October 2018

Tennessee Workers’ Compensation Update

I.         A Busy Year for Workers’ Compensation in Tennessee

So far, the year 2018 has seen the Bureau of Workers’ Compensation (BWC) introduce the most expansive revisions to the Tennessee Workers’ Compensation Rules since the reform act went into effect in 2013.  Employers and insurance carriers now bear new legal burdens brought about by several brand-new pieces of legislation, amendments to the Bureau of Workers’ Compensation’s Rules and Regulations, and additional form requirements.  The purpose of this article is to serve as a general guide to the most relevant new provisions passed in 2018. 

II.        New Claims Handling Standards

The Tennessee Bureau of Workers’ Compensation (BCW, or “the Bureau”) has adopted a new set of regulations codified at 0800-02-14 et seq. This is the first revision to the Tennessee Claims Handling Standards in decades.  These new provisions, which went into effect on August 2, 2018, have a startling impact on the responsibilities of employers and insurance carriers in handling and maintaining workers’ compensation claims.  They create a more form-intensive environment.  The Bureau of Workers’ Compensation is also philosophically placing a new burden on the employer and insurance carrier to educate employees on the workers’ compensation processes, along with their rights and responsibilities under the workers’ compensation laws. 

Given the scope of this article being utilized in the context of a Labor and Employment Law Conference, I will first address the claims handling standards that directly impact an employer.  A new provision has been enacted stating that employer shall provide the BWC all information and documentation that is requested for the purpose of monitoring, examining or investigating the entity’s operations and processes.  Employers are required within ten (10) calendar days of request to provide any information requested by the Bureau of Workers’ Compensation unless the BWC allows an extension of time.  The purpose of this new regulation is for the BWC to be empowered during the course of a workers’ compensation case to obtain whatever information is required from the employer. 

Employers should be mindful that when they do receive requests from the Bureau of Workers’ Compensation, that they are under a separate duty from their adjusting entity or insurance carrier to provide this information.  Oftentimes the insurance carrier will take the burden from the employer for providing this information.  However, this does not change the fact this regulation does make it the employer’s responsibility under a potential $50.00 to $5,000.00 penalty if the employer does not comply and the insurance company fails to meet any of its duties to provide information timely. 

Generally speaking, a penalty program has been in effect at the Bureau for many years.  However, it is anticipated that regulations such as this type are being adopted for the purpose of the Bureau of Workers’ Compensation ramping up the enforcement of its penalty program which includes monitoring and disciplining employers for failure to comply with the Workers’ Compensation Rules and Regulations.

The remaining claims standards impact the duties of third party administrators and insurance adjusters.  These responsibilities and deadlines are listed in their entirety on the following chart:

Regulation              Responsible Party                   Brief Summary                                  Time Limit

III.      The Bureau of Workers’ Compensation Has Enacted New “General Rules” of the Workers’ Compensation Program

Several of these provisions, which went into effect May 31, 2018, directly impact employers.  For example, employers are required within one business day of the knowledge of an injury to report all known and reported accidents or injuries to their adjusting entity.  The employer shall provide the employee a panel (C-42) of physicians with medical providers that are qualified, willing and able to treat in a timely manner.  The new regulation requires a medical panel to be provided by the employer “as soon as practicable.”  However, the regulation goes on to state that if the employer does not provide a panel within three (3) business days, it will be subject to a penalty.

Penalties can also occur if the panel is not provided on the proper form or does not contain doctors that are “qualified, willing and able to treat in a timely manner.”  As such, if a panel is provided with a doctor who, for example, has decided not to take workers’ compensation patients, that is considered a failure on the part of the employer and the employer can be subject to a penalty.  If the doctor is not properly qualified, the employer can be subject to a penalty.  If the doctor cannot treat in a timely manner and states he will need a number of months to schedule an appointment, the employer can be penalized.  As such, it is critical for the employer to maintain current panels.  It would not be an unreasonable practice for an employer to contact all medical providers on the panel each time a panel is provided to ensure that the doctors being provide are qualified, willing and currently able to treat in a timely manner.  Also, please note that some employers do delegate the responsibility of provision of medical panels to their insurance carrier.  However, it is to be noted that this legal duty to provide a panel is assigned to employers and that the penalty could adhere to the employer, even if an insurance carrier fails to meet its obligations.

Sometimes penalties are unavoidable.  There is a new provision under the regulations that state that an employer or adjusting entity must pay uncontested penalties within twenty (20) days of receiving a notice from the Bureau of Workers’ Compensation.  There is an appeals process which, of course, defers the requirement to provide payment.

The Bureau of Workers’ Compensation went into great detail with some additional requirements for proper drafting and handling of medical panels.  The regulations state that an employer shall “immediately” provide proper emergency assistance.  Therefore, if an employee requests emergency assistance, treatment should be provided right away.  However, this does not remove the employer’s obligation to provide a panel of physicians within three (3) days.

For years, employer have utilized on-site, in-house or other employer-sponsored medical providers.  There has always been a question as to whether or not this was a  prima facie violation of an employer of the requirement to provide a panel.  Employees and their attorneys would argue that the employer sending the claimant unilaterally to one of these on-site sponsored medical facilities or nurses was a violation of the law.  However, the new regulations clarify that on-site, in-house or other employer-sponsored medical providers are appropriate.  An employer is allowed to direct a claimant to them prior to providing the initial panel.  Critically, this does not alleviate the requirement that the employer must provide an appropriate panel of physicians within three (3) business days.

The regulations also state that walk-in clinics and urgent care facilities can be included in the panel.  However, the actual name of the staff physician or medical director from that walk-in clinic or urgent care facility must be included on the panel.  This is an exception to the general rule that employers are allowed to put the general practice name instead of a physician’s name on the panel.  Employers should be mindful that if they do utilize walk-in clinics or urgent care facilities, that the doctor’s name must be included.

For all other facilities besides walk-in clinics and urgent care facilities, employers are still able to include the name of the specialty practice group without naming a specific doctor.  However, the regulations make clear that in these circumstances the employee will have the ultimate choice as to which doctor at that facility they want.  As such, it is recommended that employers, whenever possible, utilize the name of the doctor and do not give up control over being able to direct medical treatment to the physician of their choice.  Oftentimes there are far less conservative physicians within a practice group that the employer may not want to provide to an employee.

