State News

Teague Campbell Dennis & Gorham, LLP is pleased to announce that Michael C. Sigmon has joined the firm’s Raleigh office.  Mike comes to Teague Campbell from Brooks, Stevens & Pope, P.A. and will be Of Counsel in the Workers’ Compensation Practice Group. Mike has more than 30 years of active trial experience before the Industrial Commission and North Carolina courts.  He is a North Carolina State Bar Certified Specialist in Workers’ Compensation, a Certified North Carolina Superior Court Mediator and an accredited Veterans Administration benefits attorney.

Senior Partner Dayle Flammia said, “Mike embodies the core values of Teague Campbell and shares our vision of investing in the whole client and their success. We are honored to welcome him to the team and look forward to sharing the knowledge and experience he brings.”

There can be little doubt as to the popularity and effectiveness of alternative dispute resolution (ADR) when dealing with workers’ compensation claims. The uncertainty, expense, and time involved necessitates that most claims get resolved through mediation outside of an administrative hearing and likely appeal through the court system.

Through my years of practice, I have discovered that one seldom used form of ADR is mediation followed by arbitration of issues on which the parties are deadlocked. Med-Arb, as it is referred to in the ADR world, can be a very effective tool for many claims.

Because the Department of Labor (DOL) must approve all workers’ compensation resolutions, the parties must first agree that the decision of the arbitrator will be binding, and the decision will be submitted to the DOL for adoption and approval. Such an agreement is then presented to the DOL, followed by an order entered by the DOL agreeing to adopt, as its own, the arbitrator’s decision, findings and conclusion. The parties then proceed to attempt mediation of the case. If a settlement is reached on all issues, a settlement agreement is prepared, signed and submitted for DOL approval. If the parties are deadlocked on some, or all issues, the mediation is then converted to an arbitration and submitted to the arbitrator for decision and later adoption by the DOL.

While theoretically any claim could utilize Med-Arb as an ADR tool, the claims that stand to benefit the most are those where medical causation is in dispute on some portion of the claim, and entitlement to future medical expenses is an issue. In those situations, my experience has proven that often the underlying claim is more easily resolved if the medical dispute can be resolved as well.

Med-Arb deserves your consideration on many claims. If there are questions, please do not hesitate to let me know.

To speed healing and improve return to work times, the Division has proposed a rule requiring that every claimant be given a magnetic copper bracelet and compression wraps infused with magnets and copper.  The chiropractic lobby is strongly in support of the proposal stating that the “science” is sound.  On a somewhat related note, if you’d like to purchase a magnetic copper bracelet, James Loughlin will sell you one for 4 easy payments of $24.95.

Jacqueline Harrison, a Hearing Officer in the Houston West Field Office, has moved on from the Division. No word yet on whether she’s left the world of workers’ compensation.

The claimant was injured on a large construction project.  As a result, his left leg had to be amputated above the knee.  He recovered workers’ compensation benefits through his employer.  He also sued one of the subcontractors on the job for his injuries.  The jury awarded a total of $43 million in damages.  However, the Fourteenth District Court of Appeals in Houston reversed and rendered judgment that the claimant take nothing from the subcontractor.Berkel & Company Contractors, Inc. v. Lee. 
 
The court held that the subcontractor was entitled to claim the exclusive remedy defense because the subcontractor and claimant were co-employees.  This determination was based on a provision in the Workers’ Compensation Act that deems the general contractor to be the employer of the subcontractor and the subcontractor’s employees if the general contractor enters into a written agreement with the subcontractor to provide workers’ compensation insurance coverage to the subcontractor and the subcontractor’s employees.  It was undisputed that the general contractor agreed to provide workers’ compensation insurance to all its subcontractors.
 
The court also clarified the application of the intentional-injury exception to the exclusive remedy defense. The court held that the evidence was insufficient to show that a vice-principal of the subcontractor knew to a substantial certainty that his conduct would bring about harm to a particular victim, or to someone within a small class of potential victims within a localized area. --James Loughlin, Stone Loughlin & Swanson, LLP

On July 6, 2017, Howard Gregg Diamond, M.D. was indicted on federal criminal charges including conspiracy to distribute controlled substances, possession with intent to distribute controlled substances, health care fraud, aiding and abetting, and money laundering.
           
