State News

We all know the rules for coverage in New Jersey under the “premises rule,” the rule that replaced the former going-and-coming rule.  N.J.S.A. 34:15-36 states that one is covered for workers’ compensation purposes when he or she arrives at a place of employment owned or controlled by the employer.  That is easy enough, but what about employees who do not report to the normal place of business of the employer, such as a carpenter who drives to a housing development every morning in a company truck?

The statute has different rules for those workers who report to job sites and not the normal office locations that most of us report to daily.  It says this: “… the employment of employee paid travel time by an employer for time spent traveling to and from a job site or of any employee who utilizes an employer authorized vehicle shall commence and terminate with the time spent traveling to and from a job site or the authorized operation of a vehicle on business authorized by the employer.”  This sentence says two totally different things:

A. Employees who are paid travel time are covered traveling to and from a job site; this is the old portal-to-portal rule.

B. Employees who use an authorized vehicle may be covered when they are pursuing business authorized by the employer.

This is the only part of the statute in which the use of an employer authorized vehicle actually can turn the outcome of a case.  Unfortunately, the statute does not explain what an employer authorized vehicle means. Clearly, it would cover a company car or business truck.  But does it mean just a personal vehicle for which the employee gets reimbursed mileage? There is no answer to that question but the likely answer is probably not.

The more one focuses on this language regarding the use of an authorized vehicle, the more one realizes how broad this language is.  It goes way beyond just those who are paid travel time.  It suggests that travel time is not necessary at all for coverage when an employee is utilizing an employer authorized vehicle on business authorized by the employer and the drive is not to the office of the employer.  What if the carpenter above drives to a Home Depot on a Saturday when he is not working to get sheetrock as requested by the supervisor?  (Presumably this would be covered). Does it mean that the carpenter who drives to a job site in the morning from his or her home and does not receive paid travel time is covered portal-to-portal because the carpenter is using an employer authorized vehicle on business?  The key words are “authorized vehicle on business authorized by the employer.”  Again, there is no reported case on point.

Very few employees are actually paid travel time over and above their normal pay.  But there are tens of thousands of New Jersey employees who use an authorized vehicle on business authorized by the employer.  They often leave home in a company vehicle and report to a job site – and they may be able to argue successfully that they are then covered because they are using an authorized vehicle on business authorized by the employer.  As noted above, there is no reported case on this issue.

The statute also says that an employee is covered when he or she is required by the employer to be away from the employer’s place of employment.  This is known as the “special mission” exception.  So if a defense lawyer is required to go to court by the law firm, the trip is covered because the employee is required to be away from the law firm, which is the employer’s place of employment.  The question is this:  is a job site considered the same as the employer’s place of employment if the employer does not have a regular office or place of business in New Jersey?  Many companies do not have a regular place of employment in New Jersey.  There are insurance companies which have no office in New Jersey; there are health care companies which have no office in New Jersey; there are sales companies with no office in New Jersey.  Employees of these companies work from their home.

Suppose a health care company has a nurse’s aide who leaves her home and drives to the same patient’s home every day for months using her personal vehicle? The nurse’s aide has no office to report to in New Jersey and is not paid travel time.  Is that drive covered for workers’ compensation purposes?   Is the nurse’s aide engaged in routine travel to work (not covered) or is she covered because she is reporting to a job site?  It would seem that the nurse’s aide will have a hard time arguing that her personal vehicle is an “employer authorized vehicle” if it is not a company car and if she is not paid travel time.  The nurse’s aide will also have a hard time arguing that she is required to be away from her employer’s place of business if there is no regular office where she works.   The “job site” is where she works every day.  So the nurse’s aide may have to argue that her home is her place of employment.  She may argue that since she is required to be away from her place of employment (her home), she should be covered on the ride to the patient’s home.  This is an interesting situation, and it is more and more common as employees are encouraged to work from home.  Unfortunately, the statute is not particularly helpful in providing an answer.

The author wishes to thank Stephen Fannon, Esq., and Judge Richard Hickey for their analysis of this interesting and little known provision of the statute.  Any comments from readers are welcome.

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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. 