The regulations also address the modern reality that many medical providers are utilizing nurse practitioners on an increasing basis.  Oftentimes, employees or their attorneys have made the argument that they are not receiving medical treatment under the statute because they are not seeing an actual doctor.  The regulations clarify that the employer may provide medical treatment ordered by an attending nurse practitioner.  However, only the supervising physician may actually be listed on the panel, not the name of the nurse practitioner.  The regulations also clarify that only the supervising physician may determine medical causation, impairment rating and the MMI date.  Those issues are off limits to a nurse practitioner and will be disregarded by the court.

The remaining amendments to the General Rules primarily impact adjusters and insurance carriers.  However, they are provided here in summary form in the following chart:

TN Regulations    Responsible Party                    Brief Summary                                        Time Limit

IV.       2018 Legislative Changes

Typically, the most sweeping changes in Tennessee Workers’ Compensation Law come by way of reformation of the existing Tennessee Code Annotated provisions of the Workers’ Compensation Law.  However, this year such changes were relatively minimal.

Perhaps the most relevant legislative change addresses the issue of awarding attorney’s fees to employees who are successful in challenging workers’ compensation denials. This new legislation, effective April 18, 2018, seeks to clarify a previous rule that states that an employee can obtain attorney’s fees from employers and insurance carriers who “wrongfully” deny a claim.  Previously, the Tennessee Legislature had failed to define what constitutes a “wrongful” denial.  For a wrongful denial to be assessed, a workers’ compensation judge must subsequently make a finding that workers’ compensation benefits were owed but wrongfully withheld from an employee.  This process occurs either in the context of the BWC’s expedited hearing or a compensation hearing.

This new legislation defines the term “wrongfully” as erroneous, incorrect, or otherwise inconsistent with the laws or facts.  It also extends the “sunset date” for this law to persist at least through June 30, 2020 before it must be re-examined and possibly extended by the Tennessee Legislature.

Concurrent with the enactment of this new legislation was a Workers’ Comp Appellate Court decision in the matter of  Tori Andrews v. Yates Services, LLC.  This case, decided on May 8, 2018, dealt with the issue of whether or not an employer’s denial of benefits was in fact “wrongful.”  In  Andrews the claimant injured his lower back.  The employer initially accepted the claim as compensable and provided a panel of physicians.  Thereafter, the employer denied additional benefits after receiving a medical opinion from the authorized treating physician, indicating that the employee’s condition did not arise primarily out of and in the course of employment.  The employee thereafter sought treatment on his own and obtained an unauthorized medical opinion that the injury did arise primarily out of his employment.

The Trial Court accepted the opinion of the employee’s physician, finding that the employee was likely to prevail at a compensation hearing and ordered temporary total disability and medical benefits.  The issue was whether or not the employee was also entitled to attorney’s fees and expenses for a “wrongful” denial of benefits.  The Trial Court denied a motion for attorney’s fees by the employee, stating that a wrongful denial requires that minimum of finding that the employer’s denial lacks good cause.

The Appellate Court reviewed the new proposed statutory language.  It stated that applying this new definition of “wrongfully” meant that it had to disagree with the Trial Court that there needs to be some sort of finding that the employer’s denial lacked good cause.

The Appellate Court’s most important finding was to determine that the reasonableness of an employer’s denial is to be determined at the time the denial was made.  As such, in the facts of the  Andrewscase, the denial was made when the authorized treating physician was the only medical opinion available.  The Appellate Court stated that the employer should not be held accountable for a “wrongful” denial because the unauthorized doctor later was found to rebut that presumption.  In other words, the employer could not have known that in the future a medical opinion that did not exist would come into existence and prevail over the opinion of the presumed correct authorized treating doctor. 

As such, the holding in the  Andrews case is a win for employers.  However, one unanswered question would be whether or not the court would have found the denial “wrongful” had the employer and insurance carrier had the benefit of the unauthorized doctor’s opinion and then denied: would the court have determined that was erroneous, incorrect or otherwise inconsistent with the law or facts?  Future case law will likely further interpret this provision.

Another new piece of legislation establishes that insurance carriers are no longer required to maintain a physical claims office within the state of Tennessee.  This was effective April 12, 2018 and deletes a law that has been on the books for many years but has never been enforced by the Bureau of Workers’ Compensation. Because it has lacked enforcement, many out of state insurance companies do not have a local Tennessee office.

Yet another new legislative provision impacts employers that are considered to be “farm and agricultural employers.”  These types of employers can accept workers’ compensation coverage simply by purchasing a workers’ comp insurance policy.  They are also enabled to cancel workers’ comp insurance by simply not renewing their policy.  This was put into effect to eliminate any requirement for a farm or agricultural employer to register with the state or maintain paperwork in a formal capacity with the State of Tennessee in order to elect coverage under the Tennessee Workers’ Compensation Laws.

An additional provision deals with what the law refers to as “marketplace platforms.”  This provision provides that a marketplace contractor is an independent contractor and not an employee of the marketplace platform for all purposes under state and local laws, rules, ordinances and resolutions of certain additions are set forth in a written agreement between the marketplace platform and the marketplace contractor.  This provision went into effect July 1, 2018.

An interesting new law has been put into effect for what is referred to as “workplace learning.”  This is a situation in which an employer will act as a host for a student intern.  Basically, a work-based student learning grant program will, through an educational institution, coordinate for an employer to allow a student to act as an intern (paid or otherwise).  The employer has the option to opt into workers’ compensation insurance coverage for the participating students.  In the event that the employer does make that election to provide workers’ comp coverage for the student, the educational institution is required to maintain liability insurance coverage to compensate the student for any injury that would not be covered under the workers’ compensation law. 

This would conceivably include situations where an intentional tort was perpetrated by the employer on the student.  Nevertheless, the overall purpose of this is to assist an already existing student intern program by attempting to encourage employers to engage in the process.  They will have additional protections by being able to avail themselves of their own personal workers’ compensation coverage for these students, but also for additional tort liability coverage provided by the referring educational institution.  Nevertheless, it is important for employers who engage in this program to be mindful of this new legislation and protections if they wish to engage in such internship programs.

