State News : Alabama

The Medicaid Secondary Payer Act will take effect on October 1, 2016. The new law substantially expands state Medicaid recovery rights, and these changes will affect settlements of workers’ compensation and liability claims involving Medicaid beneficiaries.

The Medicaid Secondary Payer Act represents the federal government’s response to the problems facing state Medicaid programs in their recovery efforts. The Affordable Care Act expanded the scope of persons eligible for Medicaid coverage, and at the same time, a state’s recovery efforts remained inhibited by court decisions and anti-lien provisions. In other words, the number of persons covered became disproportionate to the amount of money being recovered. The Medicaid Secondary Payer Act would seemingly strike a balance.

Under current law, a state’s Medicaid reimbursement rights are limited to portions of a settlement designated as medical expenses. In contrast, the Medicaid Secondary Payer provision allows states to recover from the entire settlement amount. More specifically, this provision eliminates the statutory language the Supreme Court relied on in Arkansas Department of Human Services v. Ahlborn, which limited Medicaid reimbursement rights to portions of the settlement or judgment related to “health care items or services.” The new language allows recovery against “any payments.” As a result, Medicaid will be able to claim 100 percent of its lien from settlements with its beneficiaries.

Whether you are attempting to settle a workers compensation claim or simply protecting your subrogation lien in a third party settlement, it will soon be more important than ever to determine the existence and extent of any Medicaid liens.

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About the Authors

This blog submission was prepared by Mike Fish and Ashleigh Hunnicutt.  Both are attorneys with Fish, Nelson & Holden, LLC, a law firm dedicated to representing self-insured employers, insurance carriers, and third party administrators in all matters related to workers’ compensation. Fish Nelson & Holden is a member of the National Workers’ Compensation Defense Network. If you have any questions about this submission or Alabama workers’ compensation in general, please contact Fish or Hunnicutt by e-mailing then at mfish@fishnelson.com  or ahunnicutt@fishnelson.com or by calling them at 205-332-1448.

The following blog article is published with the permission of guest blogger, Brian Francis.

Dateline: NEW ORLEANS- A few blocks from the commotion of New Orleans’ Bourbon Street, just outside the French Quarter, a group of one hundred and fifty worker’s compensation professionals recently met at the Roosevelt Hotel to discuss trends and issues affecting the worker’s compensation system.

In contrast to the noise and distractions of the French Quarter, the tempo in the conference room was focused deliberation. The conversations were important because in the end they affect the delivery of health care to injured employees throughout the United States. Conversely, from a business perspective, the exchanges have an impact on the financial health of employers, insurers and self-insurers.

The American Bar Association’s (ABA) mid-winter worker’s compensation meeting is the high water mark for issues concerning claims and litigation. The event, which is sponsored by the ABA’s Labor & Employment Law Section (LEL), and the Tort & Insurance Practice Section (TIPS), is a two-day thought-provoking conference. The program brings together a multi-jurisdictional cross section of plaintiff and defense bar members, judges and magistrates, insurance regulators, workers’ compensation insurance executives, self-insurers, reinsurers and physicians and medical professionals.

The majority of seasoned insurance executives in attendance were able to recall when “workman’s” compensation (comp) was a fairly predictable and profitable line of insurance coverage. Comp possessed ideally insurable attributes such as foreseeable loss expectancy and a few core statutory issues affecting compensability. Together, these made “work comp” a stable, and at times, profitable line of insurance coverage.

Today, there is no shortage of critical issues creating volatility and obscured predictability. The once profitable line of coverage faces a myriad of complex issues such as: evidenced-based medicine, attacks on the exclusive remedy doctrine,  an aging workforce, medical fee schedules, home-based employment, professional employment organizations, natural disasters, terrorism and the aggregation of losses, undocumented workers, nanotechnology, ADA and FMLA regulations, Medicare Set-Asides, obesity and co-morbidity issues, social media, RICO violations, the Federalization of Workers’ Compensation, Opt-in and Opt-Out ERISA plans and claims of bad faith conduct; so much for predictability and profitability.

While two days of meetings are insufficient to address all of these issues, the panel-format presentations were well-composed, articulate and balanced. Panels discussed topics such as: the loss mitigation of high value claims, the management of psychological injuries, compound drug use, effective claim management, social media and claimant credibility. Presentations were composed of the views of a cross-section of defense/insurer, plaintiff/employee and union/employer perspectives.