Teague Campbell is proud to announce that on March 3, 2018, Asheville Partner Daniel Hayes was officially inducted into The College of Workers’ Compensation Lawyers.  He joins just 23 fellows from North Carolina, including Raleigh Partner Bruce Hamilton, inducted in 2011.

Fellows are nominated to the College by their peers for possessing the highest professional qualifications and ethical standards, character, integrity, professional expertise and leadership over a career of 20 years or longer.  Daniel took an oath committing to a lifelong dedication to professional conduct, scholarly pursuits, integrity, excellence in the law, and a respect for the legal process.

Twenty years ago, Daniel began his career in South Carolina as a workers’ compensation defense attorney.  He continues to practice workers’ compensation and has also developed a thriving Medicare practice.  Daniel is a certified Medicare Set-Aside Consultant and licensed to practice in North and South Carolina.

For more information about The College of Workers’ Compensation Lawyers, please visit: http://www.cwclawyers.org/

YOU WANT ME TO PARK WHERE;

A RECENT PA. WORKERS’ COMPENSATION

 PARKING LOT COMPENSATION CLAIM

By:  Jeffrey D. Snyder, Esquire

            The Commonwealth Court of Pennsylvania reviews the law – a parking lot case.

             In US Airways, Inc., v. WCAB (Bockelman), 612 C.D. 2017, filed February 22, 2018, in an Opinion authored by Judge Brobson, the Court affirmed the granting of a Claim Petition, finding that the Claimant was in the course of employment at the time she was injured by a fall down incident on an airport shuttle bus returning her to one of two employee parking lots after work. 

            The Court reviewed the facts.  The Claimant was employed as a Philadelphia based flight attendant for US Airways, Inc.  In order to get to work, she drove her own vehicle to the airport and parked in one of two designated employee parking lots that were both owned, operated and maintained by the City of Philadelphia/Division of Aviation for the use of all airport employees, not just those employees of US Airways, Inc. 

            In order to park in one of these two lots, employees were required to get a secured identification display area badge issued by the Department of Aviation and paid for by the Employer.  After an employee parks in one of these lots, a shuttle bus transports the employee from the employee parking lot to the airport terminal and the reverse on the return at the end of the workday.  Employer does not own or exercise control over the shuttle buses and did not require its employees to use the airport employee parking lots.  The Employer maintained that it gave its employees no directive whatsoever in terms of how they should commute to work. There is a train from Center City Philadelphia to the airport, with no contentions regarding that alternate means of transportation by either the Claimant or the Employer in this Appeal based on the language in the Opinion.

            The incident in question occurred on January 23, 2015.  The Claimant was returning from a one day and back trip to Miami late in the evening about 9:47 p.m.  She boarded the shuttle bus and attempted to lift her suitcase onto the luggage racks and while doing so stepped in water on the floor causing her right foot to slip out from underneath her.  Her left knee buckled causing her to fall backwards, crushing her left foot under her.  She needed assistance. 

            The Claimant subsequently filed a Claim Petition for injuries to the left foot from this slip and fall incident.  The Answer to the Claim Petition denied that the Claimant was in the scope of employment at the time of the injury. 

            In a Decision circulated April 27, 2016, the Workers’ Compensation Judge granted compensability concluding that the injury occurred on the Employer’s premises, that the Claimant’s presence on the shuttle bus was required by the nature of her employment, and that the injury was caused by the condition of the premises.  The Board affirmed. 

            On Appeal to the Commonwealth Court of Pennsylvania, the Employer was arguing that the Claimant was not injured on the Employer’s premises because the Employer did not own, lease or control the shuttle bus and parking lot, and they were not integral to the Employer’s business.  The Employer asserted further error in the conclusion that the Claimant’s presence on the bus was required due to her employment status because Employer never required Claimant to use the shuttle bus. 

            The Commonwealth Court observed that injuries may arise during the course of employment in two distinct situations.  First, the course of employment may be established by showing that the employee is injured on or off the Employer’s premises, while actually engaged in furtherance of the Employer’s business or affairs.  This was not shown in the case. 

            Alternatively, to establish a course of employment, an employee can show that although not actually engaged in the furtherance of the Employer’s business or affairs, the Claimant is on the premises occupied or under the control of the Employer, or upon which the Employer’s business or affairs are being carried on, and is required by the nature of employment to be present on the Employer’s premises, and sustains injuries caused by the condition of the premises or by operation of the Employer’s business or affairs thereon, further citing to WCAB (Slaugenhaupt v. United States Steel Corporation, 376 A.2d 271 273 (Pa. Cmwlth., 1977).  

