State News

The Division is accepting public comment on revisions to the DWC-48, the form used to request travel reimbursement from Carriers for certain travel expenses to attend a DD exam, RME, post-DD RME, or  for travel expenses incurred for medical treatment not reasonably available within 30 miles if the distance traveled is greater than 30 miles one way. These revisions update the format and style for consistency with other Division forms, and add an “FAQ” to provide additional information about travel reimbursement.  The form also provides a section for the Carrier to respond to the request, indicating approval, denial, or partial denial of the claim.  A response is due within 45 days of receipt, pursuant to Rule 134.110.  If the Carrier denies or partially denies the request, the Carrier must provide a plain language explanation to the injured employee, explaining the reasons for the denial or partial denial, without “unnecessary use of technical terms, acronyms, and/or abbreviations.”  The form includes a notice to the Claimant stating that he/she may request a BRC to dispute denials or partial denials.

Revisions to the DWC-48 would incorporate amendments to 28 TAC §134.110(a), effective March 30, 2014. 

The revised form is currently available on the Texas Department of Insurance website at http://www.tdi.texas.gov/wc/rules/drafts.html.  The public comment period closes June 1, 2015  at 5:00 p.m., and public comments may be submitted by email: InformalRuleComments@tdi.texas.gov

On May 3, 2015, the U.S. Food and Drug Administration announced the filing of a consent decree against Medtronic, Inc. for repeatedly failing to correct violations related to the manufacture of Synchromed II Implantable Infusion Pump Systems.   The consent decree cites violations of the quality system regulation for medical devices, and requires the company to stop manufacturing, designing, and distributing new Synchromed II Implantable Infusion Pump Systems except in very limited cases.  The consent decree also requires Medtronic to retain a third-party expert to help develop and submit plans to the FDA to correct violations. 

The FDA first identified problems with the manufacture of these pumps in 2006, including over-infusion,  under-infusion, and delays in therapy for patients.  The FDA issued three warning letters notifying the company of major violations, including inadequate processes for identifying, investigating, and correcting quality problems, failure to document design changes, and failure to ensure the finished products met design specifications.

The agency notes that patients who are implanted with a Synchromed II Implantable Infusion Pump System should maintain regular follow-up appointments with their physicians, and should contact their physician immediately if they experience a change or return of symptoms, or hear a device alarm.

The Division recently updated the DWC Form-042 (Beneficiary Claim for Death Benefits) to include a notice in Spanish providing instruction on how to contact DWC regarding questions about the form or claims and how to locate the Spanish version of the DWC Form-042 on the Texas Department of Insurance website.  Due to this revision, Carriers will need to update any automated notification systems currently in place, as well as any additional communication notices sent to potential claim beneficiaries, to reflect this change.

On May 22, 2015, Governor Abbott signed Senate Bill 901, which amends Texas Labor Code Section 408.103 to reflect that an employee receives 75% (versus 70%) of the difference between his post-injury earnings and his average weekly wage if the employee is making less than $10 per hour.  (Previously, an injured employee was entitled to 75% of the difference between his post-injury earnings and his AWW if making less than $8.50 per hour.)  This change is effective for dates of injury on or after September 1, 2015.  

 New Division Rule 131.1 and Form PLN-04 become effective June 1, 2015.   The new Rule requires Carriers to review a Claimant’s eligibility for lifetime income benefits (LIBs) in a timely fashion, including when a Claimant requests LIBs, and review all of the statutory criteria for determining entitlement.  The new Rule also outlines the time frames for determining LIBs eligibility in situations where a Claimant requests LIBs in writing, as well as the time frames for the payment of LIBs after the Carrier reasonably believes the Claimant is eligible for LIBs.  The Carrier shall either initiate LIBs or deny the Claimant’s eligibility for LIBs within 60 days from the receipt of the injured employee’s written request.  In addition, Carriers must initiate payment of LIBs without a final decision, order, or other action of the commissioner if a Claimant meets the eligibility criteria for LIBs listed under Section 408.161 of the Texas Labor Code as a result of the compensable injury.  The Division noted in the rule adoption preamble that the initiation of LIBs without a final decision, order, or other action of the commissioner does not waive the Carrier’s right to contest the compensability of the claim in accordance with Texas Labor Code Section 409.021. The first payment of LIBs must be issued on or before the 15th day after the date the Carrier reasonably believes that the Claimant is eligible for LIBs. 