For those followers of the FN&H Alabama Workers’ Comp Blawg, both Counsel Mike Fish and Joshua Holden contributed to the ABA meeting. Josh Holden’s presentation addressed issues pertaining to Social Media uses and their associated pitfalls, while Mike Fish was a participant in a lightning round presentation of 60 Legal Tips in 60 minutes.

The ABA does not restrict its membership to attorneys. Associate memberships are available to any and all non-attorney specialist in the area of Workers’ Compensation. Membership should be attractive to those insurance professionals charged with the profitability of a workers’ compensation program. Whether your corporate role is chief underwriter, home office or regional claims manager, or self-insured program manager, I’m confident that either of the ABA committees (LEL or TIPS) would welcome your expertise and participation. To learn more about membership or associate membership visit: www.americanbar.org and click on the “join or renew tab. For question about the ABA contact Mike Fish or Joshua Holden at 205 332 3430.

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Guest blogger, Brian Francis, is a Principal and Manager in a Michigan based third party administrator.

On March 18, 2016, the Alabama Supreme Court issued a Writ of Mandamus to the Circuit Court of Jefferson County, in the case ofEx parte Rock Wool Manufacturing Company, directing the trial court to enter an order dismissing multiple tort claims and a claim under the Employers’ Liability Act brought by Palmer Cason and his wife, Jessie Cason, against Mr. Cason’s employer, Rock Wool Manufacturing Company. Palmer Cason made a workers’ compensation claim for injuries he allegedly sustained in July of 2014 while working for Rock Wool. The claim was accepted and Mr. Cason was paid benefits in accordance with The Alabama Workers’ Compensation Act. However, in October 2014, Cason sued Rock Wool, alleging claims of negligence, wantonness, and outrage. Mr. Cason later asserted a claim under the Alabama Employer’s Liability Act, and Mrs. Cason brought a claim for loss of consortium. Rock Wool filed a Motion to Dismiss all of the Casons’ claims, asserting that they were barred by the exclusivity provisions of the Alabama Workers’ Compensation Act. The trial court denied Rock Wool’s motion, and Rock Wool filed its Petition for Writ of Mandamus.

Rock Wool asserted that it was immune from suit in tort pursuant to the "exclusivity provisions" (§§ 25-5-52 and 25-5-53) of The Alabama Workers’ Compensation Act. Those sections provide that, where the injury occurs in and arises out of the course of the employment, workers’ compensation benefits are the employee’s sole remedy against the employer.

The Supreme Court noted that there was no dispute as to whether Mr. Cason’s injury occurred in and arose out of his employment, so the exclusivity provisions required that the tort claims be dismissed. The Court further held that the Employer’s Liability Act and The Alabama Workers’ Compensation Act are mutually exclusive, and there can be no claim under the Employers’ Liability Act where both the employee and employer are subject to The Alabama Workers’ Compensation Act. Finally, the Court agreed with Rock Wool in regard to Mrs. Cason’s consortium claim. As a result, the Supreme Court granted the Petition and issued a Writ of Mandamus directing the trial court to enter an order dismissing all of the Casons’ claims against Rock Wool.

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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.

On February 2, 2016, Alabama Republican Senators Orr, Sanford, Livingston, Scofield, Stutts and Melson introduced SB122. The bill seeks to revise sections of 25-5-57 to limit an employer's responsibility for permanent and total disability benefits and medical benefits. Similar revisions have been included in past bills that were unsuccessful. However, those bills included numerous other items resulting in them getting tied up by competing interests.

The first proposed revision in SB122 would limit the employer's responsibility for payment of permanent and total disability benefits. The employer's obligation to pay those benefits would be terminated upon either the date of the employee's 65th birthday or 500 weeks after the date of the injury, whichever is longer.  

The second proposed revision would limit an employer's obligation to pay medical benefits. If the employee did not receive treatment related to the injury for 2 years there would be a rebuttable presumption that any subsequent treatment was unrelated. The employer would only be liable for the treatment upon a finding by clear and convincing evidence that the treatment was related. If the employee did not receive related treatment for a period of 4 years, then the employer's obligation to pay for medical treatment would conclusively end. 

About the Author

The article was written by Joshua G. Holden, Esq. a Member of Fish, Nelson & Holden, LLC, a law firm dedicated to representing employers, self-insured employers and insurance carriers in workers’ compensation and related liability matters. Mr. Holden is AV rated by Martindale-Hubbell, which is the highest rating an attorney can receive. Holden 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.