The indictment alleges that Dr. Diamond conspired with others to write prescriptions for drugs including hydrocodone, oxymorphine, methadone, fentanyl, morphine, oxycodone, alprazolam, and zolpidem, without a legitimate medical purpose.  The conspiracy is alleged to have resulted in the overdose deaths of at least seven individuals.  At the time of his arrest, Dr. Diamond was reported to have on or about him a firearm, possible marijuana, and expired passports. 
 
On July 20, 2017, the Texas Medical Board issued an order temporarily suspending Dr. Diamond’s medical license based on their determination that his continuation in the practice of medicine would constitute a continuing threat to the public welfare. --James Loughlin, Stone Loughlin & Swanson, LLP

On July 19, 2017, Sentrix Pharmacy filed Chapter 11 bankruptcy in the United States Bankruptcy Court for the Southern District of Florida.  How does that apply to Texas, you ask?  
 
Sentrix Pharmacy is located in Pompano Beach, Florida but mails compound pain creams and scar creams to injured workers in Texas.  Past charges include $2,488.99 for a one month supply of pain cream and $12,050.06 for a one month supply of scar cream. 
 
On July 7, 2017, Sentrix Pharmacy filed comments to the Division’s informal compound drug rule proposal we reported on last month.  The proposed amendments would require preauthorization for compound drugs.  Not surprisingly, Sentrix opposed the amendments.
 
In its comments, Sentrix argues with a straight face that compound pain creams are a valuable tool in the fight against the opioid epidemic and that if preauthorization is required for compound pain creams, it could contribute to the opioid epidemic.  No mention is made of all of the other more effective, less expensive treatments for pain than a $2,500 jar of compound pain cream.
 
We commend the Division's efforts to require preauthorization for compound drugs. Preauthorization is typically required for treatments and services that are costly, medically questionable, or subject to abuse.  Compound drugs fit the bill on all three counts. --James Loughlin, Stone Loughlin & Swanson, LLP

The Medicare Secondary Payer Act requires primary payers, including workers’ compensation carriers, to reimburse Medicare for payments it made for healthcare for which the primary payer was responsible.  Many carriers have reported seeing an increase in secondary payer recovery activity by Medicare, particularly with regard to demands for reimbursement of services that bear no relation to the compensable injury. 
 
For example, on a low back sprain/strain claim, the carrier may receive a demand for reimbursement of services for treatment of COPD, diabetes, or other ordinary diseases of life.  In other cases, the provider’s bill may list a compensable diagnosis code but no treatment was actually provided for that condition.  Finally, in some instances treatment may have been provided for both related and non-related conditions, yet the carrier receives a demand for the full amount.
 
It appears that in many instances Medicare is not making an initial determination about whether and to what extent the services it paid for were actually for the compensable injury.  If the beneficiary has a prior workers’ compensation claim, Medicare simply sends a demand letter.  InCIGA v. Burwell, a federal district court case out of California, decided January 5, 2017, the court rejected Medicare’s argument that the primary payer is responsible for both the related and unrelated conditions when the provider combines the services into a single charge.  According to the court, Medicare must attempt to apportion the charges between related and non-related services. 
 
The court also held that Medicare is bound by state law in determining whether the insurance carrier is required to reimburse Medicare.  The Fifth Circuit Court of Appeals reached the same conclusion inCaldera v. Ins. Co. of the State of Pa., decided in 2013.  Therefore, if Medicare contends that a disputed condition for which it paid for treatment is related to the compensable injury, the proper forum for resolving that dispute would be the administrative dispute resolution process provided by the Texas Workers’ Compensation Act.  So far, however, it does not appear that Medicare has attempted to invoke the Division’s dispute resolution process.        
 
The Division’s involvement would be welcomed to help address the problems carriers are having with Medicare reimbursement claims.  In 2014, then Commissioner Rod Bordelon wrote a letter to Medicare to address a related problem in which Medicare would not pay for medical services because the Medicare beneficiary had a previous workers’ compensation claim.  Topics to be addressed in a new letter may include facilitating a process to better identify the compensable injury and related services before a blanket demand letter is sent, and, in the event of a disagreement, clarifying the process for resolving that dispute.  For example, do Medicare or Medicare/Medicaid managed care providers meet the definition of a “health care insurer” under section 409.0091 such that they are required to follow Labor Code section 409.0091 and submit a DWC-026 healthcare insurer reimbursement form? --James Loughlin, Stone Loughlin & Swanson, LLP

By now, those of you reading this blog know that in order for an injury to be compensable in South Dakota, the injury must arise out of and be in the course of the employment. Pretty straight forward, right?