Lastly, some sunset provisions extend the life of the Bureau of Workers’ Compensation, Medical Advisory Committee, and Medical Payment Committee for six years through June 20, 2024. 

V.        Significant Revisions to the Tennessee Fee Schedule

The Tennessee Fee Schedule is a provision of the Bureau of Workers’ Compensation’s regulations that provide caps and limitations on certain types of medical treatment and medical costs.  The primary purpose of this section of the statute is for cost containment.  These new revisions are effective for services rendered on or after February 25, 2018, irrespective of the claimant’s injury date.  As such, these will grandfather in prior cases.  These new provisions are codified at 0800-02-25-.01 et seq. 

These set the ground rules that insurance carriers use for reimbursing medical providers.  Notice of an alleged violation of the Fee Schedule allows any party to contest at a case hearing before the Administrator under the Uniformed Administrative Procedures Act.  Specific guideline limits will not be detailed here as they are outside of the scope of this article.  However, please be mindful that there are limitations on costs and number of services associated with surgery, anesthesia, injections, ambulatory surgical centers, chiropractic services, outpatient physical and occupational therapy, medical equipment, orthotics and prosthetics, pharmaceuticals, ambulance services and clinical psychological services.

With regard to some of the new provisions under the Tennessee Fee Schedule, these provisions do the following:
·               Change the timeframes for holding, notification and payments;
·       Change some current definitions to line up with those under the Medicare program;
·       Require the authorized treating physician to see an injured worker at least every sixty (60) days if an injured worker is receiving temporary disability payments, to assess progress regarding return to work;
·       Provides rules for additional payments to physicians for certain additional causation opinions and drug/alcohol evaluation and counseling;
·       Allow payment for chiropractors for an additional evaluation;
·       Clarify rules about compounding, benchmarking and parity for all drug dispensers;
·       Clarify rules about laboratory charges, pay for CRNA’s, PA’s and NP’s;
·       Establish payment for work hardening programs and functional capacity evaluations;
·       Make discretionary the Utilization Review program for physical, occupational and psychotherapy;
·       Limit payments for invoiced items to a facility;
·       Prohibit providers for charging for negative records searches;
·       Provide additional payment to trauma hospitals for certain services;
·       Simplify hospital billing determinations by changing the inclusion under the stop loss calculations; and
·       Establish that a new Fee Schedule Handbook will be published in the near future.  This has not been published at the time of the drafting of this article.

Most relevant to an employer are the provisions of the Fee Schedule that deal with the timing of medical payments.  Oftentimes this is something that will be dealt with by the insurance carrier or TPA who is assigned to this task.  Nevertheless, the regulations themselves state that employer is required to pay any undisputed portion of a bill within thirty (30) calendar days of receipt of a properly submitted medical bill.  The employer has fifteen (15) days to resubmit the bill to the provider if it is not a proper form or does not comply with the Tennessee Fee Schedule.  If resubmitted to the provider, the timing shall not apply towards the thirty (30) days that the employer has to pay the bill.  Along with resubmission of the bill, an employer shall notify the provider that the bill was not properly submitted and specify the reason.  Thereafter, the employer shall date stamp medical bills and reports not submitted electronically on receipt.

Independent Medical Examinations are not to exceed $500.00 per hour.  A physician who performs an independent medical examination may only require prepayment of $500.00, no more.  Additional billings that come after that must occur after the examination and production of a report by the IME physician. 

Now deadlines for payment of medical bills have also been established, and are summarized in the chart below:

 TN Regulations    Responsible Party                    Brief Summary                                     Time Limit

VI.       Drug-Free Workplace Program Rules

These new amendments became effective May 6, 2018.  An extensive overview of the new Tennessee Drug-Free Workplace regulations is beyond the scope of this article.  Nevertheless, portions of this program do impact a workers’ compensation case.  These new regulations clarify the rule requiring that an employer must be a certified member of the Drug-Free Workplace Program.  One of the common problems with utilizing the Drug-Free Workplace Program is that employers will often forget to renew the program and, therefore, not avail themselves of the benefits in a workers’ compensation case when an employee tests positive for drugs or alcohol. 

Traditionally speaking, an employer who wants to assert the defense of willful intoxication will be required to meet its own burden of proof to show that the drugs or alcohol were the proximate cause of the injury.  The primary benefit of the Drug-Free Workplace Program is that burden is instead shifted to the employee to show that the intoxication was not the proximate cause of the injury.  Furthermore, the defense of willful intoxication can be applied in situations where an employee refuses to take a drug test.  However, that defense to a workers’ compensation claim is only available under the circumstances where the employer is a certified Drug-Free Workplace Program participant.

VII.     Adjuster and Adjusting Entity Certification Program

This voluntary program became effective May 31, 2018.  Lengthy regulations have been established to set up a voluntary system for adjusters to become trained and, therefore, “certified” as Tennessee adjusters.  A good portion of these regulations contain the contents of that training.  Training programs have already started taking place in Tennessee.

Presently, this certification program is voluntary.  However, it is clear that the Bureau of Workers’ Compensation’s intent is to eventually make adjuster training mandatory in Tennessee.  In the next few years we anticipate that this voluntary program will be made mandatory for adjusters in the state.  It remains to be seen if adjusters will be able to obtain their education remotely or will have to travel to the state of Tennessee to obtain this annual certification.

Fredrick R. Baker, Member
Wimberly Lawson Wright Daves & Jones, PLLC
1420 Neal Street, Suite 201
P.O. Box 655
Cookeville, TN 38503-0655
(931) 372-9123
fbaker@wimberlylawson.com

T. Joseph Lynch III, Member
Wimberly Lawson Wright Daves & Jones, PLLC
550 Main Avenue, Suite 900
P.O. Box 2231
Knoxville, TN 37901-2231
(865) 546-1000
jlynch@wimberlylawson.com

Effective 10/01/18 through 09/30/19, the Division of Workers’ Compensation has increased the maximum weekly benefit rate to $938, and increased the minimum weekly benefit rate to $141.