Beginning June 1, 2015, Carriers must also use the new, June 2015 version of the Form PLN-04 (Notice Regarding Eligibility for Lifetime Income Benefits) to advise Claimants whether the Carrier is initiating LIBs or denying LIBs eligibility.  If the Carrier denies LIBs eligibility, the Carrier must do so within 60 days’ receipt of the Claimant’s written request by sending the PLN-04 to Claimant, the Claimant’s attorney (if any), and the Division, providing a full and complete explanation of the reasons for the denial.  Carriers are reminded that the statement must contain sufficient claim-specific substantive information to enable the injured employee to understand the insurance carrier’s position or action taken on the claim, and to explain the reasons for disputing the issue in plain language without unnecessary use of technical terms, acronyms, and/or abbreviations.  Denials should be based on the information the Carrier has obtained or verified.  A Claimant may contest the Carrier’s denial by requesting a BRC.

Carriers may use only the Form PLN-04 for initiating or denying LIBs, as provided under Rule 124.2(e)(1) and 131.1(d).  Claimants requesting LIBs are not required to use a particular form; any manner of written request for LIBs by Claimant is permitted.   A Carrier’s failure to respond to a Claimant’s request for LIBs within 60 days from the receipt of the written request does not constitute a waiver of the Carrier’s right to dispute eligibility to LIBs.  

New Rule 131.1 does not limit the Carrier’s duty to initiate LIBs on or before the 15th day after the date the Carrier reasonably believes that the Claimant is eligible for LIBs as a result of the compensable injury. For example, if a Carrier receives a written request for LIBs, and then five days later has a reasonable belief that the Claimant is entitled to LIBs, Rule 131.1 requires the Carrier to initiate payment of LIBs within 15 days.  In other words, the deadline to initiate LIBs is not extended to the 60th day after receipt of Claimant’s written request. 

Note that the new Rule retains the Labor Code §408.161’s statutory eligibility requirements for LIBs.  

Additional information relating to the PLN-04 is available in the instructions on the form, and in the Division’s memo dated February 19, 2015. 

          The old adage is that New Jersey is a not a partial temp state, but is that really true?  In some states, likeNew Hampshire, an employee who returns to work but due to disability cannot earn the amount he or she was earning before the work injury may be eligible for significant benefits.  The adjuster may pay the employee 60% of the difference between pre- and post-injury earnings and that may continue for up to 262 weeks.  But this applies to a situationafter maximal medical improvement.  New Jersey clearly does not have any requirement like this becauseNew Jersey is not really a wage loss state:  it is a functional loss state which compensates injured workers after maximal medical improvement with dollars that correspond with the percentage of loss of bodily function.

             But what about this increasingly common situation? Ashley Franklin works for Krogers Inc. in the deli department. She earns $20 per hour for a 40-hour week.  She makes $800 per week.  She fractures her leg at work and is out of work for the month of January 2015, receiving $560 per week in temporary disability benefits.  Krogers offers Ashley a modified duty sedentary job for the month of February.  The workers’ compensation doctor restricts her to four hours per day, and she makes $400 per week, half her normal wage, for the month of February. She works half a day for four straight weeks. Ashley calls the adjuster and asks, “what about the other $400 per week I am losing?”

             Ashley reaches maximal medical improvement on March 1, 2015.  She contacts a lawyer about her loss of wages in February, complaining as follows: “When I was working the job, I was making $800 per week.  On temporary disability, I was getting $560 per week tax free.  Now I am working on modified duty, limited to half a day by my comp doctor, and I am earning less than I was on temporary disability -- and it’s all taxable!”

             This question comes up every month in this practitioner’s practice.  Which of the following should the claims examiner tell Ashley?

             A. “New Jersey does not have partial temp. You get nothing.”

            B. “We will pay you $160 weekly in temp benefits to get you to $560, your temp rate.”

            C. “We will pay you $280 in temporary disability benefits weekly, half of what you were paid while on temporary disability.”

            To answer this question, the practitioner has to studyN.J.S.A. 34:15-38. That is the section which explains how to pay temporary disability benefits.  The question is whetherNew Jersey compensates only for loss of whole days or fractions of days.  Here is what the statute says:  first you determine the first day that the employee cannot work due to the accident up to the first day the employee can return to work and continue at work.  In Ashley’s scenario that is 28 days.  Then you “subtract from the number the waiting period and any day and fraction thereof the employee was able to work during the this time, and divide the number by seven.”  The statute concludes, “the resulting whole number and seventh will be the required period for which compensation is payable on account of temporary disability.”

