Let’s take a moment to consider this hypothetical scenario:

John Smith is at work for the Widget Company working on the assembly line.  Mr. Smith has been working for about 10 hours when he faints, causing him to fall and hit his head on the ground beneath him.  The Widget Company gets Mr. Smith to an emergency room where several tests are run to determine the cause of Mr. Smith’s fainting spell.  A review of the diagnostic testing and Mr. Smith’s medical history uncovers that Mr. Smith has a history of fainting due to a personal health condition and he has experienced these fainting spells several times in the background. The Emergency Room physician tells Mr. Smith that the fainting spell was related to his personal health condition and provides him recommendations how to address this issue in the future.

Now, the million-dollar question:  Is the diagnostic testing performed on Mr. Smith a covered benefit under South Dakota workers’ compensation law?

Whenever the purpose of the diagnostic test is to determine the cause of a claimant’s symptoms, which symptoms may be related to a compensable accident, the cost of the diagnostic test is compensable, even if it should later be determined that the claimant suffered from both compensable and noncompensable conditions.  Mettler v. Sibco, 2001 S.D. 64, ¶ 9, 628 N.W.2d 722, 724.  

We get several questions about whether or not diagnostic testing is compensable when the ultimate outcome relates the reason for the event pointing to a personal health condition.  However, keep the above case law in mind when evaluating the responsibility for payment of diagnostic testing to determine the medical explanation for an accident or injury.

As always, please call us if you have any questions, we are happy to help. 

Scott Jeannette was an employee of General Mills Progresso. He went into cardiac arrest at work on June 7, 2011 and died nine days later from complications.   He left a wife, Nacole, and a four-year-old son, Chase. Nacole filed a dependency claim petition over six months past the two-year statutory filing deadline. General Mills Progresso denied the claim as time barred. The Judge of Compensation denied both the widow’s claim and her son’s claim as time barred, leading to an appeal.

Ms. Jeannette argued on appeal that she experienced a period of temporary incapacity, which should excuse her failure to file in a timely fashion. As to her son, she argued that his claim should be tolled due to his infancy.

The Appellate Division considered the main argument of Ms. Jeannette, which was that a decision by the Supreme Court in a non-workers’ compensation context mandated a more liberal interpretation of the workers’ compensation statute, as it reads, N.J.S.A. 34:15-51 requires claimants to file their petitions in workers’ compensation within two years of the date of the accident.   The statute also provides that “proceedings on behalf of an infant shall be instituted and prosecuted by a guardian, guardian ad litem, or next friend.”  The statute goes on to provide that any claims not filed within the two-year period are forever barred.

Counsel for Ms. Jeannette argued that the case of Lafage v. Jani, 166 N.J. 412 (2001) should apply to workers’ compensation. In that case the Supreme Court of New Jersey allowed surviving children to bring a claim under the Wrongful Death Act, N.J.S.A.2A:31-1 to -6, for a parent’s death even after the statute of limitations period had expired.   The Appellate Division rejected the argument that this wrongful death statute applied to workers’ compensation cases:

While we acknowledge the Court’s directive to apply statutes of limitations flexibly, we cannot ‘rewrite a plainly-written enactment of the Legislature or presume that the Legislature intended something other than that expressed by way of the statute’s plain language.’

(citations omitted). The Court reasoned, “Here, the Legislature did not include a tolling provision for minors in the workers’ compensation statute, and we do not presume the omission was a legislative oversight.” The Court noted that the Legislature must have considered the rights of minors because they did provide for guardians to represent minors in workers’ compensation.

In essence, the Court relied on the clear reading of the workers’ compensation statute and acknowledged that workers’ compensation is a creature of statute. It will be interesting to see if the widow seeks certification from the Supreme Court on this issue. The case can be found at Jeannette v. General Mills Progresso, A-5417-15T2 (App. Div. February 6, 2018).