            The third prong, the condition of the premises, was undisputedly met, so the Court focused on the first two factors, premises and required by the nature of employment to be present on these premises.            

            In terms of whether the Claimant was on the Employer’s premises, noting the Employer did not own, lease, maintain or control the shuttle bus, the Court observed that Section 301(c)(1) of the Workers’ Compensation Act presents the issue as determinative on the establishment of the site of the accident being so connected to Employer’s business as to form an integral part of that business, citing toEpler v. North American Rockwell Corporation. 393 A.2d 1163 (Pa. 1978).  

            The critical factor is not the Employer’s title or control over the area, but rather the fact that the Employer had caused the area to be used by employees in performance of their assigned tasks.  The Commonwealth Court observed that reasonable means of access to the work place is considered an integral part of the Employer’s business and, therefore, part of the Employer’s premises, citing toNew House v. WCAB (Harris Cleaning Services, Inc.), 530 A.2d 545 (Pa. Cmwlth., 1987),appeal denied, 538 A.2d 879 (Pa. 1988).  Property becomes integral to an Employer’s business when the Employer causes employees to be in the area, citing toEpler, supra.  The Court quoted from the Opinion in Interstate United Corp., 424 A.2d 1015 (Pa. Cmwlth., 1981): 

“[T]he record shows that [Employer’s] cafeteria was located in the interior of the …plan, that employees customarily crossed the foot bridge that Claimant was injured on to enter and exit the cafeteria area, and that [Employer] was aware of this fact.  In numerous cases, Pennsylvania Courts have held that a reasonable means of access to the situs of an Employer’s business operation is such an integral part of an Employer’s business has to be encompassed within the definition of “premises” as determined to be used in Section 301(c)(1) of the Pennsylvania Workers’ Compensation Act.” 

            The Court noted with approval the analysis in Fashion Hosiery Shops v. WCAB, 423 A.2d 792 (Pa. Cmwlth., 1980), where a Claimant sustained injury while approaching an entrance to her workplace.  That Employer had three separate points of entry and indicated no preference to which point an employee should utilize.  That Employer did not own, lease or control the walkway upon which that Claimant fell.  The fact that the Employer inFashion Hosiery Shops did not require any particular point of entry to be utilized, was not found to be significant in the course determination of the premises issue there.  The Court observed that in that case ofFashion Hoisery Shops, supra.: 

“Given the relational nature of the area in question to the Employer’s place of business, it must be concluded that the Claimant was injured on an entranceway that was available and intended for use; and as such, a constituted part of the Employer’s premises, regardless of it not being owned or controlled by the Employer.  Nor does the availability of alternative entrances nullify that conclusion.  Each of the three available and intended ways of ingress to Fashion’s shop was a part of Fashion’s “premises” for purposes of Section 301(c) of the Workers’ Compensation Act.” 

            Turning to the instant case involving Ms. Bockelman, the Commonwealth Court of Pennsylvania observed that Ms. Bockelman used the airport parking lot and shuttle bus to enter and exit the workplace.  She used her vehicle as her means of transportation to work and the airport provided employees who work at the airport, which included Ms. Bockelman, no cost parking in employee parking lots designated by the airport.  Ms. Bockelman rode the shuttle bus in order to get to her workplace.  The Employer, US Airways, knew that as to employees who drove to work, they would need to board the shuttle bus after commuting to the airport and the same for the return trip.  “Accordingly, the shuttle bus is such an integral part of Employer’s business and has to be part of the premises, in addition to being a customary means of ingress and egress, and the WCJ correctly concluded as such.” 

            The Commonwealth Court of Pennsylvania then turned to the next prong of theSlaugenhaupt test, that is whether the nature of Claimant’s employment required her to be on Employer’s premises where she was injured.  The Employer argued that the Claimant’s presence on the shuttle bus was not required, as Employer gave no directive on where to park and hence did not require the Claimant to board the shuttle bus.  