             The language of the statute is confusing.  On the one hand, it recognizes a partial loss of a day by saying “any day and fraction thereof the employee was able to work.”  That would suggest that Ashley has a valid claim for two weeks of temporary disability benefits because she lost 20 half days. On the other hand, the statute speaks in terms of the “resulting whole number and seventh.”  The intention of the legislature is arguably less than clear in reading this statute.

             There are no published decisions on this issue.  In fact, there is only one decision in the Division of Workers’ Compensation directly on point, namelySoto v. Herr’s Foods, Inc., 2012 NJ Work. Comp. LEXIS 4 (September 7, 2012).  That case also involved a situation where the injured worker was limited to four hours per day by the treating doctor while on light duty.  Mr. Soto was getting $683.31 per week on temporary disability but was returned to light duty earning a net payment of $329.43 per week, which was $353.88 less per week than he was earning on temporary disability.  The Honorable Emille Cox ruled in favor of the petitioner: 

It seems rather obvious to this Court that if Respondent is responsible for the payment of temporary disability benefits, and, in this case, the amount to which Petitioner is entitled is $683.31 per week, to allow Respondent to provide minimum light duty and only pay the Petitioner an amount less than $683.31 to which he is entitled defeats the purpose of both the temporary disability and the light duty provisions of the workers’ compensation statute.

             Judge Cox did not call thistemporary partial disability benefits.  His decision was not appealed, no doubt a wise decision by the employer.  The term temporary partial disability refers more to the example at the beginning where an employee returns to work on a full-time basis earning less than he or she earned before the injury well after maximal medical improvement.  The question in Ashley’s scenario is limited to payment before she reaches maximal medical improvement.  It is this:  is temporary disability defined in New Jersey to include only whole days lost or parts of days where the treating doctor will not allow the worker to work more than parts of days?

             In this practitioner’s experience, most workers’ compensation judges agree strongly with Judge Cox, and in fact most employers also agree that modified duty when limited to half days by the treating doctor should not result in a financial penalty to workers.  In other words, the employee restricted to working half a day by the workers’ compensation doctor should not see his or her compensation drop below the amount earned in temporary disability benefits.

 The general consensus is that something must be done in Ashley’s situation because it seems inequitable for her to earn less on modified duty half days than she was earning while out of work receiving tax free temporary disability benefits. Where there remains some difference in opinion is how much Ashley should be paid over and above the $400 in earnings for half days of work that she has lost. The way Section 38 reads in subtracting any day and fraction thereof that the employee was able to work suggests that if this issue gets to the Appellate Division, the Court would order the employer to pay 70% of the four weeks of half days lost by Ashley in the month of February.  That would mean she would get paid $280 per week in temporary disability benefits.  Every two days lost becomes one day of temporary disability benefits. Adding that to the $400 per week in earnings, she would be earning $680 per week.  Of that amount $400 per week would be taxable, putting her basically in the same position she was in while out on temp earning $560 per week. 

 In the end, New Jersey needs a published decision by the Appellate Division to resolve this issue.  Absent that, employers have to do what they perceive to be both consistent with the law and fair under the law. 

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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. 

Unlike many states, most settlements in New Jersey are paid out over a period of weeks, often with payments carrying out well into the future.  For example, if an employee receives an award of 40% permanent partial disability, the award is paid over 240 weeks in equal payments beginning with the last payment of temporary disability benefits.  When an employee seeks to accelerate those payments into one lump sum check, this is known as a commutation.  Permission must be obtained from the judge. 

 A recent case illustrates the issue.  Terrance Jenkins received an award of permanent disability benefits.  He applied to the lateVirginia Dietrich, Judge of Compensation, for the sum of $16,000 in commutation funds from the remaining award of $28,000, which was being paid in equal amounts over many weeks.  He contended that he wanted to open a small business selling fish and chips.  He testified in workers’ compensation court that he wanted to build on his mother’s current catering business.  However, he admitted that his mother’s business had few customers, and he needed to purchase equipment and supplies for the business.  Furthermore, he was in arrears on his rental payments for the business premises and needed to pay off his mother’s debts.