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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 Division’s 14-month project to scan 19,634 boxes of records containing over two million claim files is nearing completion.  The paper files are from cases with injury dates between 1992 and 2005. 

In 2005, the Division began using an electronic management system and has been keeping digital versions of all paper files since that time. 

By law, the Division must maintain records for 50 years.  Files older than 1992 had previously been scanned onto microfilm, and the Division had been leasing a 24K square foot storage warehouse to house the records, at a cost of $300K/year.

~ This blog submission was prepared by Erin Shanley, an attorney with Stone Loughlin & Swanson, LLC, a law firm dedicated to representing self-insured employers, insurance carriers, and third party administrators in all matters related to workers’ compensation. Stone Loughlin & Swanson is a member of the National Workers’ Compensation Defense Network (NWCDN). If you have any questions about this submission or Texas workers’ compensation in general, please contact Erin by e-mailing her at eshanley@slsaustin.com or by calling her directly at (512) 343-1300.

According to a recent report from Columbia University, business travel may lead to serious medical conditions that require treatment and may even result in permanent disability.  The study found that people who travel for business two weeks or more a month report more symptoms of depression and anxiety than those who travel one to six nights a month.  They are also more likely to smoke, be sedentary, and report trouble sleeping.  Additionally, for those who consumed alcohol, extensive business travel was associated with symptoms of alcohol dependence. 

In Texas, employees engaged in business travel (i.e., a special mission) remain in the course and scope of employment for the duration of the special mission unless there has been a “deviation” from or abandonment of the course and scope of employment.   Aetna Cas. & Sur. Co. v. Orgon, 721 S.W.2d 572 (Tex. App.-Austin 1986, writ ref’d n.r.e.).   This is sometimes referred to as the principle of “continuous coverage.”  The "continuous coverage doctrine" extends workers’ compensation liability for injuries even when an employee is technically off duty. 

Bottom line: Employers and carriers should exercise safe protocols to prevent their employees from developing mental health issues, including alcoholism and depression, as there is now scientifically-backed evidence that business travel is a potential occupational hazard.

The results of the study are published online in the Journal of Occupational and Environmental Medicine.  (Andrew G. Rundle, Tracey A. Revenson, Michael Friedman. Business travel and behavioral and mental health. Journal of Occupational and Environmental Medicine, 2017; 1 DOI: 10.1097/JOM.0000000000001262.)

~ This blog submission was prepared by Erin Shanley, an attorney with Stone Loughlin & Swanson, LLC, a law firm dedicated to representing self-insured employers, insurance carriers, and third party administrators in all matters related to workers’ compensation. Stone Loughlin & Swanson is a member of the National Workers’ Compensation Defense Network (NWCDN). If you have any questions about this submission or Texas workers’ compensation in general, please contact Erin by e-mailing her at eshanley@slsaustin.com or by calling her directly at (512) 343-1300.

In the wake of Hurricane Harvey making landfall in numerous counties this past August, the Division had issued a bulletin directing insurance carriers and system participants to extend deadlines for medical examinations, authorize payment for pharmacies to dispense 90-day supplies of medications, reimburse for emergency and non-emergency health care services out of network, and expedite change-of-address processing.  Additionally, the bulletin had suspended deadlines for claims notifications and filing, electronic data reporting, medical and income payments, medical billing, and medical and income benefit disputes. 

The Division has issued a subsequent bulletin directing system participants to resume normal claims processing and dispute resolution operations effective January 10, 2018, stating that it is now practical and in the best interests of the workers’ compensation system to do so.  All standard workers’ compensation deadlines and procedures are now back in effect.

~ This blog submission was prepared by Erin Shanley, an attorney with Stone Loughlin & Swanson, LLC, a law firm dedicated to representing self-insured employers, insurance carriers, and third party administrators in all matters related to workers’ compensation. Stone Loughlin & Swanson is a member of the National Workers’ Compensation Defense Network (NWCDN). If you have any questions about this submission or Texas workers’ compensation in general, please contact Erin by e-mailing her at eshanley@slsaustin.com or by calling her directly at (512) 343-1300.