            The Court noted the case of ICT Group v. WCAB (Churchray-Woytunick), 995 A.2d 927 (Pa. Cmwlth., 2010), where a Claimant who slipped on ice on the Employer’s premises while leaving for her lunch break was found to be in the course of employment, the Court pledged no significance on the fact that the Claimant inICT Group independently decided to leave the building during her lunch break, since the Claimant’s presence was required by the nature of her employment.  

            Injuries that occurred reasonably proximate to work hours are compensable, as justified by the observation that once an employee is on the Employer’s premises, actually getting to or leaving the Employer’s work station is a necessary part of an employee’s employment.  Reasonable time is a concept discussed in the case ofHeverly v. WCAB (Ship N’ Shore), 578 A.2d 575 (Pa. Cmwlth., 1990), where the Claimant returned to work after initially leaving because she wanted to retrieve her eyeglasses. 

            The Commonwealth Court of Pennsylvania concluded that in this case, the Claimant’s presence on the shuttle bus was a necessary part of her employment, because it was the means by which he traversed between her work station, which was a terminal, and the parking lot designated for airport employees. The Court considered the Claimant’s presence on the shuttle bus “so connected to her employment relationship” that it was required by the nature of that relationship. 

            This Opinion of the Commonwealth Court illustrates the complexity of parking lot cases that can turn on a nuance.  These cases are highly fact sensitive and suggest that exposures can be somewhat mitigated by advance planning regarding directives to employees as to commuting and the lack of such directives.

                                                                       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.

On February 23, 2018 the Alabama Court of Civil Appeals released its opinion inEx Parte Alabama Gas Corporation denying Alagasco’s Petition for Writ of Mandamus wherein it sought relief from a particularly restrictive HIPAA Order entered by the trial court. It is quite a common occurrence for judges in workers’ compensation cases to enter a "HIPAA Order". The purpose of such an order is to ensure compliance with the Health Insurance Portability and Accountability Act of 1996 (HIPAA), while still allowing parties to obtain protected health information relevant to the case. However, in the underlying case of Robert Smitherman v Alabama Gas Corporation, the trial court entered a HIPAA order that was a departure from the "standard" order typically entered. That order provided, among other things, that the parties and their attorneys were only allowed to obtain protected health information (namely medical records and bills) after issuing a subpoena to obtain them. It also limited the parties’ ability to obtain records pertaining to "personal injury", and prohibited any medical care provider from disclosing any protected health information other than that which directly pertained to the alleged work-related injury. The order further expressly prohibited Alagasco’s attorneys from engaging in anyex parte discussions, conferences, interviews, and/or telephonic or email communications with any of the plaintiff’s healthcare providers without first providing notice to the plaintiff’s attorney.

Alagasco filed a Motion to Amend the HIPAA order, asserting that it prohibited certain methods of discovery that are allowed in workers’ compensation cases. The trial court set Alagasco’s Motion to Amend for hearing on December 20, 2017. However, two days prior to that, Alagasco filed a Petition for Writ of Mandamus with the Alabama Court of Civil Appeals, and also filed a Motion to Stay proceedings at the trial court level, pending the Court of Appeals’ resolution of its mandamus petition. At the December 20, 2017 hearing, the trial court denied Alagasco’s Motion to Stay. However, the judge stated "I think the HIPAA Order, to some degree, is due to be amended...there may be some revision that I acknowledge needs to be made".

Alagasco argued to the Court of Appeals that the HIPAA Order prohibits any meaningful opportunity on the part of Alagasco to make timely determinations of reasonableness, necessity, and relatedness of recommended medical treatment. It also argued that the order precludes any opportunity to ensure that the plaintiff is complaint with reasonable requests to submit to medical treatment as provided in the Act. However, the Court of Appeals denied Alagasco’s petition without ruling on the merits of Alagasco’s arguments. The Court of Appeals held that Alagasco failed to demonstrate that the trial court clearly exceeded its discretion, or that Alagasco lacked another adequate remedy by appeal. Judge Terry Moore wrote a concurring opinion, stating that while he agreed that the Petition for Writ of Mandamus was due to be denied, it was primarily because the trial court had not explicitly refused to act on Alagasco’s Motion to Amend the HIPAA Order.