 Judge Dietrich reviewed the provisions ofN.J.S.A. 34:15-25. That section states,“Commutation is to be allowed only when it clearly appears that an unusual circumstance warrants a departure from the normal manner of payment and not to enable the injured employee . . . to satisfy a debt, or to make payment to physicians, lawyers or others.” Applying this standard, the judge rejected the request for commutation concluding that this “would be throwing good money after bad.”  She further found that the petitioner did not have a sound business plan and had managed to get over-extended financially.  

The Appellate Division affirmed the rejection of the commutation request because of the reasons provided byJudge Dietrich.  The case shows that it is really quite difficult to obtain a commutation inNew Jersey.  Very few requests get approved because judges look out for the best interests of employees.  This case may be found atJenkins v. L.A. Fitness, A-3570-12T2 (App. Div. February 4, 2015).    

 It is important for practitioners to realize that a commutation is improper when it is caused by the employer or carrier by mistake.  For example, suppose an employer or carrier is supposed to pay out an award over the next 52 weeks.  Due to a misunderstanding or computer error, the company pays the entire 52 weeks of future payments in one lump sum to the employee.  This amounts to a commutation, and it would be illegal because only a judge of compensation can approve a commutation.

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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. 

Janice Davis was injured on April 23, 2007 in a work-related accident.  She filed a claim petition promptly against Yassien Mobility Assistance & Ambulance, Inc., her employer.  On October 1, 2007, Yassien filed an answer stating that it had no insurance for workers’ compensation.  The Uninsured Employers’ Fund (UEF) was joined in the matter as an additional party. 

Yassien had previously obtained workers’ compensation insurance from Zurich American Insurance Company, which cancelled coverage in March 2006.  The accident happened over a year after the cancellation. 

Subsequent to these events, the Supreme Court of New Jersey held that cancellation of insurance policies will only be upheld if all aspects of the statute are strictly followed. N.J.S.A. 34:15-81 requires that the notice of cancellation be filed in the Office of the Commissioner of Banking and Insurance, together with a certified statement that the notice provided for in the statute has been given.  The Supreme Court of New Jersey in Sroczynski v. Milek, 197N.J. 36 (2008) stated that even a minor deviation such as not filing the certified statement will void the cancellation.

In this case, Zurich did not file the certified statement required underN.J.S.A. 34:15-81, but Yassien failed to argue this issue until 2013.  The workers’ compensation case dragged on for many years until Yassien on February 9, 2013 filed a motion to amend its answer to the claim petition to join Zurich as an additional party.  This was the first time Yassien formally contended thatZurich failed to properly cancel its policy in 2006. 

The Judge of Compensation ruled in favor of Yassien and held thatZurich failed to properly cancel the policy and would therefore have to pay the workers’ compensation claim. Zurich appealed and argued that Yassien waited far too long to raise this issue -- seven years, in fact.  The Appellate Division reversed and held thatZurich was correct in arguing that Yassien waived its argument for improper cancellation by waiting seven years. 

The Appellate Division reasoned that it would not be fair to carriers if employers could challenge proper cancellation many years after the cancellation occurred.  The Court noted that Yassien did not raise the improper cancellation argument in 2007 or 2008 before the Sroczynskidecision came down.   The Court suggested that if Yassien had raised this issue in 2007 or 2008, before theSroczynski case had been decided, its position would have been stronger.  By waiting until 2013 to raise the improper cancellation issue for the first time, Yassien waived its right to challenge the cancellation. 

The case can be found at Davis v. Yassien Mobility Assistance & Ambulance, Inc., A-0356-14T3 (App. Div. May 5, 2015). 

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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. 

          Cases dismissed underN.J.S.A. 34:15-54 for lack of prosecution are permanently closed if not reinstated within one  year.  The matter ofKost v. GPU Energy, A-0858-13T3 (App. Div. 2015) offers one exception to the rule.

             Richard Kost filed seven claims against GPU Energy/JCP&L in 2003.  He also filed a parallel civil action which was pending from 2003 to 2008.  Claimant’s attorney,Eric Lentz, left his law firm, Garces and Grabler, in March 2005.  Lentz kept the case and from time to time met withMr. Kost. 

             Problems began between the years 2005 and 2008.  Lentz failed to comply with several requests made by the Judge of Compensation, leading GPU to file a motion to dismiss for lack of prosecution.  That motion was granted in December 2008.  The rule provides that the claimant has one year to reopen the matter or the dismissal becomes final.