After a report conducted by the Workers’ Compensation Research and Evaluation Group concluded there was no statistical difference in disability duration between CARF-accredited and non CARF-accredited programs, the Division has proposed amendments to Division Rules 134.600 (regarding preauthorization, concurrent utilization review, and voluntary certification of health care) to remove the exemption status from CARF-accredited facilities.   The Division is also proposing to amend Rule 134.230 (regarding return to work rehabilitation programs)  to set one fee schedule for work hardening and work conditioning services, regardless of a facility’s accreditation status, by removing the increased payment to CARF-accredited facilities providing these services. 

The proposed amendments are additionally intended to implement Senate Bill 1494 of the 85th Legislative Regular Session, which amended Texas Labor Code Section 413.014 to require preauthorization and concurrent utilization review for health care facilities providing work-hardening (WH) or work-conditioning (WC) programs.  Currently, health care facilities that are accredited by the Commission on Accreditation of Rehabilitation Facilities (CARF) are exempt from preauthorization and concurrent review requirements for WH and WC.  The bill no longer requires, but instead permits, the commissioner, by rule, to exempt a credentialed health care facility providing WH and WC services from preauthorization and concurrent review requirements.

The Division is accepting comments for the amendments.  The informal working draft is available atwww.tdi.texas.gov/wc/rules/drafts.html.  The comment period closes on February 2, 2018 at 5:00 p.m.

~ This blog submission was prepared by Erin Shanley, an attorney with Stone Loughlin & Swanson, LLC, a law firm dedicated to representing self-insured employers, insurance carriers, and third party administrators in all matters related to workers’ compensation. Stone Loughlin & Swanson is a member of the National Workers’ Compensation Defense Network (NWCDN). If you have any questions about this submission or Texas workers’ compensation in general, please contact Erin by e-mailing her at eshanley@slsaustin.com or by calling her directly at (512) 343-1300.

On January 2, 2018, Medical Advisor Patrick M. Palmer, M.D., sent out a notice advising system participants that the Medical Quality Review Panel (MQRP) had finalized its CY 2018 Medical Quality Review Annual Audit Plan (Annual Plan).  The Annual Plan sets priorities for the types of audits the MQRP will initiate during the year.

According to the Annual Plan as approved by Commissioner Brannan, the two categories of focus will be: (1) the appropriateness of a health care provider’s decision and recordkeeping for prescribing opioids; and (2) the appropriateness and necessity of health care providers (excludes designated doctors) referring for testing.  Notably, the following specific services were specifically mentioned as being subject to review:  muscle testing, range of motion (ROM) testing, needle electromyography (EMG), and nerve conduction tests.

The Division had solicited input from workers’ compensation participants on November 20, 2017 regarding the two potential categories for the Annual Plan, but received no input.  Therefore, Commissioner Brannan approved the plan as proposed on December 27, 2017.
 
The Division plans to obtain stakeholder input on the development of each individual plan-based audit proposal for categories within the Annual Plan, and will then post a plan-based audit that, according to the Medical Advisor, includes: inclusion and exclusion criteria; service time frame to be audited; sample size; and subject and case file selection.  All medical quality reviews initiated on or after January 1, 2018 will be performed in accordance with this approved medical quality review process.  

~ This blog submission was prepared by Erin Shanley, an attorney with Stone Loughlin & Swanson, LLC, a law firm dedicated to representing self-insured employers, insurance carriers, and third party administrators in all matters related to workers’ compensation. Stone Loughlin & Swanson is a member of the National Workers’ Compensation Defense Network (NWCDN). If you have any questions about this submission or Texas workers’ compensation in general, please contact Erin by e-mailing her at eshanley@slsaustin.com or by calling her directly at (512) 343-1300.