MY TWO CENTS

Mandamus is an "extraordinary remedy", and is only available when the trial court clearly exceeds its discretion or refuses to act when it is required to do so, and there is no other remedy available. In this case, Alagasco’s Petition for Writ may have been a little premature, since the trial judge indicated that he was considering amending the order. While the Court of Appeals declined to decide the issue on the merits, Alabama is clear how the Courtshould have decided it if the Petition for Writ had been proper. The trial court has broad, but not unfettered, discretion in discovery matters. § 25-5-81(f) of the Alabama Workers’ Compensation Act provides that the same discovery rules apply to workers’ compensation cases as apply to other civil cases, with a few minor limitations aimed at reducing costs. The Supreme Court has previously held that a defendant has a right to contact, and even haveex parte communications with, a plaintiff’s treating physicians. See, Romine v. Medicenters of America, Inc.,476 So. 2d 51 (Ala. 1985). In Romine, the Court held that "No party to litigation has anything resembling a proprietary right to any witness's evidence...Unless impeded by privilege, an adversary may inquire, in advance of trial, by any lawful manner to learn what any witness knows if other appropriate conditions the witness alone may impose are satisfied...". Id. The Supreme Court has also held that a case manager has the right to contact a medical provider by telephone to obtain reasonably necessary information, allowing the employer to fulfill its statutory obligation to provide and oversee the employee’s medical care.Ex Parte Smitherman Bros. Trucking Inc., 751 So. 2d 1232 (Ala. 1999).

ABOUT THE AUTHOR

This article was written by Charley M. Drummond, Esq. of Fish Nelson & Holden, LLC. Fish Nelson & Holden is a law firm located in Birmingham, Alabama dedicated to representing employers, self-insured employers, and insurance carriers in workers’ compensation cases and related liability matters. Drummond and his firm are members of The National Workers’ Compensation Defense Network (NWCDN). The NWCDN is a national and Canadian network of reputable law firms organized to provide employers and insurers access to the highest quality representation in workers’ compensation and related employer liability fields. If you have questions about this article or Alabama workers’ compensation issues in general, please feel free to contact the author at cdrummond@fishnelson.com or (205) 332-3414.

Written by: Brad Inman

Two long-time Deputy Commissioners have recently been nominated by Governor Roy Cooper for appointment to the Full Commission.   Deputy Commissioners Robert J. Harris and Myra L. Griffin have both served in their current roles since 2005, adjudicating cases and conducting full evidentiary hearings around the state.   Their appointments are pending confirmation by the North Carolina General Assembly, so Deputy Commissioners Harris and Griffin will continue to hear cases as Deputy Commissioners until the confirmation process is complete and each has been sworn in.  In addition to policy-setting, the six Full Commissioners sit in panels of three to represent the Commission’s appellate level, hearing claims appealed from Deputy Commissioner decisions. 

The other big news at the Commission is the expected final approval of new rules surrounding the use and prescription of opioids, related medications, and pain management treatment.   The rule-making process is nearing completion, with the stated goals of ensuring that injured workers are provided the services and care intended by the Workers’ Compensation Act and medical costs are adequately contained.  Much more about the specific provisions will be addressed in future blog posts when the rules become official, but the proposed rules will hold medical providers to strict standards and documentation requirements when it comes to prescribing controlled substances.  Certain drugs, such as fentanyl, will be prohibited from prescription during the first twelve weeks of treatment and mechanisms will be put into place to ensure that the lowest effective dosage of narcotic medication is utilized.  Again, the specific rules will be analyzed here when they become effective, which is expected by May 2018.

We are always available for consultation regarding the impact of the Commission appointments, how the current make-up of the Commission affects claim handling, and strategies for utilizing the anticipated opioid rules for maximum claim impact and cost containment. 

I have written many times about the fact that success for employers in workers’ compensation most often comes down to past medical history and causation analysis.  This is particularly true in a state like New Jersey where there is virtually no formal discovery allowed.  Employers need to know in a back claim, for example, whether the injured worker has an extensive prior history of chiropractic treatment or car accidents. But what about the importance of reviewing treating notes of various doctors and therapists after the work accident? This is an underrated concept and deserves some consideration.