The Alabama Court of Civil Appeals recently released its decision in the case ofIn re: Henry Riley v. Reed Contracting Services, Inc. (Ala. Civ. App. January 29, 2016). In its opinion, the Court denied the petition for writ of mandamus filed by Reed Contracting Services, Inc., who was requesting that an Order from the Madison County Circuit Court be vacated. The trial court’s order directed Reed Contracting, Inc. to authorize surgeries, rejected that maximum medical improvement (MMI) had been reached, and further ordered the reinstatement of temporary total disability benefits (TTD) to include accrued benefits from the date the surgeries were initially denied.

Riley was an employee of Reed Contracting Services, Inc., who reportedly fell at work injuring his knees in 2012. Both knees also showed evidence of pre-existing arthritic changes. His authorized treating physician advised that the plan of care would not resolve osteoarthritic pain, which had been aggravated by his work injury. Riley declined further treatment at that time. 

Two years later, in 2014, Riley returned to his authorized treating physician, who opined that the current knee complaints were not related to his 2012 injury, placed him at MMI with no impairment rating and released him to return to work full duty.

Riley requested a panel of four physicians, pursuant to §25-5-77(a), Ala. Code 1975. The new authorized treating physician opined that Riley had pre-exisiting arthritic changes in his knees, but that the 2012 accident made the condition worse and more symptomatic, which then warranted bilateral knee-replacement surgery. Reed Contracting Services, Inc., denied authorization for the knee replacement surgeries.

The trial judge found that, prior to the fall, Riley was capable of working as a tire technician, but had not been able to following his fall. The Court also found that both of Riley’s authorized treating physicians believed that the arthritic condition was aggravated as a result of the fall. The trial court held that the 2012 work-related fall caused a "permanent aggravation" of Riley’s arthritic condition and that the knee-replacement surgeries were medically necessary. It also held that the assigned MMI date was invalid, and ordered Reed Contracting Services, Inc., to reinstate TTD to include the payment of accrued benefits. 

The Alabama Court of Civil Appeals held that substantial evidence supported the trial court’s finding that Riley’s fall produced a "permanent aggravation" of his arthritic condition and was therefore a contributing cause of the need for the recommended surgeries; making those surgeries compensable under the Act. It further held that substantial evidence supported the trial court’s finding that Riley had not reached MMI; and that the trial court had not erred when it ordered the reinstatement of benefits to include accrued benefits, from when the surgeries were denied.

MY TWO CENTS:

In cases involving a preexisting degenerative condition, the key issue is whether or not the aggravation is permanent. In many cases, you are simply dealing with a flare up which can be treated and returned to baseline. When that happens, the employer is only responsible for paying benefits during the flare up period. It is important to remember that returning to baseline does not necessarily mean returning to the same condition as before the work accident. A degenerative condition by definition gets worse over time. Therefore, returning to baseline simply means returning the employee to the condition he or she would now be in had the work accident not occurred.

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This blog submission was prepared by Karen Cleveland, an attorney with Fish Nelson & Holden, LLC, a law firm dedicated to representing self-insured employers, insurance carriers, and third party administrators in all matters related to workers’ compensation. Fish Nelson & Holden is a member of the National Workers’ Compensation Defense Network. If you have any questions about this submission or Alabama workers’ compensation in general, please contact Cleveland by e-mailing her at kcleveland@fishnelson.com or by calling her directly at 205-332-1599.

Effective January 1, 2016, the standard mileage reimbursement rate for Alabama was decreased to 54 cents per mile.

On October 16, 2015, The Alabama Court of Civil Appeals released its opinion inAnita Martin v. Austal USA, LLC. At the trial court level, the judge granted the employers motion for summary judgment based on the applicable statute of limitations. It being an occupational disease case, the two year statute of limitations in which to file a lawsuit would have started to run on (1) the date of last exposure or (2) the date of the last indemnity payment, whichever is later. It was undisputed by the parties that the date of last exposure was the last day worked and, using that date, the statute would have definitely expired. However, the employee received employer sponsored short term disability benefits while she was out of work. The employee argued that said benefits constituted indemnity payments that served to toll the statute of limitations. The employee cited to a case where the court held payment for injury days and full pay for less than full work constituted indemnity payments.

On appeal, the Court of Civil Appeals distinguished the case relied upon by the employee by noting that the employer in that case was aware that the employee was making a workers’ compensation claim. In the instant case, however, there was no evidence that the employer was aware that the employee was claiming a work related occupational disease at the time she was receiving her short term disability benefits. As a result, the Court affirmed the trial judge’s decision.