Not so much.

While South Dakota adopts the “coming and going rule, establishing that an employee is not covered for purposes of workers’ compensation while coming from and going to work, the law has also established a ‘gray area’ regarding what is, and what is not. covered. Three seminole cases in South Dakota address this topic: Norton v. Deuel Sch. Dist. 2004 S.D 6; Fair v. Nash Finch Co., 2007 S.D. 16; and Terveen v. South Dakota Dept. of Transp. 2015 S.D. 10. These cases make it clear that a fact investigation into a workers’ compensation claim must include an analysis of minute details of the claim.

In Norton, the SD Supreme Court found that personal activities involving self-care, such as eating, resting, smoking, or using bathroom facilities should be considered in the course of employment. In Fair, the Court found that an employee’s deviation from work duties does not ‘automatically constitute departures from employment, but may … be found insubstantial.’” Fair was injured while she was exiting Family Thrift after a brief deviation from her usual direct route to her vehicle. The Court found that while it was reasonable to expect employees to exit the premises after work, it was also reasonable to expect Fair to engage in personal shopping after her shift had ended. Thus, the Court found that mere fact that an employee deviates from their work does not preclude a finding that the injuries are compensable.

Insubstantial deviations have been defined as those “largely the kind of momentary diversions which, if undertaken by an inside employee working under fixed time and place limitations, would be compensable under the personal comfort doctrine.” Arthur Larson, Larson Workers’ Compensation § 17.06[3] (2014). If someone engaged in an act for personal comfort, they do not leave the course of employment unless the extent of the departure is so great that an intent to abandon the job temporarily can be inferred. Id. at §21. In Terveen, the Court adopted the majority rule around the nation, finding that an employee who has made a personal side-trip has to ‘get back on the beam’ before being deemed to have resumed the business trip. Id. § 17.03[5]. Additionally, the Court noted that the deviation cannot be substantial.

Now you are probably wondering, what information you need to find out during an investigation. Some information you need to know will include finding out what the employee was doing at the time of the injury; did the employer authorize, expressly or impliedly, that running personal errands was acceptable; was the employee on their typical route home, did they get lost, or, perhaps, were they stopping for food? These cases are very fact specific so be sure to take the time to gather all the facts you need to make a determination.

As always, we are here and happy to help. Give us a call anytime.

The Alabama Court of Civil Appeals recently released its opinion in Kirby v Jacks Family Restaurants, LP.In that case, the plaintiff filed claims for workers’ compensation benefits, retaliatory discharge, and the tort of outrage against Jacks, its insurance fund, its third party administrator, and its case management company. All of the defendants filed Motions to Dismiss the outrage claim and the trial court granted them. The trial court further certified the judgment on the dismissal of the outrage claims to be a final judgment for purposes of appeal. However, the Court of Appeals held that even though the Order contained language certifying it as final, such certification was not appropriate in the case because the plaintiff’s workers’ compensation and retaliatory discharge claims were so intertwined with the outrage claims. The Court of Appeals noted that the plaintiff relied on facts and circumstances surrounding her injury and her termination to support her claim for the tort of outrage, and that she would rely on the same set of underlying facts in her remaining claims. The Court of Appeals held that it is improper for the trial court to certify a dismissal as "final" when at least some of the issues presented in the claim still pending in the trial court are the same as the issues presented in the claims addressed in the judgment, and repeated appellate review of the same underlying facts would be a probability in the case. Therefore, the Court of Appeals dismissed the plaintiff’s appeal as having been taken from a non-final judgment.

My Two Cents:

When tort claims accompany a workers’ compensation claim, it is common for the trial court to either sever the claims completely and assign new case numbers or keep the claims together and hold separate trials. When the trial court merely orders separate trials, the claims remain joined in one civil action, and any order disposing of anything less than all of the claims and all of the parties will generally not be considered a final order for purposes of appeal. The trial court may include language in an order certifying the order as final (as in this case), but sometimes, that is still insufficient to render an order final for purposes of appeal. On the other hand, if a tort claim is severed from a related workers’ compensation case (assigned a separate civil action number), an order granting summary judgment would be a final order for purposes of appeal. Therefore, it is often wise to ask the trial court to sever an outrage claim, rather than only asking for separate trials.

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.