This practitioner had a case recently where the employee injured her knee at work and was diagnosed with a partial tear requiring no significant treatment.  Conservative care ensued and the recovery seemed excellent.  Then six months went by and the injured worker suddenly returned back to the authorized doctor stating that her knee had become much more painful.  The treating doctor noted the significant worsening in the knee and mentioned that petitioner had seen her family doctor recently.  The IME doctors put fairly high estimates on the knee, leading to a potential award of 20% of the leg with the potential for knee surgery on a reopener.

Our office sent a subpoena for the family doctor’s records with particular interest on the visit in the summer noted in the treating doctor’s report.  That entry in the family doctor records stated, “Patient was doing some challenging rock climbing over the weekend and jumped from a height landing on her knee, causing intense pain and swelling.”  That was the only reference to this new incident, and obviously this constituted a significant event. It accounted for the sudden visit to the treating doctor after six months of no treatment.  This information changed the course of the case.  It allowed respondent to avoid a significant order approving settlement with reopener rights.  Instead the case settled for a nominal Section 20.  But for the subsequent family doctor records, this employer would have paid ten times as much money, bought a likely reopener, and eventually a likely knee surgery with a higher award.

Defense counsel, adjusters and employers must scrutinize subsequent treatment records, PT notes, and tools like ISO reports.  When an employee like the claimant above reinjures her knee, that new incident amounts to the same thing as a work accident – except it is a non-work event that breaks the chain of causation.  If someone falls in a grocery store while shopping and reinjured his shoulder before the case is settled, that subsequent accident may be perhaps of equal significance to the original fall at work that injured the shoulder.  The same is true of subsequent car accidents that cause significant treatment, new MRIs, and injections in a person who has already had a work-related back injury.

Subsequent non-work accidents are pivotal in many workers’ compensation case. These accidents often relieve the employer of paying an expensive order approving settlement with reopener rights. The reason is simple: injured workers receive permanent disability benefits for their “current complaints” at the time of settlement.  The current complaints incorporate the complaints from the subsequent non-work accident.  Employees are not entitled to receive permanency awards for their condition before the subsequent non-work event.  Think about it:  if a non-work accident has objectively worsened the medical condition originally injured in the work accident, it is impossible to distinguish the effects of the medical condition before the subsequent non-work injury from the effects after the subsequent injury.  The employee might have healed if it were not for the subsequent non-work injury.  The testimony at settlement regarding present complaints will by definition be closer in time to the events of the non-work accident.  For the petitioner to prove that the present complaints are unaffected by the subsequent accident is impossible if the non-work subsequent accident worsened the medical conditions from the work accident.  It would be like putting additional ingredients in a basic smoothie, drinking the smoothie for the first time, and then trying to describe what the drink would have tasted like before the ingredients were added.

Practitioners should read PT notes religiously.  They often contain amazingly important nuggets of information about non-work activities.  Most physical and occupational therapists are prolific note takers.  They know how important it is to get the interim medical history, and they write it down.  How many times have counsel read PT notes and discovered that the injured worker is complaining of a new injury playing sports over the weekend?  That new injury may explain a sudden change in condition and break the chain of causation.  It may lead to a Section 20 that otherwise would not have occurred.  Nor should the practitioner assume that the IME doctor is going to read the treating notes thus relieving the obligation of defense counsel and adjusters to read them.

Just as prior family doctor and chiropractic records often hold the key to the defense of a workers’ compensation case, so too subsequent treating notes may dramatically lower the defense exposure and lead to enormous savings for employers.

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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.

The Texas Third Court of Appeals issued its opinion in the lead Texas air ambulance case on January 31, 2018.PHI Air Medical, LLC v. Texas Mutual Insurance Company, Hartford Underwriters Insurance Company, TASB Risk Management Fund, Transportation Insurance Company, Truck Insurance Exchange, Twin City Fire Insurance Company, Valley Forge Insurance Company, et al., No. 03-17-00081-CV, (Tex. App.—Austin Jan. 31, 2018, no pet. h.).