The Division is currently accepting public comments on proposed amendments to Division Rules 134.500, 134.530, and 134.540 affecting the provision of compound prescription drugs in the workers’ compensation system.  The proposed amendment to Rule 134.500 would exclude from the closed formulary all compound prescription drugs, and proposed amendments to Rules 134.530 and 134.540 would require preauthorization of compound prescription drugs for both network and non-network claims.

The proposed rule changes would not prohibit the use of compounded drugs, but those drugs would need to be determined to be medically necessary via preauthorization through utilization review prior to being dispensed to a workers’ compensation claimant. 

According to the Division’s data on pharmacy billing and its ongoing audit of doctors’ practices, the cost of compounded drugs doubled from 2010 to 2014, increasing from $6 million to $12 million.  Although the average cost per prescription was $829 in 2016, increasing from $356 in 2010, our firm saw multiple individual prescriptions topping $10K per 30-day supply in 2016.  And a May 2017 report by the Division’s Research and Evaluation group found that the number of compounded drugs increased from 18,020 prescriptions in 2010 to 26,380 in 2014.  Of that, almost a third of compounded drug prescriptions were to treat back injuries.  The Division found these numbers concerning because compounded drugs aren’t recommended as first line medications in treatment guidelines for injured employees, and members of the House Committee on Business & Industry asked the Division to address the issues through a new rule.   As a result, on June 16, 2017, the Division announced an informal draft rule to require that compounded drugs be preauthorized.

Compounded drugs are not FDA-approved, nor does the FDA verify their safety, quality, or effectiveness. In fact, the FDA has found that the labeling of compounded drugs often omits important information.  Moreover, poor compounding practices can result in serious drug quality problems, such as contamination or medications that do not possess the purity, strength, and quality they are intended to have.  Finally, the FDA has reported its concern that some compounding pharmacies and pharmacists produce drugs for patients even though an FDA-approved drug may have been medically appropriate for them.

Commissioner Ryan Brannan believes the preauthorization process will strike a balance against these concerns.  “We want to make sure the use of these drugs is being reviewed and that physicians are considering efficacy and appropriateness of alternatives while still ensuring that patients who need compounded drugs will still be able to get them,” Brannan said.

The Division is accepting written comments to the proposed rule changes until 5:00 p.m. February 20, 2018, and will conduct a public hearing relating to the proposed changes on Thursday, February 15, 2018 at 10:00 a.m. in the Tippy Foster Room of the Texas Department of Insurance, Division of Workers’ Compensation, 7551 Metro Center Drive in Austin, Texas 78744.  The hearing will also be audio streamed and the audio stream may be accessed via the DWC Calendar at www.tdi.texas.gov/wc/events/index.html.

~ This blog submission was prepared by Erin Shanley, an attorney with Stone Loughlin & Swanson, LLC, a law firm dedicated to representing self-insured employers, insurance carriers, and third party administrators in all matters related to workers’ compensation. Stone Loughlin & Swanson is a member of the National Workers’ Compensation Defense Network (NWCDN). If you have any questions about this submission or Texas workers’ compensation in general, please contact Erin by e-mailing her ateshanley@slsaustin.com or by calling her directly at (512) 343-1300.

“If you require it, you buy it.”  So said the Honorable Ray A. Farrington, former Supervising Judge of Compensation in Hackensack in reference to situations where an employer required an employee to perform a task that would otherwise be clearly not work related.  The concept of compulsion is an important one to understand in the law.  This concept must be contrasted with mere permission granted by an employer to perform some task or activity.

One of the best examples of compulsion comes from McCarthy v. Quest Intern. Co.,285 N.J. Super. 469 (App. Div. 1995), certif. denied, 134 N.J. 518 (1996).  In that case the petitioner was a bookkeeper for Quest International Corporation.  Her company purchased Unilever and scheduled a joint company picnic, sending out a memorandum stating that attendance was required.  The purpose of the picnic was to help employees in both companies get to know one another.

