records release signed by the claimant.
 
Claimants are understandably reluctant to sign the DD Form 2569 agreeing to be personally liable for any unpaid charges.  And without the form, BAMC will not provide its medical records to the carrier.  As a result, carriers have been unable to obtain necessary medical records from BAMC. 
 
Matt Zurek, DWC’s Deputy Commissioner for Health and Safety, was asked about this practice by BAMC at the July 8, 2019 stakeholder meeting.  He said the DWC has not seen the issue before but that there’s no provision in section 413.0112 or the informal draft rules that allows the carrier to withhold payment if BAMC won’t provide its records.
 
Please let us know if you’ve encountered a similar issue trying to get records from BAMC.
 
Copyright 2019,James M. Loughlin, Stone Loughlin & Swanson, LLP