The discount rate and interest rate provided in the Texas Workers’ Compensation Act have likewise increased effective 10/01/18. For the fourth quarter of 2018, 10/01/18 through 12/31/18, the rates will be 6.06 percent.

Independent contractor Selena Scola was a content moderator for Facebook. Her job was to review content flagged as “inappropriate” by a Facebook user and determine whether the flagged content should be removed from the platform. The job was difficult and stressful, requiring Ms. Scola and her fellow content moderators to review, among other things, photos and videos of “rapes, suicides, beheadings and other killings.” The job took its toll and, according to a lawsuit filed by Ms. Scola in California, caused PTSD. The lawsuit asks Facebook to provide treatment for the content moderators, including the independent contractors.See New York Times article here.

Placing aside the question of whether Ms. Scola’s PTSD-type claim would be a compensable injury under the Texas Workers’ Compensation Act, after reviewing unhinged political Facebook posts from crazy family and friends, don’t we all feel a little traumatized?

-  Copyright 2018, Stone Loughlin & Swanson, LLP.

Every month we publish a newsletter and, it seems, every month we report a new criminal indictment related to a provider involved in some sort of criminal activity. The latest compound cream scheme involved pain management doctor Adam Gallardo Arredondo of the Texas Anesthesia & Pain Institute. The federal grand jury indictment alleges Dr. Arredondo, a Texas physician, accepted kickbacks from an OK Pharmacy (an Oklahoma compounding pharmacy) for prescribing excessive – allegedly – compound drugs to patients insured under the federal workers’ compensation system and other federal programs. Dr. Arredondo also – allegedly – accepted payments for recruiting other physicians to prescribe compound drugs for the OK Pharmacy.

Maybe next month we won’t have any indictments to report . . . but I wouldn’t count on it.

HT www.workcompcentral.com.

-  Copyright 2018, Stone Loughlin & Swanson, LLP.

Legislative Update by Attorney Alison Stewart

The Division of Workers’ Compensation is announcing a delay in the roll-out of WCES, the new electronic filing, case management, hearing scheduling and EDI system for workers’ compensation.

The Division had planned to Go-Live on December 3, 2018. It has been determined it is not possible to thoroughly test the system before December 3, 2018. The Division was advised to delay the Go-Live date until they can be confident WCES has been thoroughly tested.

A new Go-Live date for WCES has not been determined. Work will not stop on this project and the Division will publish a revised Go-Live date once they have agreement among the vendors and the Division.

The delay in the go-live date applies to both filing in contested claims as well as EDI. EDI filers will continue to file using EDI Release 2.0 until WCES goes live and then will switch to EDI Release 3.1. Claimants, employers and insurance carriers will continue to file paper documents in contested claims until WCES goes live. The process for scheduling hearings will also remain as it is currently until WCES goes live. 

CALFEE, HALTER & GRISWOLD LLP

STATE LAW (OHIO) UPDATE

SEPTEMBER 2018[1]

“Calfee Corner” - - Recent Calfee Cases before the Ohio Industrial Commission

Claim 18-163810 (“Fight in parking lot”). On 6/29/18, Injured Worker (IW) was hurt in the parking lot of the facility where he was placed by his staffing company employer. The injury was a blow to the head caused by a punch from a co-worker. Upon investigation and several witness interviews, the following factual circumstances were uncovered:

Earlier that day, IW had been driving a forklift and ran that forklift into a pole, damaging it. IW was cited by the employer for failing to survey his surroundings before backing up the forklift. The employer took him off forklift duty for the remainder of the day and going forward. Subsequently, a female co-worker asked IW why he was upset and he responded to her angrily. The female co-worker reported this behavior to her boyfriend, also an employee at the facility, and the remainder of the shift was filled with angry stares and tension between IW and the two co-workers. At the end of the shift when the workforce gathered at the time clock, another female co-worker asked IW what was wrong, and he responded to the group “Let’s go outside.” Once in the parking lot, the other co-workers entered their vehicles, but IW made a “come on” motion to the male co-workers in their vehicles while still in the parking lot. One of the male co-workers (the aforementioned boyfriend) got out of his vehicle and struck IW with a punch to the face.

The aftermath of the fight was caught on cell phone video, and the operations manager began his investigation of the incident. All workers involved in the incident, including IW, were terminated. Witness statements were gathered.  IW went to the emergency room for treatment for his punch injury and an Ohio workers’ compensation claim was filed with the diagnosis of a “contusion to head.”

The staffing company employer appealed Ohio BWC’s allowance of the claim. At hearing, counsel and the employer’s operations manager presented the evidence and argued that the claim should be disallowed as it did not arise in the course of IW’s employment. Ohio workers’ compensation law authorizes the allowance of a claim for an injury resulting from a workplace fight as long as: (1) the origin of the assault/fight was work-related; and (2) the IW/claimant was not the instigator of the assault/fight. While the origin of the fight may well have been work-related (IW’s anger over forklift incident), and despite IW being the only one actually punched, it was argued that he was the instigator and therefore his claim should be disallowed. The Industrial Commission agreed and disallowed his claim. Thorough investigation with witness statements was crucial to the hearing presentation in establishing that IW was the instigator, and getting his claim denied.

Claim 15-859933 (“Paraplegia diagnosis not medically justified”).  On 12/3/15 IW, a then 52 year old experienced nurse’s aide in a facility providing care for the elderly, slipped and fell in the dining room. A week later she had surgery to her right elbow. While hospitalized she developed an infection to the surgically repaired elbow. Still in the hospital, the IW developed a lumbar epidural abscess which also necessitated surgery. The IW had a complicated hospital course and was not released to rehabilitation until some six (6) months after the initial elbow surgery.  Her claim was allowed for “Displaced Fracture Lateral Condyle Right Humerus; Lumbar Epidural Abscess.”