Ms. McCarthy advised the head of personnel that she did not wish to attend.  She was told that a salary deduction could be taken in that case.  She was also advised that she should set an example for other employees and attend.  The president of the company encouraged employees to socialize with other employees.

Based on this advice, McCarthy attended the joint company picnic.  Once there she was asked by the president if she was going to participate in the tug-of-war.  McCarthy took this as a mandate and then injured herself during the activity.  She filed a workers’ compensation claim and won.  Her employer appealed to the Appellate Division, arguing that McCarthy was just engaging in a recreational activity whose purpose was nothing more than promoting morale.   The Appellate Division agreed with the Judge of Compensation that the injury was compensable, relying on reasoning of Professor Arthur Larson for the principle that an employer has the power to enlarge one’s job duties by assigning tasks outside the usual scope of employment.  By directing the petitioner to perform these duties, the employer in effect bought the injury.

Years later the New Jersey Supreme Court expanded on this principle in Lozano v. Frank DeLuca Const., 178 N.J. 513 (2004).   In that case the petitioner, Mr. Lozano, was a skilled mason who could not drive.  After a long day of work on a large private property, the owner of the property asked Mr. Deluca, who was Mr. Lozano’s boss, if he wanted to take a ride with him on his large go-cart track.  Mr. DeLuca and the owner drove around the go-cart track.  Then Mr. DeLuca asked Mr. Lozano if he wanted to take a ride.  Mr. Lozano declined because he could not drive.  Mr. DeLuca repeated that Mr. Lozano should get in the go-cart and take it for a drive.  At this point Mr. Lozano got into the cart, and he proceeded to seriously injure himself by driving into a parked truck.  The Supreme Court said “that when an employer compels an employee to participate in an activity that ordinarily would be considered recreational or social in nature, the employer thereby renders that activity a work-related task as a matter of law.”

This principle make sense, but what if the employer is aware of the activity taking place and allows it, and the permitted activity leads to injury?  Is that compensable?  The Supreme Court said no in Jumpp v. City of Ventnor, 177 N.J. 470 (2003).   In that case the petitioner was a pumping station operator who drove around the city inspecting stations.  He would pass the town post-office during his drives from one station to the next.  He asked the city administrator for permission to pull off the main road and get his personal mail during his route.  The city administrator gave him that permission.  While walking in the post office parking lot, petitioner fell and fractured his pelvis.

Mr. Jumpp argued that he had permission to make a slight deviation from his route to get his mail.  The Supreme Court acknowledged that petitioner had permission to do what he did but felt that this activity constituted a major deviation from work.  It said it made no difference whether the employer allowed the activity to take place:  the act of getting one’s personal mail constituted a major deviation from work.  Permission was not the same as direction.

So too in Sarzillo v. Turner Const. Co., 101 N.J. 114 (1985), a petitioner had permission to play a paddle ball game every day on the construction site during breaks.  Mr. Sarzillo was injured while playing the game.  The Court said that permission did not change the fact that the activity promoted nothing more than morale.  Under N.J.S.A. 34:15-7, activities whose primary purpose is to promote morale or health are not compensable.

Employers must be careful to consider whether they have directed or required an activity or whether they have merely permitted something to occur.  If an employer does not want to expand the job duties, the employer should make it clear in memoranda that the activity – whether it is a holiday party, picnic or bowling night — is not required.

This lesson emerged in Rose v. Joey Sinopoli’s Haircutters, No. A-0049-05T1 (App. Div. August 14, 2006), certif. denied, 189 N.J. 426 (2007).  The petitioner suffered a serious injury leaving a coffee shop on the way to work.  She always stopped to purchase coffee for co-employees and understood that this was part of her job.  She was reimbursed for the cost.   Her employer testified that if she did not do this, someone else would have had to do so.   Again, the decision makes sense because the employee felt a sense of compulsion and employer direction in purchasing coffee each morning.   Had the employer not made this a requirement, the injury would not have been held compensable.

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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.