NWCDN Members regularly post articles and summary judgements in workers’ compensations law in your state.
Select a state from the dropdown menu below to scroll through the state specific archives for updates and opinions on various workers’ compensation laws in your state.
Contact information for NWCDN members is also located on the state specific links in the event you have additional questions or your company is seeking a workers’ compensation lawyer in your state.
We were advised by the
Division earlier this month that the Zoom meeting IDs used to access benefit
review conferences and other remote meetings were being changed starting in
January. Instead of the usual 10-digit meeting ID assigned to each Benefit
Review Officer, which we have been using since remote BRCs became the norm
during COVID, the new meeting IDs are 11-digit numbers beginning with either
160 or 161.
Some of us were exposed to the new system a bit early on December 19, when we
called in to attend our BRCs using the usual Zoom call-in number. Upon entering
the new 160 or 161 meeting ID to access our BRCs we received a recorded message
to the effect that the meeting ID was not authorized. We were eventually able
to access and participate via the internet by accessing the Division’s Zoom
site (https://tdi-dwc-hearings.zoom.us/)
and entering the 11-digit meeting ID listed in the BRC notification.
We were later advised that BRCs may still be accessed by telephone but the
call-in number has also been changed. The new dial-in number is 551-285-1373.
Copyright 2023, Stone Loughlin & Swanson, LLP
On December 28, 2022,
the Third Court of Appeals in Austin issued its latest decision in the seemingly never-ending
litigation over the stop-loss exception to the Division’s 1997 Inpatient
Hospital Fee Guideline.
The court of appeals affirmed the trial court’s judgment which affirmed the
State Office of Administrative Hearings (SOAH) Decision and Order holding that
the “stop-loss” exception to the Division’s 1997 Inpatient Hospital Fee
Guideline did not apply to 528 inpatient hospital admissions. These
admissions took place at three hospitals, two in Houston and one in Dallas,
named Vista Medical Center Hospital, Specialty Hospital of America, Southeast
Houston, and Vista Hospital of Dallas (collectively, Vista). Most of
these admissions took place between 2001 and 2007. A conservative estimate
of the average amount sought by Vista for each admission is fifty thousand
dollars for a combined total of over twenty-six million dollars at issue in the
court of appeals decision plus thirty million dollars in interest due to the
age of the disputes and the current interest rate on delayed payment of medical
benefits.
The court of appeals made short work of Vista’s arguments challenging SOAH’s
decision. To sum up Vista’s arguments, the method SOAH used to determine
whether an admission involved unusually costly and extensive services wasn’t
fair because relatively few of the admissions qualified for stop-loss
reimbursement. However, the court of appeals held that SOAH’s decision
was not arbitrary and capricious and is reasonably supported by substantial
evidence. Vista has the right to file a motion for rehearing with the
court of appeals and it can also petition the Texas Supreme Court to review the
court of appeals decision. However, the courts surely have stop-loss fatigue by
this point and the odds of Vista getting the decision reversed are about the
same as a SIBs applicant finding a job.
The History of Stop-Loss
As we hopefully near the end of the stop-loss saga, now is a good time to look
back on how we got here. The stop-loss litigation began shortly after the
Texas Workers’ Compensation Commission (now the Division of Workers’
Compensation) adopted its 1997 Inpatient Hospital Fee Guideline. The
guideline had a giant loophole in it. It seemed to say that if the
hospital’s billed charges for an admission exceeded $40,000, the hospital was
entitled to 75% of that amount. This gave hospitals a windfall because of their
grossly inflated billed charges. The stop-loss exception led many
enterprising hospitals to make sure that their billed charges for an admission
exceeded $40,000. This was most often done with large mark-ups on spinal
hardware and this was at the point in time when spinal fusions were all the
rage and seemingly everyone who complained of back pain got a fusion whether they
needed it or not. Vista actually seems to have been founded on the
stop-loss exception. It focused almost exclusively on spinal surgeries
for injured workers covered by the stop-loss exception using questionable
doctors who would later have their medical licenses revoked. See, e.g., Eric “The Red”
Scheffey, M.D.
SLS was heavily involved in the stop-loss litigation from the beginning.
James Loughlin of the Firm, along with Ron Luke, PhD, and Nick Huestis
met with TWCC staff early on to educate them on how the stop-loss provision
should be interpreted. On behalf of various clients, SLS sent a letter to TWCC Executive Director Bob Shipe on
December 6, 2004 asking the Commission to take action to address the stop-loss
problem by issuing an advisory that would clarify the Commission’s
interpretation of its rule. Mr. Shipe responded by letter a short time later stating that the
Division was suspending the issuance of decisions in stop-loss cases while
staff reviewed the application and interpretation of the stop-loss provision.