The IW remained physically unable to return to her former position of employment as a nurse’s aide and was restricted to sedentary/office work. She eventually came under the care of Dr. N, a Physical Medicine and Rehabilitation Specialist. Dr. N provided a causal relationship for the additional allowance of her claim for “L3 AIS D Paraplegia.”  The Employer obtained an independent medical examination which concluded the additional condition shouldnot be allowed because: “Paraplegia is defined as paralysis characterized by motor or sensory loss in the lower limbs and trunk…The medical records support that she has good strength…”

In successfully arguing the case before the Industrial Commission, Calfee emphasized the “International Standards for Neurological Classification of Spinal Cord Injury.”  The “L3” was simply the nerve root level that was the source of the alleged Paraplegia. “D” stood for “Motor Incomplete.”  Motor Incomplete status is defined…“with at least half (half or more) of key muscle functions below the single Nerve Root Level having a muscle grade greater than or equal to 3.”  Dr. N’s extensive office notes all showed physical examination muscle function scores of “4” and “5” throughout the IW’s lumbar spine.  The additional allowance was denied.

Claim 14-864539 (“She fooled all the doctors, but not the camera”).  IW suffered a left foot fracture at work on 12/7/14.  The claim later was additionally allowed for complex regional pain syndrome (CRPS – formerly known as RSD).  IW was paid TT from the DOI without interruption.  Two separate employer IMEs supported on-going TT status as this doctor and that doctor tried this treatment and that treatment (PT, blocks, etc.), all to no apparent avail as the years went by.

The Employer then had IW surveilled.  Surveillance revealed an active IW with no apparent left foot problems at all and an IW ambulating in complete contradiction to her professed clinical picture.  A somewhat indignant IME doctor (who previously found the CRPS condition to be on-going and requiring treatment) issued a supplemental report finding MMI and no need for additional treatment.  All of this lead to a Commission order terminating TT, as well as all on-going and future treatment in the claim.

Court Decisions of Note:

Employer Intentional Tort 

HP Manufacturing Co. v. Westfield Insurance (Eighth District Case No. 106541 7/19/18).

The reports of the demise of employer intentional torts in Ohio have been greatly exaggerated.  A case in point isH. P. Manufacturing Co. out of Cuyahoga County (Cleveland) wherein the appellate court upheld a $400K jury verdict against the employer for the deliberate removal of a safety guard leading to injury to IW.  See also Lunsford v H. P. Manufacturing Co. (Cuyahoga C.P. Case No. 14-828457).  In addition, the court held that the loss was uninsurable as it involved intentional conduct. 

As well as demonstrating that employer intentional torts live on in Ohio, the H. P. Manufacturing Co. case is also instructive in that an employer should not simply turn over an intentional tort case defense to its insurer and assume that it will be all taken care of as though it was just another premises liability claim. 

Travelling Employee/Personal Errands

Aysha Osten v. Ohio BWC (Second District Case No. 27583 12/29/17). 

Reports that Ohio is a “24/7” coverage state for travelling employees also are greatly exaggerated. Osten is a case in point.  Flight attendant Osten was on a lay-over at LaGuardia staying at a Hampton Inn between assigned flights.  That evening, after having dinner with other flight attendants and crew personnel, she slipped and fell on a public sidewalk while returning to her hotel.

The Ohio Industrial Commission, the trial court, and then the Court of Appeals, all found that this slip and fall by a travelling employee was one occurring on a “personal errand” (i.e., dinner), and therefore wasnot compensable under the Ohio Workers’ Compensation Act. The take-away here is that an employer should assume nothing when it comes to the compensability of injuries to travelling employees (or any other employee for that matter).

Travelling Employee/Coming & Going Rule

Green v. Mark Glassman, Inc. (Eleventh District Case No. 17-P-0041). 

IW’s job was installing cash registers at retail stores.  IW suffered injuries in an MVA upon returning home from his last store.  IW argued that travelling on various roads to various locations made him a “travelling employee,” and one that also faced a “special hazard.”  The court disagreed and found in essence that he was a “rotating fixed site” employee who did not commence his employment duties until he arrived at a specific and identifiable workplace as designed by the employer.  Thus, IW’s claim was barred by the “coming-and-going” rule.

 Job Abandonment

State ex rel. Demellweek v. Indus. Comm. (10^th Dist. Franklin No. 16AP-874).

The court granted the IW’s request for a writ of mandamus ordering the Commission to vacate an order denying TT compensation.  The Commission had found IW’s safety rule violation subjected him to immediate dismissal, making him ineligible for TTD compensation.  The court found no evidence that the employee handbook provided IW with notice that his actions would constitute conduct that would warrant immediate firing.  The takeaway here is that the employer did not have sufficient evidentiary support to show voluntary abandonment so as to bar TT.

State ex rel. Williams v. Indus. Comm. (10^th Dist. No. 17AP-157).

In Williams, the court held that the Commission properly denied IW’s request for PTD compensation on the ground that he had voluntarily abandoned the workforce.  The evidence indicated IW did not attempt rehabilitation following his injury, and that his only attempt at employment in the 30-year period involved a position not within his work restrictions.

Medical Evidence

State ex rel. Farrell v. Ohio Indus. Comm. (10^th Dist. No. 17AP-126).

The court denied IW’s request for a writ of mandamus to order the Commission to vacate its order denying PTD compensation, finding that the Commission properly relied on the medical report of a doctor who opined that IW was capable of working in a “supportive environment.”  IW argued the doctrine of stare decisis operated to compel the Commission to grant PTD compensation, asserting that the Commission, in a separate and wholly unrelated decision, granted a different IW’s PTD application based on the same doctor’s opinion that used nearly identical language as the opinion in his claim.

The court held the doctrine of stare decisis applies to principles of law, not findings of fact.  To conclude that the Commission had to use the doctor’s report to determine that this IW was entitled to PTD compensation ignores the myriad factual intricacies at play in both IW’s case and the case of the unrelated IW.  Both decisions involved heavily fact-dependent determinations by the Commission, and it was the Commission’s role, in each case it evaluated, to determine the appropriate weight given to the evidence before it.

Independent Contractor  

Green v. Admr., Ohio Bur. Of Workers’ Comp. (4^th Dist. No. 17CA17).

In Green, the appellate court held that competent and credible evidence supported the trial court’s ruling that IW’s alleged employer did not exert the requisite control over his logging work necessary to establish an employer/employee relationship.  IW was hired as an experienced logger, he de-limbed trees independently without control exerted by the alleged employer, and he was free to leave regardless of hours worked or time of day.