The court of appeals’ opinion reverses the trial court’s judgment in favor of the carriers and remands the case to the trial court for further proceedings.  The court of appeals held that the federal Airline Deregulation Act (ADA) preempts Texas’ workers’ compensation laws that regulate reimbursement to air ambulance carriers.  The court also held that the McCarran-Ferguson Act (MFA) does not prevent ADA preemption in this case.  Whether the MFA applies to prevent inadvertent federal preemption depends on whether the state laws regulate the “business of insurance.”  The court held that the Texas statutes that direct workers’ compensation carriers how much to reimburse health care providers do not regulate the “business of insurance,” although the basis for that decision is not entirely clear.           

The U.S. Supreme Court has held that state laws that prescribe the terms of the insurance policy directly regulate the “business of insurance.”  The carriers argued that Texas’ workers’ compensation laws do precisely that in this case.  The terms of the workers’ compensation policy are literally the Workers’ Compensation Act and Division rules.  Workers’ compensation carriers are required to use a standard policy written by the Texas Department of Insurance which provides that carriers must pay the benefits required by the workers’ compensation law.  The policy itself is only two pages long because it incorporates Texas’ workers’ compensation laws.  Thus, the state actually writes the terms of the workers’ compensation policy which the U.S. Supreme Court has recognized falls squarely within the business of insurance.     

The court of appeals’ opinion leaves numerous unanswered questions including the Division’s authority to decide air ambulance fee disputes if it can’t apply its fee guidelines to determine reimbursement; the standards to be applied to determine reimbursement in the absence of the Division’s fee guidelines; and whether the carriers have any obligation to pay more than the amount provided by the Division’s fee guidelines since that is all they are contractually obligated to pay under their policies.

The insurance carriers will likely file a motion for rehearing with the court and if necessary, a petition for review in the Texas Supreme Court.  The federal preemption issue is also pending in federal district court in Austin in the case of Air Evac EMS, Inc. v. State of Texas, Ex Rel. Department of Insurance, Division of Workers' Compensation et al.  Briefing in that case is currently scheduled to end May 7, 2018.

-James Loughlin, Stone Loughlin & Swanson, LLP.

Arlington physician Arnold J. Morris, M.D. has failed – again – in his effort to enjoin the Texas Medical Board from attempting to discipline him for allegedly over-prescribing medications. The United States Court of Appeals for the Fifth Circuit has affirmed the district court’s dismissal of Dr. Morris’ lawsuit against the Board. The decision would appear to clear the way for the Board to resume its disciplinary action against him.

In his request for an injunction to stop the Board proceeding, Dr. Morris had enlisted the help of State Representative William Zedler, District 96 (R-Arlington). According to the report of the U. S. magistrate judge, at a hearing on his motion for a preliminary injunction Dr. Morris called Representative Zedler as a witness to support his claim that the complaint against him was “ginned up.”  That testimony reportedly revealed that Representative Zedler had called and emailed the Board president about the Board’s investigation of Dr. Morris. 

Apparently this is not the first time that Representative Zedler has intervened on behalf of doctors who were investigated by the Board. According to the “Ethics Explorer” section of theTexas Tribune, Representative Zedler previously has requested confidential records from the Board in order to assist doctors who were being investigated and at least two of the doctors, who were not his constituents, had contributed to his campaign.

- David Swanson, Stone Loughlin & Swanson, LLP.

March 1, 2018  is the deadline by which insurance carriers must begin using the new and improved versions of Plain Language Notices (PLNs). The Division of Workers’ Compensation revised the notices in September 2017. Use of the revised forms was optional prior to March 1 but now is mandatory and use of the old forms is a potential administrative violation.

Ever seen an administrative violation from the Division of Workers’ Compensation and wondered how in the world it came up with the amount of the penalty? So have we. But that may be about to change. The Division is in the early stages of drafting amendments to rules that will require a change to its procedure for assessing such penalties. The amendments to Rule 180.8 and 180.26 will, among other things, require the Division to explain the factors it considered in determining the amount of the penalty. 

The amendments are in response to changes to Labor Code §415.021 that became effective September 1, 2017. Those legislative changes apparently were prompted by concerns from system participants that the Division’s determination of penalty amounts was arbitrary.  

The Division has posted informal working drafts of the amendments on its website. It is seeking comment on the drafts through March 7, 2018. You may send an email to InformalRuleComments@tdi.texas.gov to comment on the drafts.

- David Swanson, Stone Loughlin & Swanson, LLP.