The Commission then issued its Staff Report on February 17, 2005 clarifying
that the stop-loss exception is a two-part test meaning that in order for the
stop-loss exception to apply, a hospital must demonstrate not only that its
audited charges exceed $40,000 but also that the services it provided were
unusually extensive and costly. Following the Staff Report, the Commission
began deciding stop-loss cases by determining whether the services provided
during the admission were unusually extensive and costly.
On January 12, 2007, an en
banc panel of nine SOAH ALJs rejected the Staff Report’s
two-pronged interpretation in a 7-2 decision and the trial court upheld SOAH’s
decision. However, in a decision issued on November 13, 2008, the Third
Court of Appeals reversed the trial court and held that the two-pronged interpretation
of the stop-loss provision is correct. That decision became final when
the Texas Supreme Court denied the hospitals’ motion for rehearing of their
petition for review on December 3, 2010. SOAH was now required to apply
the stop-loss exception as a two-pronged test.
SOAH subsequently consolidated all of the Vista cases for hearing and decision.
A two-day hearing was held before a five-judge panel on February 23 and 24,
2016 to take evidence in the cases. The carriers offered testimony from
Dr. Luke. Following post-hearing briefing, SOAH ultimately issued its
consolidated decision on June 24, 2019 finding that only 14 of the 542 disputed
admissions qualified for reimbursement under the stop-loss exception.
Vista filed suit for judicial review of SOAH’s decision. The trial
court issued its decision on May 13, 2021 affirming SOAH’s decision which Vista
then appealed to the Third Court of Appeals.
In the Third Court of Appeals latest Vista decision, it cites at length from Dr. Luke’s
testimony at SOAH. The court notes that the ALJs did not explicitly adopt
one of the proposed methodologies but adopted a two-part analysis that shares
certain features with Dr. Luke’s analysis. In response to Vista’s
arguments that SOAH should have used one of its proposed formulaic methods, the
court reiterated its earlier holding that what constitutes “unusually costly
and unusually extensive” services in any particular fee dispute is “a
fact-intensive inquiry best left to the Division’s determination on a
case-by-case basis.”
What Next?
The carriers have been on a winning streak since the Third Court of Appeals’
first decision in 2008 with Vista appealing every adverse decision since then.
If history is any guide, Vista will appeal again by petitioning the Texas
Supreme Court for review although it must know that doing so is likely to be in
vain and will only delay the inevitable. If and when the Third Court of
Appeals’ decision becomes final, the 528 individual cases it disposed of will
become final. There remain a currently unknown number of Vista stop-loss
cases pending at the Division, SOAH, or the trial court which must still be
resolved.
Copyright 2023, Stone Loughlin & Swanson, LLP
A Travis County
District Court this month convicted HSC International, Ltd. of a second-degree
felony in its scheme to defraud Texas Mutual Insurance Company.
The court found that between September, 2014 and December, 2016 the janitorial
service company owned by Hyong Su Choi, provided false payroll numbers to avoid
paying proper premiums for workers’ compensation coverage. The company pleaded
guilty and will pay $180,000.00 in restitution.
Copyright 2023, Stone Loughlin & Swanson, LLP
On December 1, 2022,
Commissioner Jeff Nelson released DWC’s biennial report to the 88th legislature
providing an update on the Texas workers’ compensation system including
legislative recommendations.
The Commissioner’s first recommendation is in response to the Comptroller of
Public Accounts’ October 20, 2022 Private Letter Ruling stating that designated
doctor examinations performed pursuant to Labor Code §408.0041 are considered
“insurance services” and are subject to Texas sales and use tax. DWC already
struggles with a dearth of qualified designated doctors and the Commissioner
recognizes that other specialty examinations performed within the workers’
compensation system may also be considered taxable insurance services. For such
reason and in an effort to attract and retain more doctors, the Commissioner
recommends amendment of the Tax Code §151.0039(b) to exempt from sales and use
tax any medical examination or service performed to determine the appropriate
level of benefits under the Workers’ Compensation Act.
In his second recommendation, the Commissioner seeks amendment of Labor Code
Chapter 410 to add a limited public information exception for working papers
and electronic communications for DWC administrative law judges and Appeals
Panel judges. The Commissioner indicates that such an amendment will empower
DWC ALJ’s and Appeals Panel judges to remain impartial fact finders and afford
them the same protections as ALJs at the State Office of Administrative
Hearings (SOAH).
The Commissioner’s recommendation makes a good argument, however, the Division
is very different from SOAH. SOAH ALJs are in an agency completely separate
from the agencies whose proceedings come before them. The Division, on the
other hand, acts as the executive, legislative and judicial functionary in all
things related to workers’ compensation. There is no separation of power. This
potentially opens the door to inside influences such as direction from agency
personnel in different sections of the Division which could very well influence
an ALJ’s duty as a fact finder to render a decision based solely on the law and
the evidence admitted.
Finally, the Commissioner noted an emerging issue concerning shortfalls in the
maintenance tax generated under Labor Code §403.002 which funds DWC and the
Office of Injured Employee Counsel (OIEC). Specifically, tax collections are
not adequate to match the amount appropriated by the legislature to fund
operations of DWC and OIEC resulting in a $9.4 million shortfall in fiscal year
2023.
The Commissioner indicates TDI has tools to accommodate this shortfall in the
near term, however, the current 2% statutory cap on the maintenance tax is
unlikely to generate sufficient revenues in the future.
Copyright 2023, Stone Loughlin & Swanson, LLP
Readers will recall
the article in last month’s Compendium
concerning the adventure of attending a CCH at the new Barbara Jordan Building
in the Capital Complex at 1601 Congress Avenue. That article included the
shortcut to a YouTube video produced by the Division containing instructions
for parking and attending a hearing.
This month the Division released additional information calculated to address
some of the confusion surrounding availability of parking while attending a
hearing. You may find the Division’s latest instructions here: TDI website
A few of the high points:
1)
Mobility-impaired participants may park in the garage beneath the Barbara
Jordan Building if they have a valid handicap parking permit and contact DWC.
2) The Division does provide a limited number of parking
spaces for hearing participants, however, you must contact DWC at least 5
working days prior to the hearing to request a parking pass which will be
emailed to you. Print the parking pass and place it on your vehicle’s front
window. If you wish a parking pass mailed to you, contact the Division at least
10 working days prior to the hearing.
3) Visitors to the DWC offices must park in Garage B, on the
top floor in a space that is not marked “reserved.” To make parking and
visiting the DWC offices easier, the Division has provided the following handy
map:
Copyright 2023, Stone Loughlin & Swanson, LLP
Santa paid a visit and
David Swanson won 1st place in the annual SLS Christmas Tree-Topper competition
for 2022 with this design:
Copyright 2023, Stone Loughlin & Swanson, LLP
The Division this
month released its annual report on fatal occupational injuries in Texas. In
2021 there were 533 fatal occupational injuries, a 12% increase over 2020 and a
12% decrease when compared to fatal injuries in 2019. The highest number of
fatalities (182) was in the transportation and warehousing industry followed by
127 fatalities in the constructions industry. The occupations with the highest
number of fatalities were driver/sales workers and truck drivers with 147. You
may review the report in its entirety here: report
Copyright 2023, Stone Loughlin & Swanson, LLP
Kara Mace, Deputy
Commissioner, Legal Services announced this month that suspension of Government
Code sections 607.002(1) and (2) implemented on March 30, 2020 in response to
the COVID-19 pandemic has been lifted effective December 21, 2022. Section
607.002 relates to reimbursement for disease prevention.
Section 607.002 provides that a public safety employee who is exposed to a
contagious disease is entitled to reimbursement from the employing governmental
agency for reasonable medical expenses incurred in treatment for the prevention
of the disease if (1) the disease is not an ordinary disease of life as that
term is used in the context of a workers’ compensation claim; and (2) the
exposure to the disease occurs during the course of the employment.
Governor Abbott suspended §§607.002 (1) and (2) to ensure that public safety
employees who were likely to have been exposed to COVID-19 while in the course
and scope of their employment were entitled to reimbursement from their
employer for reasonable medical expenses related to such exposure.
Copyright 2023, Stone Loughlin & Swanson, LLP
A California federal
judge has sentenced neurosurgeon, Lokesh Tantuwaya, to five years in prison for
his part in a multimillion dollar, 15-year-long fraud scheme that used bribes
and kickbacks to funnel thousands of patients to now-defunct Pacific Hospital
for overcharged invasive spinal surgeries.
Tantuwaya, who raked in $3.3 million for his part in the scheme, is just the
latest to be convicted and sentenced in the scam which was led by the former
owner of Pacific Hospital who paid kickbacks of $15,000.00 per lumbar fusion
and $10,000.00 per cervical fusion and then inflated the costs of implanted
medical devices to insurers, many of which were workers’ compensation
carriers.
Reportedly, many of Tantuwaya’s patients are now agonizing over the quality of
their implants as well as whether they even needed the surgery in the first
place.
Copyright 2023, Stone Loughlin & Swanson, LLP
A common refrain of
late is that nobody seems to want to work anymore. While that’s nothing
new for those of us in workers’ comp, we were surprised to hear that even the
beloved CEO of Jolly St. Nick, Inc. (JSN) experienced significant difficulty
this past year obtaining a sufficient number of qualified workers to
manufacture the toys necessary for him to complete his annual task. The
shortage of qualified staff appears to be linked in part to post-pandemic
preferences many workers hold for working from home rather than in the Far
North. There were also some recruiting snafus . . .
We are hopeful that personnel matters improve for the big guy next year . . .
Best Wishes for the New
Year from all of us at Stone Loughlin and Swanson, LLP!
Copyright 2023, Stone Loughlin & Swanson, LLP