The take away here is that Ohio continues to be fairly conservative on the “employee versus independent contractor” disputes and with proper presentation of evidence under the standard “right to control” test, a lack of employment relationship frequently can be found. 

Industrial Commission Update

Memo D8 (“Temporary Total Disability Certification for Physical and Psychological Conditions”):

During the first six weeks after the date of injury, temporary total disability can be certified by a physician, certified nurse practitioner, clinical nurse specialist, psychologist, or physician assistant who has examined the injured worker.

Both during and after six weeks from the date of injury, certification of temporary total disability for physical conditions may be submitted by a Medical Doctor, Doctor of Osteopathy, Doctor of Podiatric Medicine, or Chiropractor.

Both during and after six weeks from the date of injury, certification of temporary total disability for psychological conditions may only be submitted by a Psychologist, Medical Doctor, or Doctor of Osteopathy.

Memo F4 (“Loss of Use of Vision and/or Hearing Secondary to a Traumatic Brain Injury”):

R.C. 4123.57(B) does not permit an award for loss of vision or hearing resulting from the loss of brain stem functioning.  To be entitled to an award for loss of vision or hearing, evidence must demonstrate an actual loss of function of the eyes or ears.

Memo F6 (“Orders Awarding Scheduled Losses”):

When awarding compensation for a scheduled loss, hearing officers shall provide a start date for the award.  In the case of amputation or actual loss, the start date is the date of amputation or loss.  In the case of a loss of use, the start date is the date of the earliest medical evidence being relied upon to make the award. 

However, pursuant to R. C. 4123.52, in no case shall the start date be earlier than two years prior to the filing of the application seeking the award.

Memo S-11 (“Request for Allowance of a Condition by Either Direct Causation, Aggravation/Substantial Aggravation, or Flow-Through, and Jurisdiction to Rule at Hearing”):

If there is evidence on file or presented at hearing to support the theories of direct causation, aggravation (date of injury or disability prior to August 25, 2006)/substantial aggravation (date of injury or disability on or after August 25, 2006), or flow-through, a request to allow a condition in a claim is to be broadly construed to cover those theories of causation.  The hearing officer shall address the origin of the condition under those alleged theories of causation without referring the claim back to the prior hearing level or the Bureau of Workers’ Compensation.  Where a new theory, not formerly requested, is raised at hearing or where new evidence regarding an alternative theory of causation is submitted by any party, hearing officers and/or hearing administrators shall ensure that all parties are given adequate opportunity to obtain evidence in support of their position by continuing the hearing for a period of at least 30 days, unless the parties agree that less time is sufficient for obtaining the necessary evidence.  The hearing officers and/or hearing administrators shall state in their order or compliance letter the period of time allotted to obtain the necessary evidence.

New BWC Rules

OAC § 4123-6-32 (“Payment for Lumbar Fusion Surgery” 1/1/18).

This new rule requires at least sixty days of conservative care before considering a surgical fusion option.  Exceptions: spinal fractures, tumors, progressive functional neurological deficits.

OAC § 4123-6-33 (“Payment for Health & Behavioral Assessment and Services” 7/1/18).

This rule allows for a modicum of psychological-type assessment and counseling in order to help a physician “address cognitive, emotional, social and behavioral issues interfering with expected healing,” without adding a psychological condition to the claim.

New BWC Form – C-512 (“Notice of Intent to Settle”)

This form puts the BWC (and presumably any others receiving it) on notice that, after a final order of the Industrial Commission, the parties are entering into settlement negotiations.  This allows the Statute of Limitations governing the filing of an appeal into court of an adverse order of the Commission on allowance and additional allowance issues to be extended from sixty days to one hundred and fifty days, “unless the opposing party files an objection of the Notice of Intent to Settlement within fourteen days after date of receipt of the Notice of Intent to Settle.”

Medical Marijuana

Medical marijuana has come to Ohio, although the rules governing the dispensing, etc. of medical marijuana are not yet set.  However, BWC has gone on record with an August 2018 bulletin that essentially states that BWC’s position is that medical marijuana does not exist in Ohio for workers’ compensation purposes.  This is based on the fact that medical marijuana is not an approved FDA drug, will not be dispensed by a registered pharmacist, and is not listed on the BWC pharmaceutical formulary.  Thus, marijuana is not an approved drug in Ohio for workers’ compensation purposes.

Additional Ohio BWC Updates

Since our last update, the Ohio Bureau of Workers’ Compensation (BWC) has implemented additional changes affecting Ohio employers.  A summary of some of the more intriguing updates follows:

Motor Vehicle Accidents Not Chargeable – Updated Application In Process

As previously reported, the passage of House Bill 207 states that if a State Fund employer can establish that an employee’s claim is the result of a motor vehicle accident involving a third party in which the employee was not at fault, the cost of that claim will be excluded from the employer’s future premium rating calculations.  This law/policy is effective for accidents occurring on or after July 1, 2017.

The law, as originally written, required that to obtain the claim cost exemption, the third party at-fault driver must have active insurance coverage, or the employer must have active uninsured motorist’s insurance coverage,and the at-fault driver must have been issued a citation as a result of the accident.

Initial experiences with this new procedure revealed that the citation requirement was in many cases an unforeseen stumbling block in gaining BWC approval of the exemption, as issuance of a citation tends to be discretionary, and therefore is not always available. 

This unintended consequence was brought to the attention of the Ohio legislature, and an amended law has been passed & signed by the Governor.  This revision removes the requirement for an actual citation, but fault on the part of the third party must still be shown.  The change is intended to be retroactive to the original July 1, 2017 effective date of the law, which will require the BWC to re-adjudicate previously denied applications for recovery.

BWC is currently finalizing their procedures to comply with the revised law.  We urge employers to re-visit any claims involving motor vehicle accidents occurring July 1, 2017 or after, to ensure that if applicable, this potential 100% recovery is obtained.

Failure to meet all the requirements of this new statute, however, does not prevent the BWC from pursuing their historical rights to subrogate against a responsible third party, and provide proportional relief to the employer’s rating experience based on the amount they recover.