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About the Author

This blog submission was prepared by Mike Fish, an attorney with Fish, Nelson & Holden, LLC, a law firm dedicated to representing self-insured employers, insurance carriers, and third party administrators in all matters related to workers’ compensation. Fish Nelson & Holden is a member of the National Workers’ Compensation Defense Network. If you have any questions about this submission or Alabama workers’ compensation in general, please contact Fish by e-mailing him atmfish@fishnelson.com or by calling him directly at 205-332-1448.

On October 16, 2015, the Alabama Court of Civil Appeals released its opinion inJenkins v. American Transport, Inc., reversing the trial court’s order granting summary judgment in favor of American Transport, based on the trial court’s finding that American Transport was not Jenkins employer and that Jenkins’ injury was not subject to Alabama’s workers’ compensation laws.

Jenkins was a truck driver who leased his truck to American Transport. The parties entered into an agreement in Dothan, Alabama, which provided that Jenkins would use the truck to haul freight for American Transport throughout the United States. The agreement explicitly stated that Jenkins was an independent contractor and not an employee. The agreement provided that either party could terminate the relationship by giving thirty (30) days written notice, and that American Transport could terminate the agreement if Jenkins violated established service standards, any laws, any terms and/or conditions of the agreement, or transported any cargo for any company other than American Transport. The agreement further provided that American Transport would compensate Jenkins by paying him a percentage of the gross revenue of each load; that Jenkins was responsible for providing his own workers’ compensation insurance; that Jenkins assumed full responsibility for all loads; that Jenkins had the right to accept or reject loads offered to him by American Transport; and that American Transport had no right to control or attempt to control the manner or means by which Jenkins performed under the agreement.

Jenkins was later injured while hauling a load from Colorado to Minnesota. He sued American Transport for workers’ compensation benefits, and American Transport filed a Motion for Summary Judgment. In its Motion, American Transport asserted that it was not Jenkins employer, and that even if it were his employer, Alabama law would not apply because Jenkins’ employment was not principally localized in the state. The trial court granted American Transport’s Motion for Summary Judgment, and Jenkins appealed.

The Court of Appeals pointed out that Jenkins’ designation as an independent contractor alone was not determinative of whether he was entitled to workers’ compensation benefits. The Court of Appeals found sufficient evidence in the record to establish that American Transport retained a right to control, and even exercised the right to control, Jenkins’ work. Based on this, the Court found that there were genuine issues of material facts as to whether Jenkins was an employer or independent contractor, and that summary judgment was therefore improper. Additionally, the Court found that while Jenkins’ employment was not principally located in any state, there was sufficient evidence in the record to establish that if Jenkins was an employee, his contract for hire was made in Alabama.

Most notably however, the Court of Appeals pointed out that American Transport failed to argue that it could not be deemed Jenkins’ employer pursuant to §25-5-1(4). That section provides that "In no event shall a common carrier be deemed the employer of an owner/operator or a leased operator." The Court pointed out that if American Transport had asserted this defense, there may have been no need to determine whether American Transport retained a right of control over Jenkins, because American Transport would have been exempt from the provisions of the Alabama Workers’ Compensation Act.

MY TWO CENTS

Generally, when the putative employer retains a right to control the agencies and means of the work being performed, the parties will be subject to the Act. However, § 25-5-1(4) provides an absolute exemption for common carriers who employ leased owner-operators. The employee bears the burden of proof in workers’ compensation, and that burden even applies to establishing that he/she is an employee. However, since American Transport moved for summary judgment, it had the burden of proving that it was exempt pursuant to § 25-5-1(4).

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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 atcdrummond@fishnelson.com or (205) 332-3414.

Ex parte Ward International

Released September 4, 2015

The Employer, Ward International, filed a Petition for Writ of Mandamus after the Circuit Court of Mobile County entered and ordered, upon motion by the Employee, Wesley Shows, requiring the Employer to pay for erectile dysfunction (ED) medication order by the authorized treating physician.

The Employee and Employer had entered into a settlement related to a compensable lower back injury. The settlement left the issue of future medical benefits open. In March of 2015 the authorized treating physician, Dr. Wayne Cockrell, prescribed time release medication to be ingested every day to treat the Employee’s ED. The Employer deny the request and the Employee filed a motion with the trial court requesting that they enter an order requiring the Employer to pay for the ED medication. The motion included an opinion from Dr. Cockrell that the Employee suffered from chronic pain that required narcotic analgesics, and that ED can certainly be associate with chronic pain and the use of narcotic analgescis.