             On December 8, 2008, GPU’s attorney sent the order of dismissal to Lentz, who had not appeared at the hearing when the case was dismissed. Mr. Kost said he was never made aware of the dismissal.  He said he called his lawyer on numerous occasions but could not reach him.  Finally in January 2010, he reached his lawyer, who misled him into believing that the workers’ compensation cases were still active.  Lentz told Kost that the cases were progressing, and from time to time he asked Kost to sign medical authorization forms. The Appellate Division noted, “However, it is clear that Lentz hid from petitioner the true status of his cases.”

             In January 2010, Lentz scheduled an appointment for Kost to attend a permanency exam.  When petitioner got to the doctor’s office, there was no record of any appointment, nor any paperwork from Lentz.  Kost confronted Lentz, who assured him that the cases were progressing.  He never told Kost that his cases had been dismissed in December 2008.

             Kost retained new counsel, who figured out that the cases had been dismissed and attempted to restore the cases to the active list.  GPU argued that the one-year time period for reinstatement had passed.  The Judge of Compensation on September 16, 2013, refused to reinstate the case, and Kost appealed.  The Appellate Division was faced with the fact thatN.J.S.A. does not provide for any exceptions:

 Although N.J.S.A. 34:15-54 does not expressly create an exception to the one-year requirement for filing a motion for reinstatement, our courts have recognized that compensation judges possess the inherent power to excuse the one-year time bar upon the grounds set forth in Rule 4:50-1.

 The Court found that this was an exceptional circumstance. “Petitioner’s dilemma was not caused by his own dereliction or ambivalence. Instead, fault for the dismissal rests squarely on his prior attorney.  Here, petitioner made significant effort to keep in contact with Lentz.  He was affirmatively mislead, and assured his cases were still active.  It was not until new counsel took over in 2010 that petitioner was informed his cases were dismissed.”

             The Court also noted that GPU was not really prejudiced in this case because the company had obtained substantial discovery during the five-year period of the civil litigation. 

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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. 

In New Jersey, the PIP carrier has a right to file a workers’ compensation claim petition in the name of the injured worker, but there is a catch:  the PIP carrier is subject to the same defenses that the injured worker would be subject to.

 InHigh Point Insurance Company(as subrogor of Kevin Smith) v. Drexel University, A-2030-13T4 (App. Div. April 17, 2015), High Point Insurance paid personal injury protection benefits for injuries suffered by Kevin Smith, a Ph.D. student and Teaching Assistant at Drexel University.  On September 2, 2011, Smith drove aDrexel University vehicle to a site in the Pine Barrens inNew Jersey to conduct research for his graduate dissertation.  While driving back toDrexel University, Smith was injured in a car accident.

High Point sought reimbursement of the PIP benefits it paid to Smith by filing a claim petition in the Division of Workers’ Compensation.  Smith himself never filed a claim petition on his own behalf. Drexel University answered the claim petition with a denial.

The Judge of Compensation observed that the Ph.D. program Smith was enrolled in at Drexel did not require that he work as a Teaching Assistant.  Smith decided to accept that position in an attempt to offset the cost of the Ph.D. program.  The Judge felt that Smith was using the Drexel vehicle to reach thePine Barrens for his own personal research, not in his role as a Teaching Assistant.  The Judge also noted that there were no classes in session the week of the accident. Judge of Compensation dismissed the workers’ compensation claim petition commenting that High Point never proved any requirement that Smith travel to thePine Barrens for his work. 

On appeal, High Point argued that Drexel “entwined” Smith’s personal graduate studies and teaching assignments to a degree that traveling for his research became work related.  The Appellate Division rejected High Point’s reasoning and held that there was no connection between the accident and Smith’s employment.

The case illustrates a number of interesting procedural points.  The New Jersey Division of Workers’ Compensation is open to a variety of claims by PIP carriers.  A PIP carrier can intervene in an existing litigated claim in the Division of Workers’ Compensation for reimbursement of benefits the carrier has paid.  In addition, the carrier can also file a claim petition in the name of the injured party,even if there is no existing claim petition.  Getting cooperation from the injured party can sometimes prove difficult, but in this case Smith agreed to cooperate and testified.  The problem which High Point had was that it could not show that driving the Drexel vehicle was related to the Teaching Assistant job.  It was more of a personal mission related to Smith’s research for his Ph.D.   

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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.