Rating Experience Changes / Premium Credits for July 2019 Policy Year

BWC analyses suggest that premiums for individually rated State Fund employers (those who are not in group experience rating programs or involved with PEOs) may not be adequately aligned to their actual claims costs.  As a result, BWC has implemented a number of changes to the factors which govern BWC’s experience rating calculations, and the resulting premiums charged to many Ohio employers.

The most significant of these changes involves introducing a Premium Size Factor to reduce the premiums of non-group experience rated employers who pay in excess of $5,000 in annual premium.

 The reductions, which will be applied automatically to the employer’s premiums, are:

    ·         15% discount on premiums between $5,000 and $100,000

    ·         20% discount on premiums between $100,000 and $500,000

    ·         25% discount on premiums above $500,000

The impact of these changes suggest that long-standing rating program selections should be closely examined to determine if they still provide optimum results, especially for employers with larger premium and/or moderate loss ratios.

For instance, for a larger employer, if traditional group experience rating results in savings of less than ~25%, consideration may be given to the group retrospective rating option, which could provide downstream rebates dwarfing the traditional up-front group rating discounts.

Employers’ third party administrators or other resources should be consulted to determine how their premiums and alternative rating program options may be affected by these proposed changes. 

Other changes for the July 2019 policy year include:

    ·         An experience modifier adjustment factor for individually rated employers 

        o   Experience modifier adjustment credit of 5% for EMRs 0.90 and lower

        o   No adjustment factor for EMRs 0.91 to 1.99

        o   Experience modifier adjustment penalty of 5% for EMRs 2.00 and higher

    ·         Revised group retrospective rating program basic premium factors to compensate for the premium size factor               adjustments

    ·         Reduce the maximum chargeable claims losses for the smallest Ohio employers

July 2018 Policy Year Rates Reduced

The BWC reduced private employer premium rates by an average of 12% for the July 1, 2018 policy year.  BWC estimates this will save private employers $163.5 million during the policy year ending June 30, 2019. 

Ohio Workers’ Compensation rates are at their lowest point in over 40 years, with no overall rate increases since 2007.

Employers should consult their third party administrators or other resources to confirm the impact of these rate changes, as individual manuals’ base rate changes can range from +14% to -36%.  

Additionally, premium rate reductions often are accompanied by similar reductions to expected loss rates, which can result in higher experience modifiers that would at least partially offset base rate reductions.

BWC Wellness Initiative

Through their recently announced “Better You, Better Ohio” program, BWC is taking steps to introduce wellness resources and services to workers who work for small employers (50 or fewer workers).

At present, this program is limited to the following high-risk industries:  agriculture; automotive repair and service; construction; firefighters; health care; manufacturing; police and public safety; public employers; restaurant and food service; transportation and trucking; trash collection; wholesale and retail.

Upon being identified by Ohio’s WC Managed Care Organizations (MCOs), and by agreeing to participate, injured workers can qualify for free services such as:

    ·         Health and wellness awareness, education and training

    ·         Health assessments & biometric screenings to better understand their health and well-being

    ·         A website allowing them to develop health plans & track progress to achieve their health goals

    ·         A state-of-the art mobile app for creating weekly action plans and getting health tips

    ·         Digital coaching to help them on their journey to better health.

This program, still in its infancy, strives to extend the BWC’s existing Wellness Grants program, which offers up to $15,000 in refunds to employers (usually larger ones) who implement a comprehensive Wellness program including biometric measurements and coaching to address at risk health behaviors.

A number of Ohio-certified Wellness program developers, including Paramount Preferred Solutions, are available to assist employers to implement Wellness programs which qualify for the BWC Wellness Grant reimbursements.

About the Author

Michael Brown, ARM is an Account Executive with Paramount Preferred Solutions, a Third Party Administrator (TPA) recognized nationally for expertise in all aspects of Workers’ Compensation, Group Health, and Disability Management solutions.  Michael has over 38 years’ experience in the Workers’ Compensation and Risk Management business since obtaining his mathematics & statistics degree from Miami University in Oxford, Ohio. 

In addition to experience as a claims examiner and hearing representative, Michael has consulted with employers on the development and maintenance of best in class strategies, including evaluating the wide array of risk financing options available to employers.  Michael has also served as a Workers’ Compensation and Employee Benefits Manager for a multi-facility self-insured employer, and is well versed in Integrated Disability Management programs and philosophies.  This experience and his certification as an Associate in Risk Management (ARM) affords him in-depth insight into creative and wide reaching solutions to the most complex Workers’ Compensation challenges. 

With his extensive experience in the field of workers’ compensation and other employee benefit matters, Michael consults with employers in a number of ways to allow them to save time and money by reducing the risk and costs of illness and injury. 

Please feel free to reach out to Michael at mike.brown@promedica.org, www.linkedin.com/in/michaelbrown5 or (844) 777-5867 ext. 301770.

Daniel Cotto worked as a forklift operator at Ardagh Glass in Bridgeton, N.J.  On November 1, 2016, Cotto hit his head on the roof of a forklift at work.  He was advised to see Premier Orthopedics in Vineland, N.J. for a medical examination, and a Premier Orthopedics doctor placed Cotto on light duty work with a follow-up appointment set for December 8, 2016.  The Safety Department asked Cotto to submit to a breathalyzer and urine test in order to return to work.  Cotto explained that he was taking prescription medications, including medical marijuana under the New Jersey Compassionate Use of Medical Marijuana Act (“CUMMA”).  He was also taking prescription Percocet and advised the company that he could not pass any urine or drug test.

Cotto alleged that he was told he could no longer work at Ardagh Glass because he could not operate machinery while on narcotics.  Cotto argued that he revealed his prescription medications to the company when he was hired.  His doctor had given him a note stating he could operate machinery while using these drugs.  The company advised that it was not concerned about his use of Percocet but was concerned about his use of marijuana.

Cotto was not fired but he was placed on an indefinite leave.  He was not permitted to return to work until he could pass a drug test.  Cotto’s doctor wrote that Cotto had lifting restrictions because of medical conditions, but Cotto maintained that he could perform the essential functions of the job.  He sought a “reasonable accommodation,” specifically asking that the company waive any requirement that he pass a drug test for marijuana.

Eventually Cotto filed a law suit asserting disability discrimination and failure to make reasonable accommodations.  Ardagh Glass moved to dismiss the complaint because CUMMA does not mandate employer waiver of a drug test.

Initially the federal court agreed that Cotto plead enough to satisfy coverage under the New Jersey Law Against Discrimination.  His back and neck pain met the standard of the NJLAD.  The Court also noted that Cotto appeared to be qualified to perform the essential functions of the job, having done it for five years.  Ardagh, however, maintained that Cotto could not show that he could operate machinery while using marijuana.  The company noted that use of Percocet was not illegal, but marijuana use was illegal under federal law.

The Court next reviewed CUMMA and said, “The New Jersey legislature found that ‘modern medical research has discovered a beneficial use for marijuana in treating or alleviating the pain or other symptoms associated with certain debilitating medical conditions.’”  The Court added that CUMMA provides an affirmative defense to patients who are properly registered under the statute and subsequently arrested and charged with possession of marijuana.  The Court commented that the decriminalization of medical marijuana does not shield employees from adverse employment actions.

The Court’s decision today is a narrow one, as it must be for the narrow issue presented by Plaintiff’s complaint.  Plaintiff’s discrimination claims turn entirely on the question of whether he can compel Ardagh Glass to waive its requirement that he pass a drug test.  It is plain that CUMMA does not require Ardagh Glass to do so.  We therefore find that Plaintiff has failed to show that he could perform the ‘essential functions’ of the job he seeks to perform.  Ardagh Glass is within its rights to refuse to waive a drug test for federally-prohibited narcotics.

Regarding Cotto’s argument that other injured employees with restrictions had been permitted to work light-duty positions, the Court said that Cotto failed to show that similarly situated employees asked for the specific accommodation he asked for, namely a drug test waiver.

The case can be found at Cotto v. Ardagh Glass Packing, Inc., No. 18-1037 (D.N.J. August 10, 2018).  It is the first decision of its kind in New Jersey on the issue of whether an employer must make a reasonable accommodation of waiving a post-injury drug test for an employee covered under CUMMA.

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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. 

Employees who are out of work due to work injuries or illnesses are eligible for temporary disability benefits at a rate of 70% of wages subject to an annual maximum.  In 2018 that maximum is $903 per week.  That means that the employee who earns $2,000 per week or even $20,000 per week is limited to $903 per week in temporary disability benefits.  But a substantial number of New Jersey employees – particularly public sector employees – receive full salary during their period of work absences and are not limited to the annual maximum.

There are two categories of full salary employees:  those who receive full salary by statute and those who receive full salary by collective bargaining agreement.  The difference is significant and is important to understand.

Full Salary By Statute

One very large group of New Jersey employees receives full salary by statute – employees of boards of education.  Under N.J.S.A. 18A:30-2.1, a board of education employee receives full salary for one year from the date of injury.  So an experienced teacher, for example, earning $1,800 per week receives full salary for up to one year from the date of injury.  Here is the part that is not well known:  that teacher also has no state or federal taxes taken out of the paycheck!  Clearly, that was not the intention of the New Jersey legislature in passing this statute.  The IRS, however, has issued opinions that have resulted in a windfall to education employees such that they actually earn substantially more than they did while working.

How did this happen?  The explanation is really quite simple.  Workers’ Compensation laws are not taxed.  The IRS interprets N.J.S.A. 18A:30-2.1 as a workers’ compensation law because it is a statute passed by the legislature.  The law provides full salary compensation to those education employees who are injured at work for one year.  The IRS therefore concludes that the entire full salary payment is not taxable.  What is the result? Board of education employees keep virtually their whole paycheck while out on workers’ compensation absences up to one year, making more than they did while working.

Full Salary By Collective Bargaining Agreement

The other large category of employees which receives full salary does so by collective bargaining agreement, including those in the public or private sector.  These agreements are negotiated ones between union and management.  In the public sector, virtually all public safety workers, i.e., police, fire, EMT, receive full salary by collective bargaining agreement.  In some towns all municipal employees are covered by such agreements.  In the private sector, there are also comparable negotiated agreements.  The same principle applies:  the police officer earning $2,000 per week receives full salary by negotiated agreement but the employee must pay state and federal taxes from his or her paycheck.

Why the difference?  Because a negotiated agreement is not the equivalent of a law.  It is simply a written agreement between parties.  Therefore when the police officer earning $2,000 per week is out on workers’ compensation, all the same deductions come out of the paycheck.

The IRS would be more receptive to not taxing the entire full salary payment of a public safety employee if the municipality passed an ordinance, and the elected officials voted on it, as opposed to simply negotiating a collective bargaining agreement.

There are generally time limits for full salary under both scenarios.  Under Title 18A the full salary period ends at one year.  After that the third party administrator or carrier pays temporary disability benefits directly to the employee subject to the $903 maximum rate.  The same is true of most collective bargaining agreements.  Most public sector employers provide some limitation to the full salary period, perhaps six months or a year, but a good number remain unlimited, ending only at maximal medical improvement or return to work.

When an employee who was receiving full salary is reduced to the maximum rate of $903 per week for a 2018 injury, he or she may request that the employer allow supplementation of workers’ compensation benefits with accrued leave – sick time, vacation time, or personal days.  This is discretionary on the part of the employer, unless the collective bargaining agreement addresses the issue.  The FMLA does permit substitution of paid leave for those on workers’ compensation, but employees who have been out for a year are not eligible for FMLA since they cannot satisfy the requirement of having worked 1250 hours in the prior year.

The interesting question is what does an employer pay to an employee who is receiving full salary?  Is the police officer who is receiving $2,000 per week while out of work receiving workers’ compensation benefits?  Not really.  The officer is receiving something substantially better than workers’ compensation benefits.  He or she is getting full salary payments in lieu of workers’ compensation benefits. That is part of the negotiation.

Some public employees have argued that the workers’ compensation portion of their check (for example $903 of the $2,000 paycheck) should be tax free, but that would result in a windfall to the employee.  Our hypothetical police officer would be getting $903 tax free on top of $1,100 approximately taxable.  Viewed properly, the full salary employee is not getting workers’ compensation at all.   The 70% temporary disability check goes to the employer from the third party administrator or carrier as a partial reimbursement for the full salary check.

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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.