In its petition the Employer did not argue that it was entitled to an evidentiary hearing pursuant toEx parte Publix Supermarkets, Inc, 963 So. 2d 654 (Ala. Civ. App. 2007), nor did the Employer argue that the medication was reasonable necessary to treat the ED which resulted from the compensable accident/injury. The Employer relied solely on Rule 480-5-5-.15(15) of the Alabama Administrative Code, which is a regulation put into effect by the Alabama Department of Labor.

According to Rule 480-5-5-.15(15), which states it was promulgated pursuant to Ala. Code §25-5-293, the employer is responsible for ED medication when the employee suffers fromorganic ED that resulted from a compensable on the job injury. The rule further states that psychological or psychiatric ED are notorganic ED. The Department of Labor included 6 conditions that may cause organic ED: 1) Spinal cord injuries; 2) Injuries to genital and lower Urinary Tract; 3) Severe fracture fo the pelvis resulting in injury to the bladder or urethral pelvic nerve; 4) surgery of the genital or lower urinary tract; 5) removal of rectum causing injury to the nerves or vessels; or 6) any surgery that might interfere with the pelvic nerves or circulations. The Regulation goes on to state that the Employer is only responsible for 5 tablets per 30 days if treatment is for an accepted claim, one of the 6 conditions above are met, a urologist has evaluated the employee and determined he suffers fromorganic ED and a letter is received stating the medication for the ED is medically necessary.

The Alabama Court of Civil Appeals noted that, in this case, it was undisputed that the Employee did not suffer from one of the 6 conditions and a urologist had not evaluated him and determined he hadorganic ED. It was also undisputed that more than 5 tablets per 30 days was prescribed by Dr. Cockrell.

The Court of Civil Appeals first pointed out that while not clear, Rule 480-5-5-.15(15) appears to be a policy determination issued by the Department of Labor as to when ED will be compensable. The Court further noted that Rule 480-5-5-.15(15) was promulgated pursuant to §25-5-293, Ala. Code 1975, which states that insurance carriers and self-insured employers can adopt utilization review and engage in medical necessity determination, if conducted pursuant to policies, guidelines and regulations approved by the Department of Labor and Workers’ Compensation Medical Services Board.. In Overnite Transp. Co. v. McDuffie, 933 So. 2d 1092, 1098 (Ala. Civ. App. 2005), the Alabama Court of Civil Appeals ruled that a regulation promulgated pursuant to §25-5-293 which required an employer’s approval of all proposed referrals by the authorized treating physician did not override §25-5-77(a), which states employer’s are responsible for reasonably necessary medical treatment for injuries resulting from an accident that arose out of and occurred in the course of the employment.

Based on the holding in Overnite Transport, the Alabama Court of Civil Appeals ruled that Rule 480-5-5-.15(15) related to ED did not override §25-5-77(a). Therefore, since the evidence showed, and the Employer did not argue otherwise, that the ED was related to the work injury and the medication was reasonably necessary, the Court held that the Employer’s Petition was due to be denied.

Of note, The Alabama Court of Civil Appeals stated in a footnote to this opinion that the Alabama Workers’ Compensation Act provides for coverage of psychological or psychiatric conditions related to a physical injury. Therefore, it seems that the Court would find, if the issued presented itself, that §25-5-1(9) would provide coverage for psychological or psychiatric ED despite Rule 480-5-5-.15(15) stating otherwise.

My Two Cents:

Whenever there is a prescription for ED medication, it is advisable to focus on whether it is related and if the medication is reasonably necessary. You might consider having a urologist determine if the employee actually suffers from ED and provide an opinion as to the cause. You can also have the doctor weigh in on the reason for time release medication versus a tablet that could be taken as need with it being limited to 5 per 30 days. If the doctor opines that there is no medical reason for the time release medication, then it may be possible to argue that it is not reasonably necessary. Once you take §25-5-77(a) out of the equation, the Rule 480-5-5-.15(15) would apply which limits the employee to 5 tablets per 30 days for ED.

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ABOUT THE AUTHOR

The article was written by Joshua G. Holden, Esq. a Member of Fish, Nelson & Holden, LLC, a law firm dedicated to representing employers, self-insured employers and insurance carriers in workers’ compensation and related liability matters. Mr. Holden is AV rated by Martindale-Hubbell, which is the highest rating an attorney can receive. Holden 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.

For all injuries occurring on and after July 1, 2015, the maximum workers’ compensation payable was raised to $813 per week, and the minimum was raised to $224 per week. This change was based on the Commissioner of Labor’s determination that the State’s average weekly wage for 2014 was $812.